The Express.
London, England, 1860-09-03 00:00:00

TEE

a delusive

expansion is given to trade, and
ance of prosperity is created.
Were it necessary to cite instances of the evil
of the system which Mr. WARD is endeavouring
to overthrow, they could be supplied by scores.
A most flagrant case was that of two young men,
named Mitstrax and Wane, without influence
or capital, who carried on business in Cheapside,
and disappeared, leaving liabilities to the extent of
about is hundred thousand pounds. A second case
is that of BISHOP and FARDRIDOE, East India mer-
' chants, who figured in the Bankruptcy Court in
July last. These persons commenced business in
January, 1859, with little or no capital, and
within nine months were brought to a stoppage,
with liabilities to the extent of more than 12,0001.,
and without a prospect of any dividend for their
creditors. It was the bankrupts' practice to ob-
tain goods, and pledge them immediately. Mr.
Commissioner Hoteove characterised their trading
u " heedless," unjustifiable, and "tainted with
" fraud," and accordingly suspended their third
class certificates for three years, leaving them with-
out protection for six months. A third case is
that of R4.IIERT FREELA-ND and Brother, of Man-
chester, who recommenced business in January,
1859, with a virtual deficiency of 1,0001., and at
the date of their stoppage had consigned goods to
the extent of 509,000 f., subject to 441,0001. of
liabilities. We see here what the system of trad-
ing on borrowed money leads to. Once committed
to it, the reckless merchant goes on to any practi-
cable extent. The numerous and influential
creditors of ROBERT FREELAND and Brother do
not expect to get half-a-crown in the pound.
One indication of irregularity in commercial
operations is when a large sum is paid as interest
on advances or for discount of bills. This feature
is presented in the balance-sheets of most of the
houses which have failed during the last few years.
The usual facilities must be obtained, no matter
how high may be the terms demanded. The pre-
sent abuse of the system of hypothecating goods
involves a fearful degree of commercial laxity, and
tends to sap the very foundations of commercial
morality. When a man is trading with his own
money be has every inducement to exercise
prudence and economy. When the funds
which he ventures consist entirely of those
contributed by other people, the ordi-
nary incentives are wanting, and he is only too
apt to become careless in his transactions or ex-
travagant in his habits. The risk is his creditors'.
As showing the ruinous tendency of the encou-
ragement which is given to people to trade
without capital, Mr. WARD instances the case of
shippers who obtain an advance of 75 per cent. on
the cost price of goods. " How," he asks, "is
" the remaining deficiency of 25 per cent. to be
" met when the account reaches maturity ? Is
" it by means of the profit expected to be realised
"on the sale of these goods after they have
" reached their destination ? Thia, truly, is a
" safe and rational basis on which to hazard the

stability of a mercantile establishment ! But

" what is the state of the case should the goods
" be sold at a heavy loss, or not be sold at all
" And these events must not be presumed to be
" merely hypothetical, for they are of continual
" and almost daily occurrence. The perilous and
" embarrassing position of such a course can only
" be retrieved by making fresh purchases, and by
" plittiginj the goods when bought. The difficulty,
" however, is not by this means surmounted ; it
" is, in fact, merely deferred, only to reappear in
44

a worse and more threatening form." -
It is imposaible to withhold insult from the
conclusion at which Mr. WARD arrives, that no
one, however trustworthy his chars ter or exten-
sive his commercial knowledge may he, is
warranted in embarking in the foreign shipping
trade, unless ho possess a substantial capital of
his own. And this brings us to a consideration of
the principal remedy in the shape of a general and
uniform rule of credit, with regard to shippers,
which Mr. WARD urges for adoption by all whole-
sale houses and manufacturers. London, he
thinks, u the mercantile centre, ought to take the
lead in instituting a reform, and ought then to
invite the co-operation of the provinces. He

recommends that a few welleonsidered rules
for regulating the credit of the shipping
trade should be framed, and strictly acted
upon by all the leading firms in the kingdom. One
of the first of these should be, never, under any
circumstances, to open a credit account with a
shipping merchant, unless he can satisfactorily
prove that he possesses sufficient hoed file capital of
his own to form the nucleus or primary bonsai his
operations. Any one who evades or shrinks from
this test ought not to be trusted. Another rule
should be resolutely to refuse credit to all those
shippers who aro in the habit of anticipating the
proceeds of their consignments, by way of hypo-
thecation, since their systematic adoption of this
course proves conclusively that they have no basis
of capital of their own, or, at least, that their en-
gagements are far in excess of their capital.
We heartily wish Mr. WARD success in his
laudable exertions. The correctness of his con-
clusions and the salutary tendency of the remedy
suggested cannot be questioned. The wholesale
dealers and manufacturers have it undoubtedly in
their power, by combination, to diminish greatly
the evil complained of, and to raise proportion-
ately the character and remunerative capacity of
the foreign trade of the country.
The advices received from the manufacturing
districts during the last week do not speak of
much improvement in trade. A large amount of
general business is going forward, as his been
the came throughout the year; but during
the broken and gloomy weather, which seems to
have at length cleared up, there has been no buoy-
ancy, and certain departments are dull. At Man-
chester the prices of cotton goods are complained
of as =satisfactory, and the tendency is still
drooping. In some instances the stocks are in-
creasing. The accounts from India continue
unfavourable. tales to a comiderable extent are
effected, however, from week to week, at the re-
duced prices. At Liverpool the most favourable
feature is the reduction in the computed stocks of
cotton to 1,087,750 bales, but the quantity held
at the corresponding period of last year was only
653,350 bales.
In the woollen districts caution is shown, and
the sales of goods have diminished, owing to the
bad weather, but the condition of employment is
tolerably good. The same cannot be said of the
lace and hosiery trades at Nottingham, which aro
depressed. Strikes amongst the workpeople there
have contributed to cheek business. The accounts
from the iron and hardware districts are rather
!conflicting. In some quarters more animation is
shown, whilst in others considerable dulness pre•
leads. We do not hear, however, of much lack of
employment. The propitious change in the
weather will assist materially in sustaining con-
fidence.

PA y VENT or Corn► CORONNIUL—Bv an act just
pohkehell (Vaud 24 Yid., e. llrl. an inni "Aar the let
January west all 'meaty erasers will Le peel a salary
of fee... inil•acr. er.l silnwanevw. The annual valary
IpAyable quarter.y). iv t.. fe on the evtrege of five year,'
ise.ene •d the Nike. The Luovl Chance:4,r low power to
remove s miaow far laisomaduat