The Express.
London, England, 1864-06-13 00:00:00

NIGH wares AT LONDON DM:DM

TNT' DAY Nardi& 7L Oro Aftreisaa. BLM&
TO-UOlitow Waft& 84 49m AThanaada. 9h. 2111.

LONDON, MONDAY, TUNE 13.

FOR a time at least the formation of new joint-
stock companies, which, for some months past, hu
proceeded at so rapid a rate, has received a check.
Even before the late rise in the Bank rate of dis-
count (with which, it may be observed, these under-
takings had very little to do), there were indica-
tions that the production was reaching its limits,
and since then the movement appears to have been
almost entirely arrested. Although some persons
may look forward to a fresh outburst of speculative
excitement when the money market again becomes
easier, there appears some reason to believe that
they are mistaken. For the present the publics
seems surfeited with new shares, and some time
must elapse before these securities, after pass-
ing through various hands, come at last into those
of permanent investors. It has been the fashion
of late to condemn all fresh undertakings, no
matter what their intrinsic merits, the good being
classed, unjustly enough, with the bad, as mere
media of speculation concocted with the view of
obtaining inordinate premiums, whereas a fair dis-
crimination should have been adopted, showing how
one enterprise may be based on legitimate grounds
and another not. If the public is to be pro-
tected, surely a contrary course is the right one.
It is absurd in one year to clue all new companies
with the wont of those begotten of the railway
manly and in another, perhaps a period of stag-
nation, to lavish indiscriminate encouragement

...
on the few new undertakings that may be at long
intervals introduced.

Commerce has its cycles of expansion and of
depression. At one time it may go on with • steady
pace, seeking no fresh outlets, but content to satisfy
only those well-known customers it has supplied
for years before. At another perhaps a new
field opens—such, for instance, as was presented by
the gold disooveries of California and Australia,
more recently by the opening to trade of China and
Japan, and later still by the effect of the dearth
of cotton from the American war on our commer-
cial relations with Brazil, Egypt, Turkey, and
India. The same result appears to follow in the
case of joint-stock companies. For years the
public will look at nothing even of the soundest
character, until at last • period arrives when they
become only too apt to take up almost any new
scheme. I t is, however, fair to state that the growth
of experience has been such as to preclude the idea
that an absurd inflation, of which we have the most
recent developments in 1845, and afterwards in
the small mania of the Californian gold companies in
1852, is really likely to happen. Th►t such might
be the case is, however, not impossible, though
more improbable than twenty or thirty years back.
Whatever may be said of the credulity of English
speculators, previous lessons do not certainly go
for nought. The difficulty in these matters is to
discern whether the public, in • period of company
making, is actuated by the motive of making the
beet use of their long-accumulated savings, or is
simply bent on a system of wholesale gambling.
The safest guide is undoubtedly the character of the
enterprises themselves. If we find that tulip bulbs,
South American mining companies, dubious
foreign loans, and the like, are chiefly sought
after, there can be no hesitation in pronoun-
cing an adverse opinion. If, on the other
hand, the desire is for undertakings of • nature
essentially solid, the conclusion of course is pre-
cisely the contrary. During the past year or two,
whoa one of our periods of expansion seems to
have recurred, the moot successful companies have
been those for new joint-stockebanks, at home or
abroad, and financial institutions. Both of these
classes of companies are essentially safe even under
ordinarily careful management. The great prin-
ciple in either case is to keep the capital intact.
In this they differ widely from a railway, a mine, or
a foreign loan, where the rule is to expend the
capital in toto, in the hope of getting ultimately a
remunerative income. In all ordinary examples, •
bank does not sink or fix its capital. Hence, should a
time arrive when it might be necessary to return the
subscriptions to the shareholders, however much
some individualspurcheaers at a high premium, might
suffer, the community at large would not. There
would still be in all probability 20s. in the pound.
Exceptional instances of loss may, and almost
certainly would, occur, but they could only be
exceptional, and hence the difference would be
very striking, compared with the wholesale ruin of
1825 and 1845.

There is • curious prejudice against the
organizers of public companies. Tbey are accused
of working for money—u if every other worker
did not do the same. At the same time they are
denied their just due of adding to the public wealth.
Let a merchant seek out a new field for his ven-
tures, and by his enterprise and skill succeed in
trebling his wealth: he will be held up to the world,
and very rightly, as an able man and a public bene-
factor. Let the same man, looking to his own country,
find an equally good opportunity for doubling
or trebling the wealth of other people, and he gets
no praise whatever. PATIRSON, the founder of the
Bank of England, would in these days be liable to
be classed as a premium-manger. Yet surely it
must be a benefit to ► nation that new forms of
enterprise should be discovered at home as
well as abroad. The author of a joint-stock
bank, whose shares are worth three or
four times the amount paid upon them, and
yielding corresponding revenues, surely should
rank with our great speculative merchants, who
develop an equally remunerative tradewith hitherto
unknown countries. In either case there has been