test of them described himself, a mere midwife, who brings the
interesting infant into the world, pats its little head, says good-bye
to it, and leaves it to take care of itself throughout its troubled
existence. By the American system the promoter is not a midwife but a
doctor who assists at the birth of the infant, and also watches over
its youth and makes every effort to guide its toddling footsteps in
such a way that it may grow into lusty manhood. It is not until he has
done so that he is enabled, by the sale of the shares which were given
to him at the beginning, to realise the full profit which he expected.
The profits realised by this method are in many cases enormous. On
the other hand, the amount of work that is put in to secure them is
infinitely greater than happens in the case of the English midwife
promoter; and if the enterprise is a failure, then the promoter goes
without his profits.

The system, like everything else, is liable to abuse, if a rascally
board of directors, in a hurry to unload their holding of Common stock
on an unsuspecting public, makes the position and prospects of the
company look better than they are by unscrupulous bookkeeping and
extravagant distribution of profits, earned or unearned. These things
happen in a world in which the ignorance of the public about money
matters is a constant invitation to those who are skilled in them to
relieve the public of money which it would probably mis-spend; but,
if well and honestly worked, the system is by no means inherently
unsound, as some English critics too often assume, and it has been
shown that it carries with it a very great and substantial advantage
in the hands of honest people who wish to conduct the business of
company promotion on progressive lines.

XII

STATE MONOPOLY IN BANKING

_August_, 1918

Bank Fusions and the State--Their Effects on the Bank of England--Mr
Sidney Webb's Forecast--His Views of the Benefits of a Bank
Monopoly--The Contrast between German Experts and British
Amateurs--Bankers' Charges as affected by Fusions--The Effects of
Monopoly without the Fact--The "Disinterested Management" Fallacy--The
Proposal to split Banking Functions--A Picture of the State in
Control.

A few months ago, writing in this Journal on the subject of banking
amalgamations, I referred to one of the objections against them, that
they tended towards the creation of monopoly, and so encouraged hope
on the part of those who