indefinite number of other stocks-railroad, canal, dock, gas, insurance, land, mining, manufactuning, marine and other companies ; and that the great industrial enterprises of our day are prosecuted less for the actual service which they render to production, than for the incidental gains which they offer to skilful operators by the fluctuations in the nominal value of their stocks. Thus, by a singular development of the much applauded industry of recent years, the fruits of industry are contemned as inadequate to the satisfaction of modern greed, and large profits without labour, and derivable only from the fantasy of the public mind, have become the principal object of desire. It seems almost needless to intimate that the final result of this temper and the practice which ministers to it, must be the stagnation of actual production, and the sudden dissipation of the imaginary values which have inflamed the passions of all. Speculation, even when most successful, trades on fairy gold; and, though the delusion may be prolonged by the universality of its acceptance, it must be at length dispelled by the stern action of reality.

The mischief apprehended is not confined to national debts and large companies. It is implicated, in a more virulent though less active degree, in the whole system of joint stock association. In almost every combination of this kind speculation and extraordinary gains, without labour, are the object of the original shareholders, and large perquisites and revenues, with little labour, and comparatively little capital of the managers. The whole effort, as the whole tendency, is to contrive gains disproportionatė to both the labour and capital employed, and to seek incidental profits at the risk of the public, and the more simple minded of the shareholders. Profit, rather than production, is the aim contemplated, If the nature of things should permit such a system to become universal, production would cease almost entirely, and profit would be impossible. But long before the goal was reached, the profits would be gambling profits, acquired at the expense of the producers.

The establishment and multiplication of these joint stock companies operate unfavourably on those actually engaged in honest and bona fide production. The vast capitals, real or nominal, but still efficient, employed by these associations, reduce the proportion of expenses, and diminish the ratio of profit, thereby competing with the individual producer, on terms fatal to his success, and even to his subsistence. This, however, must be the consequence wherever large capitals are brought into competition with small ones, whether the former be held by individuals or corporate bodies. But this inclination of the times to operate on a grand scale—to unite extensive transactions in a single enterprizecoöperates with the avidity for easy and extravagant gains, in repressing the separate exertions of the individual members of the

community; necessitates combinations, associations, and monopolies; and aids in transmuting the industrial system of modern society into a commercial feudalism, and in increasing the range and influence of speculation. “The field of individual energy is daily restricted within narrower limits by the encroachments of association. The transformation is rapid. We are marching towards a vast anonymous incorporation, in which the most potential, like the most humble agents, will be designated simply by a number."* Three associations in France, the banks of France, La Société du Crédit Foncier and La Société du Crédit Mobilier threaten to engulf nearly all the property, and to control almost all the industry of the empire. The bank of England is one of the sovereign powers of the British empire; the United States bank at one time threatened to assume the supremacy over the Anierican States; and in New Jersey the governing power resides in a railroad company.

Large capitals, under the superintendence of a few directors, are likely to supply the principal agencies of production. Numerous small capitalists holding the stock, and purchasing the shares of such associations, with the insecure hope of living with permanent comfort on the dividends, will provide these capitals, and cease to depend principally on the fruits of their daily labour or the rewards of their personal assiduity. Outside of these shareholders, are the large capitalists and the speculators, devising gains by the invention of new schemes, the organization of new companies, and by producing and profiting by the rise and fall of stocks of all sorts. Thus the real capital and the actual production of the country are the prey of speculators and capitalists, and the whole social organism is exhausted to furnish the profits of the stock jobbers. Everything in the nature of productive property is on the high road to a transmutation into stocks, and these 'stocks, as has already been shown, are the materials for transactions which can scarcely be distinguished from open gambling, by the closest scrutiny and the nicest discrimination. Hence the inference flows immediately, that the destiny of the modern system is to convert all industry into a national game of hazard.

It is a melancholy but instructive portraiture of the modern industrial system, which is drawn by Le Spéculateur à la Bourse, in his remarks on Association. They afford a profound insight into the diseased constitution of modern societies, and explain the great revolutions which are transpiring before our eyes, with a profound sagacity which is very foreign to the spirit of the daily dissertations in economical pamphlets and commercial journals.

* Le Spéc. á la Bourse. Deuxième section. Şi, p. 156.

This ingenious speculator thus interprets the tendencies we have been considering:

“In the present state of affairs, association is an instrument of combined action, (solidarit), not as this is understood by the visionaries of Utopia, but as it is construed by business men. The shareholder, has in fact, only one right, the right of paying; and, if the favourable chanco occurs, of being paid. The management of the enterprise, the apportionment of salaries, the control of everything which is done with his money, are entirely beyond his jurisdiction. The directors may dispose of his substance, compromise him, ruin him. With all this he has nothing to do. He enjoys the principal share in the risks, the smallest share in the profits. He is bound by engagements which he never contracted, and inust discharge debts which he had no part in creating. It must be a very fortunato enterprise, if it has any benefits to bestow upon him.

The result of every commercial association is primarily the plunder of the shareholders."*

*** Limited partnership is a restricted monarchy,' says M. Troplong, corporate associations are a true republic. Let us add: with the traditionary encroachments of the two kinds of government, invasion of the legislative department by the executive, subjection of the elector by the delegate."

“It would be difficult to say which of the two regimes is the worst for the sleeping partner or shareholder. Under the one, as under the other, he is the serf, subject to taxation and imposition without mercy and without compassion. (Il est la plibe taillable et corveable a merci et misericorde.) †

Association is the grand pasture ground of speculation. It furnishes the stocks and shares which the other shuffles and deals. It gathers together the prey for the eagles, and vultures, and harpies, and other rapacious birds to pounce upon. It subjects the associates and their means to the control of the capitalist and speculator. Without its coöperation speculation would soon die out, or shrink to smaller dimensions, for want of sufficient aliment; with its expansion, which seems to be the destiny of society, speculation admits of indefinite increase until the fatal term is reached, and the spoiler and the victim both decline into a common grave.

National loans and funded debts presented the first pabulum to speculation : national banks succeeded; then followed Insurance companies ; and more recently Railroad and other joint stock associations have increased indefinitely the encouragement afforded to it. The next step has been to cut up the ownership of mines into scrip, then came the passion for buying and working, or buying, without the intention of working, conjectural mines of all sorts, and in all parts of the world. Now everything which

* Le Spéc, à la Bourse. Deuxième section. Şi, p. 157.
+ Le Spéc, à la Bourse. Deuxième section. § i, p. 164.

can offer a plausible hope of large contingent profits, and whose development requires a capital larger than the original discoverer or speculating proprietor can command, or is willing to invest in that particular adventure, becomes the subject of a speculation. In consequence, the larger portion of the business talent of the time is employed in discovering novel projects, in acquiring the materials for speculation, and adapting them to the purpose, Then the aid of capitalists and professional adventurers is invoked to give success to the tempting scheme; handbills are struck off, enumerating the unparalleled advantages presented to shareholders; prospectuses are issued; share lists are drawn up; and the influence of a few well known names serves as an inducement to attract the multitude of subscribers, solicitous to secure extraordinary returns for small investments. These subscribers—the ultimate shareholders—are the parties who pay all costs, bear all burthens, sustain all losses, and disburse all profits. The beneficiaries are the original speculators, and the capitalists and adventurers, who participate in the enterprise, with a view to the large intermediate profits of the speculation.

Throughout this whole routine we seek in vain for the evidence of a disposition to secure gradual and steady gains by persistent industry and the steady increase of actual production. The fortunate individual who originates the project makes his purchase, and all his outlays, not for the sake of developing a new industry, or of extending an old one, but with the design of placing the subject of his speculation in a plausible and attractive light; so as to win the confidence of speculators already successful, and capitalists who multiply their capitals by a succession of speculations. To these, he sells out the whole or a part of his interest at a price equally disproportionate to his labours, expenditures, and the intrinsic value of the property, and to the sun which his assignees expect to realize from the further prosecution of the enterprise.

They buy with no intention of continued production, but with the assured expectation of being able to resell, by the influence of their names, and often without any actual outlay of capital, at an enormous enhancement of price, to the numbers who desire to participate in the inordinate profits of the promising undertaking. These, in their turn, are seduced by the hope of larger benefits than regular industry and the ordinary course of production can afford. They buy shares with avidity, under the delusion that the rapid increase in the price affixed to the property has been due to a real augmentation of its intrinsic value, and that a similar progressive advancement of price and profits will continue after they have acquired the ownership. The whole operation was a fantasy ; the fever of greed which has penetrated into the public body alone gave practicability to the scheme; the rapid increase of

nominal value was generated solely by the dexterous inflammation of the coretous hopes of the people, and the game is played out as soon as shareholders have been attracted, and have paid for their stock. The last holders of the cards are the losers, and those only gain who have shared in the previous maneuvres. The wasteful expenditure of energy and ineans, in the development of schemes of this character, and in the unproductive outlays of the shareholders, is ruinous to the national wealth; while the ardour of the industrial classes is paralyzed by their losses, and all exertion is directed more or less zealously in the direction of new gambling speculations to retrieve former disappointments. Thus, actual production becomes the prey of speculation ; industry and commerce are subordinated to the fluctuations of hazard; and trade is contaminated by the infection and consequences of this universal spirit of gaming.

“Such is, in general, the perverted speculation of modern times. multiplies itself under a thousand forms, it fastens on labour, on capital, and on commerce, appropriating to itself the clearest, the surest, the largest returns of all. It apes and dishonours useful speculation, whose generous and modest votaries too often receive, for their sole recompense, wretchedness, whilst the brazen disciples of the other, insulting the morals of the community, swim in honours and opulence."'*

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We have not drawn the distinction which is made by Le Spéculateur à la Bourse, between useful and abusive speculation. The term is sufficiently familiar in its worse sense; it is not in its better meaning; and this better meaning is more adequately and significantly expressed by invention. The discrimination between the diverse applications of creative genius gives a more complete character to the treatise before us, and adds to its philosophica! precision; but if introduced into this essay, it would onl! extended our remarks unnecessarily, and produced cor the minds of our readers.

The spirit of speculation, which has converted alre::..y the pursuit of independence into a game with stocked cards, and bestowed a monopoly of gains upon the dealers, is not limited in its operations to great transactions, and the more obvious modes of suiden acquisition of wealth. It is daily sinking deeper and deeper into the whole system of society, penetrating into the daily routine of production, and circulating through all the veins and arteries of the industrial economy.

Trade is catching, nay, has already caught, the contagion. Manufactures of all sorts are sinking into the same category; even agricultural and mechanic productions are afflicted with the same

* Le Spécul. à la Bourse. Introd. Sii, p. 20.

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