1837 | New York City

The Stuff That Dreams Are Made Of

Washington Irving bursts a speculative bubble.

In the course of a voyage from England, I once fell in with a convoy of merchant ships bound for the West Indies. The weather was uncommonly bland, and the ships vied with each other in spreading sail to catch a light, favoring breeze, until their hulls were almost hidden beneath a cloud of canvas. The breeze went down with the sun, and his last yellow rays shone upon a thousand sails, idly flapping against the masts.

I exulted in the beauty of the scene and augured a prosperous voyage; but the veteran master of the ship shook his head and pronounced this halcyon calm a “weather breeder.” And so it proved. A storm burst forth in the night; the sea roared and raged; and when the day broke, I beheld the late gallant convoy scattered in every direction, some dismasted, others scudding under bare poles, and many firing signals of distress.

I have since been occasionally reminded of this scene, by those calm, sunny seasons in the commercial world which are known by the name of “times of unexampled prosperity.” They are the sure weather breeders of traffic. Every now and then the world is visited by one of these delusive seasons when “the credit system,” as it is called, expands to full luxuriance; everybody trusts everybody; a bad debt is a thing unheard of; the broad way to certain and sudden wealth lies plain and open; and men are tempted to dash forward boldly from the facility of borrowing.

Promissory notes, interchanged between scheming individuals, are liberally discounted at the banks, which become so many mints to coin words into cash; and as the supply of words is inexhaustible, it may readily be supposed what a vast amount of promissory capital is soon in circulation. Everyone now talks in thousands; nothing is heard but gigantic operations in trade, great purchases and sales of real property, and immense sums made at every transfer. All, to be sure, as yet exists in promise, but the believer in promises calculates the aggregate as solid capital and falls back in amazement at the amount of public wealth, the “unexampled state of public prosperity!”

Allegory on Tax Office in Siena in Time of Peace and War, by Benvenuto di Giovanni, 1468. State Archives of Siena, Museum of the Biccherna Tablets, Siena, Italy.

Allegory on Tax Office in Siena in Time of Peace and War, by Benvenuto di Giovanni, 1468. State Archives of Siena, Museum of the Biccherna Tablets, Siena, Italy. 

Now is the time for speculative and dreaming or designing men. They relate their dreams and projects to the ignorant and credulous, dazzle them with golden visions, and set them maddening after shadows. The example of one stimulates another; speculation rises on speculation; bubble rises on bubble; everyone helps with his breath to swell the windy superstructure and admires and wonders at the magnitude of the inflation he has contributed to produce.

Speculation is the romance of trade and casts contempt upon all its sober realities. It renders the stock jobber a magician and the exchange a region of enchantment. It elevates the merchant into a kind of knight-errant, or rather a commercial Quixote. The slow but sure gains of snug percentage become despicable in his eyes: no “operation” is thought worthy of attention that does not double or treble the investment. No business is worth following that does not promise an immediate fortune. As he sits musing over his ledger with pen behind his ear, he is like La Mancha’s hero in his study dreaming over his books of chivalry. His dusty countinghouse fades before his eyes, or changes into a Spanish mine: he gropes after diamonds or dives after pearls. The subterranean garden of Aladdin is nothing to the realms of wealth that break upon his imagination.

Could this delusion always last, the life of a merchant would indeed be a golden dream; but it is as short as it is brilliant. Let but a doubt enter, and the “season of unexampled prosperity” is at an end. The coinage of words is suddenly curtailed; the promissory capital begins to vanish into smoke; a panic succeeds, and the whole superstructure, built upon credit and reared by speculation, crumbles to the ground, leaving scarce a wreck behind:

“It is such stuff as dreams are made of.”

When a man of business, therefore, hears on every side rumors of fortunes suddenly acquired; when he finds banks liberal and brokers busy; when he sees adventurers flush of paper capital and full of scheme and enterprise; when he perceives a greater disposition to buy than to sell; when trade overflows its accustomed channels and deluges the country; when he hears of new regions of commercial adventure, of distant marts and distant mines, swallowing merchandise and disgorging gold; when he finds joint-stock companies of all kinds forming; railroads, canals, and locomotive engines springing up on every side; when idlers suddenly become men of business and dash into the game of commerce as they would into the hazards of the faro table; when he beholds the streets glittering with new equipages, palaces conjured up by the magic of speculation, tradesmen flushed with sudden success and vying with each other in ostentatious expense; in a word, when he hears the whole community joining in the theme of “unexampled prosperity,” let him look upon the whole as a “weather breeder” and prepare for the impending storm.

Contributor

Washington Irving

From “A Time of Unexampled Prosperity.” In 1815, at the age of thirty-two, Irving traveled to Europe to rescue his family’s hardware importing business from bankruptcy. On his return to New York in 1832, Irving was struck by the frenzied stock speculation then rampant on Wall Street. The dancing around the maypole of money prompted him to coin the phrase, “the Almighty Dollar.”