no questions. Unless the latter have every
confidence in him, they would not commit their
affairs to his management, and, in point of fact,
he but acts as a pawnbroker on a large scale.
His chief work is to see that the article pledged
is worth more than the money advanced upon it.
When large advances have to be made to other
companies, on which financial operations of
great magnitude are entered into, the directors,
as a body, control the decisions arrived at by
the board. They don't run great risks, or at
least, they don't think they do, and so long as
borrowers will take their acceptances as cash,
and pay interest for the use of their signature,
there can be no doubt that finance and credit
companies must make large fortunes for their
shareholders.

There is one, and only one, circumstance
which can injure establishments like ours, and
that is when discounting becomes difficult.
Unfortunately, this turn in the events of the trading
world took place when we were at the height of
our prosperity. Money got tight, and then
tighter. The first intimation we had of there
being a slight cloud in the horizon, was when
one of our best customers applied for a loan of
some ten thousand pounds, and requested that
we would make the advance in cash, as he had
found it difficult to discount some of our paper.
Not that our bills were in any way exceptional.
A commercial crisis was at hand, and, as if by
instinct, all men began to limit the business
they were doing. Short-dated bills became
difficult to discount; long-dated paper impossible.
We had a great deal of money on deposit,
for we could afford to pay a higher rate of interest
than the joint-stock banks, and consequently
had many more depositors. By almost
imperceptible degrees these commenced to withdraw
the sums they had placed with us. After a
short time, this deficit in our disposable balance
began to be sensibly felt, but we believed that
the storm would pass by, and even that the air
would be benefited by the slight commercial
thunder which had made itself heard.
Unfortunately, when London, which may be called the
heart of the mercantile world, is affected, the
whole world feels more or less the effects of the
illness. In South America there was a general
stagnation of business, in consequence of which,
the interest upon the loan we had negotiated
for the government began to be very irregularly
paid, and after a time was not paid at all. This
event not only affected our funds, but affected
still more our credit. As a matter of course,
the want of punctuality on the part of those
who had raised this money in England, became
very soon generally known in London, and we
found it almost impossible to raise money, as we
used to do formerly, upon our own acceptances.
We had still a good deal of business on hand,
but chiefly with foreign houses and in foreign
markets. We sent out a special agent to South
America, in order to try and recover at any rate
a part of the money we had lent; but after a
time he reported that he found it impossible to
do anything, as the local authorities threw every
possible obstacle in his way. We then made a
complaint to the Foreign Office in London, who
sent out instructions to her Majesty's representative
in the republic, who made a reference to
the authorities at home, who promised to do
their utmost for us, but in the end did nothing.
What could we do, or what could we expect?
England would certainly not go to war with a
republic situated thousands of miles away, for
the sake of a finance company, so we had but to
make the best of a bad job, and wait for better
times.

In the mean while, the aspect of things
was not improving at home. The joint-stock
banks, having long watched our success with
jealousy, now rejoiced when they found that
both duty and inclination led them to wound
us upon our weakest point, that of refusing
to discount our paper held by third parties.
At last it came to this, our acceptances were
so very difficult to negotiate, that borrowers
would not take them as cash, except at a very
low rate of interest. Our directors thought
they would contract greatly the limits of our
business, and only advanced money to those
who could produce the most unexceptionable
security. But here, too, we were foiled. Those
who had really sterling security to offer, did not
bring it to us, they went to the joint-stock
banks with whom they had dealt all along. We
determined not to offer our bills any more to
customers, but when we made any advances,
to do so in cash. This worked very well for a
time, but, of course, lessened immensely the
amount of profits we had to show at the next
general meeting, and of course made the
shareholders angry. A very stormy discussion
was the result. Our shareholders had all
along been accustomed to very high dividends,
and thought they were to last for ever. Finding
their mistake, the needy—who are always
the most greedy—amongst them commenced
upon that most sure mode of bringing a
company to grief, abusing the directors. It is
curious, under such circumstances, what mere
children a great number of those who hold
shares in joint-stock companies become. What
sane man, if he was disgusted with the way in
which his house had been built, would stand at
the door and tell the faults of its construction
to all passers-by? But English shareholders
do more than this. When annoyed with the
directors of a company, they not only find fault
with them, but also with everything that
concerns the undertaking, and this in a manner
that from its publicity cannot fail to greatly
depreciate their own property, and, as a natural
consequence, invariably lessen the value of the
shares. When the price of these falls, they turn
round and take the board to task for ruining
the prospects of the undertaking; whereas, had
they been content to hold their tongues, or else
have washed their dirty linen at home, it is
more than probable the shares in their company
would have fallen little, if anything, in value.
As a general rule, few shareholders who attend
meetings of their company can resist the