The Express.
London, England, 1855-10-18 00:00:00

frije expregigi.

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HIGH WATIE AT LONDON BRIDOI.
Vair—garefa& A. 7 Athena" ft. Ns.
IManam—illonisi, fah 71h.

LONDON, THURSDAY, OCTOBER 18.

WI have already, on various oceirdons, directed
public attention to the perdu system of flosses in
Preece, sad have expressed oar conviction that it ie
fraught with serious danger unless carefully watched
and oostroiled. Many cireassetanoss appear to in-
elitists that the attendee; et the Government is turned
to the operations of the banking companies estab-
lished within the last few years, and that a disposi-
tion exists to avert, in some degree, the dangers we
have pointed out, by controlling to a eossiderable
extent the disposition to foster Boone speculations
involved in their system of action. The remit cheek
on the Wee of bonds by the Crfidit Mobilise, the
raising the rate of discount on advances ea public
securities—increseing at the same time the margin
required, and the refusal to sand= any new awn-
ponies, are all steps in this direstion. It remains,
however, to be seen whether these precautionary
measures have been taken in sellisiest time to parry
the oommereial pressure whisk we believe to be the
inevitable remelt of the system to which we have
fans time to time ;aided. The prineiple as which
the reesady headed banking establishments profess
to art is that of developing se far as poseible the
system of commercial coedit, of utilising small
capitals hitherto unproductive—or nearly so sad of
distributing in Dew and more unimeens sheen& the
profits of financial undertakings sash as have been
hitherto absorbed by comparatively smell numbers of
great capitalist.. The goodies's at the principle, and
the satires' benefit of a system calculated to develop
the imernimem ioduslrW encores@ of Frame. so im-
perfectly worked hitherto. so ems will dispute ; it is

is the ;mans employed, or rather in the abeam of
say easiest teak to the ease of those means, that
the peril lies, which not only endangers the soo-
ems of those undertakings, but positively toads to
imperil the very otdeet they an established to support
—namely, the extension of commengal credit.
The statutes of most of these companies empower
them to make advisees on the security of shares and
stook, sad to invest a portion, smastinees limited, of
their capital in those securities. The managers are
generally remunerated by a proportion of the set
dividend, varying from 10 per cent., as is the Credit
Mobilier, to 40 per cent. in some other companies.
This mode of reanneraties, although admirably cal-
culated to edentate the mew of the &vetoes has
also a teadesey to lidless them to ass all mean to
maintain a high quotation of the various securities
held by the company, sad thes,sided by the loans made
at tikes emeriti= and by carrying over shares from ,
aceoant to account, to foster and keep alive thatepiritof
Bonne gambling which seems to be a besetting sin
of the Parisians. It is tree that in the east of a
reaction, the managers, as shareholders, gaffer ; but
on own experieses of public companies downstream
that each a contingency is a very feeble restraint upon
ass wielding moth mono= power as the large
capital of some of those oadertakiop affords. The
dividend recently annonned as the minimum for the
current year oa the shares of the Credit Mobilise
(2001.) gives rise to strong suspicions that radices
is sometimes lost sight of, eves when the heads of the
establishment are men of nee high changer and
talent es those who direct the affairs of that society.
A dividend of that amount gives about 116,0001. ea
the share falling to the administrators, in addition to
their profit as shareholders, and mast be mainly
produced by taking the increased vase of shares held
by them, as quoted at the Beane, as realised profit—
s meet fallacious mode of calculation, bearing in
mad the great end sadden fluctuations to which
shares sad bonds have been ablest in Fans In
sass where theme societies have the power of imuiag
beads a ono supervision is doubly neenary, inas-
much as these securities are tantamount to bills pay-
able, die at a given date, and same means ars soca-
maleted to meet them, without depending mainly en
the realisation of securities of such uncertain valve
as shares is industrial undertakings, a wide-spread
calamity mast at no distant period become
probable. In the ass of the Credit Mobilier
it is tree that the obligations are profess-
odly issued oily spinet securities parchment and
whisk have a like term of redemption with these obli-
gati/as, and that sonsequatly as they fall due the
securities they represent will become payable also,
sad the roans of the latter will egaseqeently stable
the company to pay off their own liabilities. When
the securities purchased by the lane of these obliga-
ting are railway bonds this sonde practical enough ;
bet in the case of shares in companies terminable at a
given date, railway companies for instance, it proceeds
ea the assamptioa that the sinking fonds of these
asepsain will in all oases Waco to repass the
capital a proposition to which we are by
no mesas disposed to give aa unqualified
assent. We all know the mor en the na-
tional sinking fend, " Is otiose d'asnortinessent
qui Venetic TWO r and the dating fends of the rail-
way companies may not work meek better. To
asks good any deficiency which may arise, the capi-
tal of the Credit Mobilise and its reserve fund are
pat forth as a guarantee; bat as the total amount of
obligations proposed to be issued is 600,000,000 francs,
while the espial is only 60,000,000, and the reserve
had is fixed at 2,000.000, the two latter amounts
together leave a margin of little more than 10
per seat.

The great danger appears to es, however, to consist,
sot so mesh is the isles of so large an snout of
paper as is the temptation offered to eseserage the
formation of ocompasite whisk will absorb too
large a partial of the lasting resumes
of the eosenunity or, is other words,
'W M& will =evert too rapidly the fleeting capital
11111101: asesseary for establishing weak on a Arm
Ihemadies lota axed capital, which dame ever the
essumedal community to the evils of any Awehtl
aids with their heads tied. In Engles" we have
• ism this remit on wore than ea* ecusims. The re-
pedestive powers of this consul, sad the tepid
..Nome istios el ample@ profits, by far =seed say.
thing that the most mageine an hope to see is
711111011 for many Tarsi but we eased forget that
nay mosey markets prouder), may led te, the salami.
the of 1626 and 1847, sad to the railway
and geld eorapasy maim. Ifaresatly &airing
to we tbe finesses of Fusee established on a solid
basis, sad a free seeps given to the intelligence sad
reseerose of her sapitabsts sad produeers, it is with
se captions or depvedatory spirit that we poiat oat
what we soesider the perils of the onus which sums
to be most popular with the sauldtude, sad that we
urge the Goverment (lfit will not &stela from inere-
woeld be better) to use both its power
et esti= led ha still greater pewee of esusiis_to