Everything, in these times, is done by machinery, and there is consequently no need for astonishment at finding that machinery is in existence for directing human volition. Such mechanism has for a long time been in working order, although it is scarcely realized by the community as a body. The most accomplished professional speculators make it their business to study the peculiar tendencies of people who have any money over and above what they immediately require for necessities. Firms, with numbers of clerks, exist in our day, who have forty, fifty, and as many sixty thousand names of people duly registered in their books, with their place of abode, duration of residences, means, style of living, trade, or profession, and other particulars, enabling a judgment to be formed of the kind of investment which is likely to suit them. These names are all duly marshalled under different heads, and when a certain kind of undertaking is to be brought before the notice of the public, in the form of a prospectus, that class of people for whom it is thought a suitable investment, have one sent to them by post. Experience has shown that it is unwise to scatter prospectuses broadcast over the country, trusting to some portion of them bringing applications. A wholesale scattering of prospectuses among a class of people who are not at all likely to read them even, will injure the credit of the scheme for which it is desired to raise the capital in proportion to the number of prospectuses that are thus wasted. As in everything else, in business great care must be taken to offer the right sort of investment to the persons addressed. A man, for instance who lives in a fine house in a country parish, owns land, and moves among the patricians of the district, would not think of looking at a new undertaking, if he knew a prospectus had come by the same post to a man who touches his hat to him, and lives in a small way outside the gates of the great man’s estate. A man who is higher up in life than his neighbour’s endeavours, as a rule, to mark the distinction by having everything that belongs to him of a superior type. The man of high degree would consider himself insulted if he were classed indiscriminately with the man of low degree, in sending out twenty thousand prospectuses of a new mine. People are very touchy in such matters, and therefore, in catering for the public, as regards investments, great discrimination is necessary. The different classes of investors must be passed through the speculator’s machine like the threshed corn, and when the husks and dust have been winnowed from the solid grain, he proceeds to classify them, and, as far as possible, learn their taste in the matter of investments.

When joint-stock banking came into vogue, promoters of the new undertakings that were destined gradually to supersede private banks, and have superseded all but those that have exceptionally deep roots, and partners left who are very tenacious of ancient customs, were very tentative in their mode of proceeding. As with all new things for which the public require to be educated, companies established on the share system had in the beginning to be brought forward gently and quietly, so as not to startle people. Persons are easily scared when asked to become partners in a bank, in the sense of taking much responsibility and sharing but to a small extent in what are understood to be the honors of such a position. The finessing which was at first necessary to accustom the public to joint-stock undertakings was gradually followed by a thirst for shares, because all such concerns for a considerable time were associated with a premium. Individual promoters worked at the business of building up joint-stock schemes, then it grew to syndicates, and now we have wealthy firms, with large machinery, whose whole time and staff are devoted to hunting about the world for powers to bring out foreign loans, for concessions for making railways, docks, harbours, gasworks, and the like. When they have procured one or the other, they fix the amount of capital, cut it up into shares, and administer them to the public, by much the same process as the Strasburgers enlarge the livers of their geese. Instead of people being asked politely by an advertisement to become shareholders in a new concern, the axiom of the supply creating a demand is acted upon in these times, and a man finds in his letter-box an investment especially suited to his taste and means, at the precise moment when his half-yearly dividends are falling due. The economy of capital is thus being pushed to its extremest limits, through the development of a system by which one man makes it his anxious business to see that his neighbour’s interest on his capital shall scarcely have been passed to his credit at the bank before it is snatched away to fructify in some scheme for benefiting mankind in one or other of the four quarters of the globe.

Investments provided by machinery can be done on a very large scale, and when successful are as a consequence very profitable. But unfortunately it is a kind of avocation that is pretty nearly sure to be followed by many unscrupulous persons, who will resort to all kinds of deceit and trickery, in giving a false and dazzling hue to projects that should never have seen the light. Moreover, the great difficulty that individuals find in ascertaining the truth of statements, and the authenticity of facts, causes them too frequently to take for granted what should be always viewed with more or less suspicion, unless the people who vouch for such facts are of the most undoubted standing and respectability; and, as we have remarked, it is seldom that such persons will lend their names to anything of the kind. During a season of great prosperity the promotion of new companies is sure to be largely overdone, and great will be the losses suffered; but there is sure to be more good done in the world by the dissemination of capital in new parts of the earth that would otherwise lie for the most part unproductive, than there is harm done through the misapplication or loss of a part of it. Many people bewail and lament over the failure of a bank, a discount house, or joint-stock concern now and again, and when a commercial crisis takes place one would think the world was coming to an end, as indeed the Viennese thought when they had a sharp lesson for their money-greed, early in 1873; but a little sensible reflection will show that calms and storms alternate in every variety of form on the earth, and are not confined to seas whose strands occasionally strewed with the produce of a foreign clime is only an indication of the miscarriage of a minute portion of the benefits which, in fair weather, are conveyed by the inhabitants of one land to those of another.

The fact remains, however, that speculation by machinery, or in other words, the modern system of cramming the public with securities wholesale, may be attended with a good deal of mischief, and although it is too much to say that people who launch new undertakings upon such a system are necessarily unscrupulous, there are strong reasons for looking very closely at securities known to proceed from the offices of firms whose business it professedly is to make money by manufacturing stocks and shares wholesale, and forcing them upon the public. In the first place, such a business requires a great deal of money to carry it on, and a good deal of risk must be run, and money paid out of pocket, before there is a chance of seeing anything back again. Under such circumstances private enterprises are sought to be purchased at a small price, and sold to the public at a very large one, so as to secure a considerable margin, the only object of the speculators by machinery being to fill their own pockets.

It is astonishing what faith people put in printed certificates, got up in a style which resembles documents of real value. A sheet of thin paper resembling that of a bank note, with a large impressed stamp of a corporation upon it, and filled in with the magic word sterling, is, as a rule, sufficient dust thrown in the eyes of the general public to send them home satisfied to make no further inquiries until collapse reveals the sham that has been prepared for them. Ordinary people go to market and make an elaborate fuss over a joint of meat before paying their money, seeing that it is to a Shylockian nicety of weight, but when they invest a hundred pounds in a mine, there have been cases in which they hardly knew where the property was,—or even if it existed at all. It is very wonderful that such an incomprehensible degree of confidence is placed in concoctors of companies, and it is the knowledge that the general public is so ludicrously gullible that encourages the formation of joint-stock concerns upon often the most flimsy bases.