Lacock
Sunday
17 Jany 1847
My Dear Horatia
I returned home last night, in less than 3 hours from Paddington <1> to the Abbey, <2> pitch dark all the time and very cold –
I do not advise you to lend any money to railways <3> – Of course everybody would invest their money in that kind of way, if it were not for the greater risk, which balances the advantage of the higher rate of interest. Thus Mexican bonds paid ten per cent interest while they paid anything, but no prudent person would have them, or if any did, it was with the [illegible deletion] intention of selling out on the first indication of an approaching bankruptcy and with the hope that he would have sufficient prévoyance <4> to see it coming before others did. The American funds paid higher interest than the British, & many English people were holders of them on that account not expecting that one fine morning our Pennsylvanian friends would repudiate the inconvenient obligation – Now the British funds are perfectly safe, except from one of those catastrophes which would destroy all property –
I myself heard Ld Ashburton <5> advise a friend to purchase American stock, so little can the wisest and most experienced commercial heads foresee the result of these matters. To be sure the repudiation plan was not at that time above the horizon, all was smiling May for the bondholders, and no one foreboded the winter storm – But enough of Consols (which by the way do not come from the verb to console, as some have erroneously supposed – In fact there is no real consolation in only 3 per cent interest)
Yr affte
Henry
Notes:
1. Paddington Station, London.
2. Lacock Abbey.
3. Railway investment peaked in 1847 at over £30 million, or 7% of national income. Expectations were high and led to speculative excesses followed by financial crisis later that year. WHFT’s advice was therefore wise, perceptive and timely, characteristics not normally associated with him. See the postscript in Doc. No: 06029.
4. Foresight.
5. Alexander Baring, 1st Baron Ashburton (1774–1848), financier & statesman.
6. Charles Henry Talbot (1842–1916), antiquary & WHFT’s only son.