Whenever a person is heard to talk thus he may be recognised as the easy prey of the first adventurer who comes across him; he will commonly, indeed, wind up his discourse by saying that in spite of all his natural caution, and his well knowing how foolish speculation is, yet there are some investments which are called speculative but in reality are not so, and he will pull out of his pocket the prospectus of a Cornish gold mine. It is only on having actually lost money that one realises what an awful thing the loss of it is, and finds out how easily it is lost by those who venture out of the middle of the most beaten path. Ernest had had his facer, as he had had his attack of poverty, young, and sufficiently badly for a sensible man to be little likely to forget it. I can fancy few pieces of good fortune greater than this as happening to any man, provided, of course, that he is not damaged irretrievably.
So strongly do I feel on this subject that if I had my way I would have a speculation master attached to every school. The boys would be encouraged to read the Money Market Review, the Railway News, and all the best financial papers, and should establish a stock exchange amongst themselves in which pence should stand as pounds. Then let them see how this making haste to get rich moneys out in actual practice. There might be a prize awarded by the head-master to the most prudent dealer, and the boys who lost their money time after time should be dismissed. Of course if any boy proved to have a genius for speculation and made money--well and good, let him speculate by all means.
If Universities were not the worst teachers in the world I should like to see professorships of speculation established at Oxford and Cambridge. When I reflect, however, that the only things worth doing which Oxford and Cambridge can do well are cooking, cricket, rowing and games, of which there is no professorship, I fear that the establishment of a professorial chair would end in teaching young men neither how to speculate, nor how not to speculate, but would simply turn them out as bad speculators.
I heard of one case in which a father actually carried my idea into practice. He wanted his son to learn how little confidence was to be placed in glowing prospectuses and flaming articles, and found him five hundred pounds which he was to invest according to his lights. The father expected he would lose the money; but it did not turn out so in practice, for the boy took so much pains and played so cautiously that the money kept growing and growing till the father took it away again, increment and all--as he was pleased to say, in self defence.
I had made my own mistakes with money about the year 1846, when everyone else was making them. For a few years I had been so scared and had suffered so severely, that when (owing to the good advice of the broker who had advised my father and grandfather before me) I came out in the end a winner and not a loser, I played no more pranks, but kept henceforward as nearly in the middle of the middle rut as I could. I tried in fact to keep my money rather than to make more of it. I had done with Ernest's money as with my own-- that is to say I had let it alone after investing it in Midland ordinary stock according to Miss Pontifex's instructions. No amount of trouble would have been likely to have increased my godson's estate one half so much as it had increased without my taking any trouble at all.
Midland stock at the end of August 1850, when I sold out Miss Pontifex's debentures, stood at 32 pounds per 100 pounds. I invested the whole of Ernest's 15,000 pounds at this price, and did not change the investment till a few months before the time of which I have been writing lately--that is to say until September 1861. I then sold at 129 pounds per share and invested in London and North-Western ordinary stock, which I was advised was more likely to rise than Midlands now were. I bought the London and North-Western stock at 93 pounds per 100 pounds, and my godson now in 1882 still holds it.
The original 15,000 pounds had increased in eleven years to over 60,000 pounds; the accumulated interest, which, of course, I had re- invested, had come to about 10,000 pounds more, so that Ernest was then worth over 70,000 pounds. At present he is worth nearly double that sum, and all as the result of leaving well alone.
Large as his property now was, it ought to be increased still further during the year and a half that remained of his minority, so that on coming of age he ought to have an income of at least 3500 pounds a year.
I wished him to understand book-keeping by double entry. I had myself as a young man been compelled to master this not very difficult art; having acquired it, I have become enamoured of it, and consider it the most necessary branch of any young man's education after reading and writing. I was determined, therefore, that Ernest should master it, and proposed that he should become my steward, book-keeper, and the manager of my hoardings, for so I called the sum which my ledger showed to have accumulated from 15,000 pounds to 70,000 pounds. I told him I was going to begin to spend the income as soon as it had amounted up to 80,000 pounds.
A few days after Ernest's discovery that he was still a bachelor, while he was still at the very beginning of the honeymoon, as it were, of his renewed unmarried life, I broached my scheme, desired him to give up his shop, and offered him 300 pounds a year for managing (so far indeed as it required any managing) his own property. This 300 pounds a year, I need hardly say, I made him charge to the estate.
If anything had been wanting to complete his happiness it was this.
Here, within three or four days he found himself freed from one of the most hideous, hopeless liaisons imaginable, and at the same time raised from a life of almost squalor to the enjoyment of what would to him be a handsome income.
"A pound a week," he thought, "for Ellen, and the rest for myself."
"No," said I, "we will charge Ellen's pound a week to the estate also. You must have a clear 300 pounds for yourself."
I fixed upon this sum, because it was the one which Mr Disraeli gave Coningsby when Coningsby was at the lowest ebb of his fortunes. Mr Disraeli evidently thought 300 pounds a year the smallest sum on which Coningsby could be expected to live, and make the two ends meet; with this, however, he thought his hero could manage to get along for a year or two. In 1862, of which I am now writing, prices had risen, though not so much as they have since done; on the other hand Ernest had had less expensive antecedents than Coningsby, so on the whole I thought 300 pounds a year would be about the right thing for him.
