i5o BONUS SHARES

directors of Brunner, Morid 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! per cent., and
" the directors feel that there is a widespread impres-
sion 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
customers and the labour it employs.^ This is by
no means the case/' It is a lamentable proof of the
backward state of the economic education of this
country that it should be necessary for well-financed
and prosperous concerns to take steps to make it
quite clear to the public that they are not earning
more than they appear to be. In a well-educated
community it would be perceived at once that it is
the well-financed and prosperous companies which
improve production in the interests of their share-
holders, their workmen, and the public; that the
price which the public pays for a commodity is
ultimately the price at which the worst financed and
worst managed companies can just manage to keep
alive; that the higher profits earned by the better
companies are not wrung out of the pockets of the
community, or their workmen, but are the result of
good management and good finance; and that the
more the good companies are encouraged to go ahead
and drive the bad ones out of existence, the better
will the community be served, and the better will
be the chance of the workmen to get good wages.
These platitudes are* of course, only true in a state
of free competition. If there is anything like