new shares are sometimes issued, without a corresponding increase
in the actual capital. These new shares may represent half,
or as much of the actual capital as has been already subscribed.
Such a course is usually defended by the claim that as the property
and franchises have increased in value since the formation of the corporation
the increase of the stock is necessary in order to fairly represent
the existing capital. It is said that some railway stock
has been "watered" in this way to an alarming extent,
so that a great deal of it is fictitious, yet though it exists only on paper
it ranks as the equal of the genuine stock when the dividends are paid.
Whether or not such an action really is justifiable, or even moral,
I leave to the Christian clergy and their followers to decide.
The promoters and directors of such concerns have at least hit upon
a very clever method for becoming rich, and if the securities
of the original shareholders are not injured, and the holders
of the genuine and the watered stock can share equally without endangering
the interests of all, perhaps such an action may be less blamable,
but it is a new kind of proceeding to Orientals.

I must not omit to mention, however, the confidence which is placed
in the honesty of the people in general; for example, you enter an omnibus,
you will find the driver, but no conductor to collect the fare.
"It is up to you" to put the fare into a box, and if you do not pay
no one will ask for it. Yet every fare is paid. I have never seen
a dishonest man who omitted to pay. This is a remarkable fact
which I have noticed nowhere but in America. I suppose it is because
the people are not poor, and as they are always able to pay the fare
they do so. They are too honest to cheat. It is certainly a good way
to encourage people to be honest, to put them on their honor
and then rely on their own sense of uprightness.