Chapter 8: Tea On The Candle
I came out upon Aldgate, and entered upon the Leadenhall Street, where suddenly all was again brightness and industry. The hall wherein the Auction was held was a vast palace of white marble, with a massive and imposing roof supported by a dozen columns. There were twelve or more grenadiers standing Post, all dressed in the highest martial fashion, with brass helmets and black leather chin straps.
I inquired of Mr. Fitzroy, and found him attending his stall. I produced for him my Contracts, and was prepared to take ownership of my Fifteen tons.
“Yes, I see that you have a non-exclusive right to purchase the post-excess auction tea,” said Mr. Fitzroy.
“Post excess?” I repeated, for I confess the term was not familiar to me.
“That means that whatever is left after the auction, you may purchase at the option price,” said Mr. Fitzroy, pointing with his finger to the terms of the Contract. “Not before the auction.”
This to me seemed only a minor inconvenience, and furthermore, would give me opportunity to inspect the Auction. I thanked Mr. Fitzroy and said that I should return once the Auction was concluded.
The auction-chamber was a most extraordinary place. There were long rows of elegant columns in the Greek style, supporting a broad ceiling painted in Oriental scenes, and I wondered that so many men could be assembled in a single room. I arranged myself upon a Bench, as near to the Auctioneer’s Podium as space and comity would allow. It was nothing so dignified as one might have thought. These men of commerce, these Lords of the earth, sat around the benches cursing and drinking and spitting, and having a general row with one another. Indeed, they behaved no better than the lackeys from the candle factory and I was soon engulfed with the stench that is the English upper-middle classes. Here is a fellow, on my left, who may be a minor Peer, and yet has not attended his Barber in a fortnight. His boots are covered in horse-mire, and his clothes are drenched through with Tobacco smoke. His teeth, smallish black things, stood sentry for a mouth Emitting a foul stench. And were this odor not enough, I have here on my other side a great dandy of Fleet Street; a gentleman so dainty in habit & Taste, his hair curled like a women’s, and from his Person comes an odor of Juniper flowers that should Cause the very bones of the Lord Protector to stand upright in the Pit at Tynburn and demand to be Counted.
A long faced Dutch-man came and sat beside me. He was probably not more than twenty years old, and yet he had the bearing and manners of a man thrice that age. His skin was already wrinkled and distorted from gin & Tobacco, and though his cheek was soft and without hair, this was only discerned upon a very close inspection.
“You be bidding on the sum then?” asked the Dutch-man.
“Nay, I have already purchased my contracts.”
I looked over this Dutch-man, and made him know that I did not appreciate the candor with which he approached the Lord Marbury.
“I’m quite certain that’s not any of your business.”
The Dutch-man then removed a large piece of newspaper from his jacket. He opened the paper, and removed what appeared to be a giant, rotting piece of Halibut. And then in the midst of this Auction, he proceeded to eat the Halibut with his bare hands, now sprinkling salt on the fish, now dousing it from a small bottle of vinegar, which he also kept in his pocket.
“Are you quite certain this is the proper place to be eating your dinner?” I asked.
“Aye, tis as good a place as any. I shan’t bid today. The price is too low.”
“How do you know that?”
But he refused my inquiry, and continued along with his Halibut. At last the great Champion of the auction, Mr. Oliver Fiddlesworth, ascended to the podium. He was a rather gaunt fellow, and his face was edged in thick muttonchops. He wore a thick and costly plumb-coat, with a collar of worsted red shag, and silver Buttons running along the shoulders. Although I think they have now ceased the practice, at that time the tea was sold upon the candle, which gave the mob about 25 minutes to make each sale.
“We shall start the bidding at £25,” said Mr. Fiddlesworth, as he lit the wick of the candle. The crowd roared at this price, which they seemed to feel was much too high a starting bid. Once the bidding got underway, the uproar grew in caliber and such a commotion as made it very difficult to understand what was going on. They did not use recognizable terms, and had all sorts of short-hand expressions that I was entirely confused. The traders were all in a fury, shouting & pushing one another, calling out phrases that made little sense to me. “Six pence on the guilder!” and “Two and four upon the lid!” The scene quickly became more of a blood-sport than an auction, and it seemed to me that physical strength was of far greater import than arithmetic or Coin. All around me men were throwing one another off their bench, now detaining an adversary with his foot, and giving a fellow an elbow in the stomach. In fact, these men began to bid without any seeming desire greater than to outdo the man to their immediate left, or right, and it confused me how this was anyway to manage an economy. On and on this went for more than three hours, until all the Tea had been accounted for.
The Auctioneer looked around the hall one last time; most men had fallen back into their seats on the bench, their fists clutching notes and papers which bore witness to their failures of the day. Whence the Auction was concluded, I returned to Mr. Fitzroy’s stall. There were a great number of merchants arranged to secure their contracts, and it was a full hour before my business was called.
“Mr. Sperryhawke I see,” said Mr. Fitzroy. “I’m afraid you shall have to wait a fortnight on those contracts now.”
“What? You said that I could redeem them upon the close of the auction?”
“No, I said you could redeem them from any excess tea remaining at the close the auction. But as you can see, I have sold out. I have no tea available, and thus your contract cannot be redeemed,” I suppose Mr. Fitzroy could sense that I felt I was being cheated. “Lad, the reason I have sold all of my tea is because the price was so low –- in fact, the price has not been this low in two years.”
I found myself at a loss for words, and was not eager to expose my ignorance to this treacherous merchant.
“Don’t let it bother you so much as all that. This contract is still good for the next three auctions. And besides, surely you bid on other stores given the record low price? You could have had twenty tons of tea at auction for what you would have paid me for fifteen tons with these contracts. They are worthless today.”
I exited the great hall with the rest of the commercial mob. Oh t’was an unhappy moment. The reader may be sure that I am not a man to dwell in misfortune, and am always of a mind to conduct myself with perfect equanimity; alas, my fortitude deserted me as I lamented that my first great opportunity had been squandered. To be sure, it was not so much my fault, as the miserly Captain who had refused to stand me the proper sum. I had half a mind to march straight back towards Lloyds, and demand rescission of the Contracts. Or else to Whites, and demand to speak with the Flamboyant Baronet. And yet to do so was to admit defeat, admit that I had been cheated.
And here is another apt moment for a lesson. If you are found to have been bested, you shall be hated & mistrusted by everyone. It is a rather disturbing paradox that men quickly despise those whom they have bested, and by extension, those who have been bested by their peers. And so let it be known that if you are ever the victim of deception, bear your wounds patiently, and quietly, and do not make a row of it.
I was not at all sure where I was to go, or what I was to do. I stood staring out into the street. A beggar came by with her child in tow. She was a loathsome looking urchin, but for one reason or another, her hunger and misery produced in me a profound sense of pity.
“There there good woman, be not afraid. The Lord shall provide,” and I passed her a sovereign, reducing my sum still further.
I crossed over the broad street, already the large rain pellets were hailing down from an angry sky and down into the alley behind the East India Company. I racked my brain for a solution to my dilemma; of course it was not that Dobbin should be cross, for it was his own fault for not providing me with adequate capital. Rather, I felt myself hollowed out by the dread that I had here a chance to recommend myself, and that it was all going to waste.
I entered upon a tavern, and ordered a small-Beer. I have never had a taste for intoxicating lyqours; indeed, the memories of my father have always been so near to me that I could no more look upon lyquor as an amusement than a hungry tiger as a pet.
It was then that the severity of the situation began to fill into my mind like a puddle of water on the side of the road. I had neither the Tea, nor the money the Captain had given me. And I wondered as to how exactly I should return to the Ship without being disgraced. And yet, it also occurred to me that perhaps my situation was not so sorry as I feared. I did, in point of fact, have More than two thousand quid at my disposal. The Captain was most likely dead, and the crew were all criminals anyhow. There was, therefore, little preventing me from absconding with the capital I had remaining. I could obtain passage on another ship for the Colonies, and set myself up as a proper Mercer in Boston with such a sum. And the more I entertained this idea, the less it seemed to me like any sort of theft, and more like the just satisfaction of Providence. All of the events leading up to that moment had surely been ordained for a purpose —- was perhaps that Purpose for me to begin my commercial life in splendor? Was such a sum of money not better put to my disposal, than the sickly Captain? Were my dependents not more worthy of this money than the criminal and knavish crew of deckhands? But as I considered these issues, I was interrupted in my reflections by a familiar voice.
“You have had a bad day at the auction I suppose?” asked the curious Dutch-man from the Auction, who was seated next me. He was wearing a round black hat, with a large white apron around his nek that was visibly stained with the greasy Haddock. I did not care for his intimacy, and gave him a look to know his interference was Counted.
“Yes, I was foiled in my efforts.”
“What’s you looking for?”
“I need fifteen tons of Caylon.”
“Fifteen tons be a large sum.”
“I have,” I paused, considering whether it was wise to disclose such a fact to a foreigner, “I have some two-Thousand pounds at my disposal.”
“For fifteen tons?”
“You won’t get your tea at that price. Not from the English.”
“Why so?” I asked.
This Dutchman snarled, and spit some tobacco juice on the ground. “You’ll pay a hefty tax, just for going through London.”
“And so? Why should that prevent me from getting my tea at the right price?”
The Dutchman waddled his head, and motioned for the bar-maid to bring him a drink. “Say you have a hundred pounds worth of tea. You ship it from India to London, and then London to Boston. Well, once it gets to London, now it costs 125 pounds. Then it gets to Boston, and you have to pay the Townsend tax. So you have 100 pounds worth of tea, and you already have to 150 pounds.”
“It seems an awful price,” I remarked.
“Imagine instead if you didn’t have to pay that tax.”
I have never struggled from any insecurity. I do not know what ghost it is in men that makes them quiver before controversy. “And how then might we avoid that Tax?”
“You buy it from the Dutch.”
“Yes but shouldn’t that require us to be in Holland?”
The Dutchman’s eyes lit up like cauldrons, and he rubbed his palms together as eager as a milkmaid in the bed of a great lord. “I represent a firm of Dutch merchants. They have stores of Dutch tea here in London.”
“And you have Fifteen-tons of tea for sale, today?”
No sooner had the words come out of my mouth, then the Dutchman got off hi Stool, and bade me to follow him out of the tavern, and down along the River. Though I thought I had seen the all filth of London in Cheapside, it was nothing compared to the appalling poverty this Dutchman then led me through. Naked children running through the alleys, and enormous Horse carcasses rotting in the street; there were Packs of wild dogs harassing the commons, and packs of Wild-men trying to capture the dogs to sell their meat. Countrymen, butchers, drovers, Hawkers, and vagabonds of every grade mingled together in an indiscriminate Mass; the thick steam perpetually rising from these reeking bodies of the Commons was one of the few assurances that this Hellish corner was yet capable of sustaining Life.
As we went along, I told my tale to this Dutchman, with unusual candor. “Of course, the Baronet was much impressed by me, and so I arranged with Mr. Phipps to purchase Tea valued at 250 pounds per tonnage, for only 160.”
“Only an Englishman or a Pickanniny would be seduced by such a deception,” laughed the Dutchman.
“How do you mean?” I asked.
“What you’s described is an options contract. It can be a useful instrument, but is most often a deceit the unscrupulous play upon the uninformed.”
“Because an options contract is just a way of making you feel as though you’ve gotten a good deal,” the Dutchman said, scratching his face with his long and dirty nails till the flesh turned Red. “The seller sets the value of the thing you are buying higher than it really is, and then agrees to sell you that thing below that value to make you feel like you’ve benefited from the bargain. It’s like a man telling you that his horse is worth one-Hundred guineas, but he’s willing to sell it to you for Fifty guineas. Only as fool or an Englishman would think he had gotten a bargain of Fifty guineas.”
“But surely if the horse is worth one-Hundred, and you only pay Fifty, you have saved yourself Fifty guineas?”
“And this horse is worth one-Hundred guineas according to whom exactly?” asked the Dutch-man.
“According to –- well, according to its Value?”
“But there is no fixed value of the Horse,” snarled the Dutchman. “There is no King who gets to finally say what the Horse is truly worth. Cost is just a rough estimate of value, fixed upon the point of exchange.”
It seemed to me that this Dutchman was no more than playing games with the meaning of words.
“Listen here. Imagine all the stuff in the Kingdom that has Value. All the country-Houses, and Tapestries, and Butter-churns, and horses, and shoes, and Horses-shoes, and everything, and everything. Well there’s all that stuff, but we have no way of talking about it without turning it into numbers. Do you follow?”
“Yes, I think so,” I said.
“So first we count all this stuff, and we say there are 10,000 head of Cattle, and 100,000 acres of Barley-corn, and so on. And that’s a good start. But that’s not enough to discuss them and compare them and trade them and value them because we don’t know what a head of cattle is worth compared to a bushel of Barley. So what we do is convert each of those items into a number. That is we take what is real, and make it abstract. We take a country-House, and turn it into a number, we take a pair of shoes, and turn them into a number.”
“I suppose that’s true enough,” I assented.
“But who gets to decide what that number is?”
“Well –- I don’t know I suppose?”
“It’s Nobody, and everybody,” smiled the Dutchman. “It’s simply an agreement. I say my horse is worth One-hundred quid, and if enough people agree, then that’s what it’s worth. And if I am dressed in a Frock coat, and if the Bill of Sale is written in rolling Black letters and sealed with a large dollop of red Wax, who will Doubt that the horse is worth a hundred Guineas?”
“Ridiculous,” I scoffed, and now raised my index finger to warn this Dutchman not to talk such rot. But at that moment, this Knave quite suddenly plucked an apple from a merchant’s card we passed. “Take this apple . . .”
“That you have just stolen!”
“Never mind that. What is this apple worth?”
“Perhaps a hay-penny.”
“According to whom?”
“Why must you keep asking that?” I shook my head in consternation. “According to its value!”
“But surely God has not ordained this apple to be worth a haypenny. So who fixed it?”
“Then it was the apple merchant, I suppose.”
“And why do we take the merchant’s word for it? Couldn’t the Mercer simply say the apple was worth far more than it truly was so as to make a greater Profit?”
“Yes, I suppose that would be a problem.”
“That’s right. And that’s why we don’t take his word for it. We take your word for it,” and the Dutchman pointed his finer right at my chest.
“My word for it?” I repeated.
“When the apple merchant says the Apples costs one haypenny, and you hand over a haypenny, you are assenting that the apple is worth a haypenny. You have now fixed the value at one haypenny.”
“But dammit man,” I rejoined. “That simply cannot be. If you and I agree that my Boots are worth a thousand Pounds, that doesn’t suddenly make it so.”
“Look here,” responded the Dutchman, ignoring my remark. “What if I tried to sell this apple to you for a Spanish sovereign?”
“I would refuse.”
“But now what if I told you this apple had some wondrous Medicinal properties, and that it would cure your Gout? And let us also suppose that I wrapped this apple in very fine tissue-Papers, and polished it to a high sheen, and that furthermore, I told you that I had received this Apple directly from the orchards of King George?”
“I would think you were a charlatan.”
“Rightly so. But for argument’s sake, let’s just assume it did have these properties, and I did receive it from the King himself, and you were quite a rich man, and suffered terribly from Gout. Would you then pay it, if I guaranteed you that it would cure your Goat, and that if it did not, I would pay you one-Hundred pounds?”
“So in that case, the apple would be worth a Spanish sovereign?”
“Well yes I suppose.”
“Very well. The apple would then be worth one Spanish sovereign. And here’s the important part, in completing this transaction, you and I will have succeeded in creating one Spanish sovereign.”
“But that’s absurd,” I said, certain now that this Dutchman was trying to deceive me.
“You’re mistaken, my friend. We have created a Spanish sovereign, I assure you. And it’s quite a simple demonstration. If we had measured the total Value of all Things in the Kingdom the moment before our transaction and the moment after, the difference would be one Spanish sovereign.”
“So you mean to say that at the moment I paid the Spanish sovereign, you are suggesting that the King of Spain somehow knew of our transaction, and minted a new Spanish dollar to keep the totals in check? You expect me to believe that?”
“Then how can you say we’ve created a Spanish sovereign?”
“Are you supposing that all of the value of stuff in the King’s realm corresponds precisely to the number of Coins minted by the King?”
“But that’s simply not so. The vast majority of wealth is in Notes, or on paper, or simply in people’s heads,” said the Dutchman. “Let’s again imagine all the things in England —- all the country-Houses, and shoes, and Alehouses, and shocks of Wheat, and everything and everything. Now, let us imagine that you went out and counted up all the value of all of it. What do suppose that number would be?”
“I don’t know. Perhaps a million quid.”
“Fine. Now, how many hard Coins do you think there are in the Kingdom?”
“As I said, a million quid.”
“Not a bit of it. There are possibly, at most, one hundred-Thousand Coins circulating in the Kingdom. The King does not mint a sovereign for every article of value in his Kingdom. And he does not need to.”
“But then how do we know how much Wealth is in the Kingdom?”
“As I said, it is mostly on Paper, in Notes, and Contracts and Insurance arrangements, and in people’s heads. We take so much worthless paper, push it through a Counting-house in Park lane, and suddenly you’ve got yourself enough money to buy the whole of the County of Kent,” said the Dutchman. “For instance, take those options’ Contracts you have. Now what did you pay for them?”
“And why did you agree to pay that?”
“Because Mr. Phipps said I could use them to purchase tea at One-hundred Sixty pounds per tonne.”
“So he was not even selling you tea?”
“No, it was an option to purchase a tea.”
“The East India Company.”
“But why did you agree to pay this Mr. Phipps in the first place? Why not simply buy the Tea from the Company?”
“Because the East India Company tea cost two-Hundred-and-Fifty quid per tonnage. It was only with this Contract that I could buy the Tea from the India Company at one-Hundred-Sixty per tonnage.”
“And tell me, were you able to buy the tea at one-Hundred-Sixty pounds per tonnage?”
“Well no, because I was only contracted to purchase the excess tea, and there was no excess tea available.”
“Never mind whatever the man told you. I’m sure it all sounded quite reasonable & Lawful. In the end, what happened was this. Mr. Phipps created some documents. Worthless paper. On them he proposed some values. He then presented them to you. You accepted their value, and paid him hard specie. And thus, you and Mr. Phipps created six-Hundred pounds out of thin air.”
“Utter and total nonsense,” I said. “I gave Mr. Phipps my Six-hundred quid –- why do you continue to say that he created Six hundred pounds?”
“You keep thinking the Coins are the wealth. But the Coins are not the wealth -- the Coins are merely devices for counting the wealth. The Coins are like the measuring-Rod you use to measure the size of the Room, or the acreage of your Farm. The measuring Rod is not distance, it is merely an instrument to measure distance.”
It seemed an awfully foolish Inquiry, but I asked the Dutchman what then was the Wealth.
“Wealth is all the stuff in the World turned into a number, and its value is simply what you say it is so long as someone Respectable agrees with your estimation,” said the Dutchman, and gave me a very mischievous look. “Remember the situation with the King’s Apple that cured Gout. The moment before you gave the Merchant your Six-hundred quid, there was some valuation on everything in the Kingdom. And then comes along Mr. Phipps. And he puts some numbers on paper and says the Paper is now worth Six-hundred quid. Now the moment you assented, the value of everything in the Kingdom was increased by Six-hundred pounds.”
“But dammit man. The Six-hundred pounds was merely a portion of the Value of the tea. I paid Mr. Phipps the six-Hundred, so that I did not have to pay the East India Company the full two-Hundred-Fifty per tonne.”
“And where was it written that this Tea was worth two-Hundred and Fifty pounds per tonnage?”
“Mr. Phipps said so,” I responded.
“And why did you believe him?”
“Well because he was reading insurance Notices, and quoting from the Shipping News. And Mr. Phipps is a most respectable gentleman, I assure you.”
“And when you got to the Exchange,” laughed the Dutchman, “the Tea was selling at two-Hundred and Fifty per tonnage?”
“Well no, because -- well I don’t know why but it was selling for less.”
“How much less?”
“Only one-Hundred and Twenty per tonnage,” I said, and turned bright red.
“So the man selling you the Contracts told you that you were getting tea valued at Two-hundred and Fifty quid a ton for One-hundred and Sixty quid, and he wanted you to pay him Six-hundred quid for the privilege, but then it turned out the Tea was only selling for One-hundred and Twenty per tonne, and furthermore, that your options contract did not even entitle you to buy any Tea whatsoever?”
“Yes, that’s right.”
This Dutchman stopped walking, and turned to me. He gave me a very strange look as if to suggest I recognized that he was speaking sense.
“But you still have not answered my question. If you and I now today agree that my Boots are worth One-hundred pounds, that does not make it so.”
“True, something more is required. But all that is required is that we memorialize the transaction.”
“But are you suggesting that two peasants create a Thousand pounds simply by agreeing to it on Paper?”
“No,” the Dutchman shook his head, “but there are many things Gentleman such as Mr. Phipps are permitted that are forbidden to peasants.”
At last we happened upon a lonely looking warehouse just south of the Thames. We entered the warehouse, and there were several curious looking fellows moving crates back and forth. My comrade talked Dutch to his fellows, and soon the tea was brought out in great Bales upon a black wagon.
“And if you like, we put on a stamp,” said the Dutchman, as he opened each bale to show me that they were full of Tea, and not stuffing. “But I warn you, if customs finds you with smuggled tea, they will confiscate the casks. But if they find you with a fake stamp, they will hang you.”
I pulled out a great fist of leaves from one of the chests, and put it to my nose. It surely smelled agreeable, and I could discern no great difference between this Tea, and the traditional English variety. Thus without further haggling, I purchased the tea from the Dutchman, but ordered him not to stamp the tea –- as I had no mind to see Dobbin hung for my commercial savvy.