PROMOTING.

O port, sir! You must be joking. A fellow who shirks his port deserves to be doomed to drink ditch-water till he dies. When I say port, I don't mean infusion of logwood, but the living juice of the grape-and old. Why, my dear boy, port wine has been the pride, the glory, and the backbone of the country. If we are now going by limited mail to crash and smash-and it seems a dead case of humpty-dumpty done for-it is owing to thin wines. A man who drinks his port will be a Briton even when the gout is burning and pinching him like a regiment of fiends. But the individual who turns tail at the sight of port is a miserable milksop."

Tom Botwright, our jovial host, practised what he preached. After an old-fashioned, Three per Cent. Consols dinner-soup, fish, joint, and game-the cloth was drawn, and wine, walnuts, and olives placed on the dark mahogany, which was polished till it shone as a mirror. Such port! Ruby coloured, luminous, and, as it passes over the palate, making every pulse tingle with ecstacy. Talk about wine being dear at one or two guineas a bottle! Botwright's port-wine that maketh glad the heart-is cheap at any price. Forsooth, it is the elixir of the poet's song, and priceless. If Botwright were the most loving husband ever dreamed of by credulous maidens, he would rather sell the wife of his bosom than a bottle of his port. Superlative port is Botwright's weakness, and a most pleasant one for his friends. "Ah, my boy, there is no king on the face of this mortal earth, or anywhere else, who can decanter a more glorious port than your humble servant." After the first glass it needed no persuasion not to shirk the Botwright port.

"I bought this wine at Greengrab's auction. Poor Greengrab was the principal shareholder in a concern that was wound up, and his effects went to the hammer."

"Those confounded public companies!"

"Don't talk like a parrot. My dear fellow, joint-stock enterprise is the grandest movement of the age, the corner-stone of modern commerce, progress, and civilisation. A promoter of joint-stock enterprise is a greater philanthropist than Howard; for the promoter bestows happiness, while Howard only alleviated suffering."

I remarked that widespread ruin and misery had been brought about by rotten companies.

Precisely. I have been a promoter, and I ought to know what goes on behind the curtain. Bless your life, promoting is the most difficult business going. Wellingtons, Napoleons, and Moltkes are not so plentiful as peas in July, but first-rate promoters are more scarce than first-rate warriors. Some men can get up a company, others can float it, and others can navigate it over the sea of competition to the harbour of prosperity; but there is not a score of men living who can do all these things, and thus many fortune-making ventures are steered into Chancery, and the shareholders driven to the Continent or the workhouse. And for an Englishman to be forced to live on the Continent for years is not much better than the workhouse. But the law is at fault, and the wonder is that no one thinks it worth while to go in for a reform. Amend the law, sir, and rotten companies would be nipped in the bud, or rather in the very seed; and, further, bad management would then not make legitimate concerns utter pauperism to the investors."

Botwright emptied and refilled his glass. He was warming with his subject, but he drank his wine with due deliberation, and did not insult the generous liquor or cheat his palate by gulping it down as if he were swallowing physic.

do you

"Now and then there is a fuss about the National Debt, and the Chancellor of the Exchequer invents a roundabout plan for reducing it one per cent. in fifty years. Amend your joint-stock law, and the debt would be reduced to a paying-off figure, without a turn of the tax screw. No, my boy; I am not talking after-dinner moonshine. Why are English Three per Cents. at 92? Because they are safe. Suppose joint-stock property was equally safe. Well, we won't go so far as that; but suppose the liability was really limited, and there were effective precautions against fraud. Suppose a man could put his money out securely at six or seven per cent., think you would have Consols at 92? The normal price would be 60, and the National Debt would be reduced by upwards of two hundred millions, without a penny of taxation. Moreover, it would bring down the value of land. Men go into land to pay them 2 per cent., not only because it is respectable to be a landowner, but also because land is safe. Offer safe investments at six and seven per cent., and down would topple the price of real property. Mend your joint-stock law, and the land question would be eased, the National Debt would be reduced, and the riches of the community would be multiplied by the development of enterprise. No, sir, I am not talking prospectus poetry, but unvarnished truth."

I ought to explain that Botwright is a retired City solicitor, and has been associated with several companies.

"I have no objection to tell you how the law should be amended, but before doing so I will give you a sketch of the history of Bleadstone, Pulver, and Co. (Limited). I had to investigate the affair for a client, and it is a fair specimen of bubble companies.

Ned was

"It was got up by Ned Piper, a noted bubble-blower. one of the best dressed men in town, and in this he was wise. Unless a man has a fortune he cannot afford to wear seedy clothes. In every kind of business a tip-top appearance is half the battle. Ned had a well-furnished house, a venerable butler, and a particularly neat brougham. He began life behind the counter of a country draper, and made his money by promoting. His connection was third rate, for in financial circles the highest class will not do business with a person unless something good and substantial is known of him. But the third-rate connection was good enough for bubble-blowing.

"Bleadstone, Pulver, and Co. had been a paying concern, but what with heavy settlements on wives, the retirement and death of partners, there was not a sixpence of capital left in the firm, and its credit was heavily mortgaged. Bleadstone, the grand-nephew of the founder of the house, finding himself in a fix-for his bills were not in favour in Lombard Street, and his bankers were over-loaded with his paper-called on Mr. Piper to negotiate an advance. Ned heard the application and instituted inquiries. He would not lend a farthing, but he was willing to turn the firm into a limited liability company, giving the partners a handsome sum for goodwill. Bleadstone and Co. were delighted, and Ned set to work.

"He told Bleadstone to put plenty of business on his books; and here is a sample of what was done. Fictitious champagne-that is, gassed Rhine wine-was bought at 18s. a dozen, shipped to India and Australia, invoiced at 98s. per dozen, and advances of 25s. were obtained. The like was done with other goods, so that the accountant who prepared the balance-sheet showed that the firm was making £10,000 a year, whilst in fact there was a heavy loss.

"Ned never appeared on the scene, but he directed the operations. First they found a banker; and this was easy to do. There was no reason why the Niagara Joint Stock should refuse an account, and it was useful to the promoter to be able to say that the company would bank with the Niagara. Next a solicitor was looked after, and a first-rate firm was secured. A solicitor is only responsible for the due discharge of his duties, but his name is useful to the promoters. Old maids and that sort of capitalist are impressed with the names of the banker and solicitors, not being aware that they are not a guarantee of the soundness of the venture. For auditors two eminent public

accountants were chosen, and naturally they did not refuse the business, for they were in no degree responsible for the undertaking; but their names were useful.

"Thus prepared, Ned mentioned the matter to Colonel de Soldout, C.B., and proposed that he should become a director. The Colonel thought the petty fees would not compensate him for the trouble of attendance, and further, he had not the money in hand to take the shares to qualify for the directorship. Ned replied that it was arranged with the firm that they should qualify the directors, that the fees would be worth pocketing and would not depend upon attendance. The Colonel had a further objection. Was Bleadstone, Pulver, and Co. (Limited) going up like a rocket and coming down like a stick? True, he had nothing to lose, but compulsory residence in Boulogne would not be pleasant. Ned asked him if it was likely that the Niagara Joint Stock, Bigseal and Co., the eminent solicitors, and Totum and Squareround, the noted accountants, would lend their names to anything that was not as sound as a roach in the river. The Colonel agreed to become a director, and so did Jonathan Parlet, of the Grange, Gloucestershire; Washington Splurge, director of the Nevada and Universal Banking Company (Limited); and two other gentlemen of equal calibre. Viscount Sartorial, of the Peerage of Ireland, consented to act as chairman. Then the company was launched with a beautiful prospectus-capital £100,000, in 20,000 shares of £5 each. It was not expected that it would be necessary to call up more than 30s. per share, and the net profits were estimated at £15,000 a year, with an immense prospective increase. The firm sold their goodwill for £30,000, of which £10,000 was to be paid in cash and the rest in fully-paid shares, which were to take no dividend until the other shareholders received 10 per cent. Mr. Bleadstone consented to act as managing director.

"The applications for shares were not numerous, and Bleadstone was alarmed. Piper told him the shares were not likely to be in demand until after the list closed, and the fewer shares allotted the better for the promoters. The market was carefully rigged. There were always buyers for Bleadstone, Pulver, and Co. (Limited), and naturally the quotation went up from day to day. A jobber who tried a bearing operation got the worst of it. There were very few shares except those held by Ned and his friends; and so when settling day came the jobber could not buy shares for delivery, and had to pay a heavy difference. The high quotation brought country buyers, for it is your provincials, especially the ladies, who support bubbles; and in three months there was a large sum of money in the bank, which

went into the pockets of Piper, Bleadstone, and the other adventurers. The credit of the company was so far improved that goods were readily bought on credit. There were more shipments at enormous invoice prices, and advances on bills of lading. At the first half-yearly meeting a dividend was declared of 10 per cent. Shares were in increased demand in the market. Bleadstone and the directors sold, and began to think that the company was a mine. Then—but there, you can guess the rest. Another call. A fall in the quotation. A loss of credit. A winding-up order. Exeunt Bleadstone and others to warmer climates for the benefit of their health. Ned Piper was not inconvenienced. As I told you, he never appeared on the scene; and if he was obliged to take shares he registered them in the name of a servant whom he kept for the purpose. A few score families were turned out of house and home. Now, my boy, over a glass of claret, I will tell you how bubble-blowing and other jointstock sharping could be stopped."

Botwright's claret was worthy to follow his port; not the acid washings of wine casks, not free-trade claret, but such liquor as our great-grandfathers drank.

"First, my dear sir, the liability of a shareholder should be absclutely and practically limited. At present, the word 'limited' is too often a rank delusion and a dangerous snare. What is the actual limitation when the nominal capital is a million sterling, and only £50,000 paid up? Give the quietus to nominal capital. These grandlooking figures benefit no one except bubble-blowers. It may be said that the reserve of claims on the shareholders gives credit to the concern. But that kind of credit is not healthy, and ought not to be encouraged. My plan is this: permit no company to commence business until three-fourths of its shares are subscribed, and one-half of the subscribed shares are paid, and the money deposited at a bank. Surely this would leave margin enough. Say it is estimated that £30,000 will be required to work a concern: share capital, £100,000, and of this, £75,000 must be subscribed, and £32,500 paid up. Twice the amount of capital in hand

would be held in reserve. The shareholder would know that his utmost liability would be as much again as the amount paid on his shares. Further, half of the dividends over five per cent. should be paid to the credit of the shares until three-fourths of the amount of the shares is paid up. On the other hand, the creditor ought to be protected, and no more than three-fourths of the amount of the shares should be called up, except by order of the Court of Chancery. "No additional shares should be issued until the original shares had