directly or indirectly for directors, or for working
out the scheme of "floating" a joint-stock
company—is made contingent upon the shares
being allotted to the public. If the concern
does not proceed so far, all payments are
considered "off." The usual—I might almost say
the universal—way with promoters is to give
an undertaking, of which the following may be
regarded as an average specimen:

104, Little Green-street, London, E.G.,
             14th October, 1864.

Dear Sir,—As promoter of "The Grand Financial
and Credit Bank of Europe, Asia, Africa,
America, and Australia (Limited),"I hereby
undertake to pay you the sum of two hundred pounds
sterling (say £200), should you succeed in obtaining
the consent of Mr. So-and-So, of such a place, to
become a director of the said bank. The money to
be paid within seven days of the shares being
allotted to the public, and on condition that the
said Mr. So-and-So gives his written consent that
his name may appear upon the prospectus of the
company, and remain there for at least six months
after the company shall be brought before the
public.

I am, dear sir, yours truly,
N. MAY,
Solicitor and Promoter of the
above Company.

To Nicholas Sharpe, Esq.,
25, Grove-street, E.C.

Having obtained this undertaking, the first
thing Nicholas Sharpe, Esq., does is to get
it stamped at Somerset House, for which he
pays the small sum of sixpence. He then
proceeds to take his measures to catch his
director, which he accomplishes by means
like those I have pointed out, being generally
a series of introductions which remind
one of the House that Jack built. Of the
two hundred pounds, not more than perhaps
a fourth remains to him when all his expenses
are paid. He has generally to give about
one-fourth to the various worthies from whom he
obtains the introductions, and has seldom less
than half to give to the gentleman whom he
brings in as a director. By the uninitiated it
will be asked where all the money promised
to be paid to directors, comes from? The
reply is, it all comes out of that great nugget
called the "promotion money," which is dug
out of the pockets of the shareholders, so
soon as the deposit money paid on application
for shares flows into the treasury. In the
"Articles of Association" to which, be it remembered,
all shareholders bind themselves in their
application for shares—there is a clause inserted,
which, in the case of our bank, was as follows:

In consideration of the trouble and expense to
which Mr. May, the promoter of this company, has
been put to, it is hereby agreed that he be paid the
sum of five thousand pounds sterling as promotion
money, within seven days of the company proceeding
to allot their shares to the public.

It does not follow that the amount of
promotion money is always the same. I have
known it to be as high as ten thousand pounds,
and as low as three thousand, according to the
nature of the undertaking and the amount of
the proposed capital. But, although he retains
by far the greater share of the cake, he is
obliged, in order to obtain the wherewith to set
his machine in motion, to part with some large
slices of it.

Such slices induce many directors to join the
new concern. These good things form part of
what in promoters' language is called "the pull
you get out of the concern." But there are
other "pulls" which the directors, who join a
company when it first starts, generally obtain,
and among these not the least is that of being
"qualified," gratis, to sit at the board. In every
joint-stock concern, the directors are obliged,
by the "Articles of Association," to hold a
certain number of shares—generally forty or fifty
—in the company, but gentlemen who join in
order to get "a pull" out of the affair would be
the last to lay out money in paying for shares.
The result is, that the promoter of the company
almost always offers to qualify directors—that
is, to give them the requisite number of shares
—gratis. It was so with The Grand Financial
and Credit Bank of Europe, Asia, Africa,
America, and Australia (Limited). Mr. May, our
promoter, soon saw that to induce certain
gentlemen to join the board, he must offer to qualify
them, which he did: thus making them, as it
were, a present of four hundred pounds each, in
shares, for on each share they received it was
stipulated that the calls to the amount of ten
pounds should be written off as being paid, and
thus they had only to wait until the first two
calls were paid, when they could, if they wished,
retire from the direction, sell their shares, and
pocket four hundred pounds each.

With these various advantages, or "pulls"—
viz. a certain amount of patronage in the bank,
the two or three guineas for each director per
week, a few slices of the promotion money,
and being each "qualified" with forty shares on
which ten pounds per share was paid—it is not
to be wondered at that, in a very few weeks, we
found our list of directors full, and very little
wanting to launch the company on the sea of
public opinion, there to float or sink, as fate
might direct. Our prospectus was now filled;
the parts of the play were cast. Under the word
"DIRECTORS" came the list of those gentlemen
—a list now swelled up to eight—and so pleased
was Mr. May with the general appearance of
these names, that he never seemed tired of
contemplating the paper, of which I must give a
copy as it stood when the bank was ready to be
floated. Here it is:

THE GRAND FINANCIAL AND CREDIT BANK OF
EUROPE, ASIA, AFRICA, AMERICA, AND AUSTRALIA
(LIMITED).
Incorporated under the Companies Act, 1862.
CAPITAL, ONE MILLION.
With power to increase to £5,000,000.
Twenty Thousand Shares of £50 each; First Issue,
Ten Thousand Shares.
The Directors do not propose to call up more than
£25 per Share.
Chief Office in London.
With Branches in every important commercial
town in the world.