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Joint Stock Company mania. It is have at the outset a Board active founded partly on that impatience and enterprising but interested, of low interest which culminates in which being afterwards joined by rashness, and yet more on the men of a purer and better stamp, gambling propensities of human the road to ruin may take a turn to nature-propensities so rife that, if fortune. once you can disguise the vulgar The true origin of Companies, iniquity of the gaming-table, and therefore, it is most important to deal with scrip instead of cards, consider. Good men and true are there is no party within the church, the most unlikely to originate them : and no denomination out of it, so for, all schemes yet untried admit of strict in their horror of all greed so much doubt and difficulty, that and worldliness; but' feeling it their gentlemen of scrupulous integrity duty to exert themselves for the dislike the responsibility of recomgood of their family,' will stake ten mending. Nor would they succeed, times as much with stock or shares if they did; for their honesty would as the worst gamester of their ac- be quite in their way–especially as quaintance over risked at rouge-et- the class of persons who subscribe noir.
are only to be tempted by something The world is not always pre- too good to be true. disposed to the fever of speculation, We propose, therefore, to open because the money is not always the eyes of our readers to the risks burning in their pockets. Still, incurred by all who put down their when once the people's pulse begins names to form a new Joint Stock to quicken, and the usual thirst and Company - First, we shall argue light-headedness come on, this fever from the principles of trade, and the proves of a highly infectious na- experience of all men of business, ture.
and on the assumption that there is If man is a reasoning animal,' in strict honour in the management of the language of philosophy, certainly the common purse – Secondly, we the common sort no more have their shall explain some of the dishonest thinking than their washing done ways and means by which the said at home. The shorter way is to purse, from first to last, is almost pin your faith upon your neigh- certain to be drained. bours—to 'run out into the trade In speaking here of Joint Stock winds'— to follow the crowd-your Companies and their Directors, we credulity increasing with the grow- confine ourselves to what we shall ing numbers of the dupes.
call "Trading Companies,' excluding But just as in trade, demand sti- for the present Railway and Dock mulates supply, so the fools and the Companies, Joint Stock Banks, Fiknaves, the flats and flatcatchers, nancial and many other extensive are ever found in due proportion; and boná fide undertakings, some of and—there are no greater knaves out which have, more particularly of of Newgate than some of these Com- late, opened up profitable channels pany-mongers.
for utilising and investing the overRespectable solicitors, no doubt, flowing wealth of Great Britain and are in one sense promoters, and Ireland. We shall glance chiefly at worthy men have frequently com- those petty combinations in which, bined purely for adding facilities to unlike those Companies which we commerce, but these are exceptions have excepted, men unite for conrare, and easily distinguished, so ducting the same business which can that we have little hesitation in enun- be managed by private individuals. ciating, as a good general propo- Doubtless our remarks will apply sition, that jobbery and private ends with equal force to not a few of the almost invariably make the first Companies aforesaid, and to others move. For, as our virtues have not cast in a larger mould and launched half the activity of our vices, the with an array of imposing names pure and the disinterested are not and with capital sufficient for the the most active even in commercial development,' to the heart's conrevolutions So a Company may tent of the most sanguine, of the
hitherto "smouldering, but, of with others' eyes, makes all the difcourse, "highly lucrative business. ference between profit and loss.
Where one company competes Again, we once asked a retired only with another, the waste and upholsterer why he did not leave his mismanagement of the one is met capital in the business which had by the waste and mismanagement of made it, and amuse himself one or the other. Blunders, in such case, two days a week by coming from are not ruinous, because the com- his house at Tooting to superintend. petitors are on a par, and both, Our friend turned to another old perhaps, equally inexperienced. In tradesman who stood by, and both Companies of this kind you may smiling at our suggestion, explained win; but there are those of another as follows: 'A large capital managed and inferior grade which compete in a routine way by paid shopmen, with private trade, and in which without the spur of self-interest to the shareholders will almost inva- make them keenly alive to that inriably be defeated and lose their tegration of little things which rule money, for:
great results, will scarcely pay five 1. The scheme proposed has pro
If Companies can find bably been already considered and servants to need no master's eye, rejected by the persons who are the private traders are not so fortunate.' best judges of its value.
If this be true even of the best The capital required in any servants, what shall we say of the business of ordinary magnitude is prospects of that business which is rarely so large as not to lie within pretty sure to be entrusted to the the scope of a firm of two or three worst? for: partners; so it is reasonable to ask 3. The very nature of a Company, ourselves, when something which in some instances, proves an alibi of promises to be unusually remunera- all experience in the managers, and tive is held up to us, Why have men of all fitness in the men. most keenly alive to their own in- Men of the same trade as the terests neglected so good a thing Company are not likely to be the and left it for a Company to take promoters nor on the management. up?— The common reply is that a No. Such men are generally in opsmaller return will satisfy a Com- position, and banded together against pany than will satisfy men who add the Company, especially as every labour to the venture. But, since man of business is slow to believe most Companies point to very high that any Company will succeed and returns, and a private firm might permanently supersede himself in thrive on what some Companies, his own respective vocation. either through absence of special Suppose a Company of West-End knowledge of the business waste, and gentlemen, with a Board, as usual, of worse than waste; or, by carelessness their own class, were to buy up any lose or throw away-this answer one of the most flourishing firms in hardly meets the objection.
London: suppose they were to be 2. A Company must be managed, come amateur builders in place of as it were, by deputy, instead of by Cubitt, carriers in place of Pickford, men actuated entirely by the energy or mercers in the place of Shoolbred. of self-interest.
No man of business doubts that when But this managing by proxy is once the present staff had gone out contrary to the experience of all (a not unusual result), and servants trade. Not long since, we observed chosen by the Company had come to & very well-to-do but dyspeptic in, the business, however prosperous friend in Paternoster Row, 'Why not and securely established, would very pay one extra man to help you, and soon fall to the ground. And if so take a holiday as health requires ?' —if a Company could not conduct Pray,' said he, can you tell me who a well-established business, how that man shall be ?'— In almost every little would be their chance of retail house in London we might founding a new! hear the same reply. The difference Promoters of Companies complabetween seeing with your own and cently remark, “We have only to
find some good managing men, and We will suppose that a committee all will be easy enough. Only to who seem to every trader as much find them, indeed! No remark can out of their element as land-lubbers more clearly prove how little they appear to seamen suppose they know about the matter. None but should act harmoniously in the men experienced in any business can board-room; and that they should possibly be judges of the right per- chance to choose the right staff, sons to conduct it; and even if they whether of managers, clerks, and could judge, it is only on the connec- cashiers for a business-or of waiters, tions of business that any tradesman boots, and chambermaids by the can from time to time depend for score for an hotel-pray who is to bringing to his notice servants of manage this newly organized and the proper qualifications he requires. strange crew afterwards ?-Take into
The talent for selecting the right calculation that there is in human man for the right place is not more nature little sympathy or conscience the characteristic of a good general, towards any body corporate, and than of a good manager of a City quite as little from that body tofirm. Some men have been famed wards those who serve it;-can you for possessing, in a remarkable de- then wonder at the common regree, this talent, so essential to the mark, that a Company is doomed to successful working of any business waste and peculation, and that no -in whatever line. The discern- servant feels a life interest in his ment in this respect of Green of office, so makes hay whilst the sun Blackwall, and Morrison, among shines, till the whole concern falls a others, has been mentioned as the prey to self-interest and misrule! secret of their wonderful success. 5. Companies always venture on Far from regarding a good set of an enormous capital; but dividends managing men-80 good as to re- are not always in proportion to quire no master's eye upon them- capital. as a thing to be taken for granted, In retail trade it is a maxim that, it were wiser to calculate on the when once the point of personal certainty of a bad staff, as among supervision is past, the more you the dead weights of the concern. increase your capital, the smaller
With all these disadvantages of the returns on the whole; till at conducting a business by paid ser- last all profit comes to a vanishing vants not directly amenable to an point-the point of ruin to many : experienced, deeply-interested, and
once prosperous tradesman. But ever-present head, but to a ' Board, Companies always deal in round
4. Companies attempt things far numbers; as if the larger the too difficult for any private trader, capital, the more promising the proboth in the magnitude of their ject. CAPITAL £500,000! This to enterprises, and the rapidity of their West-End gentlemen looks very organization.
grand; but often to men of busiGreat City firms are not made, ness very absurd. Amateur traders they grow; and as they grow, they innocently suppose that a business, put out not only branches, but roots like a mansion, can be built up in proportion; ay, and throw out to order, on any plan and any feelers too.
But ask one of our specification. They forget that the great City men, as he moves through greater the capital the more the his extensive offices and warehouses, shareholders to divide the profits; if even he, with all his experience, still less are they aware that those could undertake your Company, and profits depend not at all on the organize such a complexity of capital you choose to pay up, but human machinery, profitably to em- only on the capital which the busiploy all your capital in a day-he ness can judiciously employ. will tell you that no trader out of What is said of a certain big ship Bedlam would ever dream of such at sea is true of many a scheme a thing. * Companies rush in where launched ashore. It may be too mortals fear to tread.'
big to be manageable by any crew, But let us grant one point more. and certainly far beyond the powers of those who are at the helm-re- number of men, all used to the quiring too many passengers and business, juin together. Rarely, we too much traffic to form a full and believe, does any other Company complete cargo. So the ship will succeed; we have only to consider not pay if not well and regularly the black list of the many that freighted – the capital constantly have failed. Even of Mines the entailing too much dead weight. most prosperous are not worked by This is the danger of Monster Hotel Joint Stock Companies. Companies Companies. We could name one by hundreds have tried every known Sea-side Hotel Company, which, not mode. But where are they? How satisfied with pouring in so much striking this mortality, and how capital at one splash, that their very few survive! hotel shall stand them in a rental of Money - making by Companies £140 a week, has forgotten to study seems so different to trade, that we the natural history, or the habits of hardly get a hearing if we speak the creatures they hope to entice into of the risks and losses of business, it. The building soars so high in and point to the common rate air, that 'Such a getting up stairs' of profits. People are so sanguine has never been necessary before, and and hallucinated, that they rarely people must have the nature and test their speculation by the plain the habits rather of rooks than of rules of every-day life. — Subunfledged bipeds' to roost so high. scribing to a Company,' or 'paying As to the plan of hydraulicizing up calls, is a very mild form of the inmates up to the top (however words; but we have seen persons often a lady forgets her card-case, or exceedingly staggered in their faith her smelling-bottle;, or perhaps when made to understand that it just steps out, alters her mind, and means handing over your hundreds would just step in again), only ask to a dozen men in committee—to be at the Colosseum, and they will tell made ducks and drakes of by peryou that many an old-fashioned
sons lounging and chatting with lady turns as nervous and shy at the much self-importance, but with very name of the ascending room as a little personal responsibility, and hunter at the sight of a horse-box. utterly ignorant of the value or neBut what Company ever thought of cessity of the contracts under which being accommodating to its custom- the money is squandered by thouers, though with private traders sands at a time. every whim and fancy of the public Shareholders too often entertain is the study of their lives !-It is extravagant notions of the profits usually set forth that a Company of trade. If they knew how small has the advantage of an overwhelm- are the returns after payment of exing connection in business. But as penses-making allowance for bad no one shareholder thinks his own debts and deducting interest on custom can affect the dividend a far- capital - if they knew the nervous thing, it is soon proved that there is care not to offend old customers, no such connection as will endure to and the canvassing and anxiety be supplied badly, by their own Com- to gain new—if they knew also the pany, when any tradesman will sup- economy in little things by which ply them better.
even these small returns are effected * It appears then, that what you -amateur trading would not be call a Trading Company, is almost quite so popular. certain to fail.-But is not this at There is also an illusion in the variance with fact?'
very name of Shares and of ComNo. Remember we are speaking pany. There is with Shareholders of large Joint Stock Companies an association of ideas as of stock organizing a business wholly new; rising higher and higher every time and of those conducted by an inex- they open their newspaper, or (as we perienced, non-practical Board and once heard) of getting up in the Staff. The danger is less with an old- morning a hundred pounds richer established business as the basis of than they lie down at night. Few & Company, and where a limited stay to consider how the profits are