The Express.
London, England, 1866-05-23 00:00:00

TDIANCIAL SPICUL.LTION.

The Times takes the opportunity, apropos of the Earl of
Clarendon's circular, printed in yesterday's Express, to
again point out the credulousness of our countrymen and
countrywomen in the matter of financial speculations. It
is by the trade of lending money that the companies they
trust seek to pay high dividends. For the loan of capital
the public at large ought not to expect more
than a very moderate rate of interest, say 5 per cent.,
which is a sort of average profit or general gain
from the whole productive industry of the country.
If they are receiving a high interest, they must be
sharing the risk of some speculative business out of
the range of their intelligence and experience. The British
lender to a foreign country, or to one of our own
dependencies, must find himself some time or other
sharing the uncertainties and reverses peculiar to
distant markets. The Times then refers to four
fevers and four collapses in our recent history.
One in 1824 was • fever for undertakings of an ostensibly
useful character at home and abroad ; the next, about
thirty years since, was for loans to foreign countries in
which our sympathies were enlisted, and nearly the whole
of that money was last ; we had, indeed, promised to lend
more than we possessed, and people had to sacrifice their
instalments to get rid of their obligations. Then came
the railroad fever, twenty years ago, tainting the very
legislature. The next, ten years ago, was more purely
commercial, when we took to exporting all sorts of mer-
chandise to all countries under the sun upon borrowed
capital ; and now the last is a rage for money-lending by
the medium of companies, whether called banks or not, at
interest which our forefathers thought as sinful as marriage
within the prohibited degrees, or any other Levitical
offence. As on the former occasions, the enormous aggre-
gate is its own confutation. It is conceivable that
• few millions may be laid out at high in-
terest, but not that a hundred millions can be so
invested. The world will never remember that all the
world cannot grow rich. There is not room for all to
expand so suddenly. In an inelastic area, and a popula-
tion that only increases by a fixed ratio, it is impossible to
give everybody at! once twice as large a house, twice as
many servants, twice as much income, and twice as large
a share of comforts and luxuries. As soon as the attempt
is made the weaker begin to fall, like the little fledglings
elbowed in this month of May, by their stouter brothers
out of their narrow nests. Every trade is limited, and so
is money-lending ; nor can any mode of conducting it render
the area of operation much larger or the employment of
the loan much more remunerative.
It is in the enormously increased system of deposits,
the system by which capitalists, large and small, strive to
obtain the maximum of profit at the minimum of
trouble, that the Post finds the real source of danger.
and whether or no it is possible, or may be wise, to
attempt to control and regulate that system by legisla-
tion is a grave and wide question. But whatever
influence, if any, the position of shareholders may have
exercised, or may be expected to exercise, it entirely
objects to any company being relieved of its obligations
to its creditors and the public whenever two-thirds of
its shareholders think it may become unpleasant to pay up

byany process save that of bankruptcy. That a shareholder
should conceive the idea is natural, but that he should
expect the public to entertain it is remarkable.