I have just come across this puzzling sentence in Charles Dickens’ " A Christmas Carol" :-
" This was a great relief , because ’ three days after sight of this First of Exchange pay to Mr. Ebenezer Scrooge or his order ’ and so forth , would become a mere United States security if there were no days to count by "
Does this mean that in the 1840’s ( when the book was written ) the US economy was not at its best and to invest there was not recommended . Or am I misreading the phrase completely.
Interesting question. Dickens seems to have expected that readers would understand this little inside joke (a little “counting house humor”, if you will), but from a distance of 159 years, it’s hard to figure out what he’s talking about. The quote can be read in context at http://www.stormfax.com/2dickens.htm
The first point to be made is that, by “United States’ security”, he probably means a bank note, not a government security. American government bonds were as safe in the 1840’s as they are today–maybe more so, since the national debt was a lot lower.
American bank notes, on the other hand, were notoriously unreliable. Most American banks were small and undercapitalized, and confined by government regulation to operation within a single state. Andrew Jackson had dismantled the government-sponsored central bank (The “Bank of the United States”) in the 1830’s, and effective private alternatives didn’t arise until after the Civil War. The U.S. was coming off of a nasty six-year recession in 1843, and bank failures were epidemic.
So it appears that Mr. Scrooge has some type of American bank note in his hands, which has been endorsed by a more solvent British bank–probably the Bank of England–but for some reason the endorsement doesn’t kick in for three days. And Scrooge’s first reaction, when he sees that the Sun has gone out, is that the three days will never expire and he’ll be stuck forever with a “United States’ security”, which probably trades at a deep discount. Like I say, it’s counting house humor.
A full explication of this passage would be worthy of Cecil, or at least an SDMS staff report.
I disagree. The part left in in quotations by Dickens (three days after sight of this First of Exchange pay to Mr. Ebenezer Scrooge or his order) would be a standard form of a Bill of Exchange.
So what Dickens is saying here is: 'This was a great relief, because a perfectly good cheque payable in three days would become as worthless as dot-com stock if there were no days to count by." In the context of the times, ‘American security’ had the same connotation as “oil well”, “Florida real-estate”, “gold mine” or “dot-com stock” has had in others - as was pointed out by jklann
I found some detail on ‘American Securities’ in Wall Street, A History, Charles R. Geisst, Oxford University Press 1997, ISBN 0-19-511512-0.
Geisst’s source for the 'nation of swindler’s quote is Mira Wilkens (or Wilkins? - bibliography and note differ), A History of Foreign Investment in the United States to 1914, Harvard Univesrity (sic) Press, 1989.
So that seems clear, typographical errors in the Geisst book notwithstanding!
Well sure, but you’re from Houston. They’re easy to like when you have three in your back yard!
Good point about the bonds–when I said that American government bonds were safe, I should have restricted my comment to federal government bonds. State bonds were a notoriously risky proposition throughout the 19th Century.
Also bear in mind that at the time the safest, most secure bonds in the world were British government bonds, which is what Dickens is implicitly comparing the American security with.