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mistaken, “theory of perfectibility,” that it was originated by men “who believed passionately in a possible state of perfection in the material world, in the power of mankind to recognise it, and in a natural inclination to move in that direction."

This inability to understand "the long run,” and its attendant assumption, "other things being equal,” runs throughout the whole book and vitiates many of the author's most triumphant pieces of reasoning. It leads him to make an attack on the symmetrical treatment of supply and demand, and the principal laws relating to them, under a misapprehension of their nature. While he imagines himself to be overthrowing the ordinary theories of long-period value, he is in reality making a contribution to the study of short-period value.

His contribution, so regarded, is a very useful one, and his analysis throughout is singularly penetrating and acute. Of especial interest is his treatment of "cost of production,” an "unilluminating” phrase which he holds responsible for much error and misunderstanding. In his view, “it costs more to sell most articles than to make them”: a proposition which is certainly worth examination, supported as it is by interesting evidence and estimates. “Productive power has outstripped desire," and it is "selling" which is the chief difficulty for society to-day as for the man of business.

“The productive power of modern industry is so tremendous that a comparatively small amount of capital laid down in some dozen suitable English, German, and American towns with a well-trained industrial population, will be able to produce most kinds of goods capable of indefinite multiplication sufficient for the whole world."

Our industrial system has two devices for dealing with this embarrassing product, the control of supply and the manipulation of demand. The control of supply includes not merely the recognised and valuable function of adjustment between different places and different periods of time, but, in addition, a permanent "holding back.” “If we open the sluices of modern productive resources developed under the factory system in the last seventy years, goods pour out at an amazingly cheap, and ever cheaper rate, and the market is flooded beyond any possibility of commercial remuneration.” The duty of the seller, accordingly, "is one of holding back the immense output of modern production and allowing it to filter slowly through their hands." It does not occur to Mr. Dibblee that this can hardly be a very valuable service for the social point of view. His confusion wherever the

element of time enters in prevents him from distinguishing clearly between a beneficial “holding back” to meet and to avert fluctuations, and a “holding back” of this permanent and statical nature which is plainly wasteful. A similar uncertainty of conclusion marks his treatment of the "manipulation of demand." We are told that "misrepresentation has become a chief part of the advertiser's stock-in-trade,” that “nearly all trade is, from a psychological necessity, dependent on a habit of misrepresentation which is both absurd and dangerous," and the talents required for a successful seller are approvingly illustrated by the remark of a man who had made a large fortune : "Some people think me not very bright, and I cannot make a good speech nor tell a good story; but I can sell a man a bad picture which he doesn't want." A Socialist could not desire a more trenchant exposure of the wastes involved in our present commercial system; and it is somewhat surprising to find Mr. Dibblee after this analysis deducing from the very magnitude of the part played by “the manipulation of demand” and “the control of supply" an additional argument against State Socialism. The State, he tells us, is a bad seller, and unfitted for the difficult task of "holding back supply”; but one who follows his ruthless description of these processes may reasonably wonder whether their performance is on the balance socially desirable.

But the value of Mr. Dibblee's book does not lie so much in his main arguments, as in the ideas which he continually throws out by the way. “Suggestive " is the epithet which can most properly be used to describe his work. He pours forth a stream of shrewd observations upon every kind of topic, casual labour, women's wages, and the like, which invariably interest and stimulate even when they do not carry conviction; his psychological analyses are particularly acute. In addition, he brings to his task a vivid imagination, a useful descriptive power, and a happy knack of illuminating a difficult point by some apt illustration or telling phrase.

What, for instance, could be better than the following illustration of the relations between local markets and the larger ones in which they are embraced ? “We must imagine the small markets as being centres of extreme fluidity in an encompassing medium of lesser but partial fluidity, so that local agitations can affect the slower-moving enveloping medium, and carry intermediate vibrations to other local centres.”

Or, in another vein, what could better hit off the Anti-Trust legislation in the United States, with its uncertain principles and

vague phrases about combination "in restraint of trade,” than the remark that it is an attempt “to emulate the legislation of the White King in Alice in Wonderland when he wrote : Rule I. * All persons more than a mile high to leave the court'"?

Or, again, what neater definition of “necessaries” could be given than : "we are accustomed to call those objects the ' necessaries of life' where our habits permit very little choice in selection”?

These are merely instances of the fresh ideas and apt remarks which are scattered on every other page, and serve to enliven frequent tedious wastes of muddled reasoning, and misunderstanding

H. D. HENDERSON

The Constitution and Finance of English, Scottish, and Irish

Joint-Stock Companies to 1720. By W. R. SCOTT, Litt.D. (Cambridge : University Press. 1912. Vol. I. Pp. lvi + 488.)

We have now the whole of Dr. Scott's book, of which the second and third volumes were reviewed here in March and September, 1911. This volume contains the general history of the joint-stock : its predecessors gave us the individual histories of all the companies. The three form a work of which British historical scholarship may be proud. Some thirty distinct MS. collections have been consulted—counting the Museum and the Record Office each only as one ; there is a general bibliography of about five hundred works, and a pamphlet bibliography almost as long, not to mention bibliographies of official publications and newspapers. It is no exaggeration to say that dozens of books, each embodying a serious piece of historical research, could have been carved out of Dr. Scott's materials.

The method adopted in this volume, as foreshadowed in a remarkable appendix to Vol. Ill., is the study of joint-stock company financial history in close connection with national financial history. This raises a number of difficult problems in selection and arrangement. At times one is tempted to think that sections of the general history are not sufficiently relevant to the matter of joint-stock to justify the very full treatinent which they receive; at others one wonders on what principle certain aspects of financial or general economic history have been omitted. But the method itself is fully justified. From the beginning, when the Russia Company shipped naval stores from the White Sea, the

Mines Royal sought "calamine stone" for gun-metal, and the Mineral and Battery Works made the guns ; down through the age of the joint-stock privateering syndicates that “singed the beard of the King of Spain"; through the history of the East India Company that struggled with the Dutch, and the Hudson Bay Company that got parliamentary sanction because it was a thorn driven into the side of the French ; through the monopolies controversy and the Land Bank controversy, where politics so often decided economic judgments, away to the struggle between the two East India Companies and the greater struggle between the South Sea Company and the Bank for the profit of bearing the National Debt; through all this, and much more, the fortunes of the chief companies are bound up with the fortunes of the State. And from time to time the State made use of their capital or their credit, from the day when Elizabeth took long credit from the Russia Company to the final politico-economic adventure of government with the South Sea directors.

It is for the reign of Elizabeth that Dr. Scott's method is perhaps most instructive to the general historian. The Queen lends men of war to the Africa Company and takes shares in the raiding syndicates, partly to get profit, partly to get political control. The full study of her official and unofficial finance explains each stage and turn of her notorious parsimony, and justifies it. Right through the book the general historian is fortified or corrected by the less technical results of Dr. Scott's financial research. It is perhaps not difficult to correct the finance of Froude [p. 81 n.] ; but Gardiner, who is also corrected more than once [e.g., p. 245], is nobler game. The noblest of all is Adam Smith. With him we get on to more technical ground. Very little, indeed, of his generalisations about joint-stock survives some dozen pages of Dr. Scott's criticism. Some of the points, as the critic puts them, deserve to be summarised.

Firstly, Smith absorbed what Dr. Scott holds to have been

mere eighteenth-century prejudice against the joint-stock system itself—“the pernicious art of stock-jobbing.”—based upon a distorted memory of the period 1695–1720. The South Sea directors were corrupt enough ; but had they been never so pure their faith in the virtues of a "fund of credit," which almost all their contemporaries shared, and which had no necessary connection with “stock-jobbing," was bound to lead to a crash sooner or later. “The Fire Insurance Company, the Bank of England, and the Million Bank all carried on business without any working capital provided by the members ” (p. 344], and the South Sea

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did the same, only on a larger scale. Corruption was not specially characteristic of the companies of the later seventeenth and early eighteenth centuries (pp. 451, 463]. The main cause of the crisis of 1696-7 was not “stock-jobbing” (p. 357] : the stockjobber was the scapegoat. The companies of that time were not all "bubbles"_that is, fraudulent or irrational schemes-any more than were the companies of 1720.

Starting with a prejudice against joint-stock and a knowledge derived mainly from Anderson, Smith picked out-sometimes, according to Dr. Scott [p. 450], invented—for animadversion unsuccessful periods in the history of such concerns as the East India Company and the Africa Company, and omitted successful and creditable episodes. That joint-stock foreign trading companies could not hold their own against private adventurers, as Smith maintained, is not true of the period under review; the few successful interlopers were usually themselves small joint-stock concerns. The famous dictum that joint-stock -apart from monopoly-is only likely to succeed in routine businesses is also challenged. The Bank of England had no monopoly against private bankers and its early days were

purely experimental.” The early water companies had not complete monopoly and were highly experimental. “The capital of companies was used in the main for ventures which were either altogether new trades or revived industries, or those proposed to be conducted by new methods; or again, in cases where there was an exceptional degree of risk” [p. 461].

[p. 461]. Many succeeded, but not by routine.

Naturally, Dr. Scott is able to correct historians of commercial crises—like Juglar and Marx Wirth-who have not his first-hand knowledge. [See pp. 390, 464, 468.] In his references to Jevons and the sun-spots, however, he takes no account of the recent work of Jevons' son. He can easily traverse a confident dictum of Sombart that the really transferable share only came into existence in the eighteenth century. As early as 1568, “Leicester had directed a share should be sold, just as a modern stockholder gives an order to his broker” [p. 443, and Vol. II., p. 416 n.), and there was abundance of sale in the seventeenth century. True, new shareholders in the East India Company had to pay a heavy sum for their “freedom” in the early days, just as in regulated companies [p. 152] ; and this made shares imperfectly negotiable. But after 1624 the fine was so much reduced that, “on any considerable purchase,” it was no more than a moderate registration fee. Ultimately it was abolished. In any

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