hideous impostures; and among the foremost to adopt this rash and foolish prejudice, was the Lord Chancellor, who took an opportunity, at the commencement of the session of Parliament, to express a most decided hostility to them. Awed by this declaration of his lordship, only a few of the new companies ventured to apply to Parliament for acts endowing them with the privileges and functions which were indispensable to their success and permanency. Out of the whole companies formed and projected, only forty-seven applied for acts; and only eleven, (the schemes of which appeared to the legislature to possess bona fides and feasibility,) succeeded in obtaining them. Three of these were mining companies in Ireland; one was for water-works; three were for navigation and fisheries--(one of these three for sailing regular steam-packets between Valencia, in the S. W. of Ireland, and America and the West Indies; and another, for forming a canal from Seaton Bay, in Devonshire, to the Bay of Bridgewater, in the Bristol Channel) and the rest were of a miscellaneous nature.

It seems very clear, that, upon no sound principle, can joint-stock companies be indiscriminately condemned. There may be many undertakings, promising a fair return of profits to those engaged in them, and immense advantage to the country, but of a magnitude far exceeding the capital of any individual, or the risk which any individual would choose to incur. There are, for example, works for supplying large towns with water or gas, canals, and rail-roads; there is also the business of insurance; and, since no single individual is likely to engage in any of these, it is obvious that none would ever be undertaken, if not by a large number of individuals, who, uniting into companies, divide the risk among themselves. The

fact, indeed, is undoubted, that England owes much of her superiority to other nations, to the extraordinary facilities she possesses of internal communication, which have been achieved principally by companies; and it is no less certain, that the companies formed prior to 1824, have, if we average their dividends, been eminently successful. There existed, prior to the above period, and still exist, in England alone, no fewer than 156 companies for canals, roads, bridges, docks, water-works, gas-works, &c. which have advanced no less than L.34,065,936 upon local and national improvements; and though the shares of some are at a discount, those of others are at a premium; and by the operations of the whole, has the country been eminently benefited.

To

But the companies formed in 18245, were, with a very few exceptions, of a widely different character. show the extravagance and delusiveness of them, one remark might suffice-that throughout the whole world, there could not have arisen, or been created, all of a sudden, a demand for the works and the commodities which they undertook to supply, at all equal to the capitals which were to be invested in them. However, though some of their schemes were vastly magnificent, requiring almost the treasures of an empire to realize them, the far greater proportion were devoted to occupations-some most laughably sordid to which the capital of even humble individuals were fully adequate, and which, to be successful at all, demand all the economy, labour, and constant superintendence which individuals usually bestow upon their own affairs. It might have occurred to any one possessed of common understanding, that such speculations-especially in Britain, where every occupation is filled up by persons, rivalling each other, and content with the small

est profits, could not, but by a miracle, succeed, even supposing the directors and agents to have been as disinterested and honest as, generally, they were rapacious and unprincipled. Contemporaneous with the mania for joint-stock companies, and affianced to it by fraud and delusion, was there a mania for dealing in loans to foreign governments, some of which were proverbially faithless, and most of them bankrupt, or, which was nearly equivalent, in the crisis of revolution. There could scarcely have been an expectation that many of these loans would ever be repaid; but persons purchased the scrip of them, as joint-stock

companies' shares were bought at the time, in the hope that the prevailing mania would be still farther heightened, when the scrip might be resold at a premium.

The following table of the foreign loans contracted for during the two years 1824-5, shows the enormous amount of money of which the country was drained by them; most of it, we fear, never to be returned, at least in the shape of repayment. The effect which this draining of money had in producing the commercial distress that ensued, we may have occasion to notice in the sequel.

It will be supposed, that, to have brought about these extraordinary manias, there must have been some predisposing cause. For our part, we can only ascribe it to the spirit of gambling, recklessness of adventure, and impatience of gain at any risk, which, for a considerable time, had characterised the commercial classes of society; and the causes of which we shall endeavour to trace-connected as they, and the prodigies they engendered, are with the unparalleled distress which, towards the close of the year, befell the commercial world. The most efficient of those causes we conceive to be, the unsound and vicious system of banking which prevailed in England. By an absurd regulation, designed for the advantage of the Bank of England, no other banking company, consisting of more than six partners, was permitted; and, as a consequence, though we do not mean to deny the great stability and wealth of many of the English country banks, too many were very destitute of both the one and the other. Banking is a business which, unlike all others, is better conducted by a large company than by a few individuals. Prudence and caution are of much more value in it than talent or enterprise; and the former qualities are more often to be found in companies, who usually submit to the guidance of the most sagacious and experienced partners, than in individuals.

The

profits accruing to the partners singly of a large company, from any isolated transaction, must be so small, that its managers are never personally tempted into extraneous or rash speculation, they are less intent upon gain than in avoiding risk and securing the confidence of their constituents. But individual bankers, in their trade, must feel the desire to become suddenly rich, in common with others; and when they have the management

of money not their own, and the power of unlimitedly issuing their own paper money, the temptation to specu late with it is too strong to be often resisted.

In many parts of England banks were set up with very little capital, and maintained their credit solely by pushing their notes into circulation. Of course, on their part, there was an extraordinary facility in giving credit, in other words, discounting bills;the custom of great manufacturing establishments was assiduously courted by them; and it not unfrequently happened, that after the banker had advanced largely to the manufacturer, the fate of the two became completely identified; and the one had to continue to support the other, with new advances, through all his difficulties. Not unfrequently, too, bankers engaged directly themselves in manufacturing, mining, or other concerns, quite foreign to their proper business; taking care to pay their purchases of goods and labour with their own paper; so that the gain, if any, was their own-the loss, if any, fell upon their customers. Many manufacturers were not long in adopting this idea of (to use a stage phrase) doubling themselves; it was cheaper, they perceived, to pay their workmen with their own paper than with good money; and they took out the banker's license for that sole and unworthy purpose.

We are far from being enemies to paper money, when its issuers are possessed of ample funds for retiring it; but spurious paper money, which, in reality, only represents the assurance of the issuer, is, when it abounds, the greatest curse which can afflict a country-unnaturally raising prices and depreciating the currency, and exposing both, by fits and starts, to ruinous fluctuations. The vast abundance of this sort of money in 1824-5, joined to the facility of procuring it,

was sufficient, in our judgment, to have inoculated a whole people with the wild spirit of mercantile gambling. As an adjunct to this evil of spurious paper money, we may notice a lamentable change which had taken place in the qualifications of traders generally. It was the advice of Lord Bacon, we think, that no man should engage in a profession or trade before he attained the age of thirty years; and this advice was so far acted upon by our forefathers, that few engaged in a trade till their minds were stored with a thorough knowledge of it, and of adequate worldly experience. Perhaps the necessity there was then of commencing upon real capital, or at most upon credit very cautiously furnished, made such an arrangement unavoidable. A British merchant, in those days, was respected equally for his intelligence and probity; he purchased directly from the manufacturer, (who, on the other hand, regulated his supply by -not the possible or imagined-but the actual demand,) and, knowing accurately the wants of foreign markets, he made his shipments accordingly. But in modern times, so easily was credit to be procured, that persons rushed into trade, profoundly ignorant of its principles and details, and at early periods of life, when facility of obtaining credit is certain to be abused, and the possession of borrowed money is as certain to lead to extravagance and rashness of enterprise. By a strange revolution of fashion, too, the manufacturer became the merchant; and commenced producing for the foreign markets, not according to the demands from the outports, but according to his own enlightened notions of what the foreign markets required. The boy manufacturer now consigned his goods for a particular foreign market at some outport with a boy agent; and he

advanced upon them, either by his own bill or banker's paper money, perhaps two-thirds of their estimated value, and then shipped the goods to their destination, where it was the merest chance if there was the least demand for them. The ignorance which some of those shipments displayed would exceed belief, were it not perfectly well attested. One of them consisted of a cargo of ice skates for Buenos Ayres, and another for New South Wales, chiefly of Glauber salts, more than sufficient to have served the whole Chinese empire for a century. Opposed to such speculators, the trading capitalist had no chance. Their extravagant shipments beat down prices abroad far beneath the point of profit; and, at home, the fraudulent disposal, by many of them, of their goods at any price they would bring, and the frequent bringing into the market of their bankrupt stocks, had a similar and equally mischievous effect.

With all this unsoundness and disorder, never did the commercial world exhibit a more prosperous aspect, but one most unreal and deceptive. The precise effect which speculations in joint-stock companies, and foreign loans, and the paper money system, with its train of immediate evils, may have had, singly or combinedly, in producing the distress which ensued, it is impossible to determine. But it seems tolerably certain, that the bursting of so many joint-stock bubbles, which, though not immediately hurtful to the nation, occasioned the speedy ruin of many, had produced in the public mind an extreme sensitiveness of danger; and that the foreign loans led directly to consequences which produced an universal PANIC. exportation of the immense sums raised for foreign loans, had the effect of turning the rates of foreign_exchanges against England to such an

The

alarming extent, that the Bank of England, after much, and, we think, very culpable hesitation, determined to limit its issues; the immediate consequence of which was the downfall of a vast number of banking houses both in town and country. Great alarm was produced, causing runs upon other banks which had survived the shock, many of which were compelled either to declare themselves insolvent, or to suspend payment. Confidence among mercantile men was nearly destroyed; and money, which before was so plentiful that bills were freely discounted at 2 per cent, could not be procured but at the most extravagant prices. Then it was that the bad effects of the usury laws were severely felt; for many, whose assets were ample, and who might have saved their credit, had they been allowed to negotiate loans at more than

the legal premium, sunk down from the want of pecuniary supply; while others, by certain well-known expe dients, evasive of those laws, succeeded in raising supplies at the cost of sacrifices greater than would have been exacted, had the trade in money been absolutely free. The public ear was daily stunned by the fall of commercial houses, old established, and of the most unsuspected credit; and as the catastrophe of each involved the fate of others, the apprehensions excited were universal. It was found, too, that there had been an excessive production of goods of every description, and almost a cessation of demand for them; and thus the manufacturers became involved in the general distress. In short, the year 1825 closed amidst clouds and tempests, such as had never before threatened and assailed the trading world.