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its burden upon themselves on being guaranteed 5 per cent. per annum for seven-and-a-half years, at the end of which period the Government could redeem it, a proposal which naturally met with strong opposition from the Bank of England. However, by dint of bribery of high officials, Parliament accepted their offer on the 7th April, and the company's stock rose to £330 on the following day. It fluctuated, sometimes advancing and again receding by hundreds of pounds in a single day, until on 3rd June the price stood at £750. When, by the action of the directors, the shares were suddenly put up to £1,000 in August, and they as suddenly began to sell out, a panic seized on the holders of stock, so that a month later they were down to £400, when speedily the whole bubble collapsed, ending in the ruination of many, the imprisonment of some of the directors and confiscation of their goods. At this time many other gambling schemes were projected on the most shadowy grounds and for the most absurd ends. So little did the public in the height of the panic think of what was offered, that one company was started the object of which was not to be disclosed till after the capital was subscribed, unhappily a very ordinary occurrence nowadays. So great, too, was the general distress at this period that these fraudulent schemes had to be suppressed by Act of Parliament, 12th July, 1720, a precaution that might in spirit be very well adopted at the present day.

But it was reserved for the nineteenth century to develope the idea embodied in joint-stock trading, the true motive of which simply is the uniting of many small sums, belonging to individuals, into one large capital, and so accomplishing some great undertaking

that could not be carried through by a single capitalist. During the earlier years of the present reign many Acts appeared on the statute-book for regulating the formation and carrying on of companies. So numerous were these, and so involved had they become, that it was deemed advisable to unite them all in one measure; and in 1862 royal assent was given to “An Act for the Incorporation, Regulation and Winding up of Trading Companies and other Associations," better known by its short title of “ The Companies Act, 1862.” This has since been amended and added to by the Companies Act, 1867, the Stannaries Act of 1869, the Joint-Stock Arrangement Act of 1870, and Acts in 1877, 1879, and 1880, besides some special statutes relating to railway and insurance companies. In perusing these statutes, one cannot fail to be impressed with the intricate manner in which they are prepared, combining a great grasp of first principles, with

much attention to details; but, however careful in wording, they have proved open in practice to much misconstruction, and although they have doubtless given a lasting impetus to commerce in some directions, still they are liable to the most flagrant abuses. If ever the text, “God has made man upright, but he has sought out many inventions," was applicable to human institutions, it is so to the deceits, impostures and downright robberies which have been perpetrated under the wing of these statutes. It is always easier to construct machinery than to say how it will work; but the prodigal waste and perversion of capital squandered under the Companies Acts, especially in forming small companies never meant to succeed further than to serve the personal ends of the promoters, can hardly be estimated by those who have not made special study of such cases. This should be apparent to all who look at the daily list of causes tried in the Courts of Chancery, a considerable proportion of which relate to the winding up of companies ; but no one can have any adequate idea of the wickedness men are capable of, where money is concerned, until he makes a careful acquaintance with the propagation, short lives, lingering and at last miserable deaths of the greater number of those schemes which are foisted on the public at the rate of about three every working day.



“ Things are not always what they seem.”

“What's in a name ?"

T is usual, when writers aim at exactness, to define what

meanings attach to the terms they employ. This is the more necessary, as the significations of words are constantly changing, and new attributes are taken up not to be found in ordinary dictionaries. Not being a metaphysical book, it is unnecessary to inquire here what a true definition is, and whether it should define things” or merely “the names of things”; but it is always useful to discriminate

between the meaning a name usually bears, and what the writer intends it should be taken to denote for the particular purposes of his discourse. Since the Companies Acts have been in operation, some new terms have come into existence and old ones have acquired fresh meanings; so that an appeal to Johnson or Webster would be somewhat misleading in considering their characteristics.

What, then, is a JOINT-STOCK COMPANY, and what a LIMITED LIABILITY COMPANY? Let us take the words of the Act itself, as Acts of Parliament are always so clear and so free from vagueness and ambiguity, that those charged with their administration can seldom put more than one construction on them. “A Joint-stock Company (Section 181 of the Companies Act, 1862) shall be deemed to be a company having a permanent paid-up or nominal capital of fixed amount divided into shares also of fixed amount, or held and transferable as stock, or divided and held partly in one way and partly in another, and formed on the principle of having for its members the holders of shares in such capital or the holders of such stock and no other persons, and such company when registered with limited liability under this Act shall be deemed to be a company limited by shares.” This is so expressive in itself that any attempt to elaborate it here would only lead to confusion, especially as the different kinds of ventures laying claim to those titles are fully referred to in another placc.

The principal parties who are engaged in or carry on the business of a company, from its first inception to its close, are termed promoters, syndicates, vendors, directors, subscribers (also called shareholders, meinbers, and, in extreme cases, contributories), secretaries, accountants, Wreckers, and liquidators, whose duties and positions will next be indicated. A difficulty has arisen in explaining these terms, so as to convey the clearest import of their actual meaning at the present time. Old-fashioned definitions of them would only mislead, as they only apply to about five per cent. of the persons who follow some of these avocations; so that, out of every hundred, ninety-five exceptions would have to be provided for that could not honestly be included in the main definition. This being the case, it will be less confusing and more economical to let the definitions apply only to these exceptions, and trust to the discernment of readers to find out the cases where they fail of application.

A PROMOTER is “one who takes upon himself the onus of bringing vendors, directors, and shareholders together.”

He must first discover something to promote, a nucleus round which his endeavours are to centre. In this he gets material assistance from the vendors and directors, many of the latter being his own creatures; but, although the termis“ vendor" and "director” are not synonymous with promoter, they often co-exist. As all inventions presuppose an inventor, so all joint-stock companies presuppose a promoter. He is generally a hard-worked but not ill-paid member of society, and, although not always successful in his endeavours, he is not supposed to "stick at trifles," if they cross his path while in the prosecution of his labours. What the Times once said of him,-“The professional promoter is the pest of society, the directors are his nominees, and come forward for a sufficient money consideration,"-must needs be taken with some limitations.

It is difficult to trace the derivation of “ SYNDICATE.” Some are of opinion that the first syllable is a corruption of the common English word "sin; but, as no connexion can exist between that quality and those who form the body indicated in the whole term, this view is now generally disregarded. Its meaning, for our purpose, is, however, clearer than the origin of the word itself. It simply denotes “a community of persons associated for certain or uncertain purposes.” It may be for the promotion of andertakings in which they hope to secure large profits if successful in getting the public to subscribe the respective capitals for their companies, in which case they act as a band of promoters. It may be for depressing or inflating the prices of shares or stocks to throw them eventually on the market or keep it bare, or, perchance, to create fictitious prices for worthless scrip, which, after selling, they allow to drop. Syndicates are artificial growths to promote at short notice what would either not be brought about at all in a natural way, or only very gradually. Syndicates themselves are often formed on the joint-stock principle, and registered as parent companies for the purpose of initiating other companies as offshoots. The shares are generally in few hands, one object of this being to obtain comparative secrecy in the movements of the body, and also large profits to be divided over few holders of shares. A syndicate, therefore, is, in all cases, a kind of monopoly or ring, which “stands to lose little and gain much.”

A VENDOR is “one who buys something in the cheapest market and sells something or nothing in the dearest." He may either be his own promoter, or have a separate

existence apart from that functionary, and, as, with the assistance of his coadjutor, he can often make his own market, the position is a lucrative one. He stipulates that the price of what he vends shall be paid in cash and shares ; and, as this presumes a buyer, a joint-stock company is provided to furnish this party to the transaction. He sells what it does not pay him to retain, for a cash sum more than it is worth to him; and, as magnanimity is his prevailing feature, being already perfectly satisfied, he can afford to show his confidence in the ultimate success of the venture by stipulating to take a further portion of purchase-money in shares of the company, thus in some slight measure loading the capital account if by accident the thing eventually turns out to be of some value, but losing nothing if it “goes to the wall.” His main endeavour seems to aim at crippling the company at the outset, and in this he generally attains a decided amount of success.

The position of a DIRECTOR is primarily “ to confirm all arrangements entered into by the promoter and vendor.” He must be pliable, conscientious, and painstaking to a degree in his endeavours to see that only schemes promising high dividends are offered to the public; and, as his responsibilities are great, so is his position an honourable one. He need not necessarily be acquainted with the business in question,-indeed, his main qualifications are an absence of special knowledge of anything in particular. This produces a certain versatility, and so it is not unusual for one person to be a director of twelve distinct companies, each carrying on a different business from the other eleven. It is presumed in the statutes that a director acts in the interests of the shareholders, and his election has to be confirmed by them. It is only in very extreme instances that this position is reversed, obliging them to ask to be protected from him in place of leaning on him for protection. He can, on the shortest notice, cut short his responsibility for his own or co-directors' misdeeds when certain revelations of non-success are mooted, by a prompt resignation of his post, and his unselfish and meritorious actions thus escape public recognition. This has been called “ courting the fullest inquiry."

The qualifications for the post of SECRETARY are “ability to write a good bold hand, to be bland on stated occasions when shareholders, who have not paid up their shares in full, need to be conciliated, and defiant when they have paid the full amount of their shares." He must be able to answer all verbal inquiries in such a way that, whilst appearing to enter into details, he at the same time

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