Page:The Economic Journal Volume 1.djvu/411

NOTES AND MEMORANDA 389 in due time..,. a man came who had character enough to see that he was spoiling with success, and that, if left to his own devices, he would probably do a good deal of harm. Events have shown that he could be done better without than with. The same rule applies to a house of business. No matter how clever a man is, he should neither be allowed to play with the destinies of an empire nor the millions of n?oney of a great trading and banking firm. In both cases the head is apt to get turned with the belief in one's own infallibility, and the result often is ruin. The unfettered one-man power is, moreover, no longer suited to the times in which we live, and there could be no more emphatic condemnation of the system than the fall of Bismarck in Germany and of Baring in England in their respective spheres, and so close one upon the other. When the world was one or two hundred years younger, and there were no electric currents travers. ing the ocean-beds and continents of the earth, one man could find pigeon holes enough in his little brain to keep sorted and remembered the details of his business, whether political or commercial; but now it is quite otherwise. Unless there is well-ordered co-operation and properly divided command and responsibility in a large mercantile firm like that of Baring Brothers, the brain will get confused, the mind disordered, and, to descend a long flight for a parallel, likeaman too long at a time in a railway signal-box, sooner or later there will be a crash. This evil is being slowly remedied by the joint-stock company principle. Two of our largest mercantile houses have been recently converted into companies, where the one-man nianagement cannot err to the extent that it could in the conduct of the business as previously constituted. In all cases in which large private finns and private banks have been converted into joint-stock companies, it will generally be admitted, I think, that no such conduct of the business as that discovered to have been carried on in later years by the firm of Baring Brothers could possibly have been persisted in where there was a board of directors and responsible sub-managers, independent as .regards emolument of their immediate superiors in office. We require to look no further for the proof that such a con- tention is well founded than in the fact that all London banks have kept their doors open through a crisis, the cause of xvhich was the fall of the most widely-known commercial firm in the world. It is no exaggeration to say that until the middle of November 1890 the name of Baring Brothers was as good as a bank-note in every port in the civilized world. If the joint-stock principle could have stepped in in the month of October previously and put an end to that one-man power, a precious fragrance might have been saved to the commercial name of this great trading comrounity, which, unhappily, was allowed to be brushed away like the bloom from the grape, to be known no niore. There are still some survivors .amongst us where more or less of the one-man power insufficiently controlled presides; but people respect each other's feelings so much that the manageinent is allowed to jog along in the old groove, where there is no independent board x?'ith individual responsibility to the shareholders, until there is another crash and disappearance of an antiquated syste?n of administration. Whatever happens in the future, there is already sufficient evidence before us, in the fact i have already referred to, viz., that all the London banks kept their doors open until Baring's acceptances had run off, to show how enormously the system of managing banks and great com- n?ercial firms has improved of late years. One of the aspects of ' the Baring crisis'is that which relates more particularly to the circu?n-