Victrice looked at Ambroisine, and Ambroisine looked at Victrice. Neither had the courage to speak. They allowed it to be supposed that they had made a mistake, and that it was PierreEcrite they were looking for. The woman who was spinning seemed relieved, and sald: "I was afraid at first that you were M. and Madame Peyrolles, because the place here belongs to them, and we owe them some money." Then she called to her husband: THE USES OF DIRECTORS. The examination of the Chartered Company's directors before the South African committee was very oppor "You can show yourself, Frédéri. It tunely preceded by that of a solicitor is not what we feared!" Frédéri came down from the loft, followed by the children, whose timid eyes brightened. There was no wine, but he placed before the visitors milk, honey in the comb, walnuts, and apples. of great experience in company matters before the House of Lords' Committee on the Companies Bill. The opinion of this expert may best be summed up in one of his own sentences. "I do not know," he said, "any large concern where the business could be carried on if every director attempted to make himself thoroughly cognizant of the business." This deliverance, coming from such a quarter, is startling enough at first sight, for the obvious inference seems to be that directors are a useless "It is all that we have here," he said, "the ground is so poor. Fortunately the new masters do not worry us to pay. If they did, we should have to put the key under the door. We have never seen these good people, but you must know them, as you are from the town?" Ambroisine and Victrice said they and unnecessary burden upon the reveknew the Peyrolles a little. By this time the sun was getting low, and they felt that they must come to some decision. "Speak," whispered Madame Ambroi sine. "No, speak yourself!” said M. Victrice. Neither of them spoke. nues of the company, the interests of which they serve best by remaining as ignorant as possible of the business by which it subsists. Nevertheless it is evident that general supervision may be salutary where detailed interference would be fatal, and though the evidence given to the House of Lords' Committee raised a very interesting question When Madame Ambroisine was seated again upon the donkey, the by pointing to the inherent weakness tenant's wife said to her: "Perhaps you would not mind doing us a little kindness on your return to the town? It is to carry this from us to that excellent gentleman and that good Madame Peyrolles." While speaking she held out, with a string already round its legs, a great cock-a lean and sinewy bird that protested loudly against this treatment. The fowl was fastened to the packsaddle, and that evening when the two old people made their re-appearance at Canteperdrix, those who were outside the doors said, with just a suspicion of envy: for some sorts of enterprise of the joint stock system, it did not justify the assumption that directors should be abolished altogether. Walter Bagehot, dealing in his work on "Lombard Street," with the greatest and most important joint-stock company in the world, the Bank of England, points out that its "government is composed of men with a high average of general good sense, with an excellent knowledge of business in general, but without any special knowlthe particular business edge of in which they are engaged. Ordinarily, in joint-stock banks and companies this deficiency is cured by the selection of a manager of the company, who has been specially trained to that particular trade, and who engages to devote all his experience and all his ability to the affairs of the company. The directors, and often a select committee of them more especially, consult with the manager, and after hearing what he has to say, decide on the affairs of the company." In the case of the Bank of England, however, the two weak points upon which Bagehot laid most stress were the facts that the governor and deputy-governor, who form the chief executive power, change every two years, and that though "under this shifting chief executive there are indeed very valuable heads of departments . . . these officers are essentially subordinate; no one of them is like the general manager of an ordinary bank, the head of all action. The perpetually present executive-the governor and deputy-governor-make it impossible that any subordinate should have that position. A really able and active-minded governor, being required to sit all day in the bank, in fact does, and can hardly help doing, its principal business." Here we find Bagehot exposing, as a weak point in the constitution of the bank, the very thing that the House of Lords' Committee desired to insist on in laying down the duties of directors. By stipulating for "diligence" and "reasonable care"-both very vague and indefinable qualifications on the part of directors they terded to substitute for "the high average of general good sense," which is the real essential, the desire to manage the business for themselves instead of consulting with the manager. Such a system, condemned nearly a quarter of a century ago by Bagehot in the case of the bank, is now protested against still more strongly by an experienced company solicitor, on the ground that directors would thus "cease to be directors," and that no large concern could be carried on on such terms. It is obvious that all enterprises, large or small, are best conducted by a despot, qualified by the necessary constitu man tional checks. The weakness of jointstock corporations, as compared with private firms, lies in the fact that the manager, who is necessarily a salaried official, has not the same keen personal interest in the progress of the concern that is felt by the private proprietor fighting for his own hand. This weakness is only emphasized when the directors consider that they know as much about the business as the ager, and that instead of consulting him at every point, they can best show their utility and enthusiasm by striking out a line of their own and interfering with the details of the management. The ideal board of directors is one which regards itself merely as a subcommittee of the shareholders appointed to give up some portion of their time to the supervision of the business, and report to the rest of the proprietors from time to time as to its progress. It thus follows that the success or failure of joint-stock concerns depends almost entirely on the selection of the manager, and we have no doubt that if the apparently inexplicable fluctuations in the fortunes of many companies were carefully examined, it would be found that the efficiency, or otherwise, of the chief salaried official was at the root of the matter. There is, however, one obvious point at which the interest of the manager conflicts to a certain extent with that of the proprietors. Expenses of administration the salaries of himself and his subordinates, the comfort and convenience of the office which they use, and similar matters-are affairs in which the manager might naturally, and even rightly, consider himself and his staff as entitled to more consideration than the shareholders; and it is here that directorial supervision is occasionally required. Other less legitimate crannies for leakage require sterner watchfulness. Ugly stories are heard sometimes, for example, of mining companies being equipped with magnificent machinery which their output is quite inadequate to keep employed, the handsome commission given by the makers to the company's officers being the cause of this unwarranted extravagance. The shareholders can only look to the directors to prevent such frauds; but unfortunately, if half of what rumor says is correct, it is too often the fact that the board shares the plunder. It may be contended that if the utility of directors is confined to so narrow a field, most companies are provided with too many of them. This we believe to be true to a great extent, though in some cases they are also useful as a sort of high-class canvassers. The great competing railways, for instance, find it expedient to have on their boards a large number of the chief merchants and producers of the districts that they serve in order to secure their custom, and that of others whom their influence may attract. In the case of banks and insurance companies, again, which trade on public confidence, names wellknown as "sound" in the world of finance are a very valuable asset, and a goodly array of them in the list of directors is practically essential. And all new companies that appeal for subscriptions must strive to show good names on their prospectuses. Unfortunately, the general mass of investors-"the flock that's sheared, but not discriminates," if we may parody Mr. Quiller-Couch's parody-does not know a good name from a bad, and is induced by natural human snobbery to consider a name with a "handle" to it as an allurement. We should have fain believed that this superstition was dying a natural death, but an amusing case recently reported snows that there is now an organized market in titled directors. The plaintiff's case was that he had been promised £500 in cash and five founders' shares for the production of three directors any of whom the defendant, who was bringing out a company, should consider eligible. ri appears from the Daily News' report that he "professed his ability to obtain the consent of distinguished gentlemen to act as directors, he being a member of a select club in the West End." He fulfilled his boast and produced a belted earl, who was willing to take a seat on the board. Unfortunately, the nobleman was a little late in sending in his written consent, so that the board was formed without him and the defendant refused to pay the £500 promised. Mr. Justice Day confessed that he "did not understand this buying and selling of peers or of anybody else. It appeared, however, to be a practice, and the plaintiff having completed his part of the bargain, was entitled to payment. Judgment for plaintiff for £500, with costs." An appeal to the "Directory of Directors" reveals the fact that the said earl is already on the board of three companies, and we are tempted to wonder whether his name and influence can, or can not, have been secured for them by the same sort of agency. This, however, is merely a side-light on the uses of directors; but when the curtain of mystery that usually screens the machinery of company promotion is thus accidentally raised, it must be admitted that the secrets exposed donnent furieusement à penser. A Model of the Thames.-The popular attraction at the fisheries and yachting exhibition at the Imperial Institute, will certainly be the exceedingly clever model of Father Thames. The spectator will be able to view our famous river from its very source in the Cotswold Hills down to the Nore. Every three minutes, by an ingenious arrangement, the tide will ebb and flow, and flow and ebb. From fifty little springs the clear water will sprout up from the bowels of the earth, away in the Cotswold and Chiltern valleys; from a dozen tributaries such as the Thame and the Churn it will meander gracefully down into Isis, into Thames and Isis, and. finally, into Father Thames himself. In its unfinished state the fifty or sixty taps which run along the sides of hill and dale are also revealed with all their brazen faces. PUBLISHED EVERY SATURDAY BY THE LIVING AGE COMPANY, BOSTON. FOR SIX DOLLARS remitted directly to the Publishers, THE LIVING AGE will be punctually forwarded for a year, free of postage. Remittances should be made by bank draft or check, or by post-office money order, if possible. If neither of these can be procured, the money should be sent in a registered letter. All postmasters are obliged to register letters when requested to do so. Drafts, checks, and money-orders should be made payable to the order of THE LIVING AGE Co. Single copies of THE LIVING AGE, 15 cents. MIDSUMMER NIGHT. FOLK SONGS. Mother of balms and soothings manifold. Our lives are tunes by untaught voices Quiet-breathed night, whose brooding hours are seven, To whom the voices of all rest are given And those few stars whose scattered names are told, Far off, beyond the westward hills outrolled, Darker than thou, more still, more dreamy even, The golden moon leans in the dusky heaven, And under her, one star, a point of gold. And all go slowly lingering toward the west, As we go down forgetfully to our rest, Weary of daytime, tired of noise and light, Ah, it was time that thou should'st come, for we Were sore athirst and had great need of thee, Thou sweet physician, balmy-bosomed Night. ARCHIBALD LAMPMAN. sung In widest range. Some breathe but few bars' lease, And thenceforth silence; some a minor piece. From pallid lips wrung; are grievous dirges By valiant knights loud trumpet-blasts While gay hearts trip to dancing jigs at are flung; ease. Strange hands oft add what harmony they please, Roaming the wide world's ivory keys among. Yon cantus haply with full chords is set: Through this the florid counterpoint flits fast. And here, 'mid changeful notes that throb and fret, One deep-toned chime of pain's recurrent cast, If grief's our figured bass, let none regret God's Perfect Cadence closes Life at last. LADY LINDSAY. ALDEBURG. Once more I watch the pale and writhing lips THE PHOENIX. The pilgrims track the Phoenix flown, Of this old sea that gnaws around the By feathers green, across Casbeen, land. How lonely are the surges and the By gems he strewed in waste and wood, strand! The fishermen are gone, and fled the ships: The billows, that the cruel tempest whips, Shake their grey manes and plunge along the sand; Round dying day no stars attendant stand; Far o'er the foam the floating beacon dips. When last I wandered here in childhood's hour, And jewelled plumes at random thrown, Till wandering far, by moon and star, They stand beside the fruitful pyre, Whence breaking bright with sanguine light, Th' impulsive bird forgets his sire. Those ashes shine like ruby wine. Like bag of Tyrian murex spilt, The sky was blue, the waves were all The claw, the jowl of the flying fowl |