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Rh The shareholders only heard of the subsidy to the Hassia long afterwards, when it was proved to be an "error" (a word the writer might well have put in inverted commas), after the shares of the company, which those in the know were beginning to get rid of, had lost nearly all their value."

"This typical example of falsified balance sheets, quite usual in joint stock companies, makes it clear why boards of directors are more willing to run the risk of shady transactions than are individuals. The most modern technicalities in connection with the drawing up of balance sheets not only make it possible to conceal doubtful undertakings from the average shareholder, but also allow the people most concerned to get out of their responsibility by selling their shares in time if things turn out badly, whereas the private man has to pay for all it does to his last farthing.

"The balance sheets of most joint stock companies put us in mind of those manuscripts of the Middle Ages, from which the visible inscription had first to be erased, in order to discover beneath, another inscription giving the real meaning of the document. The simplest and, therefore, most usual procedure for making balance sheets indecipherable is to divide a business into several parts by setting up subsidiary companies—or by adding the business of these companies to it. The advantage of this system for various objects—legal and illegal—is so evident that it is quite unusual to find an important company in which it is not actually in use."

The author quotes as an example one of the most important monopolist companies, employing this system widely, the A.E.G., the great