Part 5: That the existing regime of the Stock Exchange and Public Credit is the condemnation of the economic system.


An Excerpt from Proudhon's Stock Exchange Speculator's Manual

Submitted by vasily on June 15, 2024

Our intention here is not to satirise an entire era, an entire society. Moreover, we would be failing to our own principles, we would be imitating theology if, instead of seeking the causes of contemporary dissolution in poorly defined principles, poorly differentiated notions, inaccurate formulas, poorly balanced forces, above all in this state of social war that the privileged classes have always created from time and nurtured as the expression of freedom and order, we attacked individuals and corporations en masse, that is to say, all of humanity.

Let others undertake, if they can, if they dare, the purification of the social body! For us, who are neither preachers nor Jacobins, our task is merely to interpret facts and to clarify ideas. Too enlightened on the mysteries of fortune to guard any resentment, it's sophisms that we're at war with, not men: it's for a science that we're fighting, not for interests. And what science? Justice, in its application to the Economy…

The coup de théâtre of December 2 has imposed silence on the defenders of the Revolution; it has not silenced its enemies.

There are people who, with regard to Stock Exchange speculation, have seized the opportunity to kick out at socialism, and to support, against our critics, the usefulness and high morality of gambling.

Others, who had had the distinguished glory of suffering persecution and captivity for the social republic, who since, freed from Belle-Isle, immediately engaged in the certain operations of the Stock Exchange, make the morality of agiotage consist in evading its uncertain conditions ; men who, in 1848 had begun the crusade of labour against the coalition of capital, have cried out that we wanted to take the world back to primitive barbarism, to create equality of misery, and to make the rejuvenated France of 1852 eat the black broth.

Lastly, others, with M. Mirès in the lead, admit that for the past three years we have witnessed great misfortunes, on which great fortunes have risen; but distinguishing, after us, the useful speculation of the unproductive and agioteuse for which they voluntarily make an exception, try to obtain grace, tolerance, for the needy speculator, maker of dupes and victims, in favour of the honest and austere financier, who...., of whom...., to whom...., etc. M. Mirès speaks from the abundance of his heart. He knows the needy, and he wouldn't ask for anything better today than to serve as a Patron of talent and virtue.

A few facts in response to these proud theoreticians will naturally find their place here, and complete the elements of the question that we submit to our readers.

§ 1. How uncertain operations, indifferent in nature, lead fatally, in the present state of things, to swindling and theft. - Complicity of science and law. - Inequality of position among players.
As we pointed out in our Introduction, in a state of affairs founded on the complete absence of mutuality between the organs of production and circulation, no serious law, be it preventive or repressive, against the abuses of which the Stock Exchange in the first place, and after it the limited partnership, are the theatre, is possible.

This impotence of the legislator against acts which all, to a greater or lesser degree, reduce to swindling and theft, constitutes, according to us, the reduction to absurdity of the theory which creates them, and which consequently finds itself condemned to uphold their innocence, to affirm their legitimacy.

Thus, as the theory, so the practice; as the science, so the society. Political economy, as left by Adam Smith, J.-B. Say, D. Ricardo, Malthus, etc., and as represented by the Academy of Moral and Political Sciences, is nothing more than the description of the social chaos in which humanity has been wallowing for sixty centuries. Is it any wonder that the followers of this so-called science have made it, in recent years, a tool of counter-revolution?...

May the reader give us a few minutes of attention: our intention is not to deceive their good faith.

What moral law or principle of justice can, internally, defend the futures markets?

Certainly none. Firstly, the condition of uncertainty is the essence of the production and circulation of values: on the other hand, the term - or, to say it better, the delay between the delivery of the commodity and the receipt of the counter-value that pays for it - is no less essential to the condition of credit and exchange.

Chance, by itself, is neither moral nor immoral. Undoubtedly, in a society organised on the principle of mutual guarantee, all combined efforts would tend to eliminate chance: but where this mutuality is not decreed, agiotage becomes preponderant, and any law that purports to restrict it in any order of transactions whilst leaving it free in others would be an arbitrary law, a law of lies and iniquity.

In two words: mutuality operates against chance, as we see with insurance; agiotage operates on it. As no law or mutualist constitution has determined the rights and duties of citizens in this respect, their legal condition is gambling: this consequence is forced.

From this it follows that what would be illicit and culpable in a mutuality system, that is, the pursuit of agio for itself, instead of the product, ceases to be so in a system of absolute insolidarity, where everything is left to fortune.

This posed, we ask: Which of these two is more moral in itself, more useful, more in keeping with eternal justice and the economy, of these two systems: mutuality or licence? Does it depend on the will of the legislator, the sophist, whether it is indifferently this or that?

And that's what we answer, against the economists: Look at the facts.

According to official documents, the product of the stockbrokers' service in Paris for 1855 was 80 million, which supposes a mass of transactions of 64 billion, not including the coulisse operations etc.

The serious transactions certainly don't reach more than 3 or 4 billion. The importance of pure agiotage operations is therefore to that of actual business such as 16 or 18 to 1. Is this moral?

Let's add: Is it economical?

It has been dared to say that Stock Exchange operations do not significantly affect agricultural and industrial credit; that it is not true that capital is diverted from its natural destination. What then is the 80 million shared by the stockbrokers, presidents and appariteurs of this immense tripot?

80 million in brokerage fees implies that several hundred million have been engaged to gambling every day: would they not have been better placed in agriculture, to which the Société du Crédit Foncier has not a penny to offer; in commerce, to which the Bank never stops tightening the belts?

Here we are, therefore, as a result of the prepotency left to the uncertain element over the legal element, in a state of chronic, organic, legal demoralisation. Who then, seeing what is happening, dare deny it?

The sole thought of people in the Stock Exchange can be summed up in three words: to win, to gamble, to make money! All, or most of, have an income, a business, an industry, a state, at last, a means of livelihood. So what do they ask of agiotage, then? Profits without work, without capital, without entrepreneurial spirit, without genius. The Stock Exchange has two oscillations, the rise and the fall, just as the roulette wheel has two colours: sell on the rise, purchase on the fall, bet on the red or the black, it's all one. Chance is the great artisan of successes and setbacks.

When we are quoted the superb profits earned by the fortunate in a game played the fairest in the world, we ask: What is this element, chance? Is it an economic power, a principle that creates useful and exchangeable values?

"Most of the stockbrokers, said the Bulletin de la Presse of January 18, 1856, had received, since yesterday, from the province, an infinite number of telegraphic dispatches that revoked sell orders, and replaced them with purchase orders."

That is like the millstone spinning empty, in the expression of J.-B. Say. A displacement of capital, sterile from the point of view of national production, fatal to the victims who lose their means of livelihood and work: such is the Stock Exchange. It is neither more nor less than a transformation of the much decried lottery. The police excessively hunt the rare clandestine gambling dens where a few sons of families risk part of their income with girls; they protect the stock exchange where fathers swallow up, with swindlers, their wives' inheritance, their daughters' dowries, the establishment of their sons. Thus, as the professor says, there is a great and a little morality.

As long as we only get together to gamble, what does it matter whether we're gambling on chimaeras or on realities?

As soon as we gather only to gamble, what does it matter whether we gamble on chimaeras or on realities?

"The history of tulipomania in Holland is as fruitful in its teachings as that of any other period. It was in the year 1634 that the main cities of the United Provinces began to indulge in a traffic that destroyed every kind of commerce. The gambling fury it ignited provoked the greed of the rich and the foolish hopes of the poor, raised the value of a flower beyond its weight in gold, and ended, as all frenzies of the same kind usually end, by all the fury and misery of despair. For every few people enriched, there were a prodigious number ruined. In 1634, people sought tulips with the same eagerness as they did, in 1844, to procure promises of railway shares. Speculation followed exactly the same pattern in both markets. One made the commitment to deliver certain onions; and, for example, when there were only two similar ones on the market, as once arrived, then chateau, land, horses and oxen were sold to pay the differences. We contracted and paid thousands of florins for tulips that neither the broker, the seller nor the buyer should ever see.”

"One can judge how far this mania went, when one sees established by various authorities that there was such a tulip that was paid for in values equal to 2,900 fr.; another variety was paid for 2,000 florins (2,320 fr.); one gave, in exchange for a third, a new carriage, two grey horses and their harnesses; one delivered twelve acres of land for a fourth. There was a speculator who, in the space of a few weeks, made 60,000 florins (69,600 fr.).

"But in the end, the hour of panic struck, confidence vanished, commitments were broken, payments stopped on all sides, golden dreams dissipated. Those who, a week before, had placed the most magnificent hopes in the possession of a few tulips, which would have been enough for them to make a princely fortune, remained with elongated faces and stunned eyes in front of bad onions which had no intrinsic value, and which they could not sell at any price.”

"To conjure the evil, the tulip merchants convened assemblies and made beautiful speeches in which they proved that their tulips were more valuable than ever, and that the panic was as absurd as it was ill-founded. These speeches aroused great applause; but the onions remained no less worthless." (The London Stock Exchange, by J. Francis, translated by M. Lefebvre-Duruflé, senator, former minister).

What dream of a delirious imagination could ever rise to the heights of history? The philosopher's stone was put on limited partnership from 1824 to 1825:

"Among the companies that were springing up daily, one was formed to manufacture gold. It was announced that success was certain. The shares were snapped up with a fury; but, when their investment was completed, the shareholders were warned that, as the costs that would result from the manufacture of an ounce of gold would reach twice its value, the company had to be dissolved, and the payment made would be retained to pay the costs incurred up to that point." (London Stock Exchange, page 272.)

Let's stay with contemporary facts. The human spirit, despite its unbridled passion for gambling, which represents its spontaneity and independence, is repulsed by nothingness: it likes to rely on materialities. Here begins the conversion of gambling into swindling.

"In France as in England, in Paris as in London, the demon of agiotage has turned the heads of those accustomed to the Stock Exchange, and soiled with its contact the most commendable businesses. Lured only by the lure of premiums and by the considerable differences it was possible to cause from one day to the other without risking a lot of money, the men who got involved in these speculations didn't bother to make a choice between the securities of the different companies that they found on the quotation of the Stock Exchange; they accepted them all without distinction, surrounded them all with the same favour, and without realising their actual value, they discounted the unknown future by premiums that they realised within forty-eight hours.”

"Things went on like this for a few months, but soon the profits obtained by the most astute by means of these manoeuvres aroused numerous competitors, who, finding the place taken, the market in industrial shares too circumscribed, threw themselves headlong into operations that were far more uncertain, by discounting, purchasing and selling at a premium, no longer existing shares, having a certain basis, but promises of shares, subscription certificates, - less than that even, - of mere words: for we sold, purchased and quoted at 40 fr. of premium for the titles of a company that still only exists as a project; that has received requests, but has not yet opened a subscription and has not even made any reply to those who have written to it to take an interest in the operation it has in view.”

Thus spoke the Railway Journal on December 28, 1844. It said again, on August 2, 1845:

"To speak only of a recent affair, the Sellière company's receipts for the branches at Dieppe and Fécamp on the Chemin de Fer du Havre, the agiotage was pushed on these values to the point of frenzy. The 36,000 shares representing the company's capital of 18 million were bought and sold several times in the same week. Should we conclude from this that buyers and sellers had different opinions of the business? Not in the least: the same gambler was buying and selling shares on the same Stock Exchange that he didn't own, that didn't yet exist. Thus, one sold receipts to be delivered as soon as they were issued; then one sold forward receipts that one didn't have, that one didn't intend to buy. It was nothing more than an exchange of commitments and payments of differences. Better than all that: most of the time, buyers and sellers know the matter only by the name of Dieppe à Fécamp; that is to say, if they had tried to understand the matter that they were gambling on, they would have had to believe, - and they generally did believe, - that it was a railway from Dieppe à Fécamp: which, incidentally, would have been industrially the most absurd thing."

The Société du Palais de l'Industrie could only be constituted, the monument could only be constructed on condition that the government guaranteed an annual interest of 4 0/0 on the capital invested in the enterprise. No one ever believed, in fact, that a colossal construction, which cost 17 million, was unsuitable for any use other than exhibitions, that is to say, that it was susceptible of producing a few very uncertain profits every five years, was an industrial concern. The State was appealing, in the form of an indirect loan, to private capital for the erection of an edifice that was much more luxurious than useful. In reality, the Palais shares were a kind of 4 0/0, and they only ever received interest guaranteed by the Treasury. Yet from their issuance, the 100-fr. shares at par carried a 30-fr. premium; in 1854, when the monument had not yet been completed, they were quoted at 170 fr. ; they have risen to 176; that is to say, while the 4 1/2, which was better guaranteed, was at 92, the stupid and voracious crowd was rushing on the 4 0/0 at 176, which has now reverted today to 70.

We can already foresee, with these facts, that the position of the gamblers is not equal, which adds particularly to the immorality of the gamble; but here, as on the very question of agiotage, the data are such that it is impossible to formulate, a priori, a condemnation, unless we place ourselves outside the regime that the anarchic, legal economy has made for us, and which it seeks to defend.

Indeed, if the uncertain market, based on real data, with a real object, is permitted; and if gambling, unbridled gambling, is the consequence, will it be a crime for the speculator with capital, whose impregnable position allows him to attack at will, or to remain in anticipation; will it be a crime to profit from the discrepancies that the gamblers' outbursts never fail to produce on the market, to combine the firm with the premium, the cash with the current end of the term?

The public at the Stock Exchange, like the world of production, is therefore divided into two categories: one, by far the most numerous, is that of the exploited; the other is that of the exploiters.

The former, a sheep-like mass, a vile multitude, a hodgepodge of doormen, servants, rentiers, petty bourgeois, greedy labourers, people at every level of the social ladder, know only one thing about the Stock Exchange and its strings: To try their luck. Frankly, they imagine that the things that happen in the Stock Exchange are the same as the lottery; that everything depends on chance or on a calculation of probabilities... Thus, with what air you hear them profess this famous axiom of popular wisdom: Who risks nothing, has nothing! Therefore, thought these philosophers, it's prudent to expose one's nest egg, one's life, on a roll of the dice. Live rich or die! The folly would be to languish in honest ease or mediocrity.

Where does wealth begin? For the craftsman and the servant, it would be a thousand pounds of income; for the industrialist, a triple or quadruple capital; for the middle bourgeoisie, the million, the holy and sacred million! Thus it is reasoned, at least at the starting point. But gambling is like a cogwheel; once the finger has been taken, it is necessary for the body to follow; the merciless machine stops at neither cries of anguish nor torture, and will only return the shreds of a corpse.

- I've only been to the Stock Exchange once; I gained 50,000 fr. I'll never set foot on it again, said a Parisian merchant to his friends. This wise man was not of his time; all his friends thought he was wrong.

Without the slightest experience of business, and completely unfamiliar with the combinations by which the privileged in the temple of Plutus prevent or deal with disasters, the gambler whose imbecility or mediocrity of stake has marked him for the god's supper, plays to the point of complete discomfiture, which is never long in coming. Nothing is more stupid or gluttonous than this animal: it bites at the crudest of baits. Stopping in front of a poster for a spectacle, which he takes for an industrial advertisement, he reads: Chemin de fer de Paris à la lune, and writes to the director for shares. No skill is needed for plucking such goslings. How many gudgeons are needed to fatten a pike? How many passerines for a sparrow hawk's dinner?

how many lambs to feed a lion? how many small fortunes for the small pleasures and mistresses of a nabob? Still, there's no shortage of prey: pikes, hawks, lions and financiers fall asleep every night blessing Providence, which gives daily pasture to all its children.

Among the small, small number of those who earn money on the Stock Exchange, and who form the category of the privileged, we distinguish between the prudent and the skillful.

The prudent make arbitrage operations from one end of the year to the other. These are capitalists who never purchase more than their available wealth; they profit from the decline to invest their funds, and are content, while awaiting the rise, to collect their dividends. They realise their assets four, five, six times a year, more or less, depending on circumstances. They go from Mobilier to Foncier, from Foncier to Rente, from Rente to Chemins de fer, from Chemins de fer to Petites Voitures, from Petites Voitures to Gaz, from Gaz to Omnibus. The wisest of them all make carryovers and become small-week lenders to gamblers who still have a few thousand francs to risk. Their position is excellent from a security point of view: the worst that can happen to them is to remain holders of securities in stagnation, and to be reduced to the half-yearly profits of their investment. They thus draw from 10 to 20 0/0 of their capital. They believe themselves to be eminently useful citizens, and willingly give the virtuous indignation of declaiming against agiotage and parasitism. Stock Exchange newspapers, Stock Exchange manuals, Stock Exchange almanacks propose them as an example; the court preaches them, the city admires them, the multitude envies them; they accumulate the benefits of fortune and the consideration of citizens. Those who can, imitate them: a movement has declared itself in this direction, and is applauded as an amelioration of public morality. That's where we are!

All this world, honest world, elite world, intelligent world, prudent and wise, who plays it safe, accomplice and perpetrator of all extravagances, of all fornications, of all the crimes that have their origins in the Stock Exchange and from which it profits, what purpose does it serve, anyway?...What purpose does its capital serve? Those who advocate it, let alone the supporters of it, should tell us.

As for us, it is impossible for us to have double standards here, to grant amnesty to the slave exploiter when we condemn the trader. The Stock Exchange, says Mr Mirès, is the capital market. We said so ourselves (page 75), and we are happy to meet the leaders of modern speculation. But are they merchants or parasites, these prickers of differences who have no interest in any enterprise, and who would have nothing to collect if there were only serious matters, if each shareholder, as the word implies, remained faithful to his limited partnership, if at least from shareholder to shareholder there were only real exchanges and arbitration?

It is the skillful, joined with the needy, as M. Mirès refers to them, who ignite the gamble, and the prudent maintain it.

Now, as little each person contributes to public corruption, as soon as everyone contributes, it generates immense corruption. This was very well expressed in the Edinburgh Review about railway operations:

"The major frauds we have reported are not the result of the disloyalty of a single individual, or even of a group of individuals; they result from the combined interests of a large number of individuals and aggregations of individuals. Like a story that passes from mouth to mouth and receives a slight addition with each new edition, it returns to its source in an almost unrecognisable form ; in the same way it is with a little abuse of influence on the part of landowners, a little favouritism on the part of members of Parliament, a little intrigue on the part of lawyers, a little collusion on the part of contractors and engineers, a little greed on the part of directors, a little mitigation of probable expenditure and exaggeration of expected profits, that shareholders are deceived in an undignified manner, without the fraud being directly attributable to anyone. " (Revue Britannique, February 1856.)

What else do we say? We admit, with the English writer, that the needy, prudent or skillful individuals, at whose instigation, under whose patronage, and for whose benefit these colossal frauds occur, are perhaps not, in relation to morality, below the general average.

We maintain only by reason of the uncertain element which dominates all transactions, and which no principle of public law is strong enough to ward off, that the works of all these men are evil, their consciences crooked, their speculations immoral; and we add that if a distinction is to be made among them, it will not certainly be in favour of the sophists who try, by vain declamations, to legitimise what the universal conscience reproves.

After the prudent, the skillful.

All speculation, whether industrial, commercial or financial, rests on a calculation of probabilities. In a system of antagonism, where thoughts and interests cannot guarantee one another, no one can be forced to share their predictions with others: that's the law.

But who will distinguish between legitimate and illegitimate predictions? Who will prevent the abuse of confidences and secrets of the State? Who will dare to say before a tribunal correctionnel: The knowledge of such a fact, of such a resolution, had to be made public, because it belonged to everyone, it created a case of force majeure of which no one had the right to prevail?

The introduction of such principles into civil law would imply a revolution, the revolution of mutuality. We therefore remain, by horror of revolutionary justice, in the immemorial anarchy, where they struggle on unequal arms between eager and blind mediocrity, clairvoyant capitalism and the swindling skill.

The skillful are, so to speak, the bohemians of the Stock Exchange. With little capital, perhaps even no capital at all, they speculate every day, selling and buying anyway.

Their liquidations resulted solely in differences. They can live for years, operate on millions, without ever owning a small share, without ever having received a dividend. This is open gambling at its highest expression. By contrast, they are perfectly masters of their terrain: all paths, trails, precipices and cut-throats are familiar to them; they don't need a compass to navigate this labyrinth; they hunt the bounty from the hounds, from the lookouts, from traps; the makers seek them out and protect them, because they use their flair and skill to launch or track the prey, to lead or mislead the pack. Thus, they live well enough from their poaching. If one of them, by chance, breaks his neck or finds himself caught up in the tribunal correctionnel, the next day at the halt we say to ourselves: "He was a very skilful man; what a pity! And after that mournful eulogy, there's no more talk about it.

Here is a specimen of their industry, which we borrow from the Gazette des Tribunaux, for the edification of the predestined. It's one of the thousand ways in which we lead them up or down. The floor is given to the head: he explains how a venture is launched.

"I have, for example, five brokers; I give them each a thousand shares in the company that I want to launch. They arrive at the Stock Exchange. The company is already known through prospectuses. They offer to sell immediately, for cash, the shares that they hold, and offer at the same time to repurchase them in the future, with more or less of a gap, on which gap is still deducted to the amount of a premium.

" I will explain by way of an example. I offer a thousand shares in La Lignéenne for cash and at par, at 100 fr.; I offer at the same time to repurchase them, at the next liquidation, at 110 fr. including a 5 fr. premium. This means that when the liquidation comes, if I don't want to take delivery of the shares I've just repurchased at 110 fr., my seller will keep them, provided I pay him 5 fr. per share.

"He will thus have gained 5 fr. and the share that he had paid 100 fr. will now cost him only 95. He can repeat the same operation for an indeterminate number of liquidations, with the chance of always winning the premium and without any chance of loss, because the worst that can happen is to see the buyer to take delivery if the shares rise, and in this case, they are paid for him.

"That's how it is possible to open a market at the Stock Exchange on the first stock that arrives. You need to find a seller and a buyer. The seller is the one who brings in his shares; the buyer is the one who very easily agrees to take the shares for cash, whatever their value, since at the same time that he takes them with one hand for cash, he gives them with the other hand for time, at a profit. This operation has an immediate effect that produces a rise.

That's when the sheep of Panurge arrive, and the accomplices find themselves stripped of, in return for good and beautiful sounding ecus, the rags of paper on which they seem to make, in their corner, such lively transactions. Now let's look at the reverse.

"Here's how the bearish operate. Without having any shares, they sell more or less considerable quantities, depending on the credit at their disposal. Thus the more a commodity is offered, the more its price falls. When the shares have decreased to a lower price than that at which they sold them, they repurchase them and thus profit from the difference.

"These bearish operations have a major influence on the market: they have the effect of forcing premium sellers to give up their premiums; which necessarily results in a depreciation of value.

Such is the mechanism of Stock Exchange operations for establishing a market, and this is how I went about launching the Lignéenne."

What do these good provincials have to say when they, from the depths of their sub-prefectures, claim, on the indications of a financial bulletin - often deceived, sometimes an accomplice - to direct a Stock Exchange operation in Paris and earn money there?

§ 2 Association of capital and intelligence in Stock Exchange operations.
If gambling is the natural condition of the producer and the trader; if, on the other hand, it is permitted for the speculator to use the advantage of his capital on the Stock Exchange,

the superiority of combinations that are inaccessible to others, the priority of information, will it be forbidden to associate, against common risks, those irresistible powers, capital and talent, as Fourier said.

No, certainly not: we are always in terms of legal probity.

Above the gamblers, big and small, agiotant from day to day, - who with the greater or lesser probability of an agio on top of the interest on his funds, who with the filial certainty of his loss, - rise the man with millions and the man with ideas, the Jewish Shylock and the industrious Figaro, those whom the union of their fortune and their genius places at the head of speculation. For, as we have said, the speculative world forms a complete society, having, as in commerce and industry, its high finance, its bourgeoisie and its proletariat. Needless to say, the distribution of profits and burdens is no other than in the field of labour.

Shylock is of plebeian origin. The source of his fortune is some public calamity. Supplier, spy, servant, betrayer of all causes at once, he grew up amidst the distress of his citizens; he rose over corpses.

"English adventurers in the Orient Indies had made prodigious sums of money in a few short months. Returning to the metropolis, they built magnificent houses where splendour too often took the place of taste; they increased the price of all articles of consumption. In front of them, they were saluted to the ground; behind them, everyone trembled. Appalling stories were told of them, and the peasant, at once malicious and fearful, shuddered with all his limbs as the passage of the heavy carriage filled with these men, who had acquired their wealth only by trampling the laws of humanity underfoot. Not more than twenty years ago, the author of this book was told that this work of Lord Clive had a box under his bed in which were piled all the evidence of his crimes, and that he had only committed suicide because his conscience would no longer allow him to bear the overwhelming memory."

"The son of a boatman, forced, in his youth, to dine on the end of a counter, with a newspaper for a tablecloth, Thomas Guy left no less than 12 and a half million francs at his death (1724). His first operations were carried out on the bonds with which sailors were paid in the time of Charles II. After several years of cruel hardship and even greater toil, the defenders of their country received their pay in paper, non-redeemable at the will of the bearers. Sailors, all too often short-sighted, were forced to surrender their uncertain pay to usurers, who discounted it at a rate determined solely by their conscience. Men who had been around the world, like Drake, or who had fought hand-to-hand with Tromp, were largely unable to combat the shrewd agents of the usurers who lured them into the ignoble dens of Rotherhithe, and bought their bonds at the lowest possible price. It was thus that excellent sailors, the glory of the English navy, were robbed, ruined and forced to take their services to foreign nations. It was the purchase of these bonds that Thomas Guy focused on first, and it was on the prejudice caused to our brave sailors that he began to establish the basis of his immense fortune.

"He died at the age of eighty-one, leaving by his testament 240,000 pounds sterling (6 million fr.) to the hospital that bears his name. His body, which rested in the chapel of the Merciers, was transferred with great pomp to St. Thomas's Hospital, and on February 13, 1734, ten years after his death, a statue was erected to his memory in the courtyard of this hospice, which he had edified with the pay so painfully earned by English sailors." (London Stock Exchange.)

Shylock is naturally the contractor of concessions, the successful bidder for loans, the patron of everything that offers big profits. His role is not difficult, for, as the proverb says, the water always flows to the river. If he decides to speculate in commodities, it's not unless he monopolises an entire nature of products: yesterday mercury, linen; today copper, three-six; tomorrow lead, sugars.

The government decrees a 3 0/0 loan and calls on capitalists to bid. Shylock was present; he became the successful bidder at a rate of 75 fr. 25 c. That same day, the 3 0/0 rose to 77. He sold the speculators his privilege of paying the loan, and without taking anything out of his coffers other than the bond for which he was paid interest, he earned 15 million in a few hours.

Full of solicitude for his country, one day he offers to the State to build at his own expense, in return for a 99-year concession, pecuniary indemnity and guaranteed interest, a railway "which the needs of commerce imperiously demand." The State, the protector of commerce, was quick to seize such a wonderful opportunity and grant Shylock the privilege which he had solicited: "the privilege of ruining himself," cried the Jeremiahs, charged with proving to the public that Shylock had no other motive than an ardent love of humanity. Shortly afterwards, the Jew, finding the matter thoroughly good, and "eager of making the profits accessible to everyone,” forms a Company to which he sells, in return for a number of shares and a perpetual deduction from the net proceeds before any distribution to shareholders, his right to build and operate a railroad in the interests of commerce.

The plutocrat has no need to look for companies; they come to him by themselves. The public doesn't want any speculation that does not recommend itself with a well-known name. How many of these high barons of limited partnerships are there, who make their honourability a profession and a commodity, and who, after appearing for a moment on the lists of founders and first shareholders, hasten, once the company has been established, to cash their bonuses, to go elsewhere to trade in their patronage? half a cent at most for the whole of France!

And the public cried out, and the government repeated after: "There is congestion and suffering; the place is overcrowded, the public saturated; there is no more cash, paper is flooding us. Until further notice, the government will make no new concessions, authorise no share issues, or approve the statutes of any limited company. It will even do more: it will restrict, through the hindrance of its laws and regulations, the limited partnership itself.

Imbeciles! your ecus have sunk into Shylock's cashbox, from where they will only come out to favour your carryovers, accelerate your ruin, repurchase your shares at a low price, even if it means returning to the masses with little noise, as the water from the springs returns to them in the form of rain.

The man of ideas is Panurge, Scapin, Figaro turned speculator. He has an elastic conscience and a mocking spirit. He knows all the resources of demands and canard. He's as happy with success in wit as he is with the profits from his mystifications. He is a master in the art of making the premium. Listen to this apologue:

A certain adventurer in an African city, in search of an idea, like so many others, rises one day all radiant, and striking his forehead: - I've found it, I've found it! he cries out like Archimedes. He brushes his shabby suit, polishes his valve boots, puts on white linen and sets off to see the governor. Moral concerns have brought him near the authorities," he says. The honest inhabitants of the city are outraged by the audacity with which prostitution is spread. He's not afraid of being contradicted by his fellow citizens when he asks that a decree quickly relegate the bawdy houses to a certain isolated, almost deserted neighbourhood, where the scandal will have no witnesses. The civil servant, family patriarch and moral guardian, speculator as well, promises to take care of the matter as soon as possible.

Our man runs to a banker. - I need a guarantor," he says, "I'm not asking for money. And he explains to the financier his approach in the interest of morals. - This is pure gold," replies the latter. Attention!

The three powers working in concert - the administration, speculation and the bank - on the day the purifying edict was issued, our adventurer found himself the leaseholder of the entire street assigned to girls' houses.

Ignoble, you may say, in both invention as in style. - Indeed! candid reader, we could attach a proper, glorious name to the yoke of this truthful history. We know the banker who provided the guarantee and received, for his share of the profit, 9,000 fr. It was he himself who told us the anecdote.

Here's yet another one, of which we can guarantee the authenticity.

- What are you thinking, my dear, of leasing at such a high price a road that does not cover its costs?

The questioned man laughed under his breath. - It may be a bad deal, he replied, but I'll take the risks.

After a while, the extension of the railway in question gave the head of the line a considerable importance; the necessities of the service demanded the cassation of the lease. Our farmer invokes the respect of agreements. However, in the public interest, he agrees to make a sacrifice. The lease was annulled in return for compensation of two million.

- If only I'd had that idea! cried the speculators with admiration.

Coulissiers, their noses to the wind and their ears to the lookout, have seen several bigwigs in conference and talk with a discreet tune. - There's news, they think. And they're off in quest of the mystery, each to his own. Happy is the one who first discovers the pot of roses!

The news, which only asks to be discovered, soon becomes the secret of Polichinelle. Only each investigator, convinced that he alone has knowledge of it, operates with confidence. There are two or three hundreds of them in the same matter, and seeing the unanimity of their tendencies, they begin to suspect the truth. Shylock and Figaro needed to produce either an increase or a decrease; the coulissiers have fallen fully into the trap. By the current end of the term, they will pay or be executed without remission.

There is chatter about a merger of companies, an increase in concessions. - Good! the shares will rise; it's a case of playing to the increase; only let's wait for the news to take consistency.

One day, the rise is characterised very clearly; it's time to buy; the symptom is decisive, the merger is certain. And the purchase requests pour in and drive up the price of the shares. Finally, the big day arrives: the merger is no longer a hypothesis, it's a fait accompli, official. The great liquidation! But now the shares remain stagnant; they're even trending downwards. Poor dupes! The deal was discounted when you decided to speculate.

"The first political mystification of which memory was kept at the Stock Exchange took place under Queen Anne. One fine day, a well-dressed man appeared on the royal road, galloping at full speed. Prodigal with his mount and spurs, he had all the barriers opened in front of him, and loudly announced the Queen's sudden death. The news flew from east to west, from south to north. Swift as a will-o'-the-wisp, it reached the city, crossing the solitudes where so many palaces now stand. Funds fell with a rapidity proportionate to the importance of the news."

"Of all the false news, none was more frequently widespread or more favourably received than that of Napoleon's death. There was, amongst others, one occasion on which this rumour was universally accredited. Lord Grandville received a message announcing it and specifying all the circumstances. There were no doubts, funds rose, and the news spread everywhere. The story put into circulation had a certain romantic character entirely in harmony with the acts in the life of the hero whose end it revealed. It was said that Napoleon, having convened a council of war to which he had called one of the desert chiefs, who had shown him some attachment only to better assure his vengeance, this barbarian had assassinated him in full council.

" It is worthy of remark that this fraudulent invention was not imputed to the people of the Stock Exchange, but to two state speculators, assisted by members of the House of Commons. Although the regulars of the Exchange were innocent of this deception, they nonetheless bore the consequences that resulted from the fluctuation of funds, and several were ruined by the ingenious kindness indulged in by the state speculators and the members of the Lower House." (London Stock Exchange, passim.)

Who does not remember the famous message from Tartar on the capture of Sevastopol! The sovereigns congratulated each other; the whole of Europe was deceived for twenty-four hours.

When Shylock and Figaro coalesce in a matter, you can expect a complete sweep.

"The capital of a mining company was divided between fifty owners, who deployed, in their warnings to the public, all that is most ignoble in the art of puffing. They announced that the most ordinary utensils used by the peasants of the area were made of silver. There were only 99 open mines throughout the district, and the company proclaimed that it had bought 360 of them. Another boldly claimed that in a country with no more than five thousand inhabitants, it owned 3,000 mines; and although the existing ones had been abandoned after a loss of 170,000 pounds sterling (4,250,000 fr.), they were nevertheless bought at a very high price. Thanks to this puff, the shares reached an enormous premium.

"Another mining company distinguished itself by the magnanimity of its sentiments. Its rules stated that none of its directors could be the owner of more than 200 shares; that all others would be loyally placed at the public's disposal, and that the strictest probity would dominate all transactions. Unfortunately, all these noble sentiments weakened as the company's power grew. Thousands of shares were divided among the administrators and carefully put under lock and key. A deliberation was passed exempting the company's directors and agents from making payments. After which, they entrusted the most respectable brokers on the Stock Exchange with the purchase of a thousand shares, which were paid for with the company's money. It resulted in a rise in the place, as a result of which they were able to sell all their shares at a premium. It was the same person who had sold the mines to the company who was in charge for providing information on their value. Although the mines were worth nothing, this accomplice didn't fail to make the most flattering descriptions of them. A mine not worth 10,000 fr. was bought for 275,000, and others were paid for at 3,025,000 fr. and found to be almost completely depleted.” (London Stock Exchange, passim)

In the shadow of these two powers, Fortune and Charlatanism, the common martyr loses or wins, depending on the odds. Thus a constant concert of murmurs and praises, in which each to his devotion exalts or curses the kings of agio. What does it matter to them? They can't hear what's being said below. Besides, won't today's malcontents be tomorrow's satisfied?

A man thinks he's clever because he's made a few good moves. By chance, he operated in the same vein as Shylock and Figaro; that's why he succeeded.

The big ones only associate with each other. Since every gain between gamblers and crooks supposes a loss, it must be someone who pays. That someone will not be the high underworld!

She certainly has her protégés. How can one refuse to warn one's doorman, one's servant, one's shoeshiner, one's friends, one's mistresses, one's doctor, one's journalist, one's boarders, one's impoverished, of the favourable moment? devoted clients whose zeal it is good to maintain, and who render so many services by their chatter!... We find an example of this in the Almanach of the Stock Exchange for 1857, an example too innocent for us to deprive ourselves of the pleasure of reporting it in our turn.

"It was only after the death of M. Laffitte, and then only through the noble indiscretion of his associates, that the many misfortunes that he helped in the shadows became known. Mr. Mirès closely follows this tradition. So many writers were pleasantly surprised to receive through the post this rich piece of news:

"Sir, I have the honour of informing you that I have granted you... shares in a company of..., and that I have sold them in accordance with your orders. Please, therefore, proceed to my cash desk to receive your profits, which amount to..."

"A host of traits of such good taste have assured M. Mirès so many devoted friends in the press and in the arts, that their gratitude imposes silence on the clamours of envy."

When Mr. Mirès, who today defends the austere financier with such comical dignity against the needy speculator, makes such mailings to the people of letters who cultivate his intimacy, is he giving them a lesson in morality, disinterestedness and civic virtue from which to learn? Is he, the entrepreneur of so many sponsorships, good and bad, in a position to justify his conduct? How could he! the promoter, entrepreneur, director and principal limited partner of a limited stock company, and when these shares, heated up by your newspapers, offer a 50-fr. premium, you allow yourself to sell them!

So you are not an entrepreneur!

You are not a serious sponsor!

And as a director and administrator of the company, you're failing in your duty.

Now, since you're no longer needy, and it's impossible to recognize in you the honest, austere financier you recommend, for another time, to the dramatic justice of M. Dumas, what are you then, Mr. Mirès?

The conclusion is clear. For the great artists of the Stock Exchange, like those of the Opera, must have a clique and a claque to silence the critics and put the speculators in heat; and the author of the anecdote, Mr. P. de F., could have done his job a little less foolishly. But once the play was performed, to hell with philanthropy: if you had to maintain all the minnows, where would the profit be? There's nothing for the imprudent to hope for in the event of failure, as the popular apologue teaches us.

The Coulisse, having flourished In full security, Found herself destitute
When the decline came.
No money, no more credit,
To pay, no respite.
She went crying out for hunger
At the Bank,
her neighbour,
Begging for a loan
A few sous to speculate with
Until the new rise.
- I'll repay you, she said,
End of next term, legal delay
Interest and principal.
The Bank is not a lender:
That's the least of its defects.
- What were you doing in times of plenty?
She says to this borrower.
- Every day, to all comers
I was buying, without displeasing you.
- You bought, I'm glad to hear;
Well, sell now.