SHAREHOLDER-MOBS.
IT is impossible to imagine a more impressive illustration of the helplessness of a crowd of identical self-interests clamouring for satisfaction, than an excited Shareholders' meeting. When we are told, as we so often are, that if we only leave people full power to look after their own property they will be stimulated by the never-failing instinct of self-interest to do the best that can be done for it, we might just as well be told that if we only leave nations full power to look after their own military organizations, they will be stimulated by the never-failing instinct of patriotism and independence to place themselves in the best possible condition for attacking and resisting attack with success. In the latter case we know perfectly well that the art of military organization and tactique and the faculty of invention for arms of precision, have far more to do with military success than the mere instinct of in- dependence, which is probably much more equally distributed than the power to preserve it. And so, too, the art of organizing a government, and the invention of an efficient administrative system, have far more to do with the successful satisfaction of the instinct of gain than the strength of that blind instinct itself can ever have. No one can attend a great shareholders' meeting with- out being struck not an much by its imbecility as its impotence. It is often supposed to be a sort of House of Commons, and so deeply has this false analogy impressed itself on themiuds of adventurous shareholders, that at the Midland meeting the other day, a great hero of the opposition to the Directorate, Dr. O'Brien, proposed that in every case in which the raising of fresh capital is to be voted the forms of the House of Commons should be adopted, and a bill, as it were, presented, and read three times by the share- holders' meeting, before passing ;—the first reading being purely by way of notice,—the second reading determining the fate of the principle involved,—and the third being a reading for recon- sideration, amendment, and final revision. But this redoubtable champion of parliamentary practice must, one would think, him- self have seen how utterly useless such a form would be in such an assembly. If he had any doubt of it, the effort it cost him to make his proposition heard at all, in spite of the advantages of a stentorian voice, nay, the pilgrim guise in which he appeared, with a small leather knapsack slung across his shoulders, as if he had been carefully providing against the contingency of being utterly cut off for a time from the outer world, should have warned him how disorganized and undeliberative was the character of the crowd, or rather mob, to which he screamed out his recom- mendations. It is true that you. scarcely ever have such a share- holders' meeting as the Midland meeting of Wednesday,—where there were perhaps as many as five per cent. of the total number of shareholders present. But if the presence of that unparalleled proportion were a disqualification for debate, how much more of a disqualification would it be if there were but a thin, apathetic meeting of (say) one or one and a half per cent. of the total
number of shareholders, who would be known by the directors to be utterly without pretension to represent the constituency ?
The truth is that as regards any check on the directorate,—short of the extreme step of turning it out, in which case the difficulty is to choose another with any guarantee that it is at all better than its predecessor,—a shareholders' meeting is all but impotent, and impotent for this reason ;—it has no organized opposition, no trusted leaders of opposition, no chance of getting leaders of' opposition with any real command of the details which are essential to weighty opposition. Even in the House of Commons the leaders of Opposition are all but helpless when the question before them is one of departmental accounts ; and yet they have the advantage of having once, at least, been in control of these accounts themselves, and knowing therefore comparatively well where the pinch would be. Yet the whole business of a railway company is business of this sort ; and anybody who tries to be- leader of opposition has to do all that an ex-head of a department has to do in Parliament, without any of his advantages. What is worse, he has no means of becoming really known;to even those shareholders who would be inclined to agree with his policy. Half-yearly meetings are far too few to mould any sort of party- organization or to elicit the qualities of leaders. Yet without habits of leadership, without something of regimental discipline in the mass of shareholders, without the prescriptive right to speak with authority in the few, the shareholders' meeting could never become anything approaching to a Parliament. As it is, the self- interest which is supposed to be so important is rather a disturb- ing element than otherwise, a principle more of misguidance than of guidance to people who have no idea of the mode by which their object would be best obtained. The man who is least pressed and consumed by hunger has, ctetoris paribus, probably the best • chance of finding out how to make his bread. Necessity is only the mother of invention if there be room for a considerable period' of gestation. The shareholders' necessity has as yet been either too faint or too pressing, for maternity of that sort. No inven- tion was ever less productive than the machinery by which the shareholders are supposed to influence their directorate.
Nothing could be more painfully amusing than the illustration which the foregoing re marks receive from the Midland Railway Shareholders' Meeting on Wednesday. Had no speech been made except the chairman's, Mr. Baines's, and Lord Lyveden's, the loss would have been absolutely nil, and, even of these, none had or needed to have any practical effect in persuading the meeting to- adopt its only practical resolution. The appointment of a Com- mittee, politely called one of " consultation,"—investigation under a milder name,—to propose retrenchments so far as may now be possible, and to advise how the ambitious policy of the Com- pany could be reduced to one of humbler dimensions, was a foregone conclusion so soon as the effect of the Directors' startling demand for 5,000,0001. was known. Every one must have seen from the first that the meeting caine together for that express object, that there was but a nominal party opposed to that object, and that speechifying upon it was a mere question of privilege, not of business. Mr. Hutchinson, the Chairman of the Board, was in a very unpleasant position, and yet he evidently understood his real power well. He, like all with one exception who spoke from the dais, where all the influentiality congregated,—had a most patient and respectful hearing ; and though he was labouring, he said, under physical debility, and had to explain that affairs were even worse than was supposed, inasmuch as not only five millions but eight would be wanted, ac- cording even to the present estimate, to complete finally all the existing engagements of the Company, if they are to be com- pleted at all, he was not in the least cast down by his disagreeable
duty, and gave with the greatest composure his very unsatisfactory reasons for believing that eight millions more would really cover all the existing engagements of the Company. When a hot and excited shareholder asked how they were to rely on engage- ments extending over many years not exceeding this esti- mate, when, only six months ago, the estimates for the Metropolitan extensions were so ludicrously underestimated, Mr. Hutchinson replied with great composure that the new exten- sions,—the Settle and Carlisle railway, for example,—did not go through towns or populous districts where the cost of land and works is likely to baffle calculation, but through a barren and thinly populated country, where they could rely on not greatly
miscalculating the cost. A shareholder shouted out that the cost of going through barren and unpopulated mountains was sometimes
as difficult to calculate as the cost of going through thickly popu- lated towns ; but this suggestion Mr. Hutchinson, with great equanimity, ignored. He gave very telling figures as to the
increasing value of the traffic, from year to year, ignoring quietly the suggestion of another shareholder that the proportion of that value to the mileage open should be given, rather than the mere value itself, which, without knowing the increased expenditure incurred to obtain it, is clearly uniustructive. He declared generally for a policy of retrenchment, without indicating what, if any, retrenchments the Board considered feasible, and assented to the appointment of a Committee of Consultation, which he called on Mr. Baines to propose, without indicating any belief of his own in the possibility of a policy of large retrenchments such as the Committee are to consider. Mr. Hutchinson certainly under- stood clearly the great strength of his situation. Mr. Baines was the popular hero of the meeting. He avowed his wish to abandon the Settle and Carlisle line altogether,—indeed, to abandon 4,000,0001. worth out of the estimated 8,000,0001. of existing engagements, and to extend the raising of the 4,000,000/. over three years, raising 2,000,0001. this year, 1,000,0001. in 1869, and 1,000,0001. in 1870. Mr. Baines laid the proper parliamentary emphasis on his denunciation of a policy of aggression, and his eulogy of a policy of co-operation amongst Railways,—distinguishing (nominally at least) " co-operation " for the benefit of rabid free-traders from " confederation," which he deprecated as endangering the public interests and leading to monopoly. He insisted on the importance of having small as well as large shareholders on the Committee, took credit for leaving out the names of two great shareholders who are also stock- brokers,—Mr. Shepherd of Sheffield, and Mr. Henry Rawson of Manchester,—and, indeed, made cleverly enough all the points which were sure to take with an alarmed shareholders' meeting. But he threw no light at all on the great question of all, how far it is still possible to retreat from any of the costly engagements still unfulfilled. When Mr. Baines sat down chaos began. First, came a quarrel between the two stockbrokers who were also large shareholders, one of them amiably saying, and the other echoing the remark, that he would never have sat on any committee with the other. Then came a vehement oration likening the wars of Railways to the old raids on the Scotch Border, the orator being compelled to scream at the shrieking meeting an argument in favour of competing boldly with the North-Western for its Scotch traffic, by threatening the Settle and Carlisle line, if not actually mak- ing it. Then a gentleman aloft on a window seat,—in some danger of the fate, though not of the slumber, of Eutychus,—asked amidst shrieks of laughter a question about the "affiliations" of the Com- pany, and was requested to put his question in writing. Then another gentleman, who began by explaining that he did not, like his pre- decessor, appear in any bastardy case, went into an autobiographical account of his own savings, which he had invested, he said, to the amount of 10,000/. in the Midland Company, having bought in 6001. worth on that very day,—this recital being intended to add weight to his own wish for war with the North-Western, and eagerness to begin the Settle and Carlisle line. Then chaos again, and Dr. O'Brien on the parliamentary duties of shareholders, and a painfully calculating gentleman who wanted to go minutely into the profit on carrying a ton of coal a mile, and was much hurt in his feelings because the meeting would not listen to his calculations, — and finally, Lord Lyveden, with a rasping attack on the judgment shown by the Directors, and a sarcastic comment on the apathy of shareholders " drunk with dividends," and on the credulity which anticipated that people would travel by a particular line in order to stay at the hotel at the terminus.
Such is a shareholders' meeting in excited times, when there is, if ever, a keen feeling in favour of searching discussion. If it were not that the only thing which a Chairman dare not do is to offend the shareholders personally,—for the one power they can exercise is to change the personnel of the directory, though only experimentally,—Mr. Hutchinson might have said with Caius Martins in Coriolanus, " Go, get you home, you fragments," for nothing could better describe the inorganic atoms of a shareholders' meeting. As it was, Mr. Hutchinson did not take a hostile line against "the five tribunes conceded to defend their vulgar wisdoms, of their own choice ?" He did not quote Coriolanus at all. Perhaps he never read it. We do not feel sure that he even felt disposed to spurn the helpless mass of clamorous self-interests at his feet. He did not take the line of patrician scorn with them at all,— perhaps because he did not feel patrician. But he must have felt that no insurrection in Paris or Warsaw, could be more helpless than this insurrection of angry Shareholders against a line of policy to which the only organized section of the Company was already committed.
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