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Book One: A Poor Man

at the Gate Series

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Chapter Eight

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In 1794, aged thirty-two, rich and increasingly unsettled, Tom sat in Martin’s office briefly dealing with business, signing as directed on a series of unread documents; he had long since decided that either he could trust his banker or he could not, and if he couldn’t then he had no business dealing with him. He became much more alert when Martin started a discussion of the state of the world. They were at war with France, again, but that was a fairly regular occurrence and one the navy would deal with in its normal fashion; the main effect on the business community so far had been a few taxes, which could be avoided or evaded, and a lot of government contracts for those who wished to pay the bribes. Tom had not moved Roberts into armaments, expecting the war to last no more than a couple of years, and consequently was little affected; he was in fact much more interested in steam and the general expansion of the economy.

“Canals, Mr Martin, that’s where the money seems to be at the moment – I was thinking of venturing twenty or thirty thousand in one of these ditches.”

Martin, older, greyer, as unobtrusive as ever, raised his voice emphatically, a rare event.

“No, Mr Andrews, definitely not, sir! The best are all gone – London is connected to Bristol, to Birmingham, Leeds, Liverpool and Manchester. All of the lowlands, the Midlands and the bulk of the industrial North Country are interlinked now – so what is left? Have you seen the latest great proposal, sir? To link Glasgow, of all places, with Leeds! Have you seen any of that country, sir?”

“I have, in fact – I took the coach from Glasgow to Carlisle to St Helens a few years ago, coming here from New York.” Tom rebuked himself, that was an unnecessary piece of information to let slip, even to a man as discreet as Martin. “Where there are no hills there are moors and mountains instead – they would need hundreds of locks, chain after chain in places.”

“They would, Mr Andrews, there will be a rise of at least a thousand feet to contend with and leaving aside their cost, think how it would slow travelling. Better far to use the coasters, except perhaps in winter when the Irish Sea is an unfriendly sort of place.”

“What cost do they envisage, Mr Martin?”

“The prospectus is seeking to raise two millions.”

“Can they hope to do so? It is a vast sum – add up the cost of every canal built last year and it would amount to less than that in total.”

“No – it is too great a sum for the market to bear; I do not believe it is possible with government offering a safe four and a half per cent in Consols and creaming the bulk of funds off of the Exchange to pay for the war.”

“So, they may get acceptances for one half, say, and make a start and then run out of cash and go down, leaving men and suppliers unpaid.”

“I am quite certain that that is exactly what will happen, Mr Andrews. This bubble is overdue for its bust; we have been in a boom, one of the biggest ever, for ten years now and it is impossible that it can continue much longer – history is against it! Have you heard of the South Sea Bubble, Mr Andrews?”

Tom had not, listened in growing horror as Martin outlined the events of seventy years before and drew the obvious parallels.

“Paper money from country banks will lose its value as the banks close their doors, so banknotes are no way to save money. Goods will be unsellable. The wise man, Mr Martin, will sell out of everything this year, except his food stocks, I suspect, and turn all of his wealth into gold coins.”

“I agree, sir, and strongly advise you to do so. I am not able to follow my own advice, because I cannot call in time loans, but everything that is at short notice is coming back in already, and I am making no new loans at all, all of my investments are in Consols, not even discounted Bills. I will still be vulnerable if there is a run on the bank, but will survive anything less than a full national panic.”

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Tom persuaded Joseph, in the end used his authority as senior partner to order him to follow his example, and sold everything he could, offering no trade credit and allowing no customer any leeway. By mid-June of 1795 they had nearly one hundred and fifty thousands in coin, locked away in a strong room they had cobbled together at Roberts, two men at a time with fowling pieces on guard, Tom’s pistol belt at his desk.

He sold every house except those at the mine, and then he had a brainwave and sold the mine itself to a consortium of speculative investors, men who had no interest in running the concern and were happy to leave everything to the managers in place, intending to take one year’s income and then sell it on at a gain. They were willing to pay a boom price because they saw no reason to expect the boom ever to end – it had lasted for ten years, why should it not last for another decade? A week after he added the twenty-five thousand to his cash pile the bubble burst.

To their surprise, the first intimation of disaster came from the Midlands, not from the north but from Redditch where a small canal was in construction, linking the town to Birmingham and the network of waterways; being short and cheap the principals had cut some corners, especially in their initial planning of the route; the diggings met an un-surveyed stretch of clays and slowed abruptly and the contractor called for an extra couple of thousands from the owners. Just one of them did not have the cash to hand and went to his bank for the loan of a mere five hundreds; the banker demanded that he should deposit some security, ideally in the form of share certificates, but he could not for already having done so elsewhere. More than a little disturbed, the banker made enquiry amongst his peers and competitors in the local banks; they discovered that between them they had lent every penny of the canal’s cost – where each had thought he was in for a small percentage, in fact the remainder, offered as assets, had been borrowed from a competitor; even worse, they found that the securities that had been accepted, in the form of shares in other canals, were all part unpaid – they had lent money as a result of false pretences. They refused to lend a penny more and demanded that all of the unlawfully acquired loans be instantly paid back, under pains of prosecution for fraud as well as civil action for recovery. The nimblest of the canal projectors left everything, fled the country with whatever they had to hand; the greedy tried to grab enough cash to make it worthwhile, and they ended up in prison; the stupid, the innocent sheep, found themselves asking what was happening as the bailiffs descended. It took just two days to discover that the canal proprietors had no cash money to hand and that the banks could not recover their loans – their only asset was the canal, and that was unfinished. A day later and the banks’ problems were public knowledge and the first depositors came queuing to withdraw their cash and the weakest bank closed its doors - broken. There was an instant run on the other banks in town and those that did not close their doors that day did not open them in the morning.

The news spread rapidly, first amongst the banking community itself, then to the general public. The banks everywhere called in their loans for fear of a run, creating more panic in process, and very nervously begged to inspect the books of their own canals – more than half of the canals in the country were discovered to have been acting fraudulently – borrowing from one bank, then from a second to repay the first, then using the proof that they had repaid their first loan on time to borrow greater sums from a third and fourth bank; as long as there was another banker willing to lend the daisy-chain could continue until eventually the canal was finished and could then be sold, repaying everybody and returning a profit. The closure of just one line of credit meant that every other fell as soon as the inevitable questions went unanswered.

The news reached the mass of depositors in London and Liverpool and Bristol overnight and the smallest town banks broke that day, triggering a mass panic over all of the rest of England and Wales; Scotland, its system different and separate to an extent, followed more slowly but it took a very bare week for the whole country to freeze and for confidence to be destroyed. The country banks had almost all issued their own banknotes which became instantly valueless when the bank failed, as more than half did. The banks tried to call in every loan they could, but their customers had no money.

Martin in common with every other banker opened his doors to a long queue of depositors begging to withdraw the whole of their accounts in gold and silver, as they had every legal right to do. He responded as every other banker had by counting out the cash very slowly, coin by coin and each cashier checked by a second, while he begged his own creditors to pay everything they could, knowing that they would not be able to and aware that he could not turn to other parts of the country to beg for help, as was normal practice. The meanwhile the depositors grew increasingly panic-stricken – few had more than a hundred in their accounts, but that was often their whole nest-egg, a lifetime’s thrift, their last bulwark against starvation, and they could see the workhouse threatening.

The word reached Tom at ten o’clock, George Mason galloping into the office to tell him that there was a run on Martin’s and they needed to get there quickly to try to save the firm’s groats.

“Harness up the dray and four, George. Send Richard to Mr Star’s mill, put him on the cob, to get there as quickly as possible. Warn the men we have named to be ready. Quickly now!”

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“Time to make a deposit at Martin’s, Joe?”

Martin had been quite open in his assessment of his prospects – he had made longer term loans to safe firms, keeping out of the short run, high risk, high rates loans, and knew that they would not be repayable in a hurry. The firms had used his money to build mills and furnaces and open mines and quarries, all of which would pay in time, none of which could be sold off, turned into cash overnight. He had estimated that he would be short by some thirty thousands if it came to a national panic in which he could not borrow from untouched banks in another part of the country.

“What do you reckon, Joe – keep back twenty thou’ for running money if worst comes to worst and there’s civil war and the Frogs invade?”

Both had accepted that there would be some rioting when the banks failed and they could envisage an unlikely set of events turning that unrest into full-fledged revolution – it had happened in France and before that in America, so it was not impossible.

Joseph nodded agreement and they turned to loading the dray – one hundred and fifty strong canvas sacks, each weighing the better part of thirty pounds and containing one thousand guineas. It was amazing just how little space they took up. The pair of guards sat on the pile, shotguns in their hands; Joseph swung his legs over the tailgate, horse pistols on either side of him; Tom lounged next to the driver, pistol belt strapped on, six butts showing prominently.

“Six pistols, Master? Are they loaded?” George Mason enquired.

Joseph laughed, “they’re no use if they’re not, George – and it won’t be the first time, by a long way, either!”

“Stupid of me to ask that question, Mr Star! I have often wondered how Mr Andrews came by that scar – the war in America?”

“We both did our share there, George.”

Twenty-four men from the foundry, the biggest and hardest-looking, lined up, a dozen on each side, all carrying cudgels or the iron bars they used for breaking out the castings. They set off into town, Tom wishing that he had been able to hire a band – fife and drum would have been appropriate he felt as they marched on the dirt road of the village and then into the silent streets of the town, their own feet and hooves on the granite setts the only noise.

There was an anxious crowd outside Martin’s bank, quiet as yet and unmoving, just waiting; the small square was full of people watching the single door that was open and the snail’s pace queue on the steps. Tom stood as the dray came to a halt.

“Let us through, please! If you want your money, let us get it inside!”

The people turned, still silently, and stared and pointed at the armed men. The brightest amongst them realised the significance of the escort, of so many guns and bludgeons, and started to tell the people on either side of them.

“Gold. That must be gold!”

Tom picked up on the mutters and bellowed at the top of his voice.

“It’s gold guineas! Martin’s gold! There’s enough here to pay every manjack twice over. Your money is safe. Martin’s is safe!”

The first enthusiast began to cheer as Martin came out and opened both flaps of his main doors and then quietly asked the men at the front of the queue to step aside to allow the gold to come in. He apologised for the delay in its arrival, explained that they had not wished to take the risk of transporting it at night. The word quickly spread and made obvious sense – no one in his right mind moved gold on the roads at night.

“Would you wish to open one of the bags out here to check it, Mr Martin? Easier to count gold in the sunlight.”

Martin kept a straight face and opened a sack, displaying it clearly to the fascinated crowd, an audience now, staring at more money than they had imagined in all of their lives. They counted the men going in laden and coming out empty-handed, awestruck.

The show ended and Martin stepped up to his doors again, invited the queue to reform; few of his waiting customers bothered.

“Thirty seven thousand five hundred to Mr Star’s account, the remainder to mine, if you please, Mr Martin.”

“Certainly, gentlemen. Thank you!”

“My pleasure, sir. I would expect Andrews Pit to come onto the market fairly soon, Mr Martin – if you get word of it put the owners in my direction, if you would be so good. You have the knowledge of high finance that I do not, sir – would you set my money to work for me?”

“And mine,” Joseph added.

“I will double it within the month, gentlemen, if I can do no better!”

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Every short-term loan in the country was called and more than half of businesses lost all of their working capital, the money that paid their day-to-day bills and the wages and bought their working raw materials while they waited for orders to be completed and their customers to pay up. A month and these businesses had closed down and were doing all they could to avoid liquidation, anxiously trying to sell stock and finished goods and machinery, eventually their premises, anything to keep out of bankruptcy and debtor’s prison; many a firm went down with ten thousands in finished goods in stock and one hundred pounds in unpaid bills and unable to find a penny in cash. Some businessmen were wealthy, possessed cash in gold and Bank of England notes, and they profited; many more had been wealthy, their assets in country banknotes and bank accounts, and they left the ranks of the new rich to rejoin the old poor.

Prices collapsed, for lack of demand – there was no cash to purchase anything. Desperate wives tried to sell their jewellery to save their husbands and discovered that diamonds were as worthless as any other asset in the absence of a buyer – there was no such thing as intrinsic value, they discovered, anything was worth only what people would, or could, pay for it. The few who could pay hardly needed to, for money was worth much more than it had been a month before.

Tom bought back his coal mine, paying five thousands in coin for it and being thanked for his generosity; he would not have paid so much had not Clapperley privately pointed out that one of the gentlemen involved was son to the Lord Lieutenant of the County, potentially a dangerous enemy to create. He refused to buy Collins’ mine, being able to make his choice of local pits, and took on half a dozen small, new enterprises, all similar to his own pit in its earliest days, possessing thick, shallow seams that had hardly been touched yet. Joseph bought four spinning mills, deciding to specialise – he did not like the potential for trouble he could see in weaving. Clapperley and Martin were kept unceasingly busy, acting as go-betweens, talking to the three or four other men possessed of gold and interested in buying – there was no sense at all in bidding each other up. Tom bought five steam engines, new and in perfect condition, for less than the price of one the previous month; he picked up ten thousand tons of coke and the yards it was stored in for almost nothing, then added five miles of wrought iron rails for new trackways and four shiploads of Canadian timber for considerably less than cost; almost as an afterthought he bought out Roberts’ largest competitor. Joseph the meanwhile attended the dockside auctions, buying shiploads of the best cotton for pennies and then spending a few pounds on drays and horses to move it and warehouses to store it in.

At the end of four frantic weeks they took stock, counted up what they had spent and all that they had got for their money. Between them they decided they were worth well over a million at boom prices, with assets that would actually value at anything from half to three-quarters of that when the market stabilised again, and would grow over the next decade. They were rich beyond any expectation – they decided it was better to recast their partnership – senior and junior no longer made sense to either. The new purchases in textiles would go one hundred per cent to Joseph, coal and iron wholly to Tom, organised in new firms; the old Andrews and Star would retain Roberts and Star Spinners only, more or less for old times’ sake. It was important they thought that they should never be brought into conflict with one another – they were too big to risk arguing.

“Friends always, I trust, Joseph, but we cannot work together any more – we’re just too damned big!”

Joseph burst into tears and then apologised – the leap in ten years from barefoot half-caste wandering the streets of English Harbour, to rich, respected gentleman in Lancashire was too much for him to think of without emotion, without reminding himself of all that he believed he owed to Tom. Now, to be setting himself up as Tom’s equal, that was too much for him – almost.

“The children know that you are the most important man in England, Tom, as far as we are concerned. They will not forget it. I want to take a risk, Tom – do you think I could send money back to Antigua, to my mother? Might it become known if I did? Could I be putting the law onto us?”

“I don’t know – let’s ask Martin. Not Clapperley, I think, not the sort of thing I want him to know.”

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Martin had no direct correspondent in Antigua, but he had contacts with Mr Lacey in Liverpool who was banker to the sugar there. Mr Lacey had not closed his doors because Martin had been able to put fifty thousands across to him on the night Tom had delivered the guineas; he had already paid back fifty-five thousands, with his best thanks, and would be able to make an anonymous gift to Mrs Laetitia on the island, the more so because the planters who had sold their sugar through his offices had received their money and knew that they owed him debts of gratitude at least – they would ensure that no nosey-parker asked awkward questions.

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Two months into the depression Martin begged the favour of an interview with Tom.

“I know that you are unsettled in the manufacturing life, Mr Andrews, and that mere money-making must seem a little pointless now. I am able to put you in the way of an opportunity that rarely arises. My Correspondent in Kettering, being aware that Martins is solvent, and must have at least one of very wealthy depositors to have kept it so – the whole country in fact, the financial part that is, must have made that surmise – two tons of gold attracts a remarkable degree of attention, you know! Where was I? Ah, yes, Kettering – a very rich iron town, as you will know, one of the earliest in the whole Midlands, finding problems now for lack of charcoal and distance from the nearest coal mine – there was used to be Rockingham Forest surrounding the town, but it is all gone now, every last tree gone to charcoal! Just to the south of the town, across the river, the Ise, there is a large and old-fashioned estate, the Quillers, the family that owned it, said to be Papist, certainly reclusive and out of favour with government and their peers; they died out some five years ago, no male issue, no cousins or nephews; one daughter, a spinster of uncertain years, not in the way of marrying certainly, who inherited and sold, is reputed to have retired to Rome to die in an odour of sanctity – or what passes for it amongst the Papists!”

Tom, who was not entirely certain of the distinction between Papist and any other sub-division of Christianity, and had thought them to be Irish anyway, smiled his sympathetic understanding - very strange and not really English, he implied.

“A Mr Rockingham – my correspondent understands the name to be of choice, not birth – was an ironmaster who was generally held to have made his fortune during the last war, certainly was prominent in the business community; he decided to set up for a gentleman and bought the estate. Quite rightly, he enclosed and began to improve the estate, but it transpires that he borrowed heavily to do so – his fortune stretched to the initial purchase but no further. Unfortunately for him, he went outside of the normal banking houses for his funds, for reasons of secrecy, one presumes; he went to the Jews! He failed to make his payments last month, asked for time, a friendly accommodation, he hoped, and was rapidly taken up and is temporarily held in a sponging house, under arrest but not yet cast into debtor’s prison. If he can sell and pay off his debts then he may yet come out of the affair with a few thousands, enough to live upon in retirement. He married late in life and has a son of about eight years, a wife as well, but she is of lesser importance; he had intended to bring the boy up as a country gentleman, it would seem, but must now be content to bring him up at all. If he does not arrange an early sale then he will find himself in court and his assets taken from him and placed into administration, the costs involved wiping out any surplus there may be – he will lose everything and may never be able even to regain his freedom. He has no choice, and cannot hold out for a high price, or indeed for anything more than a bare minimum.”

Tom nodded – it was obvious where Martin was leading. Did he want it? An estate, at Kettering, where was that exactly? The geography of England had never been one of his strong points – there was a map on the wall behind Martin, just too far distant to read the small print easily from where he was sat. He stood, grinned an apology and leant across to check the location of the town. Smack in the centre of lowland England, well away from Dorset and a respectable distance north of London.

“Tell me more, Mr Martin.”

“He owes perhaps ten thousands to the Jews, probably as much again to builders and road contractors and for drainage and bridges and who knows what else – it behoves the great man of the manor to be open-handed, and he was certainly that, even when his hands were technically empty. Twenty or so thousands in his pocket besides and he would go into his retirement; less than that and he might try to fight, to drag things out for two or three years.”

“So, forty thousands that would probably turn into somewhat more with fees and interest and extra debts turning up out of the blue. In exchange a large estate bought cheap. How large, Mr Martin?”

“Precisely, to the last acre, I do not know – indeed, the last stages of the enclosure are still in completion so probably no one knows for certain yet. The farms will be paying no rents this year and there will be money still to spend – enclosed land must be fenced and drained and set immediately to work; roads must be built, drains finished, new farmhouses built perhaps. There could be another ten thousands to go yet this year and three or four a year for each of the next five. After that, enclosed arable pays rent of thirty shillings an acre typically and the Thingdon Estate will be mostly wheat land and will amount to about seven thousand acres. So, an income of about ten thousands gross, but with expenditure to be made each year on improvements and always the risk of a bad harvest or failing prices – over a ten year stretch you would probably expect to net five thousands on average.”

Roberts and the mines would be worth at least five thousands this year, probably twice as much next – a clear ten thousand a year that would make him very rich indeed, would mean that he could afford to live a life of leisure, which would rapidly become very boring – he would be able to choose what he wanted to work at – perhaps he could encourage engineers to come to his shops and build new inventions, better steam engines, new ways of mining, of producing iron, or maybe he could improve the world of agriculture – farmers were generally backward, primitive sorts of folks – there would be a lot to do. Maybe, just possibly, he could look about for a wife and set up as a family man, probably he ought to, on an estate that needed an heir. Joseph would be pleased to see him settled in domestic bliss, though not, he rather thought, blessed ten times over.

“I would be able to keep the mines, and Roberts, Mr Martin? I have heard that ‘gentlemen’ do not approve of trade.”

“You would, but at a distance, with managers to do the work for you, you would have to pander to their prejudices to that extent. As well, Mr Andrews, you may not have considered the political implications of your position if you buy – the estate effectively controls the nomination of the local member – he is elected by about thirty burgesses of the old village of Finedon, some eighteen of whom will be your tenants, the estate owning the freehold of their shops or cordwainer’s sheds or blacksmith’s yards. It is one of the old rotten boroughs, the electorate small local men exclusively and possessing neither political knowledge nor independence of mind and they will be obedient. Your name will be known in Downing Street as a result and the government of the day will always wish to sweeten you if it can be done at little expense; the barracks in Lancashire may well be instructed to go to Andrews Pit for their coals for winter firing for example; as another instance, a minor knighthood would be yours for the asking – not the Order of the Bath certainly, but one of the lesser honours – and a baronetcy would be quite cheap, two or three years of good behaviour, a ‘loan’ of ten thousand to the Prime Minister’s personal funds and you could be Sir Thomas Andrews, Bart..”

“A hereditary title, Mr Martin, would not be of great interest to me in the absence of an heir.”

“Purchase the Thingdon Estate, Mr Andrews, and your chances of remaining unwed will be very slight indeed! You will be a rich landholder and the hunt will be up – to be an acceptable parti to the gentry, Mr Andrews, you must have birth and breeding or lands and riches, ideally both but either will suffice at a pinch.”

Tom laughed delightedly, but could not really imagine himself as a fox with a whooping, tally-hoing pack of genteel young ladies at his tail.

“Make the offer, Mr Martin.”

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It took six more months to make the offer and negotiate the price with Rockingham’s lawyers and creditors, a three-way fight with no community of interest between them. The initial demands were outrageous, scaled down to the unrealistic and eventually to the possible in the current economic climate; a year before good fields had sold at twenty pounds the enclosed acre and there would have been competition between a dozen buyers for each parcel of land, the estate split up farm-by-farm. Now there was only one possible purchaser and last year’s prices were irrelevant. Rockingham’s people found thi