The Chronicle PUBLISHED DAILY. LEVIN. WEDNESDAY, FEBRUARY 2 ABOUT DEBENTURES.

Horowhenua Chronicle, 25 February 1914, Page 2

The Chronicle PUBLISHED DAILY. LEVI N. WEDNESDAY, FEBRUARY 2 ABOUT DEBENTURES.

Tjiu Ciikoaicle i< iu receipt (from the author) of an iiilonniitive and interesting booklet compiled by Mr Herbert \Y. Jordan, of London, on tire subject of "Debentures and Other Charges." The title suggests must, and Jike topdressing for seldom-handled tomes, but the fact remains that Mr Jordan has brushed all the dust from the reference books he drew upon, and brightened his dicta and quotations with apt. wit and cheerful illustration. "The rays of wit gild wheresoe'er they strilqe" wrote Stillingfleet, and his quotation finds proof of its truthful nature in the booklet now before us. For instance: "When and by whom the joint stock system was invented history does not relate, although the distinction of being one of the greatest promoters has been claimed for Noah, there being the highest authority for the statement that lie successfully floated a large company while the rest of the world was in liquidation. Obviously, however, Noah was not the first promote] , , for the liquidation must have been preceded by some flotation at an even greater distance of time." In dealing with the derivation of the word

I "Company," Mr -Jordan—with a ; note of regret for tin , kindlier old ! days said: "in ancient and more leisurely times our f>t-c>ii*t*ii ij«>i _ s i did not divide their lives into eompartments as we do, and they had no dream of splitting ii]) each ■ day into three equal periods to he devoted to work, play and sleep, nor had the "quick lunch"' type, of restaurant been thought of. Persons associated in trade accordingly often gathered by the festive board, where ihey discussed knotty problems peculiar t<, their times, very often on each sueh occasions even "talking shop. , ' But except in the liver- ,' ies in the City of London, the seat of tho old Guilds, and some a.nboroughs, the social characteristic no longer survives." Here is an interest ing , bit of news : "It is not often that Royally openly associates itself with company flotations, but no less than three "Russian Princes signed the Memorandum of a large Oil Trust, registered by my company in 1911. In the same year my company also registered a company which was formed expressly with the object of putting- an end to trusts of all kinds. But its resources were hardly sufficient for the purpose, the capital being , only £2000. The Russian Trust has not yet succumbed.' , Mr Jordan' has something to say about "freak companies": "One individual formed a company with a capital of £1. divided into OfiO shares of £d each. The joke, if it were intended as such, was perhaps hardly worth the expenditure of about £4 in duties and fees, and the trouble fit preparingthe requisite Memorandum of Association and other decuments.' Schemes for gulling investors did not end with the South Sea Bubble: "Thousands of pounds were subscribed years ago by a confiding public who believed in the possibility of importing- compressed dried grapes from Spain, Ttaly and elsewhere, then saturaliny them with good English water and making wine from them. li is stated in the prospectus that dried grapes could be imported at a much cheaper rate than the wine, and that by being saturated in England if was possible to produce a larger quantity of wine of equal strength to (hat made abroad. Scientiiic statements supporting this contention were quoted, but the scheme collapsed in a few months, after having served the purpose of (he propo-

sers by inducing , an easily μ-ullcd public to part wiih (heir money. '' Coiniii" , to fraudulent sclicincs of Nftfifc fcccnl limes, Mr.Jordan remarked : "Twenty companies were formed in a forliiij>-hl in London for providing- sc;ils foi- Iliosc wlio wished to view (fie Diamond -Jubilee procession of 1M!)T, and one clever individiiiil niaiiayed In pay his refurn fai-e \o America and have ;i balance of £!)00 in hand liy selling , somebody else's window ten limes over at t'loo a lime. Tlie window-leltinu , public seemed to be ignorant ol' the fact that any seven individuals uiiirlil form a company hearing a soundin<j- name wiih an insignificant; cajiital, and that, promises | and agreements notwithstanding, not a fartbinji , beyond the subscribed capital can be legally recovered. \ company, for in-

stance, with a paid-up capital of £10 may enter into a contract t«i purchase a set oi' windows for 1'101)0. but the owner of the windows has no legal redress against his customers for more than £10, which iepresents if not already exhausted ihe total value of the concern." Mr .Jordan, however, sees a μ-ood side lo ihe limited liability company. ILe says: ''That a coacli-and-four can be driven through every Act of Parliament is proverbial, and the Companies Ac') is no exception to the rule. l~tiiortunalely. opportunities arc provided for fleecing , the unwary, and many other abuses are also possible: but these drawbacks ought not to cause anyone to close his eyes to the μ-reat benefit derived by the commercial world and the community generally through the. operation of the Act. The joint stock system, with the limitation of the investor's liability, enables p. .-sons of modest means to combine and Form large undertaking's without risking more than the small sum they arc able to afford.