The London Stock Exchange – 1801

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We had a ‘dig’ around in our library on the history of the London Stock Exchange and discovered this interesting article which we will publish in several parts over the next few days – its from the book London – Volume 3 published in 1824 by Sholto and Reuben Percy – Brothers of the Benedictine Monastery.

Read other posts in this series on the Stock Exchange

Read other posts in the London series

The London Stock Exchange – 1801

Of all the means of making a great fortune, there is none so rapid as by speculating in the public funds. Much has often been gained by bonefide purchases and sales of stock, but the speculation is not thus limited. Individuals who never had a shilling in the funds, or the means of purchasing £100 in the three per cents, will speculate in thousands. The risk is, however, small, and the danger still less, for as they are gambling transactions they are not recoverable in law. A jobber purchases or sells a certain quantity of stock to be received or delivered on such a day. When the time comes, he is not called on for any transfer; all that is required is that he shall pay or receive the difference in the price of that particular stock on the day fixed from that on which the bargain was made; if he has lost, and cannot or will not pay the deficiency, he becomes a defaulter, or, to use the jargon of the Stock Brokers, “is a lame duck,” and is not allowed to enter the Stock Exchange again.

By means of speculating in the funds, we have seen persons who began the world in a humble walk of life, amassing fortunes of nearly a million of money in a few years; and there is the instance of Mr. Rothschild, who a few years ago was a dealer in cloth at Manchester, and now deals in millions contracting for and supplying loans to all the powers of Europe. To the honour of this gentleman it must, however, be said, that although a member of that persecuted people, the Jews, he possesses a heart which does honour to human nature, and that to him every increase of wealth is but an additional means of doing good.

The amount of the national debt, which, during the long war with France, rendered new loans continually necessary, increased the business of the funds so much that the house in Change Alley, where it was transacted, became too limited, and in [1801] it was determined to build a more commodious house for the purpose. Capel-court, once the residence of Sir William Capel, lord mayor in 1504, was fixed upon as a convenient situation for the purpose.

The Stock Exchange, the first stone of which was laid on the 18th of May, [1801], was raised by subscription: the plate which has been placed in the first stone bears an inscription, which after ages may consider as a questionable proof of national prosperity, although evidently intended to record it. Of national good faith it is certainly an indisputable memorial. It states that the public funded debt was then upwards of five hundred millions. There is nothing in the building itself to excite particular attention, although it is conveniently and handsomely fitted up; but there is no place in the world where money transactions are carried on to such an extent, an assertion which will scarcely be doubted by those who consider the fluctuations which must occur in a funded property, which, on the 5th of January [1823], amounted to £796,530,144 15s 4d.

Although the number of persons, among whom this sum is subdivided, is varying almost every day, so as to render any calculation uncertain, yet, in a recent investigation, it was found that there were 283,958 persons who had shares of various amounts in the public funds; and that it requires upwards of twentysix millions yearly to pay the dividends. Of the various fundholders more than 90,000 receive a dividend not exceeding £10 a year; nearly 100,000 more a sum not exceeding £100 per annum; and there are 215 persons who receive an annual income of £4000 and upwards from the funds. This statement is exclusive of those persons who have deposited money in the savings’ banks, the number of which is immense.

Excerpt from London Volume 3 1824 by Sholto and Reuben Percy – Brothers of the Benedictine Monastery

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Further reading and external links

The London Stock Exchange on Wikipedia

The London Stock Exchange Website