326 THE POPULAR SCIENCE MONTHLY. 



investigators have laid great emphasis on the idea that over- 

 speculation is due largely to the formation of joint-stock com- 

 panies that have no real excuse for existence except the further- 

 ance of the personal aims of the " promoters." It is a little curi- 

 ous that, among the three hundred real or alleged causes of " hard 

 times/' brought to the attention of our National Bureau of Labor, 

 the reckless creation of limited liability concerns was not men- 

 tioned. In 1886 a writer estimated that there were afloat in the 

 English stock market fully two billion pounds of speculative 

 securities, of which at least a fourth were mere gambling count- 

 ers. It is to such a state of things that a recent law review at- 

 tributes the fact that real investors now shun the stock exchange, 

 and speculative operators are compelled to live on the plan of 

 " dog eat dog." 



The stock exchanges of this country have had a somewhat 

 similar experience, and the self-limiting nature of the speculation 

 fever is indicated by the fall in value of a place in the Chicago 

 Stock Exchange of three thousand dollars within a few years. 

 As yet few steps have been taken to restrain the incorporation of 

 absurd or fraudulent companies. Wasteful and semi-piratical 

 paralleling of railroad lines is encouraged ; incipient railroads 

 are preyed upon by construction companies ; companies of all 

 sorts are bound hand and foot by the contracts entered into by 

 an initial board of directors, and are brought into existence that 

 they may be so bound. 



None of the leading commercial countries seem to be quite 

 satisfied with the attempts they have made to remedy such evils 

 as these. Germany allows definite payment from the corporation 

 funds for the trouble and expense properly incurred by the men 

 who organize a joint-stock company, but guards very carefully 

 against the illicit gains too often made by "promoters." The pro- 

 visions for registering new companies are especially stringent in 

 all cases where a private business or factory is to be sold to a cor- 

 poration organized to buy and manage it. The fullest possible 

 publicity is sought regarding all the initial acts of a new com- 

 pany, and some matters where the first decision must be final are 

 reserved for a second meeting of the stockholders. Shares may 

 run either to " bearer " or to a particular name. The latter can 

 not be issued for a less amount than fifty thaler per share and the 

 former for less than one hundred thaler per share. By forbidding 

 the issue of shares of less amount; it is hoped to make investors 

 consider more carefully the subject of investing, and to prevent 

 the floating of small shares in worthless companies among the 

 class of very small investors, who are most likely to be swindled. 

 Some companies designed to engage in what are considered espe- 

 cially hazardous enterprises are forbidden to issue shares of less 



