Bevis Longstreth writes in the footnotes of Modern Investment Management and the Prudent Man Rule:
Of course, it was early recognized that market manipulators could do harm to even the safest investment. In March 1792, when the stock market was in its first major decline, Thomas Jefferson wrote to a friend: “…the credit and fate of the nation seem to hang on the desperate throws and plunges of gambling scoundrels.” As explained by Senator Thomas H. Kuchel in hearings on S.510 (which became the Williams Act) before the Subcommittee on Securities of the Senate Committee on Banking and Currency on March 21, 1967 […]:
Jefferson was referring to a small organization of investors of that day—”The Six Per Cent Club”—that had carelessly speculated on debt securities issued by the Federal Government and had operated with great mystery behind the scenes. They had overextended themselves in the expectation of sharply rising prices and were left with obligations that could not be met. Neither the Government nor the market was prepared to deal with the situation.
