to face when the war is over, shall be as far as possible relieved from any difficulty of finding all the capital that it needs.  To produce these results it is highly necessary to increase the confidence of the public in the machinery of the Stock Exchange, in company promotion and all financial issues.  Any one who sincerely believes that these results can be produced by tightening up the Companies Acts is not only entitled but bound to press as hard as he can for the securing of this object.  But is this the right way to do it?  There is much to be said at first sight for making more strict the regulations under which prospectuses have to be issued under the Companies Acts, demanding a franker statement of the profits in the past, a fuller statement concerning the prices paid to vendors, and the prices paid by vendors to sub-vendors, and so forth.  Any one who sits down with a pre-war industrial prospectus in his hand can find many openings for the hand of the reformer.  The accounts published by public companies might also be made fuller and more informing with advantage.  But even if these obviously beneficial reforms were carried out, there would always be danger of their evasion.  They might tend to the placing of securities by hole-and-corner methods without the issue of prospectuses at all, and to all the endless devices for dodging the law which are so readily provided as soon as any attempt is made by legislation to go too far ahead of public education and public feeling.

This is the real solution of this problem—­publicity, the education of the public, and a higher ideal among financiers.  As long as the public likes to speculate and is greedy and ignorant enough to be taken in by the wiles of the fraudulent promoter, attempts by legislation to check this gentleman’s enterprise will be defeated by his ingenuity and the public’s eagerness to be gulled.  The ignorance of the public on the subject of its investments is abysmal, as anybody knows who is brought into practical touch with it.  Just as the cure for the production of rotten and fraudulent patent medicines thrust down the public’s throat by assiduous advertising is the education of the public concerning the things of its stomach, so the real cure for financial swindles is the education of the public concerning money matters, and its recognition of the fact that it is impossible to make a fortune in the City without running risks which involve the possible, not to say probable, loss of all the money with which the speculator starts.  When once the public has learnt to distinguish between a speculation and an investment, and has also learnt honesty enough to be able to know whether it wants to speculate or invest, it will have gone much further towards checking the activity of the fraudulent promoter than any measure that can be recommended by the most respectable and industrious of committees.  At the same time, it must be recognised by those responsible for our finance, that it is their business, and their interest, to keep the City’s back premises clean; because insanitary conditions in the back yard raise a stink which fouls the whole City.