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The World’s First Stock Exchange Page 4 (13 of 305)
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A World-Famous Book
further item is offered and then there follows a bid. The hands
redden from the blows (I believe from the shame that even the
most respected people do business in such an indecent man-
ner as with blows). The handshakes are followed by shouting,
the shouting by insults, the insults by impudence and more
insults, shouting, pushes, and handshakes until the business
is finished.
He explains that there are many people who prefer to remain
aloof from this “battleground” and always use intermediaries to
conduct their dealings for them so that they are not “molested”
in this way.6 What’s more, the trade in shares is not only rough
and coarse but also “the falsest and most infamous business in the
world.” The shareholder warns the merchant and the philosopher
against a whole raft of frauds that are common in the trade. There
are, for instance, brokers who “encourage a friend whose judg-
ment is esteemed, whose connections are respected, and who has
never dealt in shares, to sell one or two lots of stock while the risk
of loss is borne by the group. The notion [behind this maneuver] is
the belief that anything new attracts attention, and that the deci-
sion of this person will produce astonishment and will have im-
portant consequences.” In other words, his action will lead many
people to follow his example. This pushes the price down, and the
brokers can buy shares cheaply.7
Undeterred by all this, the merchant and the philosopher decide
to take the plunge, with a conspicuous lack of success. At the
beginning of the third dialogue the self-pitying philosopher has a
tale of woe to tell: “Last night my peace was turned into unrest,
my calmness into despair, my awe into mockery, my knowledge
into ignorance, my equanimity into frenzy, my respect into abuse.
A speculator cheated me; a cheater took me at my word; a betray-
er stole my reputation.” He had mixed with brokers, found out
the price of East India Company shares, overheard other brokers
saying that the share price could well rise further, and become so
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