and consequently, could not pass it over without their usual " d—n all French cookery !" I felt constrained for the honor of the French cuisine to return the dinner, and that, too, in the house of the same restaurateur, Very, whose condemnation they had pronounced. When I was ordering the dinner at Madame Very's, formerly the mistress of Lucien Bonaparte, and dividing my attention between a pair of superb melons that lay upon her marble table, under a slight covering of gauze, and the heaving bosom of the hostess, half-screened with the same delicate tissue, where she sat behind the luscious fruit, I took care to intimate that the repast in question, was intended to show my English friends that there was such a thing as good eating to be had at Paris. That was enough! My guests slighted none of the numerous and varied dishes set before them, drank copiously, and with evident pleasure, and found themselves lighter and gayer after a hearty meal than if they had been devouring two or three pounds of roast-beef, and had emptied bottle after bottle of port wine. They finally con fessed, that " a French dinner was a very good thing, after all."
Among the countless numbers that Paris had attracted, at the time of which I am writing, was the American General Scott, the same who was lately a candidate for the Presidency of the United States. He had, during the three years' war with England, distinguished himself in various operations on the Canadian frontiers, such as storming a couple of forts, etc., and was looked upon by his countryman as a military star of the highest order. He was indebted to this circumstance for his mission to Europe, whither the government had sent him to enlarge the sphere of his military knowledge, and thoroughly study the art of war. He came to Paris with the idea, that the greetings of the great military leaders of the Continent, and the testimonials of their admiration, would be everywhere extended to him. In this, however, to his visible chagrin, he had been greatly misled.* In the vast collection of military celebrities then assembled at Paris, where, in one single circle, could be found the Duke of Wellington, Marshal Prince Blucher, and Schwarzenberg, the Russian Field-Marshal Kutusoff, the Generals Woronzow, Rostopchin, Tchitchagoff, and
all these remarbable personages, covered with military decora*-* See Appendix.
tions, stars, and orders, the long, thin American, in his simple blue coat, without embroidery of any kind, and distinguished only by a modest pair of epaulettes, could not expect to awaken any very great attention. But Scott could not dissemble the contrast between the part he had played in his own country, wherever he showed himself, and his present position, and frequently gave way to vehement, and sometimes even laughable exhibitions of temper. But one thing is certain, viz., that he felt and understood what he was worth; for in later days he displayed his not inconsiderable military and strategic capacity, on another theatre than the Canadian frontiers, that is to say, during the war with Mexico, in 1846 and 1847, when he attracted and fixed general attention.
I have already spoken of my return to Europe. It originated, chiefly, in the wish I felt to renew some former business relations which had been broken off since 1812, by the unexpected war with England, and to open a trade upon a secure basis with some of the European places whose commerce was the most important for New Orleans. In the French ports, people had not yet become sufficiently restored to consciousness; after so long a suppression of everything like the spirit of enterprise, they were still groping about in the dark. None but the shippers had begun to move. After a short visit, paid to my London friends, the Barings—upon which occasion a few lines from Mr. Alexander Baring, then at Geneva, informed me that I should most probably meet him in Paris—I returned to the latter city, and determined, in the meanwhile, to visit the south of France, particularly Marseilles, afterwards repairing to Bayonne and Bordeaux, and thence returning to Paris—From Marseilles I dispatched, to New Orleans, the first cargo of export articles that had left that port since the peace. I took my return trip through Nismes, Montpelier, Nar-bonne, and the Pyrenees, visited my friend A. P. Lestapis and his family at Pau, went thence to Bayonne and Bordeaux, and finally, in the month of March, met my patron and friend, Mr. Alexander Baring, at Paris. The consequences that followed the renewed interviews we had together were, that the blank credit for £10,000 opened in favor of my house, was confirmed, and, in
addition thereto, full power conceded to interest the London firm to double that amount in any safe local business.
It was just at this time, when the exhaustion of the French treasury, and the daily increasing necessities of the government, coupled with its utter inability to procure credit, was occasioning it the greatest embarrassments, to such an extent, indeed, that, to use a very common expression, "it could not help itself,"—that Ouvrard had an opportunity of again raising his head, and finding an appropriate field for the full exercise of his undeniably commanding financial talent. He had already carried on a correspondence, respecting the financial position of France, with the two heads of the Hope and Baring firms, with whom he was on terms of friendship. During the brief interregnum of the Bourbons, between the months of April, 1814, and March, 1815, when Napoleon threw France and all Europe into astonishment by his sudden return from Elba, he had used all the influence he still retained with Messrs. Hope & Co. to procure for Auguste Doumerc, the new Commissary-General, the funds he needed to carry on his business and fulfil his obligations ; but the Emperor's return brought about, as may readily have been foreseen, a complication in the business, which was conducted under the name of Doumerc, but in reality appertained to Ouvrard. Under these circumstances he could not extricate himself, either from the liquidation of his former liabilities, nor from those arising out of the business he had just been carrying on under another person's name : hence he was obliged to remain in Paris, subject to the imperious and arbitrary will of his old enemy, Napoleon. In the meanwhile the latter had found time for reflection at Elba; and if he had not become convinced of the injustice he had done to a man whom he had treated so inconsiderately and unmercifully, he had at least recognized the value of that man's financial capacity. Twenty-four hours in the Tuilleries had scarcely rolled by when Napoleon, although he found fifty millions of francs in the treasury, deemed it expedient to summon Ouvrard to an interview. The pretext put forward to account for this step was a proposition from the Emperor to send Ouvrard as his plenipotentiary to the Congress at Vienna, there to bring about a favorable change of opinion, in
the minds of Talleyrand and Metternich, respecting the resolu tions that were to be adopted by the Congress in relation to himself. Ouvrard declined this mission, and the real object of the interview w.as then brought upon the tapis, viz., the desperate want of funds felt at that moment. " Can you give me any money V! was Napoleon's question. " How much does your imperial majesty require ?" was the answer. " To begin with," said the emperor, "fifty millions of francs." " I could get that amount within twenty days, in return for five millions of Rente (of which the price was then fifty-three francs), to be given me at fifty francs, and under the condition that the treasury shall pay Doumerc, whose creditor I am, the fifteen millions it owes him." The agreement was at once concluded, and the terms drawn up on the spot, by a secretary of the emperor, the latter dictating every word, and signing the paper with his own hand ; for Ouvrard was unwilling to let it pass through the hands of the ministers," who had, on other occasions, signed so many of the emperor's decrees to his loss and overthrow. Napoleon—who had made himself fully acquainted with the condition of the public credit on the Paris Bourse—himself doubted the success of this proposition; but when Ouvrard continued, for seventeen days, to pay in two millions of francs daily to the treasury, he could scarcely master his astonishment. This was perhaps the first time that he, who had never known any other way of filling the treasury, than by contributions from the countries he overran, and the taxation of his own subjects, formed a correct idea of the power of credit, and learned, by experience, that a state debt, even in a precarious condition of public credit, is still the very source from which to supply the deficiencies of public income.
Ouvrard was obliged to accept, under certain conditions, Napoleon's proposal to make him, once again, Commissary-General of the army. He followed the emperor when he set out with his army to the Belgian frontier; and, at Waterloo, was among his staff, and in his immediate neighborhood. Some time afterwards, when I had an opportunity of talking to him about the battle, he remarked: " I was there as a spectator of the finest drama I ever witnessed. The connection and succession of scenes moved on-
ward of themselves; the interest was fixed at the beginning, and sustained throughout to the very end—a deplorable one, if you will," he added, " for no one could see it more clearly." Ouv-rard was then, and always remained, what the French call " un aimable causeur"—a pleasant talker, and the gift of riveting the attention of his hearers remained with him to his latest years. I met with him again in 1835; and. when I last saw him in Paris, eleven years afterwards, he had reached the good old age of seventy-six. His appointment to the post of Munitionnaire-General of the French army, during the Hundred Days, he owed to the conviction Napoleon had acquired at Elba, that in him he would select the best, the proper, the only man who could make the equipment and victualling of an army embracing one hundred thousand men, possible, without immediate funds, and in this appointment, unwillingly made, as it was, beyond a doubt, for the force of circumstances alone had brought it about, lay the strongest acknowledgment of his merit, and the only satisfaction at that time possible for the injustice and ill treatment to which he had been subjected. But Ouvrard had still another recognition of his claim to deference and respect, when Napoleon, in the midst of his preparations for departure to another hemisphere, offered him 1,400,000 francs of Rente for bills on the United States, to the amount of fourteen millions, the Rente to be taken at fifty francs. But, Ouvrard foresaw that, after Napoleon's flight, the Rente would be disputed, and consequently declined the propo sition.
The restored government of Louis XVIII. had to contend with unusual difficulties, in raising the funds that were absolutely necessary for not only the royal coffers, but for the payment of subsidies and the support of the foreign armies. The extremely impolitic measure of a forced loan, to the amount of one hundred millions, resorted to, could have no other consequences than to close the door upon all return of confidence. Ouvrard, who, as I have elsewhere stated, had busied himself as early as the year 1814, with all kinds of projects, in order to meet the wants of the government by foreign loans, now came forward with fresh propositions, and found means for executing the plan he conceived
of first acquiring the confidence of the Baring house, and then, as a natural consequence, that of Messrs. Hope & Co., in Amsterdam. The latter had, in a measure, become a branch of the Baring concern. The downfall of Napoleon's empire in 1814, had presented to this celebrated house, which, for five years past, had been subsisting only for the liquidation of the various state loans undertaken by it, an opportunity of at once resuming all its former importance; but the partners, who were then living in England, manifested but little disposition to do so: Mr. A. Baring, who fully comprehended the magic influence of so illustrious a mercantile name, and had learned from past experience to appreciate the scope and extent of its activity and effectiveness, resolved to buy it out, under the condition that the old, original firm should be maintained. He overcame the reluctance of his brother-in-law, Mr. P. C. Labouchere, who had been intrusted with the business management of the concern, to undertake it again, and the latter finally consented, expressly stipulating that he should be allowed to select an assistant: the desired aid was found in his friend, Mr. Jerome Sillem, who had formerly lived in Hamburgh, and just at the period in question, was on his return from St. Petersburgh, where, during Napoleon's Russian Campaign, he had found an opportunity to reestablish his fortune which the times had greatly impaired. Mr. Baring reserved for himself a third part in the new house of Hope & Co., and the other two thirds were divided between the brothers P. C. and S. P. Labouchere, Mr. Jerome Sillem, Mr. Van der Hoop of the former house of Krusen, at Amsterdam, and Mr. P. F. Lestapis, a younger brother of the Mr. A. P. Lestapis, whom I have so frequently mentioned; this young man had been reared to mercantile pursuits by Mr. Labouchere in Holland. Mr. Thomas Baring, one of the present heads of the Baring house at London, also took part in the management of the Hope concern, as did John, the younger son of Mr. P. C. Labouchere. Ouvrard, who was, unweariedly, following out his plan, had, as I have already stated, been carrying on a lively correspondence with Mr. Alexander Baring to the effect that the French government would certainly, sooner or later, be driven to the necessity of making
heavy loans, in order to meet the enormous burthens laid upon it daily for the maintenance of the foreign garrison, and annually, by the contributions it was compelled to pay to the allies, for the space of five years. The main point on which the success of Ouvrard's project depended, was the confidence of the English capitalists and no one possessed a surer key to this than the house of the Barings. Its proverbial honor and foresight alone could have given due weight and influence to the example it set of confidence in the financial position of France, and open the way to the London money market. Mr. Alexander Baring, who perfectly understood this, determined to travel through France, in all directions, particularly the southern part of that country, in order to learn by personal observation the feeling of the people, their tax-bearing capacity, the regularity with which the taxes were paid in. It was just after his return from this tour, that we met again at Paris.
I might here take the liberty of conducting my readers back to the thread of my own wanderings and adventures, did I not preserve a lively recollection of the promise made to them in my preface that I would lay before them some hitherto unrecorded traits and anecdotes from the lives of some of the remarkable characters of my time, with whom, I had an opportunity of personal acquaintanceship, and likewise to analyze for them some of those curious events which I had a better chance and means of observing than most of my contemporaries. A peep behind the curtain was not, at that time, granted to every one, and I have survived the majority of those to whom it was conceded. For this very reason I consider it a duty to leave no omissions in my narrative.
The financial embarrassment of France, at that time, may very probably have arisen from the fact that the stipulated yearly contributions demanded a sum of 140 millions of francs, and the yearly expense of maintaining the foreign army of occupation reached 160 millions. For such an extraordinary burthen as this, which France had heaped upon her shoulders, all means were lacking. An interruption, if not stoppage of payment, was unavoidable, and as will be afterwards seen, it did not fail to
come. The man who possessed the unconditional confidence of all crowned heads was the Duke of Wellington, and the first deficiency of the required funds awakened his dissatisfaction ; or, rather, his very deepest anxiety. All applications for loans, which it was deemed necessary to make in a measure corresponding with the extent of actual necessities, were fruitless. Curvetto, the minister of Finance, reaped the bitter experience that he could get nothing from the Paris Bourse, that is to say, from the financiers of that city, for no one offered or was willing to take the new emission of State paper. After Ouvrard had secured the consent and co-operation of Messrs. Baring and Labouchere, he succeeded in persuading the Duke of Wellington that all difficulty in procuring means to support the foreign troops must cease, whenever the Allied Powers would come to an understanding to accept French State paper in payment for the expenditure occasioned them, and then sell the same paper through their own confidential agents,—a position for which he proposed his friends Messrs. Baring & Hope. That these houses* possessed the means of making advances, on account of this State paper, until the favorable moment should arrive for selling it again, could not be doubted, and that their appearing in the matter would awaken and gradually bring back the confidence of capitalists, both in and out of England, could be predicted with considerable certainty, and that the maintenance of the prices of the State property, the power to sell and the choice of the moment when to do so should be intrusted to one hand alone, was perfectly clear. The combined strength of these three foundation pillars of the whole measure did not escape the Duke of Wellington, who, up to that time, had doubted the possibility of selling such a mass of French State paper, under the guaranty of an English house. After twenty-four hours delay for reflection, one point was gained ; the Duke, fully convinced that the whole project was feasible, assured Ouvrard that he had no doubt whatever the other Powers would follow his example. The Duke had conjectured rightly. After a brief trip to London, he lodged in military fashion, on his return, at Ouvrard's own house, in the
Champs Elysees, and the latter in compliance with his request, on January 8th, 1817, gave him a note developing and unfolding the whole plan. It was received on the same day by the ambassadors of all the Powers, and communicated to the latter by express couriers. Messrs. Baring & Labouchere had, in one of their last communications, declared that they were afraid of obstructing the course of the affair by their interference, and would therefore, keep aloof from it until they should be summoned by all the interested parties,—the French Ministry and the Allied Powers,— to repair to Paris. Ouvrard had, in his letters, affirmed that the Due de Richelieu and Corvetto, the Minister of Finance had, after accepting his propositions, jointly requested him to invite Messrs. Baring & Labouchere to Paris. The result, however, proved the incorrectness of this declaration, as would in fact, appear from the very face of it, since Ouvrard was in no need of any request of the kind, being too much interested in the affair to have delayed such an invitation. It is certain that he sent his open letter, to this effect, under cover to the French Ambassador in London, the Marquis d'Osmond, and that the latter thus found himself compelled to take up his pen and confirm the invitation of the Due de Richelieu to the two gentlemen. As they could not now have any further doubt, they informed Ouvrard on January 14th, 1817, that they would be in Paris within a week. When they did arrive, they at once waited upon the Due de Richelieu, without letting Ouvrard know. The Due was taken by surprise, and did not hesitate to declare that nothing had yet been definitively settled upon, and that he had, in no manner whatever, authorized Ouvrard to give the invitation in his name. Ouvrard was now summoned, and they began to reproach him. He confessed that the Due was right; " But," he added, " as I knew that there was no other way of getting you to come here, 1 resorted to this method; however, now that you are once here, in Paris, I will pledge myself, that you succeed!" I am indebted to Mr. Labouchere himself for this anecdote; that gentleman used to tell it over with evident pleasure, whenever the occasion to do so offered. Moreover, Ouvrard kept his word. A few
12
days afterwards, when Messrs. Baring and Labouchere expressed the wish to purchase the French Rentes themselves, rather than to act as salesmen for the Allies, a contract was made directly with them for six millions of Rentes, or 120 millions capital, at 53 francs 85 centimes, whereby the government was enabled to handle the sum of 64,620,000 francs towards meeting the expenses of the foreign troops. Soon afterwards, a further contract for 30 millions of Rentes, at 57 francs 51 centimes, or 545,035,000 francs capital, took place between the government and these gentlemen. This made the Rentes rise at once, to 64, then to 68, and at last to 72 francs, and by taking 68 for the average price, the speculators won nearly 8 millions of francs by their operation.
The reader will learn with regret, that Ouvrard, himself, to whom the whole combination was owing, and who had been the real originator of this immense scheme, as well as the agent by whom it was carried into operation, to the relief of the indescribable embarrassments that overwhelmed the French Treasury, by re-awakening the confidence of English financiers, and attracting their capital,—that this man, I say, came empty-handed out of an affair that created such advantages for others. When the first contract was concluded with Messrs. Baring & Hope, a good amount of Rentes was made over to him at the same price of 53 francs, as a quittance for all the deliveries made, or to be made by him to the Allied Army of Occupation, and those gentlemen had in consequence of this, reserved him no place on the list of their subscribers. But the French Minister of War, the Due de Feltre, availed himself of the arrest of M. Doumerc,—in whose name the whole business of supplies, &c, had been carried on,— as a pretext for refusing to sign this arrangement; the government, he said was defrauded by the sudden rise of the Rentes, and all that Ouvrard could do, or say, to change his resolution, was of no avail. It really seems as though fate had decreed that this extraordinary man should be left dangling to the long chain of his financial entanglements, and yet, he invariably rose to the surface again, as the indispensable person wh:> had to extend a
helping hand to every government from the commencement of the Empire, up to the termination of the Bourbon regime. He was, in his career, a living example of the words which Lessing puts into the mouth of the Countess Orsina, in his Emilia Galotti: " Let the Evil One get hold on you, but by a hair, and you are hh, forever!"
CHAPTER XV.
THE BATTLEFIELD OF WATERLOO.—THE COTTON-MARKET.— FRANCIS BARING.—REMODELLING OF THE BARINGS' ESTABLISHMENT.
Departure from Paris—Brussels—Visit to the Field of Waterloo—Costa, Napoleon's Guide, becomes mine—A short visit to Hamburgh and England, on my way back to the United States—Embarkation at Liverpool—Pit-cairn, the former American Consul at Hamburgh, with his newly-married Daughter and Son-in-Law, are my travelling Companions—The first Heart outpouring of the fond wedded pair, upon our arrival at New York—Journey overland to New Orleans—The Scotch Houses in New Orleans—Their policy on the Cotton Market, and mine—Trip to Europe in the Summer of 1819—The Congress at Aix, in 1818—Crisis in the Money Market— Berenbrook, the Dutch Speculator in Funds—Alexander Baring rescues the Paris Money Market from the consequences of the Crisis—Enormous Business of my House in New Orleans—Its preponderance in the Cotton-Market—Arrival of Mr. Francis Baring, then the Junior, now the Senior Partner of the London House at New Orleans—Sketch of some of that gentleman's peculiar Traits of Character—Death of Mr. S. C. Holland—Remodelling of the Baring House—Entry of Mr. Joshua Bates into it.
I now return from this digression to my own history, the thread of which left me at Paris with Mr. Alexander Baring. Busied with my preparations for a speedy return to America, I took my leave of this remarkable man, and departed to pay my friends at Hamburgh, and my parents at Ratzeburg a short visit, before leaving the continent of Europe. My road lay, as usual, through Brussels, which, only a few months previously, had been the very centre around which thundered all the martial tumult, where the political fate of the continent was fought for and decided. Nine months had now elapsed since the battle of Waterloo had
settled this great question. On the very day after my arrival at Brussels, I had a chance to visit the field of battle. A fortunate chance brought me for a cicerone, the same peasant, Costa, whom Napoleon found at Charleroi, on the evening before the battle, and took with him to his head-quarters as a guide. All the different narratives of the battle which I had collected and read, the plans and maps I had carefully studied, and a panoramic view of the field I had procured in London, had stamped themselves so vividly on my memory, that I had scarcely reached the scene, and alighted from my vehicle, ere I found myself quite at home. Not a hillock, not an unevenness of the ground, not a clump of trees, not a hamlet in the neighborhood, or far away, that I had not named at the first glance. Costa, who had to keep the description he had learned by heart, to himself, at length remarked that 1 did not require his services, if, as he was led to suppose, I had myself been present at the battle. I acquainted him with the truth, and greatly enjoyed his contradictory answers, when I questioned him in regard to certain points of detail. Thus, for instance, I found myself much more at home than he was, in the Castle of Hougoumont and its garden, where the marks of destruction were still so distinctly visible, for he had been beside the emperor all day, until the hero of the age was, for the second time, compelled to seek safety in flight. When Costa — this was his own story—having been placed among Napoleon's staff, rode with him into the first fire of the English batteries, he laid himself with his whole body lengthwise and as close to the animal as he could cling, upon his horse's back, so that the enemy's balls might not hit him. When Napoleon saw this, he called to him with a smile. " Get up, you silly fellow! you cannot avoid the ball that is destined to strike you, no matter how you try to do so!" "And he was right!" added Costa, "for here I am, you see." From the causeway of La Haye Sainte, we rode along a hollow, sheltered on either side by hills. I here asked my guide, if this were not the spot from which Napoleon observed the last onset of his guards and cuirassiers, under Ney. " You are on the very ground !" he said, " it was precisely here!" I then asked, "What did he say 1 ? what did he do?" "Not
much !" rejoined Costa, " he looked once more through his field-glass, then he said : ' They are in confusion—all is over—let us go !' " We then took the track right across the field to Charleroi, dashing along as fast as our beasts could go, and when we reached the place, an aide-de-camp flung me a double Napoleon, with the words: 'To the d—1 with you !' or something worse."
In Hamburgh I found all my early friends, with few exceptions, and at Ratzeburg my parents met me in good health, contented and happy. After opening the way to some business connections, I again set out for England, where some consultations in regard to a definite understanding respecting the foundation of future business combinations, rendered a brief delay necessary, for the time had at length arrived, when I could step forward as an independent merchant, in the true sense of the word, and take my place on the stage of the commercial world, whose central point was, at that time, more than ever before, in the English money-market. In consequence of the war between the United States and England, more than four years of my life were sacrificed, exactly at the time when my activity should have developed itself, and the gradual return to that extended commerce from which the European continent was shut out for so many years, and of which the mercantile classes had already availed themselves for about eleven months, namely, from April 1814 up to March 1815, remained, during that time, a sealed book to the American merchant. Hence, there was created a gap in the experience of the latter, which could not be filled by ordinary minds, and much striking in the dark was, consequently, unavoidable. The first idea of a regular line of packets, to run between New York and Liverpool, once every month—a passage now made by vessels sailing every five days—had not yet been put in execution, and I was compelled to embark on a merchant craft, the Minerva Smith, for New York. The voyage lasted for the unusually long period of fifty-seven days. Among the passengers was the former American Consul at Hamburgh, a Mr. Pitcairn, who was accompanying his newly-married daughter* and her husband to America.
* The mother of this young lady was the celebrated Pamela, the second foster-daughter of Madame de Genlis, who had married the Irish rebel, Lord
A doub'e application of the words " newly-married," may be allowed me here, since the young couple had been joined in wedlock, on Saturday, at Edinburg, and, immediately after the repast usual there on such occasions—every one knows what a Scotch breakfast is—had started with post-horses for Glasgow, and having there learned that the ship on which they intended to embark, would sail on Monday, continued their journey to Liverpool without stopping even over night, and had gone immediately on board on Monday afternoon. About two o'clock,we put out to sea. The young couple at once attacked with sea-sickness, retired to their stateroom, and the overflow of their affection was lost in the nausea of the sea, for during the whole long voyage they did not show themselves again. It was only when we had arrived off the coast of New Jersey, and took on board a pilot, and were leaving the Sandy Hook lighthouse, at the entrance of New York harbor, behind us, that they once more appeared on deck. The young bride, intoxicated with delight, sat down near the cabin stairs, her husband followed her, and when he got near enough she flung her arms about his neck and exclaimed, with an expression of deep
longing: " Ah, dear S , (I omit the name purposely), how
happy it would make me now, if I only had a slice of fine Hamburgh bread, with fresh May butter, and a morsel of Brunswick sausage!" That the joys of the honeymoon, passed at sea, could concentrate themselves in such a wish, occasioned me some little surprise, which my readers may share, when I assure them that in this instance, as in all others, my narrative is but the mirror of historical truth, and not the channel of fiction. When Goethe wrote the words: " A spectacle for gods, to see two loving ones!" he, most assuredly, did not embrace either the beginning or the end of the sea-voyage these two " loving ones " made, in his keen poetic view.
I did not remain long in New York and Philadelphia upon this occasion. 1 determined to travel through Virginia in every direction, so as to form a correct idea of the extent of the tobacco crops there, and traversed the so-called Kentucky wilderness to
Edward Fitzgerald, and, after his death in prison, at Dublin, had fled to Hamburgh, where she became acquainted with Pitcairn.
£?2 SCOTCH HOUSES IN NEW ORLEANS.
Nashville, in the state of Tennessee, from that place to Huntsville, and thence back again to Nashville and Kentucky, embarking, at Louisville, on board of a newly-constructed steamboat for New Orleans, where I once more found my partner, enjoying good health, after an absence, on my part, of nearly two years. During this interval several Scotch houses had been established in that city, having opened there w T ith large assortments of manufactured goods, whose proceeds they had expended in the purchase of cotton. This trade continued. One of the most respectable of those who had previously lived in the city, himself of Scottish origin, but born at New Orleans, and formerly a ship-captain, Thomas Urquhart by name, who had visited the land of his parents, and long resided at Glasgow, gradually opened the way for these establishments to extensive credit, by his exaggerated account of their boundless means, and in this way they found themselves enabled to employ their bills on England, and proceed with their purchases of cotton. These representatives of the Scotch houses transacted business on a systematic plan, arising more out of an instinctive feeling of their common interest than from any regular arrangement entered into between them, and endeavored to bring down the price of cotton, and keep purchasers aloof, by circulating unfavorable news concerning the posture of the factories at Manchester and Glasgow, and the lack of demand for spun yarn. When orders, at fixed or unlimited prices, fell into the hands of the few commission houses then established at New Orleans, they had to be filled at all events, and these manoeuvres were of little avail; but in every other case, where a suddenly awakened spirit of enterprise raised its head, or where returns were to be made to Europe for goods, they managed to work upon the market, and in many instances to frighten off intended buyers. Excepting these branches of Scotch houses, no one in New Orleans was acquainted with the English cotton market as it really was, and the Havre market, which subsequently became so important, was then in its cradle. But the credit which these branches procured abroad, at New Orleans, Charleston, Savannah, and other ports of the United States, was not always well deserved. Their capital was usually borrowed, on three or four signatures, from the
banks, through the influence of the central capitalists in Glasgow. The nine and twelve months notes given in return were, every time they fell due, renewed, for a moderate payment of interest, and thus, by means of fictitious capital, a competition was kept up for years in the foreign markets, whose origin was owing, not to any natural relation between production and consumption, but to mere speculation alone. The young men, who were sent out from Scotland to carry on this business, were, generally, men without means, but intelligent, to whom a share of the profits was allowed, as a reward for their exertions, under the condition that they should bear the pro rata of interest accruing on their quota of the money made. This figured as theirs* article on the debit side of their account current books, while on the credit side they were at liberty to note the profit ^ot yet realized. In case the busi ness lost, in the course of the year, instead of gaining, the debtor liability of the original interests embarked was increased by the respective shares of the computed loss, and the agents, thus hav ing to look to the principal of the house, were obliged to remain satisfied with the honor of seeing their names in the firm, and yet usually remained indebted to the central house. I have, in the course of my life, known several meritorious young men, from Scotland, who were destined to remain for long years the victims of this cheap and convenient method of securing effective and faithful agent-clerks.
My partner Hollander had no experience in these things, usually paid very little attention to what was passing around him, and was prone to the error of taking every man to be honest until he had proof to the contrary—a very costly system to go upon in a region such as Louisiana was at that time. This sort of proof, too, is seldom obtained without having first been paid for, that is to say, by one's own experience. Hence, in America, as well as in Paris, the best and least expensive rule is to prefer proven honesty to a mere reputation for the possession of that virtue. My companion, a most honorable man, who never allowed an unworthy thought to arise in his own mind, could not presume the existence of base motives in others, whom he looked upon as friends; and hence it was, that in the discretionary orders for cot
12*
ton my house received, he made his own judgment subordinate to the expressed opinions of the Scotch agents who surrounded him, and whose society he liked. I had left England but a few months previously, and having foreseen an inevitable rise in the price of cotton, wrote from New York, as I soon afterwards repeated from Louisiana, that it would be advisable to lay out some money for cotton on our account, in anticipation of this rise. My letter contained the sentence, " Perhaps later advices than this letter contains may have arrived direct from Liverpool, and they must not be neglected by any means." The contingency thus hinted had really occurred; the later advices—later by a few days—had represented the Liverpool market as flat, but prices had not receded. Hollander conferred with his Scotch friends, and they, probably instructed by their leading houses in Scotland, repeated the usual song, and declared that cotton yarn was without demand, and that he ought not to think of buying. This was enough for Hollander, and he folded his arms. When I arrived my first inquiry was, " Have we been buying V " No!" was the reply ; " cotton is down in the English manufacturing towns, and the English houses here are not moving." It was only when T remarked that a local rise ot price was unavoidable, if we waited „o hear better news from Liverpool before touching the article, that my associate perceived how he had sacrificed his own judgment. The first squad of cotton brokers called upon me on the morning after my arrival. Already acquainted with the nominal prices, I asked what was in the market. " We can offer you," said the brokers Dubuys & Longer, " two boat-loads of the best planters' marks, from the Opelousas district, at sixteen cents, each load consisting of about 400 bales." I examined the samples they had brought, the quality was good, and said that I would take both loads. At that time such a purchase was sufficient to excite remark, and the so-called English, but, properly speaking, Scotch houses, were full of curiosity to know the man who could venture, against their notions, to make so heavy a stride into the market. Two days afterwards these gentlemen began, quietly, to make certain bargains of their own, notwithstanding the discouraging news they had received from "our folks," as they called the leading houses at home, and reg
ularly continued their purchases from time to time. The ice was broken, and my Scottish neighbors were speedily convinced that every attempt to make me dance to their music would signally fail. My position in the cotton market now became, step by step, more influential; whether I would buy, and when, or how, was, for many years afterwards, a matter of calculation which my competitors could not leave out of sight, and which often led them into false conclusions.
In the year 1818, my house was the first that sent out printed advices in relation to the eventualities of the cotton market and the crops. The meteorological weather tables had given me the idea of getting up one similar to them, which should exhibit the course and fluctuations of prices, from week to week, during the shipping period of three successive years, and designate the difference of exchange, each time, by black, red, and blue lines. These new tables were very successful, particularly among the French speculators in cotton,.and led to many commissions from Havre, Rouen, and Switzerland.
In the summer of 1819, I again visited Europe. It was for both the commercial and political relations of that continent, an epoch of the greatest interest, when business had just begun to recover from the consequences of the crisis that had arisen during the preceding year. France, at least, had, through the loan of 27,238,938 francs, 5 per cent, rente decided upon by the congress of crowned heads at Aix, and taken by the Barings at 67 francs, freed herself from the burthen of the sanitary cordon, which the leaders of the holy alliance, Russia, Prussia, and Austria, had inI:ended to maintain, for five years, along the northern and northeastern frontiers of France, with an army of 50,000 men, each. But the Paris Bourse received some severe blows, by the fall of the State paper from 67 to 58, and was indebted for its rescue only to the coolness of Mr. Alexander Baring, as I have elsewhere related.*
Besides the fall of 30 per cent, in the price of goods, and the sudden reduction that succeeded it of four millions of pounds ster-
* In No. 24, of the " Deutschen Freihafen," for 1848. See my article on " Lord Ashhurton nnd the Baring house at London."
ling, in the English paper circulation, on the part of the London Dank, it was the mad enterprises of sundry speculators in the funds in London, and particularly at Paris, that opened the way to the crisis of that time. For an example, I need refer only to the Hollander Berenbrock, from Amsterdam, who possessed a capital of perhaps half a million of francs, and had purchased five millions 5 per cent, rentes, or one hundred millions of capital on credit, then, as a millionaire, had procured an advance of one hundred and fifty or two hundred thousand francs each, from seven or eight bankers, and in this way paid up his interest for several months in succession, calculating that a rise in the rentes of 1 per cent, would make him a million better; of 2 per cent, two millions, and so on ;—but the funds fell more than 8 per cent., and Berenbrock remained nearly eight millions in debt to the Paris bankers and " agents de change." The Bourse was full of similar speculators, even if all of them did not give their enterprises the same extension: and it may readily be imagined what an effect large sales of rentes, following each other in rapid succession, must necessarily exercise upon its currency on change. The loan taken by Messrs. Baring & Co. was concluded in two portions— one of 14,925,500 francs, at 66 francs 50 centimes, and the other of 12,313,438 francs, at 67. The rente fell to 58 francs before the contracting parties had the last portion in their hands. The whole Paris Bourse was violently agitated—the contractors saw that, under such circumstances, the strength was lacking to sustain so heavy an emission of State paper, and that there would be any number of failures in case a further sum of two hundred and forty-six millions were put in circulation. Thus, pretty nearly every one lost all presence of mind; but Mr. Alexander Baring retained his. He persuaded the Duke de Richelieu to annul the contract for the last half of the loan, and likewise prevailed upon the bankers associated with him to relinquish it, on their part. Yet, it was not merely his powers of persuasion that brought about this result. The majority of the ministers of the allied powers, present at Aix—Mettemich, Nesselrode, Hardenberg, and others—had desired to participate in the loan, and there had been an understanding to that effect. When the rente fell, Mr.
Baring desired that they should make their payments themselves, but they lacked the means—they had counted upon the profits and not upon the risks of the venture. A hint was then thrown out that they should be released from their obligations, if they could prevail upon the Due de Richelieu to accede to the measure I have mentioned. The Congress of Plenipotentiaries bade and Richelieu obeyed.
The sudden reduction by the London Bank of four millions of pounds sterling, in the English paper circulation, had given the first blow to the prices of goods in the commercial market. The rapid and progressive extension of trade, upon the re-opening of its channels after the year 1815, had given rise to a certain disproportion between the general consumption and the requisite supplies : the origin of this disproportion lay chiefly in the want of accurate knowledge respecting the nature and extent of these two elements of commerce. The rapidly returning and daily increasing prosperity of trade had manifested a continually upward tendency for two years and a half—and thus the turning point had been nearly approached, where that inevitable reaction must begin, which human affairs cannot always escape ; but people had not yet discovered the method of establishing a balance between consumption and the eventualities of production and supply.
This was the posture of the European market, when, after pass-ing the winter of 1819-20 at Paris, I again embarked in March, of the latter year, at Bordeaux, on board of the French vessel " La J eune Corinne," direct for New Orleans.
The business of my house had very importantly increased. In opposition to the six, seven, or eight thousand bales of cotton, which most of the houses in that city, styling themselves first class, used to purchase, my quota was seldom less than sixteen or eighteen thousand bales, which occasioned the transfer from hand to hand of at least a million and a half of dollars within a few weeks. The season of 1820-21 was a particularly successful one for my house. The most important commissions from France were, through the activity of our agents, concentrated in our hands, while the orders coming in from England, in addition to the business intrusted to us from the northern states of the Ameri-
can Union, had very considerably increased our purchases. As I was in a situation to calculate the general posture of things with considerable accuracy, and had, especially, noticed that the English consumers would not give up their idea, of the imposing influence of Liverpool prices on the American cotton market, and would not hear of the independence and self-reliance of the French, or rather Havre market, which several of the houses in the latter port were, in their fancied importance striving to make a marche regulateur; and that the cypher of English commissions, given under the anticipation of a heavy demand, might unavoidably remain far behind the prices they were inclined to pay in France, my course appeared to be plainly enough marked out, not only to open our market with a firm hand, but likewise to control it, so long as the mass of my commissions might authorize such a position. The policy of this initiative was, as may be seen, forced upon me by circumstances, unless I was willing to yield the precedence to the coalition of Scottish houses, and then follow in their wake, as an imitator and dependent. My requirements were altogether too important and continual to permit my appearing in the market simultaneously with them, and performing the part of a usual competitor, which would, moreover, have been impossible, without occasioning a ri&v*. in prices, and would so have restricted my sphere of operations. The state of uncertainty in which my Scotch neighbors remained, touching my means for buying, also assisted me. They had been accustomed to collect and prepare their resources for making purchases about the close of summer, and during the autumn months, and were aided in their operations by remittances of silver from the neighboring branches of their head firms, established at Jamaica and in Mexico. Thus it was prettily accurately known in the bank that they had money ready, in sufficient amount at least to pay for the first important purchases, and in this way they had acquired a certain preponderance in the cotton market. It will not be forgotten that I am here speaking of a period when the American cotton crops were very far behind the immense development they have since attained— amounting, in 1823, to 700,000 bales, and, in 1851, to 3,100,000 —and that the chief demand for the article was intrusted to but
it-T hands, the most of foreign, even of English nouses, concentrating their orders in ray establishment. The Scotch houses, four in number, were rather speculators for the account of their principals, than the agents of English manufactories, or other correspondents. As I have already remarked, the resources of these houses could be in some measure calculated, but of mine no one could form any correct estimate. My competitors indulged in the delusion that these means must be limited, and would soon be exhausted, as they had not been able to see or hear of any preparation beforehand. They thought they could impose upon all parties by assuming a commanding attitude, and so depress the market at pleasure, by merely abstaining from making their purchases. I was contented with being forgotten, and consequently kept my bank credit a secret.
The earliest batches of the new crop, from the neighboring districts of Pointe Coupee, Fausse Riviere, Lafourche, and Baton Rouge, regularly came into the hands of four different cotton brokers, whom I will designate only by the letters A, B, C, and D, and who watched each other with the greatest jealousy. The closing price of the last crop had been eighteen cents, and it was not deemed proper to take less. However, the planters were anxious to receive their money soon, but the regular houses were shy, and held back. The brokers thereupon came repeatedly to me. I spoke of fifteen, and at the farthest sixteen cents for the best quality. Finally, A offered his quantum at sixteen cents, if B would accede to the same terms. So, whenever B learned from me that A was ready to sell at that price, then he declared that he would not hesitate to do the same thing. I thereupon made an appointment to meet both these gentlemen the next morning, at the well-known cotton-press of Rillieux, and even prevailed upon C and D to come. These four gentlemen were true to the rendezvous, and I desired A and B to fulfil their promise. They did so; and, owing to the anxiety of the owners to realize the price of their cotton, it was not difficult to coax C and D to the same terms. Thus the whole quantity, viz., 2,000 bales, then in the market, fell into my hands, and the market was instantly cleared. Fresh supplies were hurried in with greater speed than
ever, for the planters at once found out who the purchaser was, and learned from experience, that they could get the highest prices from me that circumstances seemed to warrant. They therefore hastened to avail themselves of a price which went so far beyond the cost of production, and gave them such considerable profit. I also was enabled to continue my purchases, and the pick and choice of the new supplies fell without interruption into my hands. If I frequently held back from purchasing, and had noticed a decline of prices, I still followed them, and in their fluctuations, between fifteen and sixteen cents, always maintained a position where I was ready to buy at any moment. In short, during the most active shipping season, namely, from December until the end of March, there were but few purchasers who could call themselves masters of any considerable quantity, from time to time, when they felt disposed. I had already concluded my purchases, which ran up to no less a quantity than 40,000 bales, as early as the first days in April, when, at length, a serious competition broke forth, which called for sixteen and a half cents. The shipments of my house were by this time completed, had nearly all arrived, and been advantageously sold, while my neighbors were still operating in New Orleans. The result of this anticipation of the market was very beneficial, and established our influence with planters, as well as with our neighbors and competitors. From this I was enabled to deduce a wholesome lesson, to the effect that neither combinations nor coalitions, to violently raise or lower the price of any imported article, such as cotton, can possibly succeed, since it is not given to human foresight to anticipate and count up every circumstance which may unexpectedly overthrow all such combinations. How much I would buy, and how much I was to pay for it, were matters that must escape all the foresight of my competitors ; and it was precisely because they had tried to form their own conclusions in this respect, and had cast their conjectures in so wrong a direction, that it was so easy for me " to take the wind out of their sails," as nautical Englishmen would say. In the course of my life this item of experience has frequently been presented to me, without any participation, on my ov i part, as my readers will have occasion
to perceive hereafter, until at last, against my own convictions, and without either my will or my knowledge, I found myself involved in a combination of the kind, and became its innocent victim.
Just at this very time the present head of the Barings' house, Mr. Francis Baring, second son of the deceased Lord Ashburton, had arrived in New Orleans from Havana, and taken his quarters with me in my newly-built residence. We had nine large vessels receiving cargo at that moment, and he was evidently gratified when he took his first walk along the so-called Levee—the quay on the left bank of the Mississippi, in front of the town, where vessels load and unload their freight—and saw it strown, from the upper to the lower suburb, with cotton bales, on which were stamped the marks of my firm. Nothing could have given him a better idea of our activity, and he seemed to be pleased that he could take back with him to Europe a proof of it, like this one, from his own experience.
Since there can be but little that relates to this establishment, which occupies and has occupied so lofty a position, that is devoid of all interest to the mercantile reader, I may venture to say a few words concerning Mr. Baring, who was quite a young man when he visited New Orleans. I do so with the greater reason, that he yields a proof the more of the fact, how rarely the combination of qualities belonging to a distinguished father descends to his sons. Bountiful nature had endowed this man, destined at so early a period of life to become the head and manager of the London house, with so lavish a hand, that it might almost be termed spendthrift profusion, in summing up the list of capacities and talents he possessed. To his mental wealth belonged most unusual intellectual superiority, rare keenness of perception, and an almost instinctive penetration of the opposite and diverse characters with which he was brought in contact; to these was added a remarkable memory, which did not lose the minutest circumstance; an iron strength of will, whenever he had made up his mind to perform any act; a perseverance in carrying out his enterprises, notwithstanding every obstacle ; and, finally, the facility of expressing his ideas and convictions in a few words, and the knack of con-
veying the whole force and point of a close analysis, or criticism, in a happily selected phrase or two, which might be called " hitting the nail on the head." This latter talent, which is by no means an indispensable one, in the list of perfections desirable for a man of talent, nevertheless has ite value in dialectic debates, particularly on the parliamentary floor, where young Baring hoped to stand before any great length of time, and in all instances of common life where brief and rapid explanations are desirable. An example will suffice to illustrate this remark. Young Baring was travelling through the western part of Virginia, which was at that time peopled by the roughest class of Americans, and the vehicle he used was a very handsome and newly-varnished travelling carriage. In accordance with the favorite custom of these wild fellows, who usually carried a penknife or a nail in their pockets, one of the idlers, who stood and leaned about the door of the tavern, where he had alighted for refreshment, amused himself by scratching, with a nail, all sorts of ridiculous figures on the varnish of the carriage doors. Baring, who came out of the inn, and caught our friend engaged in this agreeable and polite occupation, the instant he saw what was going on, very sharply expressed his disapprobation. The loiterer responded, " Look here, Sir, don't be saucy ; we make no ceremony. T 'other day we had a European fellow here, like yourself, who was mighty saucy, so I pulled out my pistol and shot him dead, right on the spot. There he lies !" Baring rejoined, in the coolest manner imaginable, by asking, " And did you scalp him, too V* The American was so struck with this, and felt this reproach upon his savage rudeness so keenly, that, after gazing at Baring suddenly and earnestly for a moment in silence, he exclaimed, " By God ! Sir, you must be a clever fellow ! let's shake hands!" It would not have been easy to give a sharper lesson.
After entering the house of his father and grandfather, where he had the keen-sighted S. C. Holland, now deceased, at his elbow, the creation of the new London " Alliance Marine Insurance Company," formed his debut. He came to an understanding on that subject with the Rothschilds, and a most successful business was the result. He then visited Mexico, where he fancied he had
found a magic wand, one wave of which would bring him in a gain of two millions or more. The city of Mexico lies in the midst of a small lake wiiose shores furnish it with fruit, vegetables, milk, game, and other articles required for its consumption. It had become usual to assign an immense value to these lands along the lake shore, basing the estimate upon the idea of their being indispensable. Young Baring, already a member of the London House, had managed to quietly ascertain the price that most of the owners would accept for this important property and had bought it all up together. The exact sum has been differently represented, but it went over £200,000, of which the fifth part had to be paid in cash. Baring drew a single bill on his House for £40,000, at three days' sight. The draft quickly reached London, before the firm had the least knowledge of the purpose for which it had been drawn; yet, it was the true hand-writing of an associate of the House, drawn upon it by him; thus much was evident at first sight, and the House was bound to pay. Notwithstanding this, Mr. Holland, the gentleman already named as a member of the establishment, alarmed at the sudden appearance of a bill for such a sum, rejected it, but wrote concerning it to the father of Mr. Alexander Baring, who, fortunately, was in England at " La Grange," his country-seat, about sixty-five English miles from London. He at once declared himself personally responsible for all obligations entered into by his son, as a member of the firm, and the draft was paid. The whole business was disapproved of, as it naturally had to be, for no House in the world could find it convenient to bury so large a capital, all at once, and on uncertain time, in a distant part of the globe. And now the question arose how they were to extricate themselves from this involvement. They, at length, managed to get a law passed by the Mexican Congress, prohibiting any one, who was not a Mexican by birth, and did not reside in the City of Mexico, from owning landed property within a certain given distance of the capital. In this way, the whole purchase was made null and void; they made up their minds in London to let the £40,000 go and forget all about it, as they could not expect to procure any reimbursement from those who had sold the lands.
After his return from Mexico, Francis Baring visited Paris, where he came in contact with the head partner of the firm of Reid, Irving & Co., which, at that time, although very undeservedly, as the sequel has shown, stood in great repute. This was Mr. John Irving, who had one of the most narrow business minds I have ever known; he was among the personal friends and supporters of another Scotch house at Havre, the Messrs. Firebrace, Davidson & Co.; to whom, through the influence of the London firm, important consignments of raw sugar were sent from Gua-daloupe and Martinique. By the Vienna Treaty of 1815, these colonies, as every one knows, were restored by the English to France, but, as they had been in English possession for several years, and during that time had been permitted to enjoy equal privileges with the Colonies originally belonging to Great Britain, many of the plantations had fallen into the hands of English speculators, who determined to remain where they had settled. The consumption of sugar in France is almost exclusively based upon the production of these two islands; it has, of course, increased with the growth of population in France, and the fact, gradually, became evident, that the production of the French West Indies, at least with average crops, was no longer sufficient to satisfy the consumption, however confidently the legislators of France may have cherished the idea that the stimulus of an exclusive admission of French Colonial sugars, for home consumption, would contribute to a great increase of that production. It had been calculated that the 8,000 or 10,000 casks lying in the French ports, such as Havre, Nantes, Bordeaux, and Marseilles, might be simultaneously bought up and collected in one single hand, while, by means of orders sent off, before this general purchase, to the West Indian islands, the stock then disposable at Martinique and Guadaloupe might also be got hold of in the same way. Such a scheme was planned by Messrs. Firebrace, Davidson & Co. at Havre, and backed by a >series of calculations, which made it palatable to Mr. John Irving; Mr. Francis Baring was readily allured by this, and when it was communicated, at last, to Mr. James Rothschild, the latter declared his willingness to join in the plan of buying up all the sugar in France. The project
was accordingly carried into execution; but, when they came to sell again, unforeseen difficulties arose. The French sugar refiners would not purchase at the advanced prices any more than was absolutely necessary to keep their establishments in motion, and during the delay thus occasioned, it came out that the colonies of Martinique and Guadaloupe could send much more sugar into the market than they could have anticipated, notwithstanding the calculations they had drawn up with so much accuracy and care. What had, up to that time, been known but by few, and had always been kept a secret, was now made plain to everybody. As the markets in the French Colonies began to rise, the merchants in the neighboring English Colonies of Barbadoes, Antigua, etc., had managed to send a part of their supply to their French neighbors by a very simple and easy system of smuggling; and this additional quantity was shipped and carried to France, as the product of the country. Thus, more sugar came in than was required, and the prices could not be maintained. Messrs. Firebrace, Davidson & Co., who had made the first purchases on account of Messrs. Baring, Rothschild, and Reid, Irving & Co., had been allured into speculating largely on their own account, and, consequently, bought in all the sugar that was to be had, at Bordeaux. When the sudden cessation and decline of prices began, and they found it impossible to sell, they were obliged to suspend payment, and made over the 8,000 or 9,000 casks of sugar they had bought for the London coalition to the house of Messrs. Hottinguer & Co. What then took place 1 Nothing but what, according to the ideas of the Havre Bourse, at that time, deserved to be called a perfectly legitimate transaction. The commission houses of the French sugar refineries, at Havre, secretly concluded upon a combined purchase, in which the sellers were quietly to retain a portion for themselves, and Mr. Bourlet, the head of the Hottinguer house, who had a particular fondness for purchases "en blocq," transferred the whole quantity to a single purchaser, who gave his name. This was the last transaction that Mr. Francis- Baring went into on his own authority.
The death of Mr. S. C. Holland, the so-called managing partner, brought about in 1825, a change in the organization of the Baring
house. At first, some embarrassment was experienced in filling his place properly. Mr. J oshua Bates of Boston, formerly the London agent for the important house of Mr. William Gray, in Boston and Salem, had, a couple of years before the decease of Mr. Holland, set up a commission house in company with John, the third son of Sir Thomas Baring, Bart., under the firm of Bates & Baring. Bates, who had long been known and respected by his fellow-citizens in Boston and in Salem, was in the possession of a London business which required greater cash and credit means than the young house could control. It was about £20,000 that John Baring had brought into the firm, and it was said that Bates had not the command of a larger sum. The character and peculiar mode of transacting the business of Mr. Holland had frightened away many of the best American mercantile connections from the Baring house. He had only one measure for all the American houses, without distinction, and applied the same rule to each and every one of them. Houses like that of James and Thomas H. Perkins, in Boston, or John Jacob Astor at New York, whose wealth and credit were undoubted, and who, through mere motives of convenience, since they were paying only five per cent, at London, while money was worth seven, eight, and ten per cent, in New York, used to leave large debits in the account-current standing for some time, at the close of the year, without making immediate remittances for the same, were reminded of their arrearage on the book in postscripts written by Mr. Holland, himself, and usually couched in very sharp language. Thus, the Messrs. Barings had lost among many others, Astor as a correspondent, and similar important connections, and by this means were frequently compelled to let superfluous capital lie idle, which might otherwise have been well employed. Hence, it was wise policy on the part of this house, to follow the counsel of Mr. P. C. Labouchere, and allow the house of Messrs. Bates & Baring to dissolve, and then receive it under the general name of its own firm. Mr. Thomas Baring, who had found in the house of Hope, at Amsterdam, no occupation suited to his talents and his business spirit, also entered the London house, which now, besides Mr. Alexander Baring himself, consisted of his son Francis,
his two nephews John and Francis Baring, and Mr. Bates. In the year 1828, Mr. Alexander Baring, who was then anticipating his elevation to the Chamber of Peers, resolved to retire from the house he had hitherto conducted, and let his son-in-law Mr. Humphrey St. John Mildmay, enter it. The latter gentleman was a brother of Sir Harry Mildmay, Bart., (who won so wide a reputation in the English gay world), and until his admission into this partnership had been a Brevet-Captain in the Royal Life Guards. There then remained five associates, Mr. Francis Baring, Mr. H. St. John Mildmay, Mr. Joshua Bates, and the two brothers, Thomas and John Baring. The principle was then laid down for the management of the house, that henceforth no business should be entered into without the assent of three partners, and that since it might be foreseen, that the two associates most nearly related to Mr. Alexander Baring, namely, his son Francis, and his son-in-law, Mildmay, would generally be apt to vote on one side, and the two nephews, Thomas and John, on the other, thus leaving to Mr. Bates the casting vote; an arrangement was made, by which Francis and John were removed from all participation in any new business, and were to be called upon for their votes only when the active managers, Messrs. Thomas Baring, Mildmay, and Bates could not agree. Since that time, Mr. Francis Baring has occupied himself but little with the general transaction of business for the house, but after marrying the daughter of Napoleon's former Secretary of State, Maret, Duke of Bassano, at Paris, settled permanently in the latter city, where he bought one of the most magnificent palatial residences on the Place Vendome, at no less an expense than 1,600,000 francs.
From this it will be perceived, that although destined to have had such a career, it was not given him to follow in his father's footsteps as a mercantile and financial authority of the highest order. In the Lower House of Parliament, where he was a member for Thetford, and had hoped to shine, he likewise completely failed in his attempts to reach political importance. He had inherited from his father, a stuttering, hesitating delivery, which was pardoned in the latter, because he had become one of the most distinguished of England's remarkable men, and because
his opinion always deserved and commanded respect. But these advantages did not reside in the son, and he wearied his hearers. Upon one occasion, when he had obtained permission to bring forward a Bill in relation to New Zealand, and was about to speak, the members, as is customary in the Lower House, when they do not wish to listen, one after another withdrew, and he was soon reduced to silence for want of a proper quorum which required the presence of forty members. Fate seemed to deny Mr. Francis Baring success, in everything he undertook, where his natural, and assuredly not reprehensible ambition, made the object desirable—an observation which I have not made without some regret, for the friendship he has ever shown me, and his independent, manly character have endeared him to me. I have elsewhere remarked, that after the death of his elder brother, the present Lord Ashburton, who lives in childless celibacy, both title and property will pass to Francis Baring; or, in case of his previous decease, to his eldest son. Before the birth of this son, a doubt arose in the family, whether he, being born in France, could be the rightful heir, according to the English law, since his father had first seen the light at Philadelphia and his mother at Paris, while the child's grandmother had, likewise, been born at Philadelphia. The legal advisers of the British crown and other counsel were consulted, and their decision was affirmative, on the ground that a British subject retains his rights to the third gene-tiou, and can neither lose them nor divest himself of them. Had the decision been of an opposite character, the offer made by Lord Grenville, the English ambassador at Paris, would have been accepted, and the accouchement would have taken place within the walls of the British Legation.
CHAPTER XVI.
THE CONVERSION OF THE FRENCH FIVE PER CENT. RENTES.
My reception in Havre in the summer of 1822—James Lafitte, the Paris banker—A Sunday at his country-seat—" Maison sur Seine," a former pleasure palace of Louis XIV—The Marquis of Lansdowne—Exorbitant price of cotton—The general improper conduct of speculators at Havre and Rouen—The only exception—A merchant's morality—Breach of trust of one of the first houses in Havre, to the injury of Mr. P. C. Labouchere, its great patron—The combination of Messrs. Cropper, Benson & Co., and Rath-bone, Hodgson & Co., to bring about a fresh rise in the prices of cotton, which had gone down—An offer made, inviting me to join in this project, which, as I had foreseen, proved impracticable—A visit to Hamburgh, in the winter of 1823-24—Return to Paris—Project of the French Minister of Finance, the Marquis de Villele, for the conversion of the whole national debt into, five per cent Rentes—Rivalry of the Vicomte de Chateaubriand, who succeeds in defeating the scheme, but without being able to unseat the Marquis—By this he loses his own place in the ministry—First acquaintance with General Lafayette; his desire, after an interval of forty years, to revisit the United States—His embarrassed pecuniary situation—Successful attempt, on my part, to procure the sum of 100,000 francs for him—He is thereby enabled to undertake the desired journey, and starts upon it—Miss Wright, his protegee—The Paris Bourse, after the failure of Vill&e's scheme—Well-meant but enigmatically-worded advice of Mr. Francis Baring, in regard to the five per cent. Rente—He fails in his object to save me from an important loss.
I again resume the thread of my own history, which I dropped in the spring of 1820, after my return to New Orleans, in the month of May. Shortly after my return I was enabled to gratify a long-deferred wish. The wish was for a good wife, whose goodness of heart and disposition might insure me the homely happiness which men seek for in the married life. Of bachelorhood I was heartily weary. The daughter of a former naval officer in
the French service, Feve by name, who, in the year of the emigration to Charleston, had come over and died there, appeared to me to possess all necessary qualifications. Her mother, after her widowhood, removed to New Orleans, and there I learned to know my Lisida, even in her childhood. Her captivating and agreeable manners soon won me; and, as Louisiana was poorly furnished with instructors, prompted me to complete her education, giving to it all the attention which my predilection for her caused in me. During my absence of nearly a year and a half from New Orleans she had become a blooming maiden, who won all hearts, but made a deeper impression upon none more than mine. At my return she greeted me with a true childlike affection, and a few months afterward she became mine. In the matrimonial lottery I have had the good luck to draw a prize. My wife, who is remarkable, not only for rare beauty, but for good tact—that substitute for a powerful mind which good Nature grants to women— won, not only in New Orleans, but later, in the great society of a city like Paris, the title, belle et bonne, and has been to me a faithful, loving, steadfast, well-tried, and courageous companion through life, as the reader will more fully learn in the ensuing pages. She has borne me five children, two boys and three girls, the youngest of whom died soon after its birth. I have also had the misfortune to lose both my sons just as they had attained manhood, and were full of good promise. My eldest daughter is the wife of Mr. Buhrer, chief of division in the ministry of state, and in the department de la Maison de VEmpereur.
Late in the summer of 1822 the affairs of my house required a visit, to Europe, and I departed. I landed at Havre. Here I was received by the whole Exchange, not merely with distinction, but with a sort of jubilee. In connection with all the first houses, I had executed all their commissions, sent cotton to all, and put money into the purses of all. My appearance at the Exchange was the signal of the gathering of a little court about me, and for the offering of numberless dejeuners dinatoires and dinners. Had it been possible to deceive myself, as to the source of this reception and this impressement, I had but to cast a glance at the shore of the sea, in the immediate neighborhood of the port. There I
saw the great Chateaubriand, then in the zenith of his glory, com-panionless, wandering lonely and forsaken on the shore, pursuing his own dreams or inspirations. He merited this visible neglect as little as I my distinguished welcome; that I felt in my heart. His merits rested upon a pedestal that, with progressing time, would lift him ever higher; mine consisted in a well calculated lucky operation in the cotton market, offered by opportunity, and the consequences of which lost their importance, even in the very next year, as will be seen in the sequel.
I had more or less extensive connections with*all the great bankers of Paris, except Jacques Lafitte, who, as a native Frenchman —he came from Bayonne—kept himself at the head of the others, who were mostly Swiss. A very pressing letter of introduction, from Alexander Baring himself, made me at length acquainted with him. He was then owner of the former Hotel de l'Empire, and had his various offices on the ground floor. His own counting-room was in a great hall, where, upon a very broad dais of mahogany, four steps high, stood his huge writing desk. Before him, at the foot of the dais, were some twenty arm-chairs, in half circle ; behind him, right and left, a dozen speaking tubes in the hall served as means of communication with the heads of the va rious departments which composed his establishment. The arrangements were princely. As I entered I found most of the arm-chairs filled by exchange brokers. I mounted the four steps, and presented to the chief of this gathering my letter of introduction, which, after a glance at its contents, he laid behind him, and graciously waved me to one of the empty chairs. After some minutes a word was whispered into one of the speaking tubes, and a clerk appeared from within, to whom Mr. Lafitte gave my letter, and then beckoned to me. With all due reverence I drew near his mercantile majesty, and received from his own mouth a polite invitation to visit him on next Sunday, at the Maison sur Seine, a country-seat which he had just purchased from government and which Louis XIV. had built. " Come early," he said, " and we will talk at our ease, while promenading in the park." I made my appearance on Sunday, about three o'clock, was received by the steward, and shown into the reception rooms, library, billiard
room, saloon, etc., after which I was told that I would find M. La-fitte walking in the park. Thereupon I took for my companion an elderly Englishman, who appeared to be boring himself in the library. We soon met the master of the house, in company with two very simply-dressed, well-mannered Englishmen, one of whom wore something then unusual in French society—a summer costume, white drilling trowsers, fine cotton stockings and shoes. Both spoke French well. The perfection of English cotton manufactures appeared to be the topic of conversation; and when we returned to the house I had decided that the two gentlemen were great Manchester spinners. M. Lafitte, as usual, led the conversation, as the French say, " il tenait la come ;" that is, he spoke out whatsoever came into his head, interrupting others, and starting countless topics that had nothing to do with the matter in hand. On reaching the drawing-rooms we found Madame Lafitte, with her only daughter, now the Princess de la Moskowa, and several gentlemen, most of them opposition deputies in the chamber, among them M. Cassimir Perrier and M. Grammont, to whom M. Lafitte introduced me personally. At table one of the Englishmen was placed at Madame Lafitte's right hand, the other at her husband's. I concluded, by this distribution of the places of honor, that they must be, probably, owners of several great cotton factories, with enormous credits at Lafitte's, which regulated the proportion of his great politeness to them. M. Lafitte, whose talkativeness had as yet found no obstacle, rattled away. He told a great deal about the "hundred days," and said he had never admired Napoleon ; and that during the time when he was daily sent for, and consulted by the emperor, he had learned to know him well, and had discovered that he possessed the art of making himself popular in the highest degree. " He was quite confidential with me," said Lafitte, " spoke without any retinence, and once made to me a notable remark about our nation. ' The French,' he said, ' are a people whom one must know how to govern with arms of iron, but with velvet gloves.'" My readers may have heard this; but a remark which fell from the lips of Madame Lafitte's right hand neighbor is newer. " Right," said he, " it is so—but he very often forgot to put his gloves on." This was
so true, and so apropos, that all who heard it burst out laughing. I asked my next neighbor who the witty gentleman was, and learned, to my surprise, that he was no less a person than the celebrated Marquis of Lansdowne ; his companion was Lord Bristol.
After dinner M. Lafitte continued his discoursing, and displayed great power of retaining the attention of his guests: he always had a little circle round him which I joined the more willingly because it gave me an opportunity to observe the remarkable superiority of an English parliamentary speaker, like Lord Lansdowne, over a French faiseur de discours, and phrase-hunter. Lafitte, in his attempts to develop and render comprehensible the use and method of the French Chamber of Deputies, met with constant difficulties in the answers and remarks of his English listener. " Faire preuve de capacite" said he, " Jest le premier devoir d'un depute quand il s'agit de porler" The simple answer of the Marquis was, " ckez nous on ne prend la parole que pour j'O'isser a la roue et avancer les affaires —to do the business of the nation— comme nous disons en Anglais."
The fortunate issue of the important operation in cotton, to which my concurrence in the winter of 1820-21, had so materially contributed, created in my French correspondents a veritable greediness to renew and extend their operations in the next winter season. Important commissions, many of them without restriction or limitation as to price, as well as considerable sums of money poured into my house, and as there was a prospect of an immense English demand for the raw material, the factors of the planters understood the position of things as well as the usual great purchasers did, and being enabled to count upon a demand upon the production market, kept the prices very high. Instead of sixteen cents, with which a year before I had opened the market, twenty and twenty-one cents were offered, a price which surpassed the cost of the shipments of the past year by 30 per cent, and over. The European markets held back until the first arrival of new goods should come into market. Then, however, prices began to fall as rapidly as they had risen, and an average loss of 20 to 25 per cent, on the purchases made, became unavoidable. My house had kept itself to the letter of its
commissions, and all those who had paid money kept the cotton which they had ordered, because they could not get out of the scrape. But all the paper given by my house was allowed to be protested upon the slightest pretext. The house of Hot-tinguer & Co., in Paris, received the returned purchase and took our paper as far as they could get possession of it. There resulted from this, no less than five law-suits, which were settled by arbitration, and one fierce process that endured for three years. All these cases were decided in our favor; but the want of truth and of ordinary commercial honesty of many of our correspondents who had so caressed and courted me the year before, was without example. Every means was made use of by these men to avoid the necessity of keeping the losing purchases for their own account. One M. Morel Fatio, who had played an important part as Coullssier in the Paris stock exchange, and afterwards did a heavy business in cotton, at Rouen in 1822, threw back upon us 200 bales of cotton, before he had even seen them, under the pretext that he had ordered "prime quality" (without limitation of price), that all the New Orleans houses advertised " prime quality" at nineteen cents, and that as our factor only asked seventeen and a half cents it could not, possibly, be " prime quality."
One exception to this scandalous course which seemed to have become the rule, must not be left unrecorded: I refer to the firm of Victor Elie Lefevre & Sons, Rouen. This firm had sent us the reimbursement of our paper in a draft upon the London house of Barandon & Co. "When our drafts were presented and accepted, this house had received the money from Rouen to pay them, but failed before the acceptances fell due, and Lefevre lost the amount. He did not, however, delay one moment, but immediately instructed another house in London to take measures for the payment of our paper. Besides the loss of this capital, Lefevre had also to bear the loss of the cotton bought on his account, and accepted by him, and for which he was thus obliged to pay twice. I have considered it so much the more my duty to set down the honorable act of a Rouen house, not so much bo3ause of the strict fulfilment of mercantile obligations under the
circumstances, as because of the rarity of the occurrence in that part of the world ; for the natives of Normandy, and the houses of Rouen and Havre, do not enjoy the best reputation, and in the art of overreaching, and the practice of cheating, are usually considered as masters. From this quarter, as already remarked, I derived my bitterest and most abundant experience.
One word about the morality of a merchant. He who does not positively despair of the possibility of an exact and strict observation of the laws of trade and commerce, must at least confess that he has fatten upon the exceptions far oftener than upon common instances. It is often said and believed of politics, that that science cannot be bound by the customary laws of morality, or in other words, that the common acceptation of the words Right and Wrong, must undergo a considerable modification when those words are politically employed— then judiciousness decides,—and whatever is judicious must be right. One may say about the same of commerce ; if we allow that all that is " on the books," as merchants say, is right, because it is judicious, which means no more than that it brings the money in. According to the ideas of the day, wealth has taken the place of worth, which was the object once of the merchant's ambition. Whether the practice of this principle violate the conscience of the honest man or not, if he adopt any measure simply because it is judicious, he cannot in trade, justify himself by saying " the end sanctifies the means." In politics, the recognition of this principle meets with but few difficulties, and fifty years' experience has taught me, that in commerce also, it is oftener followed than neglected. Out of many such experiences let me record one incident: during a confidential reading of this chapter to Mr. Alexander Baring, he gave to the conduct of the merchants in Havre, the name of "felony."
In the autumn of 1824, as I have already remarked, the Liverpool cotton market showed the greatest probability of a rise in prices. The house of Hottinguer & Co., in Havre, at the head of which was M. Bourlet, a practical, experienced man of business, was several times urged by the house of Cropper, in Liverpool—in whose house young Hottinguer, now head of the Havre house, was a clerk—to go into an operation in cotton; M.
Bourlet, however, gave evasive answers, and the matter fell through. At the same time Mr. Daniel Willink, of Amsterdam, established in Liverpool, had greatly befriended Mr. P. C. Labouchere, and kept up a regular correspondence with him, from his estate Hylands, in the neighborhood of Chelmsford, in Essex County. He entered heartily into Cropper's ideas, and offered to trust him with a certain amount of capital for the operation, which appeared to promise great gain ; only conditioning that the purchase should not be delayed. M. Labouchere determined quickly, and at once sent express to Havre, and commissioned Messrs. Hottinguer to purchase for him 3,000 bales of cotton. The express reached Havre late in the evening of Saturday. The entire disposable quantity of cotton in Havre was 10,000 bales, nearly all of which was in the hands of Hottinguer & Co., and Thuret & Co. On Sunday morning the merchants assembled as usual at the Bourse du Canon, to wait for the arrival of the Paris mail. A decided possession of the market was not only possible but certain; but to succeed, it must be executed by the broker Lefevre, because he possessed the entire confidence both of buyers and sellers. He was the man usually employed by the most extensive purchasers, the house of Guerard, Dupasseur & Co., and their interests lay naturally near his heart. M. Bourlet, as soon as he saw a person like M. Labouchere entering earnestly into a cotton speculation, changed suddenly his own views, and recognized the operation as an unfailing one. Thereupon he sent for the broker Lefevre, and in order to avoid the peril of a betrayal, which might throw the whole affair into other hands, he invited the Messrs. Guerard, Dupasseur & Co. to a consultation. A share in the purchase of the whole quantity, 10,000 bales, was also offered to M. Delaunay, at that time head of the firm of Thuret & Co., in Havre; and the two houses agreed to the entire purchase, the house of Guerard alone appearing as buyers. It was also determined that Hottinguer and Thuret should offer all their cotton for sale, and that the broker Lefevre should try to get possession of all smaller quantities. My house then possessed 500 bales, stored with Messrs. Hottinguer, and 300 with Thuret. Our agent, M. Emanuel Bernoulli, was by accident in Havre. It i*
CHARACTERIZED BY MR. A. BARING AS " FELONY." 297
not necessary to say here in what manner he became acquainted with the foregoing circumstances, but he lost no time in going to M. Bourlet, and telling him, resolutely, " Whatsoever occurs in the cotton market, all further sale of Nolte's cotton must be stopped. You must not sell a single bale without directions from me." Then he went to M. Delaunay, and made the same remark to him ; but he was answered with the completest sangfroid, " Vous arrivez trop tard, mon ami. Vos cotons sont dejd vendus. The 300 bales had thus fallen into the hands of this worthy speculator. At once it was rumored about the exchange, that the entire stock in Havre had fallen into the hands of Messrs. Gue-rard, Dupasseur & Co. On Monday morning the post brought news of a rise of prices in the Liverpool market, the instant consequence of which was a rise of three francs a hundred weighty which went still higher soon after. M. Labouchere was written to, that the Havre purchasers had gotten the start of him, and had thwarted the fulfilment of his commission ; it was thought, however, that a similar outlay of capital in cotton-yarn at Rouen would be judicious, inasmuch as the prices of this had not been affected by the news. Bourlet knew with whom he had to do, when he reckoned upon the cheapening of this improper acquisition ; instead of a regular rise in the first months of the year 1825, it gave a very meagre result. M. Labouchere had learned nothing about the foregoing circumstances, nor the head of the Paris house, the elder M. Hottinguer, whose straightforward, honest spirit would have severely condemned the action of his associates. I have already remarked, that in the United States, overreaching goes for cleverness, and there this act would probably be called " a capital combination." How very few merchants, indeed, are there out of England who, like Mr. Alexander Baring, would give it a very different appellation !
The commerce of New Orleans, destined to so mighty a future, and which had begun its increase the second year after the treaty of Ghent, in 1814, was obliged in the city itself to contend with the greatest difficulties, because of the miserable condition of the streets, the highways, and the dykes of the river, which threw a thousand hindrances in the way of trade's advancement. The
legislation about city interests was in the hands of the mayor and a council, almost entirely composed of native, i. e., ignorant Creoles, who, during the first years of peace, thought of nothing, and used their influence for nothing but the protection of their own personal interests; and troubled themselves exceedingly little about the common-weal. The mayor himself, Rouffignac by name, was a native of France, formerly a cavalry officer in the Spanish service, had the best will in the world, was an honest, practical person, but yet so perfectly uninstructed that he feared to trust himself or any other man. So it happened that nearly 'six years went by, before they took the slightest action towards the improvement of the streets. In 1821 New Orleans did not possess one single paved street. Through the city ran four feet wide side-walks, which were called banquettes, and which ran along close to the houses. They were made of brick set loosely in the sand, and in wet weather became almost utterly useless, since nearly every step of the pedestrian produced a spirt of liquid mud from between the loose bricks. The streets themselves were nothing but mud holes, with occasional projecting bits of dried clod. In 1822 the city council recognized the necessity of some improvement, and it was determined that the principal street, called Rue Roy ale, should be paved. The cost of this pavement was calculated at $300,000, while the revenue of the city amounted only to $60,000 or $70,000 per annum. Leases of tenements and lands belonging to the city, and the yearly sale of part of them, the results of public sales, etc., made up this sum. Finally, they determined to make an effort to borrow the money ; a committee of the city council was appointed, and this committee immediately waited upon me, requesting the loan at an interest of 7 per cent, payable half yearly ; the money to be retained so long as they might require it. I could find no means of rendering comprehensible to these gentlemen the fact that no capitalist could be discovered who would lend upon such terms; particularly none in Europe, whither they appeared to be looking : that they must borrow the money for a certain specified time, etc. At length I succeeded in proposing an acceptable project for a loan. That the city should receive a cash payment of $150,000, to be
followed* the next year by a similar sum, giving its obligation to repay the sum in ten years, with interest at the rate of 98 per cent, for that time. I also naturally arranged to have certificate s of stock, all bearing the same date of emission, to be held as compensation for the yearly interest on the second half of the loan, while I paid in the sum in solid, well secured planter's note., which had one year to run. These notes were in the money -market, at a discount of from 15 to 18 per cent., and the difference of interest, which amounted to about $13,000, and which the council could have gained had they chosen; but by their neglect of it, it fell to me. The Messrs. Barings sold me these notes with a bonus of 17 per cent., and the whole operation brought me in a net profit of $65,000. This was the forerunner of a later advance made by the Barings to the city of New Orleans and the state of Louisiana, and which somewhat surpassed a couple of millions. This business was conducted, some years after the ruin of my house, by Mr. Alexander Baring, who visited New Orleans for the purpose.
The stock of cotton which the stimulus already spoken of, had gathered and left unsaleable in many European markets, particularly Liverpool, of course caused great anxiety about the new American crop, in the minds of all who had made advances, and to whom shipments would not guaranty a return. The great quaker house of Cropper, Benson & Co., were at the head of the firms who found themselves in this position. Whether it were a proper comprehension of the real position, and look of the whole European cotton market, in reference to the stock on hand, and tee supply to be imported, or only an experiment to awaken the spirit of speculation, and to cause a rise in prices; in brief, this house exhibited a general manifest, in which by a variety of calculations it strove to show by logical conclusions and reckonings, that the production of cotton had its limit, and that in consequence of the abolition of the slave trade, and the annual decrease of the colored population,* as well as by the natural restrictions which
* This argument was precisely one of the most feeble in the logic of the Croppers. Five years before, the colored census was 1.538.060 ; and in 18-30, thirty years later, 3.176.380, a yearly increase of 54.609 souls.
northern latitudes place upon cotton growing, that the ncesswy and approaching consequence must be, that the importation would become daily less, and obtainable only at very high prices, and that from this would result—so at least they believed—that the consumption would far exceed the production, and make the cost of cotton immensely high. This manifest was disseminated with a certain pomp over all the cotton manufacturing cities of England and the United States. People read it with interest, but it failed of its object, and had very slight effect upon the cotton market. The thoughtful houses of Havre and Rouen, called it " echauffaudage pour /aire monter les prix" and in Liverpool and Manchester they were distrustful, and appeared to remember the calculation, by means of which the firm of Cropper had prophesied a poor crop of wheat, and high prices only a few years before. They went so far as to send their agents into every part of England to calculate the general yield of ears in the wheat fields of the various districts, and the average number of grains in the ears, in order to strike a parallel with the yield of grains in fruitful and abundant crops, and so to support their prophecy with reference to prices. All the calculations failed; the crop was a good general crop, and speculators, among whom were the Messrs. Cropper themselves, lost very heavily. Their very important share in the speculations which followed these calculations, proved in this instance, the uprightness of their conviction; but in respect of the cotton manifest that appeared later, I had no opportunity to divine the concealed objects. I had visited Liverpool in the course of the summer of 1823, and found that the general voice of the exchange there was not prophetic of a rise in the price of cotton. In the house of Cropper a hint was given me that other views might possibly be correct. Thereupon, I betook myself to Manchester, to look around me among my friends there. This occurred about the time of the Doncaster races, where Mr. William Garnet (of the then important house of Messrs. Robert & William Garnet), had determined to go in his own carriage, and invited me to accompany. I had scarcely accepted, and so written to my friend Adam Hodgson, then partner in the house of Rathbone, Hodgson & Co., that I at once
received in answer, a most urgent letter, urging me, instead of thinking of the Doncaster races, to weigh carefully an event which must infallibly occur in the cotton market; that my co-operation was necessary to him, and therefore, he begged me to return at once to Liverpool. I obeyed the call, and betook myself directly to Liverpool. On my arrival, he pointed out to me, that he must take me at once to the Messrs. Cropper, and there it would be shown to me in the strictest secrecy, that an entirely new view of the condition of things was to be taken. When we reached the place, the elder Mr. James Cropper, head of the firm, was in his sanctum sanctorum, a homely sort of chamber, which touched the great hall of the general counting-room, and possessed a double iron door. Into this chamber we were mysteriously introduced by one of the partners, Mr. David Hodgson, and after our entrance, the head of the greatest cotton broker firm, Mr. Cooke, of the firm of Cooke & Cowen, was sent for; meanwhile, the already mentioned, ever ready manifesto, was exhibited. Mr. Cooke was sent for to prove to me that a demand for the exportation of 10,000 bales of cotton to Havre, where the market appeared to have been neglected, must infallibly shake the ordinary buyers and spinners in Manchester and Glasgow; and already a rise in the prices was evident, as would soon be visible to all. In the expectation that I would not refuse my assent and co-operation to a plan formed by him, and that I would associate myself with their representatives, David and Adam Hodgson; Messrs. Cropper had resolved to send both of these gentlemen to Havre, in order to unite in one house commissions for the purchase, in Liverpool, of 10,000 bales for Havre; as it was clear that the speculation would be a good one for both places, as it would prove the result of the manifesto, so soon as it came to general knowledge. My society, I said, was very much at the service of those gentlemen, but their project must positively fail, particularly if they were to go directly to Havre. On the first knowledge of the object of such a voyage taken by the heads of two important Liverpool houses, the idea would suggest itself to people that there must be an under design—to wit: if the speculation was so sure and infallible, as they appeared to think, folks
would be certain to ask what the established house, iu union with their mmerous friends could gain by sending 10,000 bales of cotton on their own account to Havre. My advice was, not to go by Southampton to Havre, but by Dieppe to Rouen, where I would make them acquainted with a leading merchant who thoroughly understood the French cotton market, and who would place them at once in the exact position to judge of the whole matter. My advice was taken. We went by London direct to Rouen, and here I presented my companions to M. Edward Quesnel l'Aine. A conversation took place. On his correction of their ideas as to the nature of a Havre merchant, they saw so clearly the impossibility of continuing their project, that they themselves, proposed to accompany me to Paris, and so by Holland back to England. On this occasion I could not help recalling that expression of Lafontaine's, '-'•Jean s'en alia comme il etait venu"
From Holland, whither I had accompanied my friends, I went to Hamburg. Here memories of my early youth were still vivid in the hearts of most of my acquaintances, and I found my boyhood's friends, with one exception, in good health and circumstances. I found also that both my parents were well, although my father had already for some years been afflicted with total blindness. Early in January, 1824, I went to Paris again, and there learned that the speedy arrival of Mr. Alexander Baring and his family was expected.
The project of the minister-president, Marquis de Villele, to convert the state debt from five per cents to three per cents gave rise to this visit. It was proposed to pay off with a round sum those who were disinclined to exchange their claims which bore five per cent, interest for new three per cent, claims, and to take seventy-five francs for every hundred. The whole state debt amounted to 3,066,783,560 francs ; and as it was shown that only about one-third of the state creditors would consent to the conversion, a payment in cash of 1,055,556,720 francs became necessary. In order to collect this important capital, the whole financial power of England, Holland and France must be called into exercise. Invitations in all directions assembled the leaders of
THE FRENCH STATE DEBT. . 30o
the Paris and London Exchanges—Messrs. Baring Brothers & Co., of London, Brothers Rothschild and J. Lafitte & Co., of Paris—to no very difficult task, namely, to arrange in three lists the capitalists of various lands with whom they were connected, especially those of London, Amsterdam, and Paris, at the head of each list being one of themselves. Thereupon, under the presidency of Mr. Alexander Baring, a committee was appointed, composed of Baron James Rothschild and Mr. Jacques Lafitte, to treat of the conversion with the Marquis of Villele in exchange, and to procure ready money for the payment of the old state debt. This committee sat daily in the house of the Brothers Rothschild, and sat the longer because of the inexhaustible eloquence of M. Lafitte, about the advantages to accrue from the conversion and all matters connected with it—an eloquence which claimed all the attention of his colleagues, and, as I learned from Mr. Baring, with whom, conformably to his desires, I breakfasted nearly every day, drove them frequently into positive impatience. The secret plan of the holders of the 3 per cent, debt was to raise it to 80, and then to sell it, and so get rid of it. This price would give to buyers an interest of 3^ per cent.; and- if the portion of the debt to be paid off could not be raised, excepting by new 3 per cent, purchasers at 80, the consequence would be, that the 5 per cent, before the conversion would be worth the relative price of 106 francs 66%, in order to get rid of the corresponding interest. This governed the operations of the London, Frankfort, Amsterdam, and Paris Exchanges. The capital destined for the conversion, and collected at the common cost of the representatives of the three lists, was estimated at 1,000 millions. Speculators had conceived so favorable an idea of the 3 per cent funds to-be created—an idea based on the belief that the undertakers would not bring it into circulation under 80—that buyers were found in Amsterdam and Frankfort at 81*82, and even 83J. At the same time important sales were made of French 5 per cent, state paper, at the relative price of from 106 francs 67 to 110. Nothing more was to be had. The project of M. de Villele needed, in order to become a legal operation, the sanction of the two chambers, and caused important debates. Opinions about the judiciousness,
and even about the legality of the conversion, were widely different. Meanwhile the ministry possessed, in the chamber of deputies, an immense majority of three hundred and more, whom the wits were accustomed to speak of as " M. de Villeie's three hundred Spartans;" so that while a doubt of the success of the project was scarcely possible, it was yet a critical matter to open a debate with the small holders of the Rent, to whom countless deputies belonged—it was aiming at their purses. The funny men of Paris did not let the occasion slip. The Rue d'Artois (now Rue Lafitte), in which lived Mr. Alexander Baring, on the corner of the Boulevard, in the Hotel d'Artois, Baron James Rothschild, in the hotel formerly belonging to the queen of Holland, and Mr. Lafitte, in his own hotel, corner of Rue de Provence, was called " la Rue de la Reduction ;" and the keepers of cafes in the neighborhood, who had formerly given five lumps of sugar to a cup of coffee now gave but three, "on account of the reduction," as they said. When the project of the conversion came to a hearing in the chamber of deputies, it passed by a majority of sixty-eight. This, in ordinary circumstances, would have been considered a large majority; but, contrasted with the usual majority of M. de Villele, it was looked on as very small, and served as a certain proof the project of the finance minister found many opponents, even among his well-disciplined hangers on.
In the Chamber of Peers people were more independent of ministerial influence, and the conversion found an important opponent in the person of the minister for foreign affairs, M. le Vicomte de Chateaubriand. He had a personal rancor, nourished in silence, against the M. de Villele. The question of the conversion, supposed, to be a national one, became, in the chamber of peers, a personal one. It came to the point, whether the influence of the Marquis de Villele, or that of the Vicomte de Chateaubriand, would prove the more powerful: and, as to the judiciousness of the conversion, people, as often happens in France, snapped their fingers. The marquis, as I learned from Mr. Baring, had included in his calculations every single voice in the chamber of peers; he knew well both the pro and con, and reckoned confidentially on a majority of eighteen votes for his project. The voting at length
HIS RETIREMENT. j>05
took place, and Villele was defeated by a majority of twelve voices. For a while Chateaubriand was victorious. This took place on a Friday. The day before the 5 per cent. Rents had been quoted at 106 francs; but at the close of the Exchange, on Saturday evening, they had fallen to 98. The agitation among Parisians, especially in the business world, was immeasurable. Villele and Chateaubriand had spoken to each other at the royal mass on Sunday, at the Tuilleries, on which occasion the former very politely informed the latter that he would find a very important dispatch awaiting him at home. On this Sunday the vicomte had invited the most important ministers and diplomatists in Paris to dinner. So soon as he reached home he opened the dispatch; it contained the command to send in his portfolio, as he had been replaced. When his guests had arrived, and taken their places at the dinner-table, the vicomte informed them that this was the last occasion on which he could have the honor to receive them in this way, as in the morning, he said, laughingly, his ministerial course would be run—he had been " remplace." The news was spread far and wide the same evening, in the usual haunt of the notabilities, the foyer de V Opera, and the next day, Monday, at the opening of the Exchange, 104 francs were freely given for 5 per cents. It was of course a natural opinion, that the retirement of Chateaubriand would not militate against the permanence of de Villele's ministry, and the opinion was a correct one. But for the business world the consequence was immense losses for all the direct part-takers in the conversion, and for all the first speculators, among whom I, unfortunately, was one, and that for no small amount. The 5 per cents ran down to 98 francs, and remained fixed at that price for a long time. As people had freely purchased in behalf of the conversion, it became necessary to turn the purchases made on time into money again. Of the three chiefs of the coalition, Messrs. Baring and Lafitte suffered most, because of the immense expense caused by the collection of the thousand millions. But the Rothschilds were splendidly compensated by the sales of the 3 per cents, at 81 and 82, and by the sale, at the same time, of a great quantity of 5 per cents, at 104, 105, and 106. As the 3 per cents had just been called into ex-
istence they had nothing to furnish, and they could replace the 5 per cents sold at 98 francs. This plan of M. Rothschild was not imparted to the other two who were interested in the conversion, as is always required by the common understanding of a common participation in loss and gain—the two had been outflanked. The unconquerable aversion which the chief of the Hope house had long felt, to all business connexion with the Rothschilds, was the cause of the Amsterdam firms having no part in the projected conversion, and consequently none in the losses. In the same way the house of Hottinguer & Co., by advice of M. Labouchere, had refused any participation in the matter.
In the course of the summer of 1824, I received several visits from General La Fayette, whom I had slightly known some years before. His possession of certain lands in the state of Louisiana, in the district known as Pointe Coupee, had given rise to this acquaintance. At his liberation from his long imprisonment at Olmutz, the general's circumstances were so narrow, that old Sir Francis Baring (father, as already said, of Alexander Baring) had, of his own free will and out of personal esteem for the nobleman, sent him the important sum of £5,000. The repayment of this was hindered for several years, and finally (after the death of Sir Francis) it was agreed that the Barings should take, as equivalent for this not unimportant sum, some of the Louisiana lands, at the disproportionately high, purely imaginary price of eleven dollars per acre. The supervision of this purchase and the payment of the yearly land tax upon it, were committed to me by Messrs. Baring, at the time of the establishment of my house in New Orleans. Soon after this arrangement—which was made purely for the convenience of one party—General Lafayette found opportunity to sell at the same enormous price, as speculation price, another large tract of these lands, to the English baronet Sir Jos. Coghill, and to realize the money. The affair was closed in the most perfectly good faith by the general, who really believed that he was only getting the worth of his lands ; and that it was no bad trade, but a genuinely good speculation, to buy them at the same price that so eminent and far-seeing a firm as the Barings had been willing to pay. On closer examination, instituted by
Sir Joshua, it was shown under how great an error he had lain. He complained to the Barings, in London, although he had nothing to do with them. He complained to the general, in Paris, and the latter considered it important to get more correct information about these lands from me. Naturally enough, I could give him as little information as comfort for the honest patience with which he bore this unfortunate state of things. The general was in every sense of the word an honorable man. But a second difficulty lay heavy upon his heart, during the frequent visits that he made to me. So many invitations had come to him from the United States, once more to visit that land, which had to thank his youthful arms for part of its freedom. Congress had instructed the president to notify him officially, their readiness to receive, as well as their power would admit, and to keep a frigate in readiness for him; he had received from all sides proofs of esteem and affection in such numbers, that he had finally determined, in spite of his advanced age, to undertake the voyage. One difficulty, however, must first be removed. He had no money. " I have here in Paris," said the general to me, " debts to the amount of 100,000 francs, which must be paid before I dare go to another quarter of the world. I could procure the money here if I would give a mortgage upon my estate, Lagrange, but it is the heritage of my children—it belonged to my wife, and now is theirs; and although they are all willing to resign, to help me in my embarrassments, I cannot accept it—I will not disturb it." The general then asked me to sound Mr. Baring, as to whether he would follow the example of his father, and advance an hundred thousand francs. I promised to do so, but at the same time told La Fayette that I doubted the result. The old advance was stuck into useless lands, and I feared that a second experiment would not be to the taste of the sons. Such was literally the case. "No, no," said Alexander Baring; " we are not quite clear of an old scrape, and cannot plump into a fresh one." The general appeared so sad when I told him of this, and he interested me so much, as he did every one who knew him well, that I bade him be of good courage; and promised to visit and inquire among such Americans as ^ere living in independent circumstances in Paris, at the
time, and see what could be done with them. And first I went to our ambassador, James Brown, a worthy man, with whom I had become acquainted in Louisiana, and whose esteem and good will I dared flatter myself to possess. Cool and serious as this gentleman was in all his dealings, yet he took hold of this affair right heartily, and with a fire which much encouraged me. He promised to go to work, and pledged himself to furnish one quarter of the sum, and to induce others to follow his example. In fact, two persons at once joined him, naturalized Americans, who had returned from the United States, with abundant means, and now lived in Paris—a Hollander by the name of Jacob Gerhard Kock, from Amsterdam, and a Savoyard (lately deceased), M. Jean Francois Girod. In what manner the required sum was finally made up I have never learned, but the general himself informed me in a friendly note that the goal of his desires was attained. His note inclosed the request to visit him in the course of the week, that he might introduce me to a couple of English ladies, living in the house with him and under his protection, who expected to visit the United States, and desired to confer with me about some pecuniary difficulties. These two ladies were the authoress, Miss Fanny Wright, afterwards so well known for her eccentricities, and her sister. They desired to make over to me the sum of 120,000 francs, then in the hands of the banker Lafitte, that I might invest this capital in Louisiana, without losing the interest in the meantime ; and with power to use the same in the meanwhile, if circumstances should render it necessary. This little negotiation was soon arranged, and when the ladies visited Louisiana, eighteen months later, they received their money back. The general spoke and wrote English perfectly well, yet in speaking he had a very broad accent. In writing, nothing betrayed him but the form of the letters and the hand. As a proof of this, you have here literally a letter which he wrote me on Miss Wright's affairs.
Friday Evening. My Dear Sir —
I have, received a note from Mr. Barnes, Consul of the U. S., informing me that he has to-morrow, at one o'clock, a Committee
LAFAYETTE EMBARKS FOR AMERICA. $09
from the Supreme Court of Pennsylvania, which takes up the greater part of his time, and that Monday he will be ready to receive Mr. Nolte and myself. As I had not asked a positive appointment for us, but only announced my visit for this morning or the day after, I suppose it alludes to some application from you.
My young friends have left Paris, with a deep feeling of gratitude for your kind attentions in their behalf. I very heartily join in the sentiment, and am charged by them to make an inquiry, to which you will be pleased to give an answer, not losing sight of our inexperience in those matters, and the possibility of our making, very innocently, an improper demand.
You have been so kind as to give them the benefit of your arrangement with Mr. Hottinguer, so far as respects the money destined to the Louisiana State Bank. Could the same interest be extended to about twenty thousand francs remaining in the hands of Mr. Lafitte, if transferred to Mr. Hottinguer. Miss Wright left with me a letter to that purpose, in case I was encouraged to propose the arrangement. I waited upon you, after I had paid a visit to Mr. and Mrs. Baring; you was not at home; to-day I have been detained by cold and hoarseness, and hope the pleasure to find you to-morrow at an early hour; but as I have an opportunity to write to my friend, I thought I might anticipate the query at the same time that I gave the answer of the Consul.
Receive, dear sir, my best thanks, and most sincere regard.
LAFAYETTE.
Two weeks later the general, accompanied by his son, George Washington Lafayette, and his secretary, M. Levasseur, went to Havre, where he embarked on the 13th of July, in the regular packet Cadmus, for New York. Here he happily arrived after a short voyage, on the 16th of August. The somewhat imperfectly edited memoirs of the general, which appeared after his death, and other cotemporaneous writings, describe in detail the extraordinary reception that awaited him there. The enthusiasm which welcomed him, found an echo throughout the entire land.
In every State of the Union, (the original thirteen which composed it, after the war of Independence, as well as those which had been afterwards admitted,) gathered young and old together to greet and honor worthily the man who, sprung from the old French noblesse, in the bloom of youth, the darling of the court, had carried over the mighty ocean his strength, his ability, and a great part of his fortune to fight for the young Republic; had been Washington's comrade, friend, and first aid-decamp, and was now the only living warrior of that time. A period of more than forty years had rolled away since the general had left the land for which he fought; the new generation which did not know him, regarded him in the light of a saint, and the old who remained, were so scattered that only here and there came one who could take the stranger by the hand and bid him welcome.
The chronologic sequence of my narrative now obliges me here to break off until I can again refer to the man whom I knew well, and whose friendship I had won. I return now to my two athletes, Villele and Chateaubriand ; the latter of whom I left as victor in the Chamber of Peers, but as a sorely wounded member of the Ministry, the doors of which were closed against him. He was dismissed on Sunday. I have shown how the next day, Monday, the whole exchange knew of the dismissal of the Minister for Foreign Affairs, and saw there a proof of the unshaken power of the Marquis de Villele, and the price of the stocks rose to 102 and 102J. Shortly before exchange hours I received a visit from my friend Francis Baring, to whom I had made no secret of my great losses in the 5 per cents. He came to advise me to let my stock go the next day. He had resolved, he said, to let it and his own—that is, what he had bought for his own account—go, if he could only do it without harm. " Mine," I said, " would only cost me the brokerage." " Ei," he said ; " that I could not offer," and then he continued, " that it only came now to the difference of brokerage." " Ah," thought I to myself, " there is no danger here of any great fall;" and so I took the affair tolerably cool and instructed my exchange agent, D. Maurency, to sell mine "at a certain price which would not be strictly kept to, however. Tie stock which at the opening of the exchange became saleable at
102J and 102, went the same day back to 98, and so remained for some weeks. I now suffered a very important loss. M. Maurency had considered himself authorized to throw away my stock for the low price of 98 without any commission from me, without any preceding advice, because I had no provision for the stock bought on time. It is well known that in stocks, all purchasers on time are unlawful and cannot be sued on. So that I had no help, and was obliged to acknowledge to myself that I had neglected the means of remedying my evident loss. For I should have taken the object of Baring's visit for what it was, namely, to spare me a small loss, as it must have been a great loss which he feared. But then, why make the remark that he could not spare the brokerage. He wished in the first place, to give me a proof of his good will towards me; but at the same time he would have engaged me to concur in the sale of his own stock, which might have pressed the current of prices and so have brought down the stock. From the knowledge which I possessed of his custom of wishing to unite the most heterogeneous points, even when such union must be excessively difficult, I ought not to have overlooked this, but I could scarcely harbor such a suspicion against a friend. The offered advice was in open contradiction to itself. I had, as already remarked, treated the affair with levity; but m all matters of business, a merchant should never neglect to study and examine diligently all circumstances connected nearly, or distantly with the subject. Human foresight reaches seldom far enough to embrace all the circumstances of a case, and is unable to dispense with the greatest watchfulness; and I failed in this case, because I had neglected to be vigilant.
To this extended and ready vigilance, over all possible results connected with, or growing out of his projects and undertakings, belong the most important exigencies of the speculative merchant, by which term, I do not understand the ordinary speculator, but the man who feels himself obliged to stand out in the broad daylight, and amid his fellow-citizens, and in the sight of the whole world, to win for himself the rank that insures to him the reward of his struggles. What is usually understood by the word merchant, is simply the factor of sales and purchases. This man, no
.312 THE CHARACTER OF THE TRUE MERCHANT.
matter how extended his trade, remains, what in the mercantile categories of South Germany, particularly in Austria, is called a wholesale tradesman—he is but a tradesman, and not a merchant in the true spirit of that word. It is the speculative spirit alone which marks the real merchant. And the use of this spirit, when kept subordinate to his actual clearly known means, and requires from him a prevision and observation of all possible results that may occur, is what procures for him a character for prudence. And yet how often does accident, by an unusual, hidden and suddenly self-created train of circumstances change the results of the wisest combination. Stock on hand, importations, supply,— these are usually the main points of most speculations in trade to which miscalculations have often given rise in corn and cotton, which latter occupied me daily and almost hourly. The reader will see something about it in most of the following pages, but I must be allowed to record one example here. In one of the years when British consumption of cotton appeared to be on the progressive decline, it yet on one occasion appeared to revive and exhibit fresh vigor. People remarked important consignments of raw material to the consumers, the spinners, and judged therefrom that they had not only exhausted their regular supply, but that they would infallibly come into the market again as purchasers. The expression " delivered to the trade," although it announced no positive sales, still suggested the momentarily existing and pressing need of the material. And what did I discover in the course of the same year. The head of the great spinning and manufacturing establishment of Messrs. Strutt, in Derbyshire, who never required less annually than 10,000 bales of cotton, had convinced themselves that the pressure on the raw material had reached the lowest degree, and that the prices would not probably, for many a year, be so low as at present. They therefore, commanded all that they would need for three years at once, 30,000 bales, which they purchased quietly, by means of their brokers, who did not fail in their weekly circulars to set this quantity down as " delivered to the trade." The reader will easily understand that the purchase by a single house of such a quantity of cotton did not exhibit the true amount of a year's
necessities; for it might have represented ten houses, of which, each had purchased 3,000 bales. Nevertheless, this single example had its influence. A regular demand was produced, which also, was not caused by a real present need of material, but was a mere delusion, of which, even many of the speculators were victims. The restoration of the whole mass of material owed its existence to a delusion. The same errors never have such powerful and stirring influence as in attempts to monopolize a branch of commerce. Thus in the whole course of my mercantile struggles, no single example of a successful speculation of this kind, that is, where a great permanent revolution of the market was aimed at, exists. A wholesale monopolizing purchase of an article is often destroyed by an attempt to sell it at paying prices. The difference between the supply and the actual regular consumption, can in these peaceful times, be easily discovered ; and therefore, one ordinarily resists, until forced by necessity, to pay a compulsory speculation price. A man seldom forgives himself for a lack of foresight which another has made use of, and still less does he like to pay away money that such foresight might have saved him. Sales on delivery at unusually high prices seldom fail, if the speculator only choose his time right, and take his measures accordingly.
14
CHAPTER XVII.
THE BUSINESS CRISIS OF 1825-6.—LAFAYETTE IN NEW ORLEANS.
The Liverpool Cottou Market at the close of the year 1824—Sudden rise of prices, in January, 1825—Manoeuvres of the Liverpool houses to keep up the prices—Well calculated course of the Scotch house of J. &, A. Denis-toun & Co.—The speculation mania in New Orleans—Arrival of General Lafayette in New Orleans—His reception—Anecdotes of him—I accompany him, in the name of the city, as one of its deputies, to Natchez-State of the Cotton Market when I arrived in Natchez.
At my arrival in Liverpool, where I went on my return to the United States, I found, as is usual in the beginning of autumn, that the whole Exchange was engrossed in calculations as to the probable position of the cotton market at the end of the year. Men would not listen to the news that all the supply in the Atlantic ports was exhausted, but calculated that the shipments of what remained of the old crop, and the abundant produce of the new, from October 1, to the end of the year, would reach 250,000 bales. From that came the calculation, that the stock of American cotton in England, proportioned to the then consumption, would be about 200,000 bales. My simple question, " What will be the consequence if the supply do not transcend 100,000 bales," was met by the reply, that a sudden rise of a penny a pound, or fifteen to twenty per cent., was the universal conviction.
I reached New York about the middle of November. With the foregoing information about the Southern harbors, and a list of all exportations which had taken place meantime, I perceived that, instead of an export of 150,000 bales of the old crop, scarce 30,000 had been sent off in the months of October and November, and that the month of December could not and would not furnish 20,000
bales. I hastened to New Orleans. Here I foujd two ships in the hands of my house, which we were to load for the account of a Quaker firm in New York. This was done at the prices, 11, 11£, and 12 cents. We also sent off a cargo of 900 bales on our own account. The prices had no direct tendency towards a rise, but the expectation of such a rise was evident, by the willingness with which the prices demanded were paid. I therefore determined to buy 1000 bales more on my own account, and to keep it ready. The prices raised but little, and we sent off another cargo on our own account.
I supposed that about the middle of February we would receive information about the stock of American cotton on hand in Liverpool, at the close of the year, if the regular packets between Liverpool and New York should make short passages; and I possessed, in advance, the certainty which could not be had in Liverpool, that it could not possibly surpass 100,000 bales. Already, on the 12th of February, my fears were aroused, lest the news of the scanty condition of the Liverpool market, at the close of the year, should find us careless and unprepared. Driven, then, by my own impatience, I sent our clerk, Ferriday, who was accustomed to make all our purchases with zealous diligence, to the suburbs, where the cotton market is always held, and instructed him not to return with empty hands, nor without having purchased at least 1500 bales for our house, at the current prices. My last words were, " Do not stand upon trifles, but buy." He fulfilled the commission, and bought 2000 bales.
Two days later, on February 14th, at noon, a neat, fast sailing schooner brought me, from the two Quaker houses, Francis Thompson & Nephews, and Jeremiah Thompson, in New York, the news of the close of the Liverpool market, on December 21, 1824. and the commission to purchase 10,000 bales for them and for Cropper, Benson & Co., of Liverpool, at the current prices. The stock of American cotton in Liverpool was exactly as I had anticipated—there were but 100,000 bales there—and the consequence of so unusually small a supply was precisely the fulfilment of the knowing people's prophecies. There was a sudden rise of a penny. The first re-action on our market at New Orleans was
a rise of throe cents. Whosoever was engaged in the coLton trade and was a cotemporary of that remarkable year, 1825, will remember the frenzy that seized all speculators, first in England, and then, by infallible consequence, in the United States. In spite of the disposition of my adopted countrymen to take fire easily, the rise in American shipment prices did not move so rapidly as the spirit of speculation in England, for there the prices rose 110 per cent, but in the United States not more than 85. We turned most of our own local stock into money, gaining thereby $60,000; and from the first cargo sent to Liverpool, in the brig Ocean, Captain Bond, 950 bales, we received a return from the house of Cropper, with the unexampled gain of £11,460. Besides a share in the cargoes shipped in union with the Messrs. Cropper and Thompson, we had two others, which arrived in Liverpool about ten days after the 950 bales, but costing about ten per cent, more, on which the Croppers could have gained quite as much, had they chosen. They, however, thought it judicious to throw away the enormous profit of eighty per cent., because they would not, by " ill-timed sales," interfere with their own pre-conceived views of the future of the cotton market, nor stop the revolution; but the con sumers, the spinners, would force them to withdraw their extortion ate claims. With very few exceptions, all the cotton traders became quiet participants in this coalition. The higher the article rose, so rose also the resolution of the spinners not to pay the unheard of price which was demanded—they scarcely bought at all. But the leaders of the countless troop of speculators, Messrs. Cropper, Benson & Co., with their fellow-quakers, Rathbone, Hodgson & Co., in union with the brokers, Cooke & Comer, were enabled to avoid, what under usual circumstances would have been the inevitable result of this opposition, to wit, a fall of prices, by always permitting underhand sales, or by supporting new buyers, who found means to come into the market, who in the end only gave out their own names. The Manchester spinners, though pressed by necessity to accept the high prices, had as yet bought as little as possible, and finally came to the resolution not to buy at all. The whole month of May passed over without one single important sale having taken place.
The letters of the Quaker firms to their correspondents contained the words, " Nothing can equal the firmness of our holders." The words should have been, " Nothing can equal the firmness of our holders but the unbending obstinacy of the consumers, to economize their stock as much as possible, and to buy no more than positive necessity demands." The ground upon which the superstructure of this mighty speculation rested was hollow, and must inevitably give way, and carry the whole fabric with it to destruction. The expectation that the spinners, at the sight of the rising prices, must necessarily provide themselves with the raw material at any cost, was the groundwork, and the belief in the insufficiency of the expected importations was the foundation, of the whole speculation. Both of these calculations were ill made. The spinners knew too well that they could find no buyers for their fabrics at prices commensurate with those of the raw material, and that, consequently, they could only manufacture at great loss to them selves; and the importers, allured from all the markets and corners of the earth, surpassed all and every calculation that had been made. From Brazil, of which the exportable cotton crop for five years had been reckoned at 175,000 bales, came suddenly just twice that quantity, 350,000 bales. Stiff-necked, well-to-do planters had annually kept back a portion of their crops when the prices did not suit them. This no one knew > and it may serve as a universal proof of the assertion that, in wholesale speculations, particularly in those which take their rise in a view to monopoly, that human foresight is never sufficiently great to calculate upon all the circumstances which may belong to, or result from its actions.
The month of May, with its enforced activity in the cotton-market, was scarcely gone, when the Scottish house of James and Alexander Denistoun & Co., of Glasgow, received in Liverpool 5000 bales, from New Orleans; and under the direction of the clever head of the firm, Mr. James Denistoun, then president of the bank of Scotland, in Glasgow, determined to offer the whole importation for sale. The Quaker confederation implored them to keep up the price, which was for Georgia cotton, 15J to 16 pence, but in vain. The 5000 bales were sold at from 2\ to 2}
below the standing price ; and when it is recollected that a fall o one farthing, under the ordinary price of cotton, will prevent an} one in Liverpool from buying, it will easily be understood that a sale at from 15 to 16 per cent, under current prices offered a cleai proof that all the calculations were shown to be false, that the elasticity of the market had been unnaturally tried, and that spinners had perfectly understood the whole combination. The determination of the Scottish firm arose from the simple observation of the fact that the extraordinary importations allured by the high prices had already, in the beginning of June, collected more cotton in Great Britain than the greatest possible consumption of the whole year could demand; and hence, that every pound of the raw material, which might arrive from that time forth, must be seen by every clear-sighted importer to be simply superfluous, and to add to an already unnecessary stock. In another five months the new American crop would be ready, and it was promising to be very abundant.
In the beginning of April, precisely when the wildest spirit of speculation was at work in New Orleans, and was occupying our almost entire attention, came General Lafayette, an arrival which alone could have created a diversion. Although in the whole population of the city and its environs not one comrade in the war of independence, nor even one personal acquaintance, except myself, was there to greet him, still the enthusiasm with which he had been received everywhere was intense in Louisiana, from the fact of most of the inhabitants being of French extraction ; and men were more anxious to venerate the historic importance of the actor in the French revolution, than of the then young but now gray~ haired hero of the American. The general had arrived, before the opening of the Congress of December 8,1824, in Washington, and had employed the intervening time in visiting the states of New York, Connecticut, Rhode Island, and Massachusetts. He passed through New Jersey, Pennsylvania, Delaware, and Maryland, on his way to Washington, and it was there that the then speaker of the House, the late Henry Clay, introduced him, on the 10th December, into the Hall of Representatives, and presented him to both houses therein assembled. Tho roomy and richly-decorated
hall held on this occasion 2,000 persons, with all the foreign min isters, except the French ambassador of the Bourbons. The Mar quis afterwards told me, that although he had witnessed very many assemblies in his own country, never had he received such an impression as from this one; and that he had never been so thoroughly moved by the eloquence of any man, not even by that of Mirabeau, as by the clear and spirited ring of the voice of Henry Clay. " It was," he said, " the voice of a nation, making itself heard by the mouth of a great man." The whole house, as if stricken by the wand of an enchanter, had risen to their feet as Clay entered, leading Lafayette by the hand. They sat down at the conclusion of the welcoming speech, but arose again at the first signs of a reply. They expected him to take his spectacles and a written answer from his pocket; but after a moment's pause he spoke, extemporaneously, and in English. To Clay's remark, that he was the witness of his own future, he replied, that when he there found, in the sons of his former and now departed friends, the same spirit for the general weal, as well as tjti.e same personal friendship for him, no future spread itself before him. The Congress, as is well known, voted to the general, as a testimonial of the national gratitude, $200,000, and 200,000 acres of land, which the general chose in the newly-received state of Florida, which had just been purchased from Spain, it having been allowed him, as a condition of the present, to choose from any unoccupied public lands in the United States. After this present, the general resolved to visit all the States, if only for a couple of days, which, in the session of Congress, had voted for the present. Therefore he left Washington, and passed through Virginia, North and South Carolina, Georgia and Alabama, to Mobile, where he found a deputation from * New Orleans, headed by the governor, who had come to welcome him, and conduct him to their city. As I learned from the governor, his first question about New Orleans was whether I were there, and he seemed pleased at receiving an affirmative answer. The legislature of the state had arranged his reception with the common council of the city. The residence of the common council, the Mayory, was entirely refitted, admirably adorned, and newly and luxuriously furnished. A table, with
thirty covers, was set every day during the general's stay, in order that he might become acquainted with the principal inhabitants and planters. I will not speak of other festivities—balls, theatres, &c. Finally, one of the best steamers was procured, and kept ready for a visit to Natchez and the state of Mississippi, with a deputation, consisting of the governor, a member of thf legislature, a member of the common council, and a delegate from all the most important classes in the country—planters, lawyers, merchants, &c.—chosen by the general himself. When he looked over the list, and came to the names of the merchants, he designated me as the person who, as an old acquaintance, would be most agreeable to him. By his wish I visited him every morning after breakfast, on which occasions he questioned me freely about men and things in Louisiana. One morning he acknowledged to me that his purse was but meagrely furnished. " Certainly," he said, " Congress has granted me money enough, but I have not as yet received one cent of the $200,000, because the treasury was not at the moment prepared to pay it; therefore, I am in need of money ; can you give it me ?" My answer may be divined. I placed my cash-box at his disposal; but he only wanted $1200, which I brought him the same day. I asked for no receipt, but begged him merely, when he should return to the North, and visit Boston, at his convenience to give the sum to my friend there, Mr. John Richards. The general insisted on giving a receipt, and put one into my hand the next morning, which I have retained, although the debt has been paid.
The voyage to Natchez gave me better opportunities of seeing the general, and of enjoying his conversation, than would otherwise have been possible. The whole of the great cabin of the steamboat was for the general's convenience. Above this, on the deck, was erected a large convenient saloon, wherein the eating was carried on, and where people passed the time as well as they could. In it were sofas, play-tables, cards, and books. The governor of Louisiana, by name Johnson—a most ordinary kind of man, ill-instructed, and of most unpolished manners, in many respects a true child of nature—sat on the general's right hand. The seat at the left hand was reserved for me ; and at breakfast