206 STUDIES, SCIENTIFIC AND SOCIAL chap. 



the nominal capital — of these 8,000 companies was 

 £475,000,000 ; that is about £55,000 each on an average 

 paid up, some of course very much more, and some very 

 much less. Now, not to take an extreme estimate, 

 suppose we reduce this average of £55,000 down to only 

 £10,000, and consider that each of the wound-up com- 

 panies involves a loss to its shareholders of £10,000, I 

 think everybody who knows anything about them will 

 think that absurdly low, and yet that would involve a 

 loss of £120,000,000 sterling to the unfortunate share- 

 holders. 



Effect of Speculation in Depressing Trade. 



Now let us think what is the effect of this continuous 

 loss — and in many cases absolute ruin, of a large number 

 of persons amounting to many hundreds of thousands — by 

 the failure of these companies ? I daresay there is not a 

 person who reads this chapter but knows one, and most 

 of you several, individuals who have been ruined by such 

 things. A great number don't like to speak about the 

 matter, and keep it secret, and therefore nothing is heard 

 of it ; but we have the absolute fact that thousands of 

 individuals, mostly persons with small means, deluded by 

 flattering prospectuses, were induced to invest their means 

 in these companies — persons of the middle class, very 

 often officers and widows and country clergymen, 

 scattered over the country. These have lost, at the very 

 least, £120,000,000, and much more likely three or four 

 hundred millions sterling. Now just think what is the 

 effect of the ever-increasing impoverishment of this large 

 body of the middle classes, and we will take it in 

 connection with the increasing mass of speculators who 

 have become millionaires from the losses of these men. 

 The one are counted by hundreds, and the other by tens 

 of thousands. Some people will perhaps say, " What 

 difference can it make to trade, if the money is there, and 

 the money is spent ? " But I want to show you that this 

 is a most delusive idea, and that it really makes all the 

 difference to trade. When you have a thousand families 

 of the middle classes impoverished, it means that you 



