at something may be
done some day to remedy them if mankind can produce a set of rulers
capable of approaching the question with all the knowledge and
experience required; but to substitute this system at a time of great
uncertainty for one which might or might not work would seem to be
tempting Providence in an entirely unnecessary manner at a time when
it is above all necessary to get the economic ship as far as possible
on an even keel.

If the proposed substitute is to succeed it will have to be at least
as acceptable as gold, and at the same time its quantity must be so
regulated as to be at all times constant in relation to the output of
commodities. Can we pretend that the economic enlightenment of mankind
has yet reached a point at which such a currency could be produced and
regulated by the Governments of the world and be accepted by their
citizens?

XI

BONUS SHARES

_July_, 1918

A Deluge of Bonus Shares--The Effect on the Market--A Problem in
Financial Psychology--The Capitalisation of Reserves--The Stock
Exchange View--The Issue of Bonus-carrying Shares--The Case of the
A.B.C.--A Wiser Variation from Canada--Bonus Shares on Flotation--An
American Device--Midwife or Doctor?--The Good and Bad Points of Both
Systems.

Of the many kinds of Bonus shares, the one which has lately been
most prominent in the public eye is that which is produced by the
capitalisation of a reserve fund. There has lately been a perfect
epidemic of this kind of Bonus share, which is almost as plentiful as
the caterpillars in the oak trees and the green fly on the allotments.
The reason for this outburst is apparently the anxiety which the
directors of many prosperous industrial companies feel lest the high
dividends which good management and sound finance in the past have
enabled them to pay should lay them open to misunderstanding and
attack by well-meaning people who think that it is a crime for a
company to earn more than a certain percentage on its capital.

This explanation was very frankly given by the directors of Brunner,
Mond and Company, when they lately capitalised part of their reserves.
The company, they stated, has for many years paid a dividend on its
Ordinary shares of 27-1/2 per cent., and "the directors feel that
there is a widespread impression that this is the rate of profit
earned on the total of the capital invested, and consequently that the
company is making an unfair profit out of its custome