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too insignificant, nothing too vast for the range of these enterprises. Many of them resemble the Nasmyth hammer in the breadth of their capabilities, the comparison only failing in that, when the hypothetical nut is broken, the still more hypothetical kernel is found to be gone. Each company must define the exact field of its intended operations, and great care must be taken that all the objects are stated, and the powers wanted are here described, as, after the company is once registered, no alteration can be made with regard to this part of the document. It is usual, however, to conclude with the words : “ And the doing of all other things as are incidental or conducive to the attainment of the above objects," which leaves ample margin for contingencies. Let us now pass on to the fourth item, “the liability of its members; and where, in joint-stock companies, there is so much that is problematical, it is refreshing to find something which may generally be relied on as certain, and that is the matter of liability. In 1856 the principle of “limited liability” was first provided for, and by it, as before mentioned, the members are liable only to the extent of the money amount of their shares. The word limitedmust be added after the name of any company. so registered. Besides companies "limited by shares," there are some “limited by guarantee,” in which case the members subscribe after their names the amounts they respectively guarantee to meet the company's liabilities. There are also unlimited companies, which now, however, are not at all common. The last point to be noticed with regard to the memorandum of association is "the nominal capital, and the number and value of the shares into which it is divided." This nominal capital is often stated at fabulous amounts, and is no criterion either to what the first issue may be, or what is likely to be subscribed. In the summary at the end of the last Parliamentary return, showing the capital of the companies formed since the year 1862, an asterisk against the year 1869 carries the eye to a footnote, which naïvely reads thus :-“In this year (1869) a company was registered with a nominal capital of £100,000,000 (one hundred million pounds sterling), but its paid-up capital appears never to have exceeded £200.” The facilities for registration could no further go; and although freedom is a grand thing, and is a privilege that all British subjects are supposed to inherit as a birthright, it should never degenerate into licence like this; and here is the great mistake in joint-stock registration. It would be well if, instead of making such careful regulations for winding up (which are of slight interest, if not a gratuitous

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insult to the public, once their money is in other pockets), some slight inquiries were made at the very beginning of such undertakings; then there would be some kind of protection and guarantee that fair dealing would follow. At present no such protection exists; but, on the other hand, everything is so easy of accomplishment, and the forms prescribed are so readily adhered to, that there is a distinct bait held out to the fraudulent to thrust their money-making plots on the people. The registration of companies is followed out on the same plan as the granting of patents. Anything can be patented if the fees are paid. No examination is made as to whether the idea is new or old ; those whose existing patents it conflicts with are left to fight the matter out in the law courts.

After the memorandum of association has been impressed with a los. stamp, and a fee stamp of from £2 to £ 50, according to the amount of capital, a certificate of registration is granted by the registrar that the company has been duly "incorporated under the Companies Acts, 1862 to 1880." The forms in this first step of the career of all kinds of joint-stock .companies are much alike, the main difference being that, in companies “limited by guarantee' and with "unlimited liability,” articles of association must accompany the memorandum of association, while in limited liability concerns, which for general purposes are now practically in possession of the field, it is optional whether these be lodged or not, as there is a form A appended to the Act, which is always taken as their articles of association, if no special articles are attached. But, as a matter of practice, many limited companies now prepare their own articles. These ARTICLES OF ASSOCIATION are simply the rules which the particular companies adopt, and they regulate their management; they treat of issue of shares, calls, transfers, transmissions, and forfeitures, conversion of shares into stock, increase in capital, general (i.e., ordinary) and extraordinary meetings, votes of members, proxies, remuneration, powers, disqualification and rotation of directors, dividends, when they are fortunate in having any, notices of meeting, and auditing of accounts and balancesheets. If any alterations in these articles require to be · made, this can always be effected by passing special resolutions, which must also be lodged with the registrar.

SECOND.-It may be premised now that the memorandum of association has been duly registered, and DIRECTORS named by the subscribers,—for they are held in law to be the directors until they appoint others. It is advisable at the start to try and enlist the services of a


man who is already on the board of a company of good standing, which has either promised great things, or, better still, performed them. He will be made chairman, and if he happens to be an Earl, or Sir Somebody, this is all in favour of the new enterprise. If a Right Honourable, a Mayor, a Justice of the Peace, C.B., C.E., F.R.S., or any other combination of initials can be got, by all means secure his services, but do not overlook the necessity of attracting a Captain to the board. It is not. always considered necessary to mention whether he be a naval or military officer, or whether the title has been assumed by reason of his serving with the home forces, or with those of foreign potentates, -enough, if he be possessed of the rank, however he may have won it. His qualifications for handling a ship, or directing a body of troops, are not likely to be brought into requisition ; but the mere habit of "commanding” necessarily fits him to be the custodian of financial trusts, and the guardian of public business pursuits. A Colonel or Major-General is also considered eligible for vacant posts. Plain Esquires, however, are sometimes given a place, as a sort of padding for the prospectus. Generally they are the solid men who do the work; the others are oftener ornamental names to attract the unwary, and are promising features in the raising of the capital, if only the other tit-bits of the prospectus can be arranged with equal tact. The great drawback in seeing a list of directors is that the public have no kind of guarantee that they have examined into and believe in the statements which follow their names. Directors very often blindly confide in the promoters, and, being assured of comfortable fees, and told that all the thinking-out of the intricate problems have been well considered and matured beforehand, they settle down quite placidly and wait events. Even well-known and well-meaning men, whose personal characters are above suspicion, lend their names and influence to undertakings of a very questionable nature. On Mr. A. hearing that Mr. So-and-so has joined the board, he thinks that it must be all in order ; whereas Mr. So-and-so has consented to take the position on being informed that Mr. A. is ready to connect himself with the promising scheme. When they find out their mistake the damage, so far as the public are concerned, is irreparably done; and carelessness in a thing of this sort is almost as culpable as bad intention. Some men are much sought after as directors, and we need only mention the names of Sir Henry Tyler as the director of nine companies, and the Hon. Cecil Raikes as

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the director of an equal number, to show that many there are who make it an important part of their daily business. We do not mean it to be inferred that those gentlemen may not be able to do as much for each of their companies as many others who have only one or two to serve can impart to theirs, there being so great a difference in the energies and capacities of individual men; but it is evident that, although directors can easily draw their emoluments from all the companies, they cannot do justice to the whole of them, by giving anything more than their names and a mere superficial service in return for their fees. By reference to the “Directory of Directors” for 1883, it will be seen that the names of those who are on the directorates of six different undertakings are exceedingly numerous. One gentleman devotes his energies to sixteen companies, another to fifteen; five afford their advice to fourteen, and other five to twelve ; while six look after the affairs of eleven distinct concerns. Thirteen names appear each to be connected with the affairs of ten; fifteen have their attention directed towards nine; no fewer than twenty-eight partake in the duties of supervising cight distinct schemes, and as many as fifty-two hard-working and devoted servants must regularly attend the board meetings of seven different associations. We are firmly of opinion that when one man is a director of more than half a dozen companies, and that, too, in addition to attending to his own ordinary avocations, Parliament should step in and prevent his time being so much encroached upon,

-to do so would be charitable to the man, and justice to the undertakings he is supposed to serve so diligently.

THIRD.—Now, having reached this stage of their proceedings with closed doors, the next thing for the promoters to do is to lay their scheme before the public in as attractive a form as possible in the shape of a PROSPECTUS. It generally commences by inviting subscriptions, says when the list will “

open and close" for “ London and the country.” Then comes the name of the company in large letters, followed by the clause: "Incorporated under the Companies Acts, 1862 to 1880, whereby the liability of shareholders is limited to the amount of their shares.” The capital is next stated, and whether the shares are £100, 450, £10, £5, or f1, also when the calls are payable. In sound undertakings calls are generally spread over a considerable period, and the capital called up as the requirements of the business demand it; in others, the main object being the getting in of subscriptions, it is called up with all speed,—but all allow interest


if the shares are fully paid up at once. The £i share is very popular nowadays, especially in companies whose motives are not the purest, because it attracts the savings of small investors. After this the list of directors is given, and often you will find the names of one or two “who will join the board after allotment of shares," as if they were

fighting shy” of the duties, and would only confer a favour upon shareholders by coming forward through pressure at the last moment. The bankers, brokers, solicitors, auditors, manager, engineer, and secretary are next stated, and, last of all, the offices of the company. All this is generally spread over the first sheet of the paper. Then comes the memorandum of association before referred to; and next, the real PROSPECTUS (although the name is generally applied to the whole document), which gives a theoretical view of the prospects of the association, what it is intended to do, and what to avoid, how much superior it is likely to prove to all ventures of a similar kind, and details of its prospects and probable dividends, which, by the way, are seldom understated. If other undertakings of a like nature have paid good dividends, and their shares are quoted at a premium, this is not overlooked, but paraded as good reason why this particular investment should be a desirable one. All agreements entered into must be stated on the prospectus. These are generally two in number :—First, between the patentee of an invention, the owner of a business, or somebody else, and a promoter; and, secondly, between the latter and the secretary to the company. A clause is inserted that these agreements may be inspected at the company's offices. Now, although these agreements are assumed to be all above board, they invariably omit one very desirable item of information, and that is, what the promoter has paid originally for a something for which the company will be asked in the most unblushing manner to hand over £50,000 or £100,000. Probably, if this information were forthcoming, it would be found that a mere nominal sum was paid, or an amount not yet fixed, but contingent on the floating of the concern; and, as often the main object is to get this money together, some inquiry should be made on this all-important point before the Governmental authorities allow registration. It is all very well to say to the public: “You can see these agreements, and whatever you subscribe you do it in open daylight, nothing is under hand"; but a stringent preliminary examination should take place, to see that other agreements, or persons who are working the affair, are not kept

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