The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1866-06-25

by which railway schemes are worked W, and
the way in which contractors and finance con.
paDies involve the shareholders in enormous
liabilities in return for ''aCcommodation.r
Amongst others, his lordship instanced the Car
marihen and Cardigan Railway Company. The
proposed capital OF the concern was f30o. 600;
and of this only 100000 was ever subscribed
But to increase their funds the directors had
raised fl5S,7S0 by preference shares, E60,355
by debentures, and f733,s33 on Lloyd's bonds,
making total capital OF f9Sl $50 for the con
struction Of a line o. railway for which e300 COO
only had been proposed in the bill and allowed
by Parliament. The question VIII naturally arise,
as to what became OF the balance OF the money
raised, and secondly. how will the subscribers
to the original 900 feel at being thus
swamped by the increased capital2 Were thee
gentlemen cousenting parties TO the dro sn-
directors the power TO make ducks and
brakes of their money? Another example
as TO how the property of share
holders was played with by directors was on
the sane occasion brought forward by his lord
ship. He stated that during the past year the
contractors for the city extension OF the London
Chatham, and Dover Railway went to the Credit
Moblller finance Company tor million sterling,
which they obtained on the folio wing terms:-
For every Ell advanced there was given f40 of
fully patdup stock, thus paying Gl9 fer every
f2l ut was in effect" said his lordship, pay
ing G622, ,2OO-sacrdcing that amount at once
and ioreyer-in order 10 get e577 500r For the
benefit OF the uninitla:ed, 1t may perhaps be as
well 10 explain that the "940 fully paid up stockn
precisely similar to that one by which Captain
Heavy would give Mr. Leverson his bill Tor f40
on condition of the latter advancing him eel, a
piece OF business whicn we believe the most
foolish DRAGON or spendthrift guaTdsman that
ever got up behindn stamped paper would
refuse 10 transact, although as trading on his
own credit he would be perfectly justified in
doing that which the directors OF a Joint stock
con pany are by no means at liberty TO do with
the credit of others.
Is it, then, any wonder If, with the state of
commercial morality OF the present day, failures
follow, as o matter of course, upon the
finance and frauds which we have endeavored
to depict Go where you WILL in business parts,
or meet who you like OF business men, it is
and has been for the last three years-the same
story and the same lament. Dishonesty, un-
truth, and What may, IN plan English, be term
ed mercantile swndllng within the limits of the
law, exist on all sides and on every quarter.
There is everywhere such keen contest for
wealth, such determination on the part of
those who have no means to hold their own in
trade with those who have capital. that
ten thousand doors are open tor every one who
chooses to pass out of the old track which men
used to term honesty. That there are honor
able, honest men lett still amongst our mer
chants, is but an assertion which cannot be
denied; but 1t quite as certain that these are
outnumbered a hundred to one by mere ad
ventUIers. who, like the finance companies
which have helped so greatly to eXalt this
class with f5 paid-up capital, do business,
accept bills and trade where and how they can
writer could point out an instance-one amongst
many-ot North.cOuntryman who, eighteen
months ago, came to London Gust after having
failed In Scotland) with barely money enough TO
pay for third-class railway ticket, and who
tor many weeks after his arrival in this metro
polls used to live by begging halt crowns from
| the few acquaintance he had in town. This
| man never had, and never will have, any
| capital whatever, save a large stock
| of impudence. But to-day he has an
office in the city, two clerks at work under
him, and passes many thousands ofpounds' worth
| of bills into his bankers-and gets cash in re-
| turn-every week OF his lite. When such state
| of things can exist, and when all men know, not
only that it exists, but that it is tie rule and
not the exception, what wonder if, when the
slightest panic arises In the mouey market,
| every one takes fright, and by the confusion
| which they cause increase q hundred-told the
number of commercial disasters. This is a
| state of affairs which we shall see yet worse
instead OF better, until by the force of events
| there shall arise whirlwind in the mercantile
atmosphere which will go purity the air that 1T
| will be impossible for either companies or indi-
| viduals to trade upon imaginary capital; and
| then borrowing upon bills, which are nothing
| more than so much accommodation paper,
| will become moral impossIbility. For some time
| past it has been only those who have no solid
| foundation for their business that really launch
| out. They finance" ana commit what are really
frauds, as long as they can; and when those mines
| can no longer be worked, they fail. There is q
strong feeling amongst the firms that have some
| thing to lose that things must be worse before
they ale better, and that we shall yet see a far
more universal shipwreck in the mercantile
world than anything we have hitherto wit
messed. The present systematic overtradng
and the facilities by which the merest adven-
turer can obtain money or moneys worth, If he
likes to pay for it, can only have one result ;aud
until that general overturnlng takes place, the
commerce OF the country, both export and i'm
| port, as well as bank ng and monetary, must be
! business of SO much risk, that tLose only who
have little or nothing to lose will engage in it to
any extent. AS the late panic took no one by sur
prise, so now every one is looking forward to
coming day the final result of which
! will be to strip ''dufier" firms and make.
! believe companies OF that pretense of capital
! which enables them to cause SO much disas .er
| and ruin to trade. With the collapse of the
! FINANCE" companies system we shall hear less
! of frauds and taiures and although our com.
| merce may be more limited IL will be infinitely
! .sounder than at present. Nor will any one who
! does not belong to the mercantile adventurer
/ class lookH back with9 regret to the days when
| these large accommodation" shops were in che
full swing of bush ess, and when, as at present,
| every man who is able t. buy bill-stamps eau
write himself down a merchant Tempe Bar
| for June