a company rarely exceeds the nominal amount of 150,000l., and for control, which of course is secured when prices are lowest, a pool of 80,000 17. shares is more than sufficient. Perhaps another 50,000 shares are held more or less firmly by investors, and hence the market supply consists of no more than 20,000 shares, and often of less. This last fact deserves special attention. The small market supply renders manipulation easy. By gradually diminishing it, prices can easily be rushed up to a height far exceeding intrinsic merits; and those at all acquainted with Stock Exchanges will know that, under such conditions, it is quite feasible for a powerful group to maintain artificially a high level of prices while a process of 'unloading' is going on. At present this is done on a vast scale." Huge profits must of course result from such manipulations; and their worst side is that, in spite of the sale of shares on a large scale, control remains where it was before, so that, in theory, the manipulators when they have sold their holdings still have it in their power to take such steps as will enable them to repurchase cheaply the same shares they have sold dearly. The sudden decline which took place in May last as the result of a small London failure shows how easily this market falls to pieces, and has warned us that determined 'bears' can send it down almost at will.

Under these circumstances one is naturally inclined to ask whether the moral status of Rand financiers is such that we must expect a similar abuse of control.' There are, amongst the London-Johannesburg houses, some wealthy firms of vast power, upon the integrity of which great reliance may be placed; and it must likewise be said that the Continental interest, which has become so large, is well looked after by powerful firms of a standing which precludes even the suspicion of dishonourable motives. But at the same time there are various groups of financiers to rely upon whom would be most foolish. So far the interests of both these classes have coincided. Supported by the wonderfully stable nature of the mining industry, by the marvellously progressive character of the various processes, by the ever-increasing output of the growing profits and dividends, they have together succeeded in causing a 'boom' which has sent up prices to a marvellous extent, in many cases to a risky and even dangerous

extent.

But the moment will come when the interests of these two great groups will no longer be identical. The better class of financiers may strain every nerve to maintain values; the inferior class will endeavour to make money by breaking the market,' as soon as this pays better than supporting it. There will be a fierce battle

• In fact, with very few exceptions the market for every share is 'rigged.' Prices have been made to rise by artificial means, and they are supported by artificial means whilst the 'insiders' are unloading their wares upon the public.

between 'bears' and 'bulls,' assuming even that the more trustworthy houses resist the temptation of joining in that part of the game which inevitably follows an exaggerated rise in values. And the result will in all probability be disastrous for the public at large, while it can never be less than injurious. The public has gone too far in many cases, as numerous sober spectators have pointed out over and over again; and a mere cloud of adversity will send the hearts of these optimists into their shoes and cause a violent decline in prices.

In addition, we must remember that 'bears' always have resources at their disposal against which the best intentions of honest interests will be of no avail whatsoever. A hausse is a voracious animal; it must be fed by a constant stream of good news. A baisse derives support even from mere neutral conditions. But yonder in South Africa there are plenty of people who can conjure up a long string of disappointment and disaster to force on a débâcle as soon as they think the time for it has come.

With their absolute control they can do what they like. They can sell and buy properties, and consolidate, extend, amalgamate, and 'water' at pleasure. They can easily interrupt dividends. They can-to mention but a few things, and to assume no actual fraud— influence crushings by working either the better or the poorer bodies of ore which lies open for selection in every mine, because these subterraneous treasures are developed-that is, laid out in open blocks which are assayed throughout, and the exact value of which is therefore known. They may parodise the 'betterment' trick of American railways by applying profits, instead of to dividend, to 'development,' the necessity of which cannot be judged of by investors; they may resolve to add largely to the plant by buying new machinery.

I do not say that all these things, or any of them, will surely happen in all cases. I am not a Cassandra. All I wish is to submit. to the sober judgment of those interested certain important facts and possibilities that appear to have been overlooked. I do not for a moment assert that there are no excellent, well-managed properties on the Rand, and no honest, well-meaning men. Whoever has been there to inquire for himself could not make such a statement.

But I wish to urge the public to ask itself whether it has seriously weighed all pros and cons-whether it has gone too far or not. I wish to point out that the market for these South African shares is largely artificial; that, though no doubt some shares are quoted at prices which represent their actual and intrinsic worth, the rise has gone so dangerously far now that even the augmented output of next year must fail to offer an adequate interest upon the

capital invested. Further, I wish to emphasise the fact that the danger of collapse is especially great in this market, where strained conditions prevail, and where control rules, irresponsible, inscrutable, and all-powerful. Predictions are dangerous, and gloomy forecasts unpleasant to make. But unless this mad boom' is checked, if it is still possible to check it, there will come a day of dénouement which must lead to a collapse so huge that the entire business world will feel the shock.

S. F. VAN OSs.

THE POLITICAL SITUATION IN ITALY

I

THE English public is accustomed to consider political events in Italy almost exclusively from the point of view of foreign policy. And it is natural that this should be the case. The joint interests of the two countries in Africa and in the equilibrium of the Mediterranean are knitting more and more closely the political relations between them, and make it of importance to England that the Government in Italy be pledged to a policy of expansion abroad, and able to guarantee the stability of its foreign policy by proving itself master of the situation at home. It is easy, then, to understand the preference shown by the leading English papers for Signor Crispi, expansionist abroad, high-handed and despotic at home. Certainly, the strength and authority enjoyed by a Ministry at home contribute to the stability of its foreign policy, providing they be based upon the support of a large public opinion.

But this is not the case in Italy. To understand the present moment in Italy it is not necessary to dwell on the political gossip of the daily Press with regard to the private life of Signor Crispi. His weaknesses, far from being a discovery of to-day, have long been known to the Italian public, and if the knowledge did not avail originally to demolish the public man, there is no reason why it should do so now. A few years cannot have radically changed the moral atmosphere of Italian public life. It remains as yet, in spite of the recent exposures of political tripotage and tamperings with the banks, what it was. Signor Crispi also claims to remain what he was in spite of his own lately noised dealings with the Banca Romana and with Baron Reinach.

If anything, indeed, the Bank scandals may be said but to have furnished another evidence that Signor Crispi was the man of the hour. The Government having already, under Signor Giolitti, adopted the course of obstructing the light demanded by the country, Signor Crispi was doubtless the best fitted to carry out such a policy, both because he seemed possessed of sufficient personal knowledge of the matter, and because he was known to have no scruple, moral or constitutional, as to the means to be employed. This partial

explanation of Signor Crispi's access to power may seem cynical in itself, or born of contempt for the man; it arises, however, from the parliamentary situation created under the preceding Ministry. The parliamentary majority of that time wished silence on the subject of the scandals of the Banca Romana; but the Giolitti Ministry proved itself powerless to resist the attacks of the minority, nay, of a mere fraction of the minority. A leader of authority and unscrupulous energy had therefore become indispensable. Analogous reasons-though in different fields-combined to place Signor Crispi in power.

First. Insurrections had broken out in Sicily and Lunigiana, and the Giolitti Ministry showed itself incapable of a single energetic measure of repression or provision. Crispi appeared to have the necessary courage. He proclaimed the state of siege and instituted special military tribunals.

Second. Crimes, bombs, and other misdeeds of more or less authentic anarchists, spread terror from time to time throughout the peace-loving Italian bourgeoisie, whose troubled fancy saw everywhere sects and associations of anarchists, and would fain have had at least the satisfaction of seeing some of the authors of these crimes discovered by the police. But this satisfaction was not forthcoming. The terror increased. Crispi appeared to the Italian bourgeoisie as its saviour.

A result of this panic was the exceptional police laws, by which the preceding Chamber had, in a moment of reaction, conferred upon the executive power the right to institute special political tribunals, and to apply, over the head of the ordinary magistrate, the penalty of compulsory domicile. Thus the system of police of the Bourbons was revived.

Third. Finally, the deficit in the Budget persisted, and the Giolitti Ministry had not the courage either to reduce expenses or to increase taxes, but dallied with expedients of disguised and inadequate loans, which increased public discredit without remedying the Budget.

Meanwhile the country was overwhelmed beneath the burden of existing taxation; with the crises of banks and of building speculations; with railroad debts not yet openly avowed; and with the long economic depression, resulting from the vast amount of unproductive public works, from militarism and commercial protection.

So the current urging retrenchment swelled from day to day. But a programme of retrenchment would have split-as it had split under the Di Rudini Ministry-against the interests of the army and against the engagements said to have been entered into, extra-constitutionally, with the sovereigns of the central Powers. A programme of increased taxation seemed an alternative of unimaginable audacity; but the man ready to impose it upon the country by any means,