Joint Stock Company mania. It is founded partly on that impatience of low interest which culminates in rashness, and yet more on the gambling propensities of human nature-propensities so rife that, if once you can disguise the vulgar iniquity of the gaming-table, and deal with scrip instead of cards, there is no party within the church, and no denomination out of it, so strict in their horror of all greed and worldliness; but 'feeling it their duty to exert themselves for the good of their family,' will stake ten times as much with stock or shares as the worst gamester of their acquaintance ever risked at rouge-etnoir.

The world is not always predisposed to the fever of speculation, because the money is not always burning in their pockets. Still, when once the people's pulse begins to quicken, and the usual thirst and light-headedness come on, this fever proves of a highly infectious nature.

If man is 'a reasoning animal,' in the language of philosophy, certainly the common sort no more have their thinking than their washing' done at home.' The shorter way is to pin your faith upon your neighbours-to run out into the trade winds'-to follow the crowd-your credulity increasing with the growing numbers of the dupes.

But just as in trade, demand stimulates supply, so the fools and the knaves, the flats and flatcatchers, are ever found in due proportion; and-there are no greater knaves out of Newgate than some of these Company-mongers.

Respectable solicitors, no doubt, are in one sense promoters, and worthy men have frequently combined purely for adding facilities to commerce, but these are exceptions rare, and easily distinguished, so that we have little hesitation in enunciating, as a good general proposition, that jobbery and private ends almost invariably make the first move. For, as our virtues have not half the activity of our vices, the pure and the disinterested are not the most active even in commercial revolutions. So a Company may

have at the outset a Board active and enterprising but interested, which being afterwards joined by men of a purer and better stamp, the road to ruin may take a turn to fortune.

The true origin of Companies, therefore, it is most important to consider.. Good men and true are the most unlikely to originate them : for, all schemes yet untried admit of so much doubt and difficulty, that gentlemen of scrupulous integrity dislike the responsibility of recommending. Nor would they succeed, if they did; for their honesty would be quite in their way-especially as the class of persons who subscribe are only to be tempted by something too good to be true.

We propose, therefore, to open the eyes of our readers to the risks incurred by all who put down their names to form a new Joint Stock Company-First, we shall argue from the principles of trade, and the experience of all men of business, and on the assumption that there is strict honour in the management of the common purse-Secondly, we shall explain some of the dishonest ways and means by which the said purse, from first to last, is almost certain to be drained.

In speaking here of Joint Stock Companies and their Directors, we confine ourselves to what we shall call Trading Companies,' excluding for the present Railway and Dock Companies, Joint Stock Banks, Financial and many other extensive and bona fide undertakings, some of which have, more particularly of late, opened up profitable channels for utilising and investing the overflowing wealth of Great Britain and Ireland. We shall glance chiefly at those petty combinations in which, unlike those Companies which we have excepted, men unite for conducting the same business which can be managed by private individuals. Doubtless our remarks will apply with equal force to not a few of the Companies aforesaid, and to others cast in a larger mould and launched with an array of imposing names and with capital sufficient for the 'development,' to the heart's content of the most sanguine, of the

hitherto smouldering,' but, of course, 'highly lucrative' business.

Where one Company competes only with another, the waste and mismanagement of the one is met by the waste and mismanagement of the other. Blunders, in such case, are not ruinous, because the competitors are on a par, and both, perhaps, equally inexperienced. In Companies of this kind you may win; but there are those of another and inferior grade which compete with private trade, and in which the shareholders will almost invariably be defeated and lose their money, for:

1. The scheme proposed has probably been already considered and rejected by the persons who are the best judges of its value.

The capital required in any business of ordinary magnitude is rarely so large as not to lie within the scope of a firm of two or three partners; so it is reasonable to ask ourselves, when something which promises to be unusually remunerative is held up to us, Why have men most keenly alive to their own interests neglected so good a thing and left it for a Company to take up?-The common reply is that a smaller return will satisfy a Company than will satisfy men who add labour to the venture. But, since most Companies point to very high returns, and a private firm might thrive on what some Companies, either through absence of special knowledge of the business waste, and worse than waste; or, by carelessness lose or throw away-this answer hardly meets the objection.

2. A Company must be managed, as it were, by deputy, instead of by men actuated entirely by the energy of self-interest.

But this managing by proxy is contrary to the experience of all trade. Not long since, we observed to a very well-to-do but dyspeptic friend in Paternoster Row,' Why not pay one extra man to help you, and take a holiday as health requires?' "Pray,' said he, can you tell me who that man shall be?'-In almost every retail house in London we might hear the same reply. The difference between seeing with your own and

with others' eyes, makes all the difference between profit and loss.

Again, we once asked a retired upholsterer why he did not leave his capital in the business which had made it, and amuse himself one or two days a week by coming from his house at Tooting to superintend. Our friend turned to another old tradesman who stood by, and both smiling at our suggestion, explained as follows: A large capital managed in a routine way by paid shopmen, without the spur of self-interest to make them keenly alive to that integration of little things which rule great results, will scarcely pay five per cent. If Companies can find servants to need no master's eye, private traders are not so fortunate.' If this be true even of the best servants, what shall we say of the prospects of that business which is pretty sure to be entrusted to the worst? for:

3. The very nature of a Company, in some instances, proves an alibi of all experience in the managers, and of all fitness in the men.

Men of the same trade as the Company are not likely to be the promoters nor on the management. No. Such men are generally in opposition, and banded together against the Company, especially as every man of business is slow to believe that any Company will succeed and permanently supersede himself in his own respective vocation.

Suppose a Company of West-End gentlemen, with a Board, as usual, of their own class, were to buy up any one of the most flourishing firms in London: suppose they were to become amateur builders in place of Cubitt, carriers in place of Pickford, or mercers in the place of Shoolbred. No man of business doubts that when once the present staff had gone out (a not unusual result), and servants chosen by the Company had come in, the business, however prosperous and securely established, would very soon fall to the ground. And if so -if a Company could not conduct a well-established business, how little would be their chance of founding a new!

Promoters of Companies complacently remark, 'We have only to

find some good managing men, and all will be easy enough.' Only to find them, indeed! No remark can more clearly prove how little they know about the matter. None but men experienced in any business can possibly be judges of the right persons to conduct it; and even if they could judge, it is only on the connections of business that any tradesman can from time to time depend for bringing to his notice servants of the proper qualifications he requires.

The talent for selecting the right man for the right place is not more the characteristic of a good general, than of a good manager of a City firm. Some men have been famed for possessing, in a remarkable degree, this talent, so essential to the successful working of any business -in whatever line. The discernment in this respect of Green of Blackwall, and Morrison, among others, has been mentioned as the secret of their wonderful success. Far from regarding a good set of managing men-so good as to require no master's eye upon themas a thing to be taken for granted, it were wiser to calculate on the certainty of a bad staff, as among the dead weights of the concern.

With all these disadvantages of conducting a business by paid servants not directly amenable to an experienced, deeply-interested, and ever-present head, but to a 'Board,'

4. Companies attempt things far too difficult for any private trader, both in the magnitude of their enterprises, and the rapidity of their organization.

Great City firms are not made, they grow; and as they grow, they put out not only branches, but roots in proportion; ay, and throw out feelers too. But ask one of our great City men, as he moves through his extensive offices and warehouses, if even he, with all his experience, could undertake your Company, and organize such a complexity of human machinery, profitably to employ all your capital in a day-he will tell you that no trader out of Bedlam would ever dream of such a thing. Companies rush in where mortals fear to tread.'

But let us grant one point more.

We will suppose that a committee who seem to every trader as much out of their element as land-lubbers

appear to seamen suppose they should act harmoniously in the board-room; and that they should chance to choose the right staff, whether of managers, clerks, and cashiers for a business--or of waiters, boots, and chambermaids by the score for an hotel-pray who is to manage this newly organized and strange crew afterwards?-Take into calculation that there is in human nature little sympathy or conscience towards any body corporate, and quite as little from that body towards those who serve it;-can you then wonder at the common remark, that a Company is doomed to waste and peculation, and that no servant feels a life interest in his office, so makes hay whilst the sun shines, till the whole concern falls a prey to self-interest and misrule!

5. Companies always venture on an enormous capital; but dividends are not always in proportion to capital.

In retail trade it is a maxim that, when once the point of personal supervision is past, the more you increase your capital, the smaller the returns on the whole; till at last all profit comes to a vanishing point-the point of ruin to many a once prosperous tradesman. But Companies always deal in round numbers; as if the larger the capital, the more promising the project. CAPITAL £500,000! This to West-End gentlemen looks very grand; but often to men of business very absurd. Amateur traders innocently suppose that a business, like a mansion, can be built up to order, on any plan and any specification. They forget that the greater the capital the more the shareholders to divide the profits; still less are they aware that those profits depend not at all on the capital you choose to pay up, but only on the capital which the business can judiciously employ.

What is said of a certain big ship at sea is true of many a scheme launched ashore. It may be too big to be manageable by any crew, and certainly far beyond the powers

of those who are at the helm-requiring too many passengers and too much traffic, to form a full and complete cargo. So the ship will not pay if not well and regularly freighted the capital constantly entailing too much 'dead weight.' This is the danger of Monster Hotel Companies. We could name one Sea-side Hotel Company, which, not satisfied with pouring in so much capital at one splash, that their hotel shall stand them in a rental of £140 a week, has forgotten to study the natural history, or the habits of the creatures they hope to entice into it. The building soars so high in air, that 'Such a getting up stairs' has never been necessary before, and people must have the nature and the habits rather of rooks than of 'unfledged bipeds' to roost so high. As to the plan of hydraulicizing the inmates up to the top (however often a lady forgets her card-case, or her smelling-bottle; or perhaps just steps out, alters her mind, and would just step in again), only ask at the Colosseum, and they will tell you that many an old-fashioned lady turns as nervous and shy at the name of the ascending room as a hunter at the sight of a horse-box. But what Company ever thought of being accommodating to its customers, though with private traders every whim and fancy of the public is the study of their lives!-It is usually set forth that a Company has the advantage of an overwhelming connection in business. But as no one shareholder thinks his own custom can affect the dividend a farthing, it is soon proved that there is no such connection as will endure to be supplied badly, by their own Company, when any tradesman will supply them better.

It appears then, that what you call a Trading Company, is almost certain to fail.-But is not this at variance with fact?'

No. Remember we are speaking of large Joint Stock Companies organizing a business wholly new; and of those conducted by an inexperienced, non-practical Board and Staff. The danger is less with an oldestablished business as the basis of & Company, and where a limited

number of men, all used to the business, join together. Rarely, we believe, does any other Company succeed; we have only to consider the black list of the many that have failed. Even of Mines the most prosperous are not worked by Joint Stock Companies. Companies by hundreds have tried every known mode. But where are they? How striking this mortality, and how very few survive!

Money - making by Companies seems so different to trade, that we hardly get a hearing if we speak of the risks and losses of business, and point to the common rate of profits. People are so sanguine and hallucinated, that they rarely test their speculation by the plain rules of every-day life. 'Subscribing to a Company,' or 'paying up calls,' is a very mild form of words; but we have seen persons exceedingly staggered in their faith when made to understand that it means handing over your hundreds to a dozen men in committee-to be made ducks and drakes of by persons lounging and chatting with much self-importance, but with very little personal responsibility, and utterly ignorant of the value or necessity of the contracts under which the money is squandered by thousands at a time.

Shareholders too often entertain extravagant notions of the profits of trade. If they knew how small are the returns after payment of expenses-making allowance for bad debts and deducting interest on capital-if they knew the nervous care not to offend old customers, and the canvassing and anxiety to gain new-if they knew also the economy in little things by which even these small returns are effected -amateur trading would not be quite so popular.

There is also an illusion in the very name of Shares and of Company. There is with Shareholders an association of ideas as of stock rising higher and higher every time they open their newspaper, or (as we once heard) of getting up in the morning a hundred pounds richer than they lie down at night. Few stay to consider how the profits are