For the warning of young men, I shall specify but two of the world’s most gigantic swindles—one English, and the other American. In England, in the early part of the last century, reports were circulated of the fabulous wealth of South America. A company was formed, with a stock of what would be equal to thirty millions of our dollars. The government guaranteed to the company the control of all the trade to the South Sea, and the company was to assume the entire debt of England, then amounting to one hundred and forty millions of dollars. Magnificent project! The English nation talked and dreamed of nothing but Peruvian gold and Mexican silver, the national debt liquidated, and Eldorados numberless and illimitable! When five million pounds of new stock was offered at three hundred pounds per share, it was all snatched up with avidity. Thirty million dollars of the stock was subscribed for, when there were but five millions offered. South Sea went up, until in the midsummer month the stock stood at one thousand per cent. The whole nation was intoxicated. Around about this scheme, as might have been expected, others just as wild arose. A company was formed with ten million dollars of capital for importing walnut trees from Virginia. A company for developing a wheel to go by perpetual motion, with a capital of four million dollars. A company for developing a new kind of soap. A company for insuring against losses by servants, with fifteen million dollars capital. One scheme was entitled: “A company for carrying on an undertaking of great advantage, but nobody to know what it is—capital two million five hundred thousand dollars, in shares of five hundred each. Further information to be given in a month.”
The books were opened at nine o’clock in the morning. Before night a thousand shares were taken, and two thousand pounds paid in. So successful was the day’s work, that that night the projector of the enterprise went out of the business, and forever vanished from the public. But it was not a perfect loss. The subscribers had their ornamented certificates of stock to comfort them. Hunt’s Merchant’s Magazine, speaking of those times, says “that from morning until evening ’Change Alley was filled to overflowing with one dense mass of living beings composed of the most incongruous materials, and, in all things save the mad pursuit in which they were employed, the very opposite in habits and conditions.”
What was the end of this chapter of English enterprise? Suddenly the ruin came. Down went the whole nation—members of Parliament, tradesmen, physicians, clergymen, lawyers, royal ladies, and poor needle-women—in one stupendous calamity. The whole earth, and all the ages, heard that bubble burst.