By the aid of the £1 share, all manner of enterprises have during the last fifteen years, or since 1890, been converted into joint-stock companies on the basis of an excessive capitalisation that would have been impossible to the same extent under the old fashion of the £10, £20, £50, or £100 share; and the losses consequent upon the unprincipled rapacity of the promoter, gratified by means of this ensnaring instrument of speculation, have been greater and more widespread than those inflicted upon an easily deluded public by all other forms of joint-stock swindling put together. When the new fashion was just coming into favour, one of the shrewdest members of the Stock Exchange, a broker of high character, predicted to me that it would be so. Talking of railway manias, shipping manias, and the losses they have caused, he remarked that they were “trifles to what the public is going to suffer through the £1 share.” Not many years after this opinion was expressed to me, the nation plunged into the South African gold and diamond mine dementia, with results not yet by any means fully visible, but whose harvest of loss and affliction has already transcended in magnitude and in the numbers of the victims all the plagues of this sort that have preceded it.
It looks so easy for the “small man,” as the City slang would put it, to have his “little fling” with a £1 share. Even when such share rises to five, ten, or twenty times its nominal value, it still seems easy, tempts the multitude more perhaps than when it may be at a discount, and there are such facilities for indulgence in the passion to make money without effort, with “no risk at all,” as the bucket-shop puffer is ever iterating. The market gives every facility, is ready to lend its means to the player, to smooth the field for him at the start. He need not pay for the shares he buys. The dealer and broker will “carry” them for him fortnight after fortnight, as each market “settlement” comes round, lending the money at handsome rates of interest, and charging an infinitesimal commission, or, perhaps, no commission at all, for performing this necessary operation. A man possessed of £50 may in this way be induced to speculate in £500 or £1000 worth of these small shares, staking his all. If the buyer wins, as in seasons of fever he often for a time does, the heavy interest he is charged does not affect him. Each fortnight, as the Stock Exchange account comes round, he pockets his “difference,” the sum left over as product of the advance in price after all charges have been met, and thinks himself on the high road to affluence. Initial success inflames the appetite, fresh purchases are made, probably before the earlier speculations are closed, and while the profits already reaped by the earlier gambles are being spent as fast as received. By and by reaction comes, losses accrue, expressed in “differences” to be paid instead of received, and the end is usually misery for years, for a lifetime, or sudden and irretrievable ruin. Slowly, and amid infinite suffering, this harvest of the South African, the Kaffir market insanity is now being reaped, as that of more than one Australasian and American rage of speculative abandon has been again and again during the present generation.