Notebook “Trade and Finance 1868”. II. The Doulton Case and the Daily News City Article, November 1868 to January 1869

Newspaper cuttings, mostly from the Daily News, cut out and pasted in for Karl Marx by his daughter Jenny Marx in the notebook “Trade and Finance 1868”, London, 1868-1869 (IISG, Amsterdam, Karl Marx and Friedrich Engels Papers, P 1). Text from MEGAdigital (MEGA² IV/19), without the editorial apparatus; words in square brackets are missing from the cuttings and supplied by the MEGA editors.¹ Traducción al español

OCTOBER 22, 1868.

A TERRIBLE story of ruinous bank management is told in the Report presented by Messrs. R. ROBERTS and W. BARTLETT, two of the Committee of Investigation of the Royal Bank of Liverpool, to its shareholders. This great establishment, it may be remembered, passed through the earlier stages of the great panic, not indeed without loss of credit, but without actual shipwreck; indeed, in January, 1867, the proprietors were congratulated upon a state of things which allowed the directors to declare that even in the previous disastrous year a profit of 83,800l. had been made. The bank, however, had been in an unsound state for many years; the crisis of 1866 greatly increased the drain upon its resources caused by the wants of its least solvent customers; the adventurous character of the business it was doing became known among its London connexions; and thus, when the Bank of England prudently set a limit to the assistance it would afford, the Royal Bank of Liverpool closed its doors, exactly twelve months yesterday. It now appears that, in the words of this Report, “the more remote but real cause of the failure was the locking up of the capital of the bank by advances of a most extraordinary nature, and of unprecedented amount, to two firms, who, after their insolvency, were ‘carried on’ by the directors, apparently from want of courage to admit the fact that they had made very heavy bad debts. The effect of the arrangements made with those firms was practically to convert the bank in a great measure into a trading concern, and the results have been eminently disastrous.”

In support of these statements the authors of the Report analyse a number of accounts, giving especial prominence to those of H. T. WILSON, CUNNINGHAM, and Co., and SEDDON and Co. They state that on the day when Overend, Gurney, and Co. closed their doors Mr. WILSON, of the former of the two Liverpool firms, called at the bank and stated that the house must stop payment. At the request of the bank he made a statement of its position, showing 341,000l. assets and 370,000l. liabilities, the assets, however, being enormously over-estimated. After consultation the board offered Mr. WILSON to cancel his overdrawn account of 30,000l.; but he refused to keep on upon those terms, and was then told that the bank would “carry him on.” He stipulated as a condition of continuing his business and transferring his property to the bank, that the bank should pay, or become liable to pay, all his then existing debts, and that he should be allowed five years, in which he was to endeavour to work round, but if he failed to do so the bank were nevertheless to pay all debts incurred in the business, and to release Messrs. WILSON and Co. from all claims and demands; and, extraordinary as it seems, all this appears to have been agreed to, and a deed was drawn up to that effect. Thus, as Messrs. ROBERTS and BARTLETT remark, “in order to avoid a probable loss between 50,000l. and 60,000l., the bank was by this deed placed under liability to the extent of about 450,000l., the greater part of the security, for which consisted of shipping, a security at all times a risky one for a bank to accept.” Thus the bank was saddled with Messrs. WILSON’S large business, with chances of losses to an indefinite extent, while in no case could it receive more than the amount of debt due to it.

The effect of the deed upon the account of Messrs. WILSON and Co. was soon apparent. On the undermentioned dates it stood thus:

This large and sudden increase is accountable for by the fact that the other bank with which Messrs. WILSON and Co. had been in the habit of discounting their paper, having heard that the firm was being carried on by the Royal Bank, refused to continue their discount, and thus the whole of the paper was thrown upon the bank. This, however, was not all. In December, 1866, when, as we have seen, WILSON’S account was more by 200,000l. than it was in June, Mr. WILSON obtained the bank’s authority to speculate in the purchase of cotton, and transactions took place which resulted in a loss of 64,000l., bringing the total indebtedness of WILSON and Co. to the bank up to 528,000l.

We need not multiply illustrations, for where such things as these are possible, everything is possible. It is impossible to read of such doings without feeling that the unfortunate shareholders—who only as late as January, 1866, were assured that the profit of the year, after making full allowance for all bad and doubtful debts, was 102,633l.—have been cruelly betrayed.

THE TRIAL OF MR. DOULTON, M.P., AT BRUSSELS.

Brussels, SUNDAY.

The trial of Mr. Doulton, M.P., was resumed yesterday.

After the evidence already reported had been given, M. Anspach, the burgomaster, was recalled, and questioned by the presiding judge. He said that after the exposé in La Finance respecting the pot-de-vin to be handed over to Doulton, he had had no relation with Doulton. Heritage, the solicitor to the company (who has been sworn to as having been a participator in the pot-de-vin), said to him several times that the contract made secretly with Mention was disliked by him. The witness said he had never to his remembrance seen Mr. Clench during the time of the concession.

Mr. Clench was then recalled and told that the presiding judge was about to examine him under the oath administered the previous day. In reply to questions he said that when the concession was under question he was taken by Doulton and Swan to the house of the burgomaster, and introduced to the burgomaster as the gentleman who would introduce the capital into the proposed company. He also saw the burgomaster at the Hotel de Ville twice or three times. He also saw the burgomaster at the Hotel de Ville twice or three times. He went over the plans with Doulton in his presence. He thought that the burgomaster must have gathered from what took place that Doulton and Swan were his agents, and moreover, the secretary of the burgomaster came to London. Proceeding to speak of the pot-de-vin secret contract, the witness said he had heard shareholders say that if they had known of that secret contract they would have had nothing to do with the company. The witness said directly he found out about the secret contract his solicitor wrote letters to the board of directors; and on this board of directors were, besides Mr. Albert Grant, M.P., and Mr. Doulton, M.P., Mr. Warner, M.P., Lieut.-Colonel Neville, Mr. J. Irving Pascoe, and Mr. Henry Pownall, J. P.

The presiding judge drew attention to certain lists which the accused had laid before the London directors in excuse for having made this secret contract. The lists referred to were in une lettre confidentiellle from the board of directors to the communal council of Brussels, and was signed by Mr. Heriot, the secretary. It was dated the 2nd of April, 1868, and contained a resolution passed by the directors in January, 1867, stating that Mr. Doulton, having brought before the directors a statement of accounts of money which he was personally liable to pay, should be at liberty to “make such arrangements with the contractors” as should appear to him convenient, so long as the conditions and price already agreed upon under the contract should not be altered. The list of moneys for which Mr. Doulton stated he was liable was as follows:—Mr. Swan, 15,000l.; Mr. Clench, 25,000l.; M. Keymolin, 8,000l.; Van der Erst, 2,000l.; Ronstorff, 20,000l.; Langrand, 1,600l.; publicity (the sums given to the editors of L’Independance Belge and L’Etoile Belge) and for new plans (about) 2,000l.; making a total of 75,000l. There was an additional list, in which Mr. Doulton said that he had applied 6,103l. 16s. 9d., as follow:—To Swan, 2,051l.; to Swan’s solicitor, 121l.; Mr. Clench, 969l.; Mr Clench’s solicitor, 400l.; Jennings, 600l.; J. B. Smith, 337l. 16s. 9d.; other expenses, 475l.; and to his solicitor, 650l.

The Judge wanted to know how Mr. Clench’s name appeared in these lists after his letter to the directors concerning the secret contract.

Mr. Clench proceeded to reply that the two sums put down to his name and Swan’s were those really due to himself—in all 40,000l., representing his interest in the ultimate profit of the concern; but he was not to be paid this out of the pot-de-vin, for it had been otherwise provided for, so that its insertion in this list as a debt due, and for which Doulton was responsible, was a falsity. When the company was announced to the public, the witness said, I saw by the prospectus that our claims on the concern had been overlooked, or not provided for. I saw Doulton on many occasions, and he said it had been decided to give up these claims. I saw Mr. Heritage, the solicitor, and complained that the concession had been parted with contrary to the agreement entered into with me by Doulton and Grant. He said it could not be helped, for the only provision was to be made with the B shares (deferred). I drew Doulton’s attention to the fact that I was entitled to a fourth of the B shares, besides my other claims, and he said he could not help it, and I, acting under the advice of my solicitor, signed a deep of release of my claim, on condition of having B shares to the amount. I should not have done that if had known of this secret contract for the pot-de-vin; but I have not had the shares to this day, and believe that the company, who told them, set up claim upon them for money owing by Doulton. I have received no money from Doulton except what has been given him by the company to pay certain expenses, 2,500l., and the money he has entered as having paid me, 969l., is the interest of my caution money, and that interest he had received from the town, so that could not have come out of the pot-de-vin, as he has stated. Besides, there is a sum of 600l. which he has received, and that is still owing.

In reply to further questions, witness said the prospectus of the company was issued in 1866, and might be said to be formed in the middle of December of that year. The prospectus said, “No purchase money for the concession and no promotion money will be paid, and the expenses will be strictly limited to the actual preliminary disbursements necessary to acquiring the concession, and the establishment of the company.” The capital was altered, and the company had to be re-registered, as it was registered March. His own name and the names of other capitalists were submitted to the town as willing to find capital before the concession was granted. He further said it was his belief that Doulton never attempted to obtain any other tender than that of Mention’s. Doulton brought a particular friend of his, Mr. Webster, over, but there was no bonâ fide tender that witness was aware of.

The presiding Judge several times expressed his surprise that a company could be formed in commercial England without any more inquiry than had been made in this case, and from his remarks it was apparent that he could not comprehend how persons could be found to take shares in a company of whose working they could know nothing. He was the more astonished that this could take place in England.

Mr. W. C. Reynolds, solicitor, of Fenchurch-street, said—I was present when Mention was charged with the secret contract with Doulton, and he did not deny it. Doulton refused to answer any questions about it until he found we knew all about it. It had then been done some time, from the beginning of the works, and Doulton said that it had been done with the knowledge of Grant, the chairman, and Heritage, the solicitor. I afterwards spoke to Heritage, and he told me that Doulton had been empowered by the resolution of January, 1868, to make arrangements with the contractor, but he (Heritage) said he had no idea that it was for such a sum as 100,000l.

The presiding Judge—You have read this resolution, of course. Now, tell us what you think—you, a solicitor, and one knowing the law, what you think of it?

The Witness—I think it is a resolution framed for committing such a fraud as this, and framed also to conceal it. The witness then continued—Doulton told me on several occasions that the money was to be divided between himself and Albert Grant, after 5,000l. and small payments to John Beavan Smith and Jennings, the engineer and the clerk of the works. Doulton has received money for expenses; as by the balance-sheet of last year it will be seen that expenses were charged and paid for preliminary expenses. I have read the deed of assignment and the concession, and I know that it is laid down that 50,000l. “caution money” is to be refunded to Doulton. But then it is not Doulton’s; and then Doulton is allowed money for plans and expenses incurred in obtaining the concession. By not having any sum stated in that, it was meant that Mr. Doulton should be paid any sum for which he could vouch as having actually paid as travelling expenses and such like. These were to be merely “out of pocket” expenses. The meaning of Doulton’s being remunerated for obtaining the concession by having awarded to him 10,000,10l. shares, B deferred, was that he was to have his profits after the shareholders’ claims had been satisfied, and these B deferred shares were to serve the double purpose of remunerating Doulton for the concession, and to pay off charges. I have complained to Grant, the chairman of the company; Mr. Pascoe, a director, and other directors, of the secret contract with the pot-de-vin, and I was told distinctly that some had been deceived by Doulton. With respect to the question as to whether Doulton employed any “fraudulent manœuvres” to obtain the contract for Mention, it must be palpable that Doulton must have told a false amount. The first board was formed of Doulton, Albert Grant, and Heritage, the solicitor. As a fact the company was formed on the production of the concession and the provisional contract.

The presiding judge expressed himself as unable to understand how a company could be formed on the mere production of “two pieces of paper.”

The witness continued—Doulton informed me that he had made inquiries, and was unable to find a contractor to do the work for a less amount than that to be given to Mention, and I believe it is on the minutes that he told the company the same thing. I made an arrangement with Doulton for Mr. Clench, and this was that Mr. Clench should take his money, advanced in the caution money, in A shares, and that he should have 2,400 of B deferred shares, in discharge of his share of profits, 40,000l. Mr Doulton represented to me that there was no other way to meet the claim, and if the claim was not settled Mr. Clench would certainly lose all his money for the company would be broken up. Doulton offered to pay the costs of a suit I had entered against him, and to refund to Mr. Clench 2,800l. paid for expenses before the concession, and he said he would pay these personally. I have been told they have been paid by the company in money; but Doulton gave bills for the amounts. (A laugh.)

Witness further said that he had been informed by a director that Grant had been accused in the board-room of sharing the pot de vin, and that he did not deny it. As to the “charges” which Doulton said he had to meet, all the real charges witness believed had been met by the company, and the other charges had been repudiated. The sums put down by Doulton were certainly not personal liabilities; and as to Mr. Clench’s 40,000l., which Doulton had returned as due by him personally, that debt and the company’s had actually been extinguished by the acceptance of B shares.

In answer to M. Lauret, the Procureur’s representative, the witness said that Doulton had never shown any receipt for the money he said he had paid Swan. All the accounts were then gone over one by one, and it was stated in detail that Doulton had incurred no personal liability upon them, as he had said in the excuse for making the secret contract.

Several other witnesses were called, and their evidence supported the testimony already given.

The speech of M. Lauret followed. In this he analysed the accounts given by Doulton, and contended that their fictitious character had been established; and if that were not so, he said the accused had only shown out how he was to expend 75,000l., whereas the pot de vin by the secret contract amounted to 100,000l.; so that Doulton convicted himself, on his own showing, of putting into his own pocket 25,000l. As to the question of the jurisdiction of the court, Doulton had twice acknowledged it, and he had only refused to come at the last moment, the third time the court had assembled. The learned counsel held that as the company had Belgian shareholders, was enrolled under Belgian law, and its operations were conducted on Belgian soil, and as Doulton had lived in this country when committing the offence, and had been paid with Belgian money, he was answerable to Belgian law. Attention was drawn to the fact that the secret contract was made at the starting of the company, and that the resolution empowering Doulton to make arrangements with the contractors was only passed this year. As to the fact that some of the money had been restored, this did not condone the offence, for that remained, and was an offence still. The law, the advocate pointed out, was, that a person who had a fraudulent intention offended against the law, and Doulton had proved his fraudulent intention by an overt act by which he had profited. The learned gentleman in severe terms condemned the bribes to the press, and concluded a powerful address by calling for a severe punishment to recorded against the accused, who by his social position had incurred more serious responsibility than the humble.

The address occupied more than two hours, and at its conclusion the judge said the court would deliberate.

THE DOULTON TRIAL.

TO THE EDITOR OF THE DAILY NEWS.

SIR,—After the full report of the proceedings in Brussels which has appeared in your journal, I, as an act of justice, have to ask the insertion of this letter of explanation. In doing this it is not necessary to occupy your space by entering into the early history of all the proceedings that led to the granting of the concession, further than to state that in 1865, having received an intimation personally addressed to me from Brussels that the authorities of that city were prepared to receive tenders for the execution of works for its drainage and improvement, I, in an unhappy moment, applied to the firm of which Mr. Clench was the head to co-operate with me in that business, and Mr. Swann, at that time known to Mr. Clench as his colleague on the board of the Oriental and Commercial Bank, was mentioned to me by him as the most suitable person to undertake any necessary surveys and inquiries on the subject, and consented, at my request, to proceed to Brussels respecting the matter. The result was provisional contract with the city authorities, myself, and Mr. Swann. The caution money required was 50,000l., and this Messrs. Clench, as financial agents, undertook to provide. The time, however, when the deposit had to be made had nearly expired without their being able to find more than 15,000l.; and in this emergency I applied to Mr. Albert Grant, who, after satisfying himself as to the value of the concession, undertook to provide the next day 35,000l. upon Mr. Swann’s assignment of his share in the contract, and an express disclaimer in writing from Mr. Clench and his firm as to any connection or pretension on their part with or to the concession and contract in question. The disclaimer alluded to was in the following terms:—“Sept. 30, 1865.—Dear Sir,—You having made an arrangement with us to pay us an agreed sum out of your share of the profit in the Brussels concession, we hereby acknowledge that we have otherwise no claim upon the concession, and that you are thereby at full liberty to deal with it as you may think proper.—We are, dear sir, yours faithfully, CLENCH, SMITH, and Co. To F. Doulton, Esq., M.P.”

The conditions upon which Messrs. Clench and Co. abandoned all rights in the concession, having regard to an initiatory understanding that they should join me in working out the enterprise, and to their contribution of 15,000l. as part of the caution money, were that they should receive a sum of 25,000l. Upon Mr. Swannʼs assignment, as above stated, I agreed that upon his engaging to complete the project in its various parts, and conduct the business with the municipal and state officers and engineers at Brussels, he should receive 15,000l. In addition to these two sums, amouting to 40,000l., Mr. Swann had entered into other obligations which he deemed necessary, or which were forced upon him as necessary to acquiring the concession, of a nearly like amount, making in the whole about 80,000l., for which, as concessionaire, I became personally liable. And it was, therefore, not only prudent but necessary, that I should provide for that amount before transferring the contract and concession to any company. The estimated price for the whole of the works, including all contingencies, was 600,000l. Up to that time, however, November, 1866, I had been unable to obtain any English contractor who would carry out the works for that sum, even without contributing to any of the liabilities, Messrs. Brassey and Co.’s estimate for works only being (I have not the exact figures by me) nearly 610,000l. So desirous was I, however, that English contractors of repute should execute the works, that I actually made anoffer of the contract to Mr. Harrison, of that firm, at the price of 603,000l., and a letter from that gentleman confirmatory of this statement has been in the hands of the Brussels legal authorities for some time past. Failing in these endeavours, I, after receiving strong recommendations from the Belgian authorities in favour of Messrs. Mention, of Liege, entered into a contract with that firm for the sum of 598,000l., which included a rebate of 16¾ per cent., as an approximative amount likely to be required to meet existing liabilities and other carges incidental to the concession that might arise of a special and exceptional nature. At this time no company was in existence. I was concessionaire, and as such had a perfect right to make any arrangement I liked with the contractors, even although I had not been under any such obligations as those to which I have referred. After this date the Belgian Public Works Company was formed, and they having before them the fact that the Messrs. Brassey’s estimate was over 600,000l., accepted from me, with the concession, the contract of Messrs. Mention.

Soon after the formation of the company, and at the same time that the contract and concession were formally handed over by me, I was appointed managing director of the company, and then it was that I informed the board that I had made arrangements with the contractors. At the same time, a discussion arose as to the notice which had been served upon the company on the part of Messrs. Clench, Smith, and Co., who claimed to be entitled to a charge upon the profits of the concession, and to an interest in the B shares of the company; thereupon a long discussion ensued upon the fact of the company being harassed by legal proceedings at the very commencement of its operations. I explained to the board that I considered myself liable to provide for the payment of all claims on the part of Messrs. Clench, Smith, and Co., and also claims by several parties in Brussels and elsewhere, and that I had made arrangements with the contractors to meet the same. Finally, the board passed the following resolution:—“Resolved that upon Mr. Doulton giving the company a complete indemnity against all claims whatsoever, excepting as set forth in the articles of [a]ssociation, that he be at liberty to make any arrangement with the contractors which he may think fit, provided that the terms of the contract above referred to be in no way affected thereby.” This indemnity I accordingly gave. Mr. Clench was the first who endeavoured to enforce what he considered to be his rights, by filing a bill in Chancery against myself and the company for 40,000l. and a fourth interest in the B Deferred shares. This bill he ultimately withdrew, abandoning altogether his claim for 40,000l., and accepting, in full satisfaction of all his claims, 2,400 of my Deferred B shares. Having thus got quit of half the liabilities, and with good grounds for believing that the remainder might be settled for a comparatively small amount, did I seek to retain the percentage which had been set aside especially to meet these amounts? Let the following facts show:

Believing at the time that the contractors would continue the execution of the works, and that a large sum would still be paid to this rebate fund; I, in the interests of the company, entered into a contract with them to give them a bonus of 20,000l. over and above their contract price, provided they would finish their contract in an accelerated period. I also induced them to obtain the services of an experienced English contractor, with whom I entered into a contract, whereby (out of this fund) I undertook to pay him a salary and per centage on the work done, which together at the close of the undertaking would have amounted to 20,000l., of course, this being conditional on Mentionʼs continuing the work, and the payment by them of the 16¾ per cent.

In the autumn of last year, and long before the existence of the rebate of 16¾ per cent. was talked of or known in Brussels, Messrs. Mention applied to the board to consent to a modification of their contract as to times and mode of payment, but not in any way affecting the price of the work. As managing director the board natullaly refered this question to me, and what was the course I took? If the 16¾ per cent. agreement had been made for my own personal use, and not simply to meet the liabilities to which I have referred, I should naturally have advised the board to consent to the contractors’ proposal, especially as by so doing the payment of the percentage would have been more certainly secured; but no, the liabilities for which the rebate was intended had been in a great measure extinguished, and not being satisfied with the progress made, I, in the interest of the company, and of my own, being the largest shareholder, wrote a formal report to the board, advising them not to accede to the request of the contractors, but to put an end to their contract. This course, upon my recommendation, was adopted; and with this cancelling of the contract of course the rebate ceased, which would have continued to this day if I had consented to the proposal of the contractors, who, not from unwillingness, but from having had unexpectedly to encounter work of a different character to that which they had anticipated, were not, in my judgment, equal to the requirements made upon them; and upon my advice, and my advice only, all contracts with Messrs. Mention were put an end to. The whole of the money received from the contractors under this agreement amounted to about 6,000l., and was in the first instance paid to Mr. Smith, one of the superior officers of the company at Brussels, who has been most grossly maligned and calumniated in reference to this matter. Him I selected for that purpose, firstly, because his integrity was unquestionable, and secondly, because it appeared to me advisable that some one other than myself should be able to testify as to the nature and amount of that account. On a question arising, however, as to my right to retain the rebate for the purpose of disbursement, as intended, it being alleged that the claims could not be sustained in Brussels or elsewhere, and in any case should not be borne by the company, I, to remove all charge against myself of sharp practice towards the company, although having no doubt as to my legal rights, at once consented to refer the whole matters in dispute to arbitration, leaving the appointment of the arbitrator absolutely to the company, and pending such arbitration offered, and did accordingly deposit the whole amount received by me, into the company’s hands, together with an account of my disbursements. The arbitrator appointed was the eminent barrister, John Horatio Lloyd, Esq.

Such are the simple facts in connexion with this matter, and it will perhaps scarcely be believed, that all I have here stated, with documents in proof, were by me given to that singular functionary, the Judge of Instruction, at Brussels, some months since, yet not the slightest reference has been made to these facts in the trial which has now closed. As to the evidence, as it is called, that has been given I confess it is difficult to speak with anything like calmness. I distinctly assert, however, that the only fact proved as affecting me, by such evidence as would be received in England, is the one fact of the existence of the rebate—which, indeed, I have never denied. All the rest has been hearsay evidence, most of it entirely beside the question, and without any foundation in fact. This hearsay evidence has, be it remarked, not only been received, but actually solicited by the judge. Now let us suppose a man on his trial in this country for the offence, say, of horse stealing, and let us imagine, if we can, the following examination by the judge of a witness:

Judge—Do you know the accused? Witness—I don’t know him exactly; but I have seen him.

Judge—Well, what do you know of his morality? Witness—Well, I don’t know anything myself, but only what I have heard.

Judge—What have you heard as to his morals? Witness—Well, I have been told by a friend, who had it from a party who was in a position to get good information, that the accused seldom goes to church, and totally disregards the obligations of “fast-days;” and forthwith that fact is jotted down as incontestable evidence that the accused stole the horse.

Now this, without any exaggeration, is the kind of evidence given and accepted at Brussels. The assertions made on oath that I have given Mr. Clench bills that have never been paid—that I have not paid Mr. Swann the sum put down to his name—that there was not only no other tender, but that I never sought for any other tender but that of Messrs. Mention—that I informed Mr. Clench and Mr. Reynolds of other directors who had received a portion of the rebate—I had acknowledged to have wronged him (Mr. Clench)—that he has never been able to obtain his B shares, by reason of debts owing by me to the company—all these, I assert, are absolute inventions. Fortunately, most of these statements, although made on oath, can be incontestably disproved. Thus the statement as to Mr. Swann is proved to be false by the fact of his having made a statutory declaration that he did receive the money in question. The assertion as to no other tender being invited is answered by there being in existence evidence that not only were tenders sought, but offers made to English contractors to undertake the work. The impudent statement that I have given Mr. Clench bills that are still unpaid is dis proved by the unquestioned fact that I have every bill in my own possession at the present time—or receipts for their payment; while the no less impudent statement that his B shares are retained by the company by reason of debts owing by me is met by the fact that their retention is owing to a notice served on the company by Mr. Clench’s late partner, who contends, and I believe justly, that he has an equal right to them with Mr. Clench himself.

I am quite aware that as to some of the evidence given at Brussels I am simply pitting my word against that of Mr. Edmund Clench, late of 1. Royal Exchange -buildings, London, and now of Brussels, and Mr. William Collett Reynolds, late of the firm of Reynolds and Palmer, Yarmouth, and now of Fenchurch-street; and thus I am contented it should be. And it is upon statements and hearsay evidence such as I have here alluded to that I am to be charged with great crimes and misdemeanors. Fraud, attempt at fraud, fraudulently manœuvring, &c., there has been none. I can quite understand the question will be put—Why, if you have to the charges brought against you so clear and straightforward a defence, did you not go to Brussels to meet your accusers? No one will, however, ask this question who is cognisant of the system of jurisprudence in Belgium, or who knows the character of the witnesses there arrayed against me, some of whom, to my own knowledge, were in daily private conference with the judge who had to report upon the case; still less shall I be asked this question by those who have been observers of the growing prejudice existing against me in Brussels, mainly because I, and my able coadjutors there, have surmounted the tremendous difficulties we had to encounter, revealing, as this has done, the exceptional value of the enterprise in which, in common with the rest of the shareholders, I am so deeply interested.

What the decision of the court may be I neither know, nor do I care. What I do care for, and what I think this simple recital of facts will ensure, is the continued good opinion of my friends, and my countrymen in England, and my retention among them of an honest and honourable name.—I am, &c.,

FRED. DOULTON. Oct. 29

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TO THE EDITOR OF THE DAILY NEWS.

SIR,—My attention has been called to a report your journal of the proceedings in Brussels against Mr. Doulton, in which it is alleged that I participated, or expected to participate, in the arrangement made by him with the contractors, Messrs. Mention and Co. I beg to give my most distinct and unqualified denial to this statement. I never received or expected to receive, one shilling from the transaction, and I am at loss to understand why my name should have been mentioned in the matter, unless it was because I persistently opposed the attempts made by some of the parties giving evidence on the inquiry to obtan money from the company and the directors by the threat of legal proceedings, for which, in my opinion, there was not the shadow of foundation.

I have only this morning returned from the continent, or I should have sent this communication before.—I am, &c.,

FREDERICK HERITAGE. Clement’s –Jane, Oct. 29.

MR. F. DOULTON, M.P.

TO THE EDITOR OF THE DAILY NEWS.

SIR,—The insertion in your journal of an account of some proceedings now being taken against me in Brussels induces me to request that you will allow me to state shortly the circumstances upon which these proceedings have been founded. About three years since I became one of the concessionaires for important works in Brussels, having for their object the sanitary improvement of that city, and in the obtaining of which concession I necessarily incurred very many heavy pecuniary liabilities. As concessionaire I in the first instance sought for competent contractors in England to execute the works at the estimated amount; failing in this I entered into provisional arrangements with Belgian contractors, who undertook the execution of the contract for 598,000l., being considerably less than any tender I had been able to obtain from English contractor; they agreeing also to contribute such a sum as would enable me to discharge the beforenamed liabilities. Subsequently to this an English company was formed to purchase the concession and contract; and I was requested to occupy an official position in connexion therewith. This I accepted; and at the same time, and before the assignment of the contract to the company, informed the board of directors (they having had a claim made upon them for a large amount by one of the parties to whom I considered myself liable) that my arrangements with the contractors would enable me to meet all claims in connection with the obtaining the concession, whereupon the following resolution was passed:—“Resolved, that upon Mr. Doulton giving the company a complete indemnity against all claims whatever, excepting as set forth in the articles of association, that he be at liberty to make any arrangement with the contractors which he may think fit, provided that the terms of the contract above referred to be in no way affected thereby.” This indemnity was given, and the contract sealed with the contractors. No sooner, however, had the works commenced with vigour, and the exceptional value of the concession become apparent, than attempts were made to injure the company, with the evident object of getting the concession rescinded, by circulating charges against myself and the more prominent members of the city authorities, with whom it was alleged I had a corrupt agreement. This attempt, however, collapsed, by the prosecution of the journal which originated the report, the editor of which was mulcted in heavy damages. The attempt to injure the company then took the form of the present proceedings against myself, on the ground on that the arrangement made with the contractors for payment of the liabilities before alluded to was contrary to Belgian law. Directly this question arose, I, although assured that my position could be neither legally nor morally assailed, but with a view of removing all proceedings that might in any way injure our enterprise, made an offer to the board of directors to refer everything in connexion with or relating to the formation of the company and the contract to arbitration, the arbitrator to be appointed by themselves; and to this the board assented, appointing as arbitrator the eminent barrister, John Horatio Lloyd, Esq. I further offered to deposit, pending his decision, the whole amount I had received, together with an account of my disbursements. Accordingly, I did deposit this sum with the company, to await his award. Beyond this simple statement of facts, I do not desire, at the present time, to occupy your space, especially as, although the inquiry is closed in Brussels, no decision has yet been arrived at. When that is given I may, if necessary, ask your indulgence to lay before the public evidence which will reveal as gross a case of persecution as few have had to encounter, but which, as the largest shareholder, I am glad to say, has not had the effect contemplated, viz., to damage one of the most valuable concessions ever obtained by English enterprise.—I am, &c.,

FRED. DOULTON. Oct. 24.

THE JUDGMENT IN THE CASE OF MR. DOULTON.

The following is the text of the judgment pronounced by the correctional tribunal of Brussels in the case of Mr. Doulton:

“Considering that the accused, Frederick Doulton, although properly summoned, has not put in an appearance, considering that it results from the information which Mr. Doulton supplied at Brussels on the 9th December, 1866, through Mention and Son, that there was—first, a sub-contract for the works to be executed for the purification of the Senne at a cost of 14,950,000fr. (596,000l.); second, a promise, through the agency of Smith, by which Mention and Son bound themselves to return to him a sum of 2,500,000fr., to be deducted from the price of the sub-contract;—Considering that the accused had obtained the sub-contract under these circumstances with the view of depositing it in a company which he intended to create in London, that in point of fact a company was formed by Doulton in London on December 19, 1866, under the denomination of the Belgian Public Works Company;—Considering that it results from the examination and especially from the letter of April 2, 1868, issued by the directors of that company, that, towards the end of December, 1866, the company was established to obtain the concession of June 15, and that the declaration of Doulton that perfectly solvent contractors in Belgium had made a provisional contract for the purification of the Senne, for a sum of 596,000l.—in other words, the subcontract between Doulton and Mention—was one of the inducements to the obtaining of that concession;—Considering further, that it appears from the same letter of April 2 that Doulton, with a view of getting his contract for 596,000l. accepted by the company, induced his co-partners to believe that he was in correspondence with the wealthiest contractors in England and that they were convinced that nowhere could more favourable terms be obtained;—Considering that after the company was formed, Doulton, as its managing director, renewed in its name, in London on January 15, 1867, the sub-contract of 596,000l. in order to make it complete and valid;—Considering that Doulton by this proceeding put it in his power to appropriate ulteriorly in Brussels a part of the profit under the agreement between him and Mention and Son, to the prejudice of the Belgian Public Work Company;—Considering that it results from the foregoing that Doulton thus succeeded by fraudulent manœuvres to influence the aforesaid society in London to take on its own account the sub-contract of Mention and Son, and consequently that the acts constituting swindling as defined by Article 490 of the Belgian Penal Code have been done in a foreign country;—Considering, indeed, that by this act the society contracted an obligation towards Mention and Son, and that it was this obligation fraudulently worked by Doulton that enabled him to receive the unlawful advantage which he stipulated for him;—Considering that if Doulton remitted to Brussels, through Mention and Son, a sum of 14,897,537fr., this payment, which would show a persistence in his intention, was in Belgium but the consequence of a delinquency committed abroad;—Considering that it is of little importance that since the constitution of the Belgian Public Works Company, the originators of which are all foreigners, Belgian shareholders were subsequently interested in that company, since it has not been established that fraudulent manœuvres were employed by the accused to influence them to take shares;—Considering that the acts charged against Frederick Doulton, and committed by him in Brussels, do not fall within the purview of the new Belgian penal code: The court, for these reasons, discharges the accused from further prosecution.

TRADE AND FINANCE.

THE withdrawal of a million sterling in gold from the Bank in a single day is precisely one of those unprecedented events that strike most forcibly on the public mind. We are accustomed to a moderate drain; to see sums taken for export at the rate of 20,000l. to 100,000l. at a time; to find that our regular arrivals from Australia, America, and other parts of the world, are at once purchased by shippers for the Continent, so that more than a million may easily leave us in this manner in a week. But it has not the sensational effect of a million going out of the Bank in one huge amount, and without the least warning that any such grand operation was contemplated. Hence the first consequence of the affair was a depreciation in the public funds alone of some 3,000,000l. to 4,000,000l., and in other securities, home, colonial, and foreign, of at least as much more. Why the withdrawal of this large sum should cause an eightfold loss in the quoted value of permanent investments is one of those questions which cannot be explained on purely economical grounds. Supposing that the money represented remittances from the United States to pay for their newly-acquired territory, it was only held by us, as it were, in transitu, and could not affect the prosperity of the nation one way or the other. Say that it represents the subscriptions to the late railway loans—hardly a satisfactory explanation considering their total amount, and the fact that a great proportion must remain here in payment of materials—still in the existing state of the money market the export or import of a million ought not to make much difference. Besides, we have nearly that sum coming forward in a week or two, which would serve to fill the gap. The foreign exchanges also have risen, so that whatever specie is now received may fairly be expected to remain. The demand for gold for the Continent generally has subsided, and does not appear likely to revive for the present. The advance in the Bank rate of discount cannot be considered in the light of a protective measure, since it has come after instead of before this export of a million, and when it was evident the exchanges were already turning in our favour. The rise may thus be regarded as a consequence of the withdrawal rather than an effort at its prevention. It is very certain that if the Bank rate had been raised to 2½ per cent. last Thursday week, it would not have had the slightest effect in retarding the operation which started the mercantile public a few days later. There is, likewise, little or no reason to doubt that even if a fresh advance were to be adopted to 3 per cent., it would be ineffectual to stop a similar transaction, always supposing the conditions equal. There are many financial arrangements constantly passing between foreign Governments and the great monetary houses of England and the Continent of which the general public hear but little. On the present occasion, the magnitude of the affair has attracted especial notice, solely because it happened that the supply of gold required was taken from the Bank, and a heavy decline in the Bank bullion is an important question to every trader.

There seems, however, good cause for believing that, apart from this exceptional transaction, money was about to rise in value—slowly, perhaps, but steadily. Symptoms of revival in trade are apparent, which will be much more marked as soon as the general election shall have been concluded. As long as merchants and manufacturers are thoroughly engaged in political matters, commercial business is naturally more or less put in the background. Besides, the expenditure consequent on a general election necessitates a large absorption of ready money or floating capital—temporary, it may be, but effective for the moment. Every one is ready to admit that the money will return into banking circulation by-and-bye, but the great point is that it is not immediately available. This circumstance, of course, adds to the influence produced by the late heavy withdrawal. A month or two hence our trade may have returned to the normal conditions of the period before 1866. There are indications that, notwithstanding the general election, this long looked-for improvement might have happened even now, but we have some legislative obstacles to battle against, which, thrice removed by overpowering necessity, are still maintained in defiance of experience and common sense. Under our present currency system any large and sudden withdrawal of gold like the present has the effect on moral grounds of disturbing confidence and tending to derange our commercial relations. True, the Bank of England still retains nearly 18½ millions of bullion, and the Bank of France 46½ millions, and there is therefore no cause to fear a restricted money market, on any existing reasonable basis; but the evil is, that directly the reserve begins to decline, a certain sort of anxiety is fed by obstinate adherents to the Bank Charter Act, who refuse to see that trade such as that of this country, always extending, must require from time to time exceptional measures of accommodation. With equal readiness money-lenders take advantage of the situation, and assist to create an artificial scarcity. It has been frequently said, “Lenders are few just now, people prefer to hold their money.” And why? Not that it is really less abundant, but that the falling off of the reserve of the Bank makes capitalists hoard for highest rates. Borrowers are equally anxious to provide against the difficulties born of our currency system, and which they have severely suffered from in the past crises. How many a man has undeservedly fallen since the panic of 1866 because his securities were of scarcely second-class kind, and bankers refused to lend from dread of advancing anything upon those not quickly convertible.

It is quite right that bankers should do their utmost to protect their depositors. It is also right that speculators should not be encouraged by money facilities from those who take in charge the funds of others; but it is not right, or the least wise, that we in this country should be subjected periodically to vague alarms and checks to trade because a large amount of gold is suddenly taken from the Bank, or its reserve shows for some weeks a regular, though actually an unimportant decline. It is not so in France. There the Bank authorities take upon themselves to deal with the circumstances of the time. At periods of great trial they have not hesitated to make large over issues of notes to meet national hoarding and stay public alarm, and there can be little question that their policy has been successful. The knowledge that legitimate accommodation would be granted, though the gold coffers of the Bank were getting daily lighter, arrested growing fright, and has more than once prevented wide-spread ruin. Happily we are not in these times. A plethora, not a dearth, of bullion, is and has been long the distinctive feature of both these Banks. We have a little return of confidence, and foreign governments have been drawing from us, owing to our low rates of money, a little fast, but let us hope that some sound revival is coming, that we are the wiser for the ruinous lessons of the last few years, and let us regard dearer money as the best evidence of returning enterprise.

MONEY MARKET.

TUESDAY EVENING.

Business in the City to-day was much interfered with by the excitement in connection with the elections. Apart from this, attention was chiefly directed to the actual realization of yesterday’s rumour with regard to impending withdrawals of gold, the heavy amount of 1,000,000l. in Russian imperials having been taken from the Bank to-day for exportation to Russia, through the agency of Messrs. Baring Brothers and Co. One effect of this transaction was an increased demand for money, and an advance in the rates in the general market. In fact the terms in the discount market to-day were generally fixed subject to revision in the event of the Bank of England minimum being raised on Thursday to 2½ to 3 per cent. To-day’s large withdrawal of gold having already made the foreign exchanges firmer, and a total of about 1,000,000l. being on the way from Australia, though not yet due, the impression is that the movement on Thursday will not be beyond 2½ per cent., more especially as the Bank would run a risk of being underbid by the general market were it to charge more. At the Bank discount-office to-day a good demand was experienced. It is of course absurd to suppose that after more than two years’ plethora of bullion our financial arrangements here can be seriously affected by this exceptional draught upon our stock. On the contrary, the prospect is that with a somewhat higher value of money we may have an increased amount of business, a 2 per cent. rate at the Bank being, in fact, synonymous with stagnation.

The funds to-day were dull, and closed at a reduction of 1-16 to ⅛ per cent. As regards foreign stocks, some, such as Portuguese, Honduras, and Brazilian of 1865, improved, but several were lower, including Danubian, Turkish Six per Cents. of 1865, and Spanish of 1867. Home railway stocks were mostly better; there was a rise of 1 per cent. in Caledonian and South Eastern B, or Preferred, ⅝ in Great Eastern and South Eastern, ½ in Great Northern A, and ¼ to ½ in a few of the other principal lines, but Brighton experienced a fresh fall of nearly 1 per cent. There was again considerable excitement in Erie Railway shares in consequence of the advance telegraphed from New York. After repeated fluctuations the price closed 1 per cent. higher than yesterday.

TRADE AND FINANCE.

THE Exchequer Chamber have in the past week reversed the decision of the Common Pleas in the important Stock Exchange case of “Grissell v. Bristowe.” This result could not have been altogether unexpected, since one judge—not the least able, or the least acquainted with commercial law—dissented from the majority of his colleagues. Strangely enough, the duty has also devolved on Lord CAIRNS to pronounce a judgment in the cognate case of “Coles v. Bristowe,” which was entirely antagonistic to his own preconceived ideas. We have no care to quarrel with that. So long as justice is done it matters little whether it comes by the correction of former mistakes or without the commission of any whatever. The result is the same, and, as far as the general community are concerned, is equally valuable. There can be no question that the decision in the case of “Grissell v. Bristowe” is perfectly equitable. How, in the first instance, it could have been other than it is seems at first sight difficult to explain. We can only offer the diffident assumption that the judges—always expecting Mr. Justice BYLES—contrived to get puzzled with purely commercial technicalities.

However, the question has been decided, both by the highest courts of common law and equity, that an agent or intermediary is not a principal. If the agent fail in his duty, let him by all means be hold responsible; but if he fulfil his part of the contract, he ought not, on any principle of business or common justice, to be made responsible for the laches of others. Both the LORD CHIEF JUSTICE and Chief Baron KELLY clearly defined this situation. The remarks of the latter on closing the case are especially worthy attention. They distribute the responsibility fairly. There was so much to be done on one side, so much on the other. But it is not fair that in a mutual agreement the whole onus should be cast on one party when he has done his best to fulfil his share of the bargain. A dealer buys shares every day, and is responsible to pay for them. On default of his principals he must meet this engagement, in times of difficulty an onerous one enough. Granted, however, that, as in the case of Messrs. BRISTOWE, everything had been done that had been undertaken, it seems unjust that the dealers should be saddled with a responsibility they had never undertaken.

This verdict is regarded as a great relief by those engaged in monetary transactions. It has a double value. It not only establishes a safe basis on the highest authority on which professional dealers in shares and sellers or buyers of shares among the public may transact their business, but it bears just testimony to the usefulness of the Stock Exchange as the recognised mart for operations of this nature. We have had occasion sometimes to differ from the judgments of the Committee of this body, and we retain the opinion that its constitution should be altered so as to prevent any member of the Committee from taking part in the trial of any case in which he is personally interested. This is wrong in principle, and will always leave a certain amount of doubt whether justice thus administered by a private tribunal can be strictly pure; but, apart from this very obvious conclusion, there can be little question that the Stock Exchange is a very valuable medium for the carrying out of financial business, and the prompt and honest realization of stock and share property. Moreover, it has been proved through a long series of years that the Committee in the main have discharged their functions well. Those who have had any experience of their judicial procedure must bear testimony to the patience of their investigations, and their studious desire to do right between the public and their own body. Any fair complaint from the public is sure to receive full consideration, and it is of vital importance to such a corporation that it should be so. The Stock Exchange is one of the very few monopolies that remain in this country. At the same time it is an arena open to every one who can be responsibly introduced and who will bind himself to subscribe to its published laws. Thus the monopoly becomes virtually one merely in name, and as such a medium of monetary dealings is regarded as indispensable both here and in all the principal cities of the world, anything that can tend to ensure justice and safety of dealing and raise the character of such privileged bodies, is a clear advantage to their own members, and an equally clear boon to the communities at large. Since the fall of Overend and Gurney’s house, and the terrible ruin it involved, of which the Stock Exchange must naturally have had frequent and conclusive evidence, the question of the liability of the jobber, or middle-man, has been continually raised, and the very existence of doubt on this point has for a long time past paralysed business, and in thousands of cases made it impossible for holders of any share property with liability attached to realise, whatever the sacrifice they were prepared to make. Even securities of very high class, such as our joint stock banks, with capital uncalled, have suffered in some degree from the uncertainty of the situation. A restricted market generally leads to undue depreciation, and manifestly everything that impedes the free interchange of the securities of this wealthy country must be as prejudicial to capitalists as to those whose agency they employ for conversion into money or investment. On this further ground, the judgment of last week is rightly regarded as a subject of general congratulation. How far the points which have been so long and seriously debated may be of public service in another sense, has yet to be tested. The immediate lesson it teaches, in addition to the sad instruction of the past few years, is that shares if registered on our joint stock principle should be issued fully paid up. Infinitely preferable would it be to imitate the example used on the Continent, and adopt the system of issuing shares to bearer. If this policy had been permitted three or four years back, a quarter of a million, to say the very least, would have been saved in litigation alone. At the same time speculation and “rigging the market” would have been seriously arrested by the obligation to pay the money subscribed at once, instead of a small deposit, the subscriber, with very few exceptions, taking his stock in the hope of an immediate premium, and with the full purpose of evading future calls. This system has been fruitful of evil, and is still telling on us as a people. The welcome judgments of the Exchequer Chamber and the Chancery Courts in the analogous case of “Grissell v. Bristowe” and “Coles v. Bristowe,” will be doubly valuable if they lead us to a more sensible and honourable mode of carrying out fresh enterprise. The want is that those embarking in it should follow the wisest principle of life, that of not incurring obligations beyond their resources, present or prospective, but of limiting their subscription by their actual means.

TRADE AND FINANCE IN 1868.

THE principle that a nation is happy which has no history does not precisely apply to commerce. An uneventful year may have its negative advantages, but commerce needs impulse, movement, and effect, while a quiet year too frequently means stagnation in business, unemployed capital, and diminished profits.

The twelve months which expired yesterday have not furnished us with new examples of the recklessness of a sanguine period. Some feeble attempts at speculation have been manifested, but although occasionally successful for a time, their subsequent break down has been sufficiently marked. The Russian railway loans, readily as they were taken at the first issue, have dropped from premiums to discounts. The constantly promised revival of trade is apparently still as far off as ever. At intervals some few indications have been presented that commerce was at last about to improve, but these signs have been always evanescent, and we have finally dropped back into the old state of weary and profitless stagnation. Dulness in trade was the characteristic of the year 1868 at its commencement; dulness is equally the feature at its close. It is impossible to gloss over the fact that merchants and producers are making but little money now. The announcement that the Lancashire cotton-mills are to be put upon half time in the present winter is far more significant than any statistics from the Board of Trade. After making every possible explanation there stands the actual fact, that the purchasing power of our home consumers, and probably of our foreign customers as well, is materially below the average mark.

Certainly we have the consolation, whatever it may be worth, that if trade has gained little, it has lost less. The mercantile failures have been remarkably few—hardly one could be mentioned of any magnitude. Now and then some disagreeable reminder has been received that the great joint-stock disasters of 1866 have still to be finally adjusted; that calls are made, or pending; and that the public are yet far from having completed the expiation of their follies in 1864–5. But these difficulties trouble the mercantile class less than the other portions of the community. Traders are not, perhaps, altogether too wary to escape being led into these risks sometimes, but in the long run they are less liable to err than the confiding clergymen, doctors, and governesses who are specially marked out as the promoter’s prey. These last investors, who were tempted by a high premium to invest their money, find out that they have incautiously undertaken obligations far beyond what they knew, or even suspected. The year 1868 has bitterly undeceived them in this respect.

As regards purely monetary affairs the prospects on the 1st January betokened an easy discount market. The bullion at the Bank was 22,061,728l., and the reserve 12,819,673l.—a respective increase compared with 1867 of about 2,646,000l. in the former item, and of nearly 1,700,000l. in the latter. The introduction of railway loans was commenced by the issue of two new projects, for the Panama Railroad, and for New South Wales, supplemented afterwards by a fresh demand for the Madras Company. Another instalment of the many revelations of railway mismanagement had been furnished by the publication of the report from the Committee of Investigation of the Caledonian. A Hungarian loan was introduced, but commanded little attention.

In the next month the prominent topic in commercial circles was the first judgment in the case of “GRISSELL v. BRISTOWE,” which, if it had been upheld, would have fastened a liability on dealers in the Stock Exchange practically subversive of business. It is only lately that the first decision has been reversed on appeal. The first of the Russian Railway loans for the year had been brought forward with a success that has not been maintained to the present day.

There is little to record in March. Railway loans were again the feature, both for India and the colonies. The issue of debenture stocks for some of our own lines had been satisfactorily tried. A Spanish colonial loan proved informal, and was not persisted in, there being some doubt whether it had received the proper sanction of the Cortes. The subscriptions received were consequently returned.

In April an important bill was introduced in Parliament to enable the Government to acquire and work the Electric Telegraphs. The annual and illusory attempt to place the Bankruptcy Laws upon a satisfactory and equitable footing was brought forward in its tenth new shape by Lord CAIRNS. A fresh railway loan had come out, this time for the Indiana Southern Company (United States). Tasmania also appeared as a borrower, “for railway and other useful works,” of 400,000l., the operation proving a perfect success.

In May another of our colonies, New Zealand, appeared in the field, with an intended conversion of her public debts combined with a new issue of stock of 1,114,000l., at 97. Shortly afterwards a first mortgage of 400,000l. on the European and North Railway at 75 was brought out, followed by an issue of 600,000l. by the Great Indian Peninsula Company.

In June the new Argentine loan of 1,950,000l. nominally, was issued and fully subscribed. About this period the plan for confiscating a portion of the public creditors’ interest by some foreign Government—notably Italy and Austria—in the shape of a special tax on the coupons, was attracting attention, and hence, in the case of the Argentine loan, Messrs. BARING, the agents for the affair, expressly mentioned that the bonds will be exempt from any present or future taxation on the part of the Argentine Government. In this month Consols reached the highest point of the year—95⅜—and the Bank bullion on the 25th was at 22,962,981l., nearly 700,000l. more than in the corresponding week of 1867. An attempted combination of the South Eastern, London, Chatham, and Dover, and London and Brighton Companies had fallen through, the bill to effect this purpose having been withdrawn.

In July and the succeeding month the British public were offered rather a perplexing choice of new securities in which to make their investments. They comprised a Russian Railway Loan for 320,000l., a Swedish Loan for 1,150,000l. an Egyptian for 11,890,000l., a Canadian Intercolonial for 2,000,000l., the West Wisconsin Railway 200,000l., the great French Loan of 18,000,000l., the new French Atlantic Telegraph Company of 1,200,000l., and another issue of bonds for Russian railways of 1,920,000l. The above sums represent the nominal amounts, and in some cases a portion was subscribed abroad—the great French Loan, for example, being practically taken in its entirety in Paris and the Departments. Notwithstanding these drains, money at the end of July was only 1½ per cent. on the best bills, although the rate soon after increased. About this period occurred the meeting of the Credit Foncier Company of England, with anything but a satisfactory result to the shareholders—Mr. ALBERT GRANT, M.P., hitherto the leading genius of the concern, being conspicuous by his absence. At the commencement of September the rate of discount had risen in London to not more than 1¾ per cent. In Paris it was 1½, and the bullion at Bank of France stood at the enormous total of nearly 52,572,000l. Since that period, however, there has been an almost continuous decline.

The events of the latter part of the year have more of political than financial importance. The earthquake in Peru and Ecuador, and the revolution in Spain, necessarily affected the prices of the stocks issued by those countries, but not to any very great extent. In October and November we had a fresh batch of loans—the Italian Tobacco Loan for 9,404,762l.; South Australian Debentures, 400,000l., and two more Russian Railway Loans of which 3,300,000l. was offered in London. The effect of these and previous operations was seen by the unprecedented withdrawal in one day of 1,000,000l. of gold from the Bank for St. Petersburg. Hence on the 19th November the Bank rate was raised to 2½ per cent., and on the 3rd December to 3, at which it still remains. Besides the above the Great Indian Peninsula Company announced an issue of 2,000,000l. guaranteed stock, and the Pennsylvania Railroad 800,000l. General Mortgage Bonds.

Scarcely any new companies of importance have been introduced during the past year, nor was there the slightest likelihood that they could have been attended with success. Perhaps the most prominent have been the Foreign and Colonial Trust, an association to enable capitalists to hold foreign and other bonds with the minimum of risk of loss, and the French Atlantic Telegraph Company, which, however, concerns our neighbours more than ourselves. Some few minor undertakings have been floated, but they have commanded little attention. For the present the public have no care to run the slightest chance of repeating their late experiences. Anything is looked upon as better than a joint stock share where a call is possible.

As regards the future, there is still the expectation that trade may revive, but there appears little chance of its being realised for the present. During the last few months we have been going backward rather than forward. It may be hoped that this is but a temporary reaction, and that the new year will bring us better times than we have experienced since 1865. The prospect, however, is not encouraging—wars and rumours of wars, and political disturbances abroad, and short time in the manufacturing districts at home. Still we live in days of sudden changes. The public may on a sudden break through its long-continued lethargy, and resume the old habits of trust and enterprise, which, judiciously combined, have made England what she is.

TRADE AND FINANCE.

THE recent events on the Stock Exchange have amply justified the warning we gave to the public three weeks ago. It has been proved that the late demand for foreign stocks was in a great degree speculative, and that the Bonds taken off the market were frequently held against borrowed money. Up to the last moment there seems to have been a hope that these stocks would be absorbed by real investors, but the general public appear for the present to have had enough. Their revived inclination to take a class of securities which a few years ago were in universal favour has been amply satisfied by the new creations that foreign governments are ever ready to supply. Still it might have been prudent for the speculators to have held on if they could for the chance of realising at a profit, but they did not calculate on the effect of the approaching close of the year. Everybody likes to have a good balance on the 31st December, and a joint-stock bank especially. Hence, even under ordinary circumstances, outstanding loans are at this period often either called in or renewed with difficulty, particularly where there is even the faintest suspicion of risk. This feeling has been necessarily aggravated by the course of political affairs. Holders of Turkish Bonds are not unnaturally anxious about the threatened revival of the Eastern question. Perhaps some of the more timid may sell the whole or a part of their investments, and the price, of course, goes back. Holders of Russian, Italian, Spanish, and other securities are in a nearly equal degree agitated by the possibility of a general European conflagration. These, too, also sell rather than buy, and the result is a generally falling market. A prudent banker takes care not to allow his margin for loans on foreign securities to run very close. The fluctuations are too violent to be risked with safety. The experience of the year 1859 is a case in point, when some stocks fell 20 or 30 per cent. in a few hours, and were then practically unsaleable. Hence there have latterly been forced sales, or, which comes to be the same thing, the banks have withdrawn their advances. It is therefore merely a foregone conclusion that at least a slight collapse from the previous speculative excitement was imminent. Fortunately no great harm has yet been done. There have been in some cases heavy losses, but not that terrible ruin which the political difficulties nearly ten years ago produced. The danger cannot be said to be over, but it is something to say that it has not occurred at present. The maxim that to be forewarned applies more truly in financial affairs than in any other walk of life. The fact that everybody is preparing for a panic renders a panic almost impossible. Sudden precautions may indeed bring on the very evil they were intend to obviate; but when they are deliberately adopted, steadily and without haste, they rarely fail to turn out successful. There are exceptions, doubtless; but we trust that the present time is not one of them. The only difficulty lies in the peculiar channel into which speculation has just now been diverted.

We have observed upon the success of the Russian Railway Loans. However excellent the purpose for which this capital was required, there have been evident signs that these operations have been pushed too far. The success of the first issues emboldened further proposals, until the aggregate reaches a formidable sum. If the bonds had passed solely into the hands of permanent investors we should probably have had fewer of these applications; but the speculative public, seeing the favour with which the first of these stock had been received, naturally welcomed others. They subscribed to sell again, caring little for the future, but looking only to their present profit. Hence during the present year we have had a goodly array of projects, while in the past we had but one—the pioneer, and not the least of the number. Annexed is the list:

The nominal total is thus not far short of thirteen millions, in less than a year and a half. Deducting from this the amount reserved for the Continent (not an infallible test, since if the bonds are quoted at a good premium in London, those subscribed abroad soon find their way over here), and allowing for the price of issue, the actual cash raised from the England capitalist must represent in round numbers pretty nearly seven and three-quarter millions. Even Russia, whose credit is unimpeachable to this day, has seldom or never got so much hard money from us within so short a time. The financial policy of that empire is certainly in one sense admirable. Although the state currency is hopelessly depreciated, and the annual budgets, such as we see of them, reveal a chronic deficit, Russian credit is well maintained in other countries. Latterly there has been no attempt to negotiate a single government loan, the utter failure of the affair of August, 1867, being conclusive on that point. The time has gone by for this old style of dealing. But money can still be raised for public works with the safeguard of the Imperial guarantee, and this plan has been worked to good effect; and if common honesty is observed—which we have no reason to doubt—to the mutual benefit of borrower and lender. There are, of course, rumours afloat that the money will be diverted from its avowed purpose, but this can hardly be credible.

We may dismiss in a few words the chance that our other speculative borrowers will come before us anew. Turkey, indeed, has at all events a plausible excuse in the Cretan insurrection to raise what she can; but the power is not equal to the will. Turkish finance is rather blown upon. People are tired of hearing one day that the budget shows a surplus of half a million, and the next that, owing to pressing necessities, the Porte has borrowed from a foreign house a couple of millions at 16 or 17 per cent. There is no logical coherence in the facts, and Englishmen are dull enough to care for these in preference to the best written descriptions of the amazing present and future prosperity of the Turkish Empire. We are happily freed from Egypt for a few years to come. She is bound to raise no more loans in Europe for a specified period, under penalty of being shut out from the great Exchanges of the world. Whether she may contrive to evade the pledge in a roundabout way, is a question which we do not care to discuss. The successful introduction of the Turkish Consolidés in London shows that this sort of thing is not utterly impracticable.

Reverting, however, to matters of more purely domestic interest, it is clear that the events and severe fluctuations of the past week fully bear out the view we have frequently urged of the dangers of a wide-spread speculation in foreign stocks. A large class of investors are content to risk a moderate proportion of their capital in these securities for the high rates of interest they return; but when, as at the present time, a formidable aggregate is held on borrowed money, and the political horizon becomes suddenly overcast, fresh investors are slow to come forward, and the speculator loses at one and the same time the support both of the capitalist and the banker.

The latter is, as we have said, sure to be the first to take alarm—his duty and reasonable object is to lend his deposits for as short a time as possible, except upon commercial bills, and he naturally withdraws his money at the due date when confidence is shaken, either by financial or political causes. Then comes the difficulty of the speculator, and too often ruin, which common prudence would have averted. The evil is that men will operate much in excess of their means. Honour and common sense are alike forgotten in the haste to make money. The immediate position fully confirms this view. Few of the loans of this year are yet solidly placed; and with more to follow, and even a small note of war sounded in Europe, real buyers will be shy, and wisely defer their investments until the depreciation arrives which almost inevitably follows speculative excess.

COMPANIES IN LIQUIDATION.

THE troubles of shareholders are far from being at an end. In some of the worst cases they have apparently but just commenced. Hardly a day passes without a report of some costly process of litigation or other. The state of our law, and the strange and contradictory views taken by the various Courts in its interpretation, promote all kinds of suits. The majority come from the unlucky class of contributories, many of whom seek to get rid of their own liability at the expense of their co-partners. The attempt generally fails, but the chance of success through some ingenious legal quibble is too tempting to prevent its being repeated again and again. It is perfectly extraordinary, and not very flattering to our estimate of English commercial honour, to mark the shifts which highly respectable people are quite ready to employ in order to evade the unpleasant necessity of meeting their obligations. Two specimens were reported on Friday, in which the demand for relief was based on the ground that the applicants were victims of a collusion to deceive the public at large. Vice-Chancellor MALINS, who is certainly sufficiently acute to prevent the powers of his Court from being abused, and has sufficient force of will to characterize a “subterfuge” of this sort as it deserves, spoke out pretty strongly. It would indeed be most unjust and unfair that a contributory, by some adroit dodge, should escape scot-free, and leave in the lurch others who most likely had been partially deceived into subscribing for shares by the very same dodge. Probably there is no more unpleasant position than having to pay debts which other people have led you into mainly through your own folly. Even the most honest and upright of men will require strict proof that the liability has been really and fairly incurred. Bur there the question ends. A sense of justice ought to prevent any endeavour to wriggle out of the affair by a pettifogging or captious objection. This healthy moral feeling, however, is somewhat capricious in its action. The sense of right which will prevent a man from taking dishonest advantage of a shopkeeper, somehow or other often tones down to a vanishing point when share allotments in defunct companies have to be considered.

Moreover, shareholders do not for the most part regard the claims of creditors of a company as they do their business or private liabilities. The view is, if bad times come, that these claims must wait, or be compromised. The creditors of a company in liquidation have, however, their remedy. When the capital is not paid up they can enforce a call, and bring any defaulter into a court of law. Hence the ruinous litigation which has already taken place, and the prospect of much more. It is perfectly intelligible on the ground, so far as regards the creditor, that, unlike a mercantile concern in difficulties, which may be reconstructed by new capital and the support of powerful connections, a company that stops payment almost invariably stops once for all. The creditor has nothing to hope for in the future. He naturally seeks the payment of his claims as quickly as he can; while the shareholder wants time, and constantly resorts to litigation or a trip abroad to get it. We have a case of recent occurrence to which these remarks pointedly refer. Unhappily it is but one of many. In the halcyon days of 1864, when everybody was going to make his fortune out of a join-stock company, and few dreamt of losing one, a gigantic scheme was introduced called “The International Contract Corporation.” It was heralded by a long and imposing list of directors, both native and foreign, at the head of whom figured the name of Senor DE SALAMANCA, the well-known Spanish capitalist. The capital of this undertaking was on a grand scale—no less than 4,000,000l., in 80,000 shares of 50l. each. Only one-half, however, was to be issued at first, and the amount called on this preliminary total of 40,000 shares was 5l. on allotment. Afterwards another 5l. was required, making altogether a round sum of 400,000l. It does not appear, however, that the whole was paid in cash. The business of the concern is sufficiently described by its name—the execution of great works, not in one, but both hemispheres of the globe. An eminent contractor’s business—Mr. PICKERING’s it was stated—had been secured on highly advantageous terms. All very attractive and glittering, no doubt, but the substantial result was sadly different; in about a year and a half the company passed into liquidation. The liabilities are so formidable that the whole of the remaining 40l. per share will, it is said, be required; thus, supposing all the shareholders pay up in full, 1,600,000l. will be provided for an utterly bankrupt company. The claims are so imperative, that not only Class A, the actual holders, have been compelled where practicable to meet their entire liability, but it is understood that Class B, those who had not transferred their shares to responsible parties, or whose transfers had not been registered by the buyers within a specified period before the stoppage, will be rigorously proceeded against. It would be as unnecessary as painful to expatiate upon this disastrous affair in general terms. The facts speak for themselves.

The practical question is, whether shareholders should submit tamely to be ruined in this fashion. That they have been deceived is very obvious. Two dividends were paid by this very company of 10 per cent.; but as in the case of the Credit Foncier Company (that signal monument of public folly, which wasted nearly 2,000,000l. of the money of its shareholders, and rapidly enriched Mr. ALBERT GRANT) these dividends were improperly paid. The Contract Company, like the Credit Foncier, held securities it could not realise, and had large liabilities upon those inconvertible securities to meet, fast coming on, instead of honest profits to divide. It can scarcely be that the directors, who are responsible for unveracious official statements, are not amenable to the law—and before their dupes part with that which in too many cases forms their sole means of subsistence, or seek the shelter of that chilling asylum, the Bankruptcy Court, they should certainly unite, and under good advice take practical measures to ascertain how far they can transfer their liability to those who have deluded them into undertaking or retaining it. It is not only a duty they owe to themselves, but to the community at large. Granted that litigation is expensive and the issue uncertain, still they can hardly be in a worse position than their present one. Combined action is cheap, and often powerful for good, and in such a case as this of the International Contract Company it would have the usefulness both of exposing a gross public wrong and of ascertaining what reparation can be enforced from those who circulate fictitious accounts. It is high time that some practical course was taken by shareholders to compel restitution of fees or profits taken by directors and managers as a reward for their services in protecting the general body of proprietors. According to the opinion of some great legal authorities the contests between insolvent companies and their victims will increase rather than diminish. The fight is, in fact, gaining strength. How many will be wounded or utterly slain it is impossible to compute. Presently there will be a Class C of shareholders to be attacked, and then liquidators, accountants, and lawyers will have golden times; but the reverse of the picture is gloomy indeed. We have had too much of this mysterious ruin. Unfortunately, thousands cannot help themselves, either from ignorance of business or fear of costs; but there are thousands who can, and they should be up and stirring, to ascertain if the calls made upon them are honest, and of real necessity; and also, to bring those who have betrayed them to the bar of public justice.

TRADE AND FINANCE.

THE opening of the new year is always a season of interest in the commercial world. For many mercantile purposes the last half of December is practically a dead letter. No one cares at that season to undertake fresh transactions, except where indispensably necessary. This feeling becomes entirely changed at the commencement of the new year. The previous apathy is shaken off, and all go to work with the more zest that the inactivity of a week or a fortnight has to be made up. There are two annual periods when trade is often unusually active—the beginning of the autumn and the beginning of the year. In the former instance 1868 has not much to boast of; but, if only from this fact, increased hopes are entertained for 1869. It is reasonably argued that the longer the depression of trade the greater will be the ultimate reaction. The great question is whether the hoped-for recovery is really at hand. In a general sense, we are afraid that it is yet far in the future. In the immediate present, however, there is no doubt that business will for a few weeks improve, from the reasons that have been already cited. Hence, without extraneous circumstances, there is just now enough to occupy the attention of City men generally.

The first day of 1869 has nevertheless been characterised by the formal opening of a prosecution of such consequence as at any time to absorb public attention. The proceedings against the directors of the defunct company of Overend, Gurney, and Company (Limited) bid fair to result in the most important commercial cause célèbre within living memory. We have neither the right nor the inclination to pronounce an opinion as to the ultimate issue. Both before a legal tribunal and that other more powerful tribunal of public opinion judgment is reserved until both sides have been fairly heard. The facts must be left to be fully divulged before a decision can be given on the entire merits of the individual case. But, apart from these considerations, the present action is one that in a general sense—no matter what the ultimate verdict may be—claims to fix upon the directors of a great company a responsibility that has almost, if not always, been disregarded. Nothing for years has been more common than for a director to sanction the issue of a prospectus, in his and his co-directors’ names, containing statements which he has neither taken the trouble nor had the leisure to verify. Some excuse may be made for this neglect. There are sometimes difficulties in the way of the proper interpretation of deeds, conveyances, and so forth, for which he depends solely upon the solicitor of the new company. There is no wrong in this last course, since the trust thus reposed in very rarely if ever abused. But when laxity of personal examination creeps in it is liable to go a great deal farther than the easygoing gentlemen who pocket their fees once a week care to think about. Something is wrong, and the prospectus turns out not quite correct. Where there is an error it is occasionally discovered by the Committee of the Stock Exchange, when a settlement in or official quotation of the shares is applied for, and consequently refused. In that case the company is nine times out of ten virtually at an end. The shareholders have their money returned, or, in case of default, have been compelled to try and enforce their claims in the Court of Chancery, with the by no means improbable event of being defeated by a technical objection.

The peculiarity in this instance is that the remedy sought is not in the civil, but the criminal law. The plaintiff does not sue in an ordinary court for money improperly obtained, but prefers a complaint before the sitting magistrate on the ground of alleged fraud. There is no chance that the affair will be burked in the mysterious manner by which similar proceedings were stopped in another failed company a little time ago; the cause will no doubt be fully tried to the end. The point to be considered is how far the precedent may be followed, whether in the present case the complaint succeed or fail. There must be many companies of all sorts and descriptions where similar allegations, true or untrue, could be brought forward. In one notorious instance the directors of a concern with a large nominal capital recommended the payment of a dividend up to the very eye of the stoppage of the company, since when most of the shareholders have been ruined by calls to meet unknown liabilities. Suppose that any one had purchased shares on the faith of the handsome profits the board alleged to be realised; or that they announced that a property had been purchased at a fair price which any competent valuer would have told them was not worth one-tenth of the money, and yet included it as an asset for the full amount in their balance-sheet? It is needless to repeat instances of this sort; they appear in a dozen different shapes. We ought, however, in fairness to distinguish. Many as are the charges brought against directors for this sort of fraud, they have not been frequently substantiated. Sometimes they are made from recklessness or disappointment—no persons being so unreasonably angry as shareholders who have lost a little money by a temporary fall in prices, or have unsuccessfully tried for a seat at the board. Others, sometimes practical men of business, entertain the opinion, though rarely expressing it, that affairs of this kind should be hushed up. Certainly it is by no means uncommon that proceedings, threatened or begun, for some inexplicable reason fall to the ground. Again, directors have the strongest reason to fight the matter out together, sometimes with the money of their own shareholders, while an individual proprietor has generally the only consolation of having to pay his own costs. It is evident, nevertheless, that the public mind is undergoing a great change on these points, and is getting tired of leaving things to take care of themselves.

The end will be beneficial, though probably not all at once. Some difficulty will be experienced in getting what are termed first-class names on the board of a new company; but as these have generally too much to do in caring for their own business to attend to anything else, their absence will be well dispensed with for second-class persons with more time to exercise their direct supervision. One ultimate advantage will be a heavy blow and great discouragement to professional directors, the gentlemen who belong to fourteen or fifteen boards at a time. The fact that a heavy responsibility attaches to their office will come home to them with most disagreeable force.

TRADE AND FINANCE.

THE Trade Circulars which are published about this time of the year furnish a more exact, as well as more life-like representation of the state of the various departments of commerce, than can be found in the necessarily imperfect statistics of the Board of Trade. In dealing with the latter, the figures of which are unimpeachable, there are numberless limitations and allowances to be made which are entirely beyond the province, and it may be added the capacity, of a government department. This is no reproach; the Board of Trade perform their duty by exhibiting broadly and correctly the general results of the year. They have not the power of explaining how much of the commerce, say of 1866, depends upon the orders given in 1865; why a year of panic actually seems more prosperous than the succeeding period of recovery, or what peculiar circumstances, take trade out of its ordinary course. To a knowledge of these practical details we can have no better guides than those furnished by merchants who are daily and intimately concerned in the business on which they report. There often exists, it cannot be denied, a suspicion that some unconscious bias may influence the opinions of dealers materially interested in the questions on which they touch, that they will take too strong a view on one side or the other, and thus, without positive intention, partially distort or suppress the truth. These cases, however, are rare, and even if they were more frequent the public would yet gain by accepting the greater portion of the good, though tarnished with the slighter admixture of the evil. At any rate we obtain a large mass of facts upon which to base our judgment, since as far as these are concerned in the existing competition of trade a wilful error would be corrected forthwith by a dozen rival houses. The conclusions that may be drawn stand in a different category. Diversity of opinion must be looked for everywhere, and if Messrs. A. disagree with Messrs. B. on the prospects of the coming year, it is merely a repetition of the same sort of thing that we have long been accustomed to, and receive, as the case may be, with dissent or regard.

Foremost among the questions in which the nation is most deeply interested is the supply of corn. Mr. KAINS-JACKSON has published a succinct report of the trade during the past year. In January the prospects of the harvest were considered so uncertain that many experienced merchants foretold famine rates in the summer. The current price was high—72s. 4d. for wheat—and afterwards rose to 73s. 11d. A reaction then set in, owing to the receipt of large cargoes from the Danube, where the crops, after three years’ bad harvests, were unusually good, and to the appearance of an early and abundant in-gathering in England. After some fluctuations, the average price fell to 50s. a quarter, and at Christmas, 1868, Mr. KAINS-JACKSON estimates the reduction since the corresponding period of 1867 at 33 per cent., and that we have saved an extra outlay of twenty millions sterling, which we were obliged to make the year before last. There is also a prediction hazarded that 1869, 1870, and 1871 will also prove unusually productive, of which it is unnecessary to say more than to express a humble hope that the prophecy will turn out correct.

Cotton is the next subject that claims attention. As regards the raw material, Messrs. HEUGH, BALFOUR, and Co. observe upon the wrong information and wrong calculation—common things in the cotton trade—which caused the price to run up in a few months from 7⅜ d. per lb. to 13d. From that high point, however, as the miscalculation was discovered, there has been a partial reaction. As regards manufactured goods, the report speaks of protracted dulness in Manchester, and observes that from no large foreign market, except for a short from China, has there been a good, or even healthy demand, and that the same may be said of the home trade, and of nearly every one of the smaller foreign markets. This unhappily bears out the view we have often expressed. Nor does there appear to be any sign of improvement at present. India and China are fully stocked, and the purchasing power of the former is besides weakened by a famine in some important provinces. South America, from wars and earthquakes, takes less, and the United States (chiefly, we believe, from their protective tariff) take less also. The home and continental consumption, we are told, has never shown any vitality since the crisis of 1866. Truly not an agreeable prospect for the new year.

The position of the iron trade is stated by Messrs. W. BIRD and Co. to have greatly improved, through large foreign contracts for railways and public works’ requirements. So far, however, the demand has almost exclusively benefited the great manufactures, since the home trade is slow, and the smaller makers, who have not participated in the good fortune of the large houses, find considerable difficulty in keeping their staff and machinery employed. The trade are at present deeply interested in the controversy respecting the HEATON mode of manufacturing steel against that of BESSEMER. It is mentioned that the scientific testimony in favour of the new plan has been severely criticised, and that the public have as yet learnt little of importance. The time for judgment, in our view, is when “the new systems mature and emerge from the regions of experiment into practical commercial life.” It is not much use discussing whether a new invention will pay, when it has been conclusively proved or disproved that it does pay.

The sugar market is stated by the Produce Markets Review (Messrs. TRAVERS and SONS) to have been by no means profitable. Prices have been steadily declining since last spring, and for the first time for many years the consumption has been falling off considerably. The effects of the crisis of 1866 and the dearness of bread in the earlier part of 1868, and of other provisions during the whole year, are given as a reason. The holders of stocks have consequently suffered, their supplies having been left on hand. The explanation of the falling off in the demand is, in fact, easily given; the mass of the people have had less money to spend, and consequently have been compelled to curtail their comparative luxuries.

The shipping trade has fared much as others. The anticipations of a prosperous year, which, according to MESSRS. RUCKER, OFFOR, and Co., were generally entertained at the commencement of 1868, have not been fully realised. In some important instances freights with the East were temporarily remunerative, yet adverse circumstances subsequently occurred which seriously affected the average returns for the year. For example, in Bombay the rates were 75s. in March, but the sudden termination of the Abyssinian war caused a sort of panic, and cotton was shipped in May at no more than 15s. This was the extreme point of depression, however, and a recovery has since taken place to 47s. 6d. Similar, though less violent, fluctuations have been experienced as regards Calcutta and China. An opportune relief was afforded by the timely demand for tonnage for the Peruvian guano trade, of which a large fleet took advantage.

According to Mr. W. H. HINDLEY, we are threatened with a scarcity of hemp and flax. The shipments from St. Petersburg and Riga have considerably diminished, and there are indications that the forthcoming supply, owing chiefly to the drought, will be inadequate, while the stock in London is smaller than at any time on record. The ordinary consumption has also been considerably increased by the quantity required for the French Atlantic Telegraph cable, which will not be finished before next June. We think that the deficiency may, nevertheless, be compensated, as in the time of the Crimean war, by the import of jute. It is mentioned that this article is the only fibre that has at all increased in production. Since 1857 the annual quantity imported has increased from 30,000 to 100,000 tons, and a much larger amount is expected this year.

The colonial wool trade, say Messrs. WILLANS, OVERBURY, and Co., shows that there exists a demand capable of absorbing on certain terms the present enormous supply. Still, it has been necessary to submit to a reduction in price even on the depressed rates of November and December, 1867. In the inferior sorts the terms obtained by the growers have, no doubt in many instances, been unremunerative; but some improvement has already been made, which is the more encouraging when regard is paid to the adverse course of business during the past two or three years. At the same time purchases for the Continent have been heavy throughout the past year. This result is observed to be the more remarkable when the enormous direct importation of River Plate wools, chiefly to Antwerp and Havre, is taken into account. It seems also that Australia has lately produced in the outlying districts more than can be sold to pay at present prices, and hence that some at least of the poorest and driest districts must sooner or later be abandoned, in which case a gradual recovery in prices may be confidently looked for.

Here we must stop for the present. There are many other important departments of trade which deserve examination, and require to be dealt with hereafter. One almost invariable conclusion can be drawn now—that, save where exceptional circumstances supervene, business on the whole has not been prosperous. A new year, however, has opened, and with it the anticipation is entertained that commerce will again revive. After so long a period of stagnation it seems hard that hope should again be deferred, and that for another year we should experience the long-drawn effects of the crisis of 1866.

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1. Text from MEGAdigital (Berlin-Brandenburg Academy of Sciences and Humanities), MEGA² IV/19, licence CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0/); the editorial apparatus of the MEGA is not reproduced. ↩