The Press.
London, England, 1854-03-11 00:00:00

THE LAW OF PARTNERSHIP AND LIMITED

LIABILITY.
WE had•not space last week to refer to a late resolu-
tion of the Liverpool Chamber of Commerce, in
favour of the expediency of modifying the present
law of partnership, so that the liability of each
member of any association may be limited to the
amount he has subscribed towards its capital. As
the law now stands, every member of any association
is individually liable for all the debts of the partner-
ship ; hence prudent and wealthy men are slow to
embark in enterprises which might be nationally
advantageous, whilst adventurers and sharpers, ac
cording to a pamphlet published by an experienced
solicitor, Mr. FIELD, " like such risky cor,cerns
" better than any other. The higher the stakes no
" matter how critical the risk -" and this statement
the recollection of the vanished " stags" of '46-47
amply corroborates. A man of wealth rarely originates
a public company. In stating these and some other
obvious truths in a letter to l.is American namesake,
MT. DUDLEY FIELD, Mr. FIELD adds :

" I am ashamed to trouble you with inch palpable
arguments—arguments lying I bad fancied in the very
rudiments of political science ; and I really could nut have
done so had it been longer ago than yesterday, and from
a less man than the President of the Board of Trade, and

220

from him sitting and adjudicating in his official chair.
that I heard views totally opposed to these—and such as I
had conceived were utterly exploded."
In certain exceptional cases, indeed, liability can
be limited by the grant of a charter from the Crown,
and, before the accession of the present Ministry to
office, these grants were not infrequent; but Mr.
CARDWELL, believing that
" in Massachusetts and New York States the allow-
ance of partnerships of this kind had been found so
mischievous that those States were now restricting, if not
prohibiting, the privilege of establishing such partner-
ships,"
he of course hastened to follow the example of
these sections of the great and enlightened republic.
For amongst a certain class of legislators an
American " institution " is the emanation of abso-
lute wisdom, and an American precedent conclusive.
But Mr. CARDWELL in this instance was wrongly
informed. Mr. DUDLEY FIELD, in answering his
London correspondent, thus begins :
"Your President of the Board of Trade is entirely mis-
taken in supposing that we have lessened the privilege of
forming limited partnerships, or that we have found them
mischievous. On the contrary, there is the concurrent
testimony of nearly all our men of business in their favour •
and, if any change in the law were attempted, it would be
to extend the privilege."
But even if on discovering his error the President
of the Board of Trade should resume the practice of
conceding charters, the process of obtaining them is
tedious and expensive, and, when deemed complete,
they are sometimes worthless. Witness the noto-
rious case of the Eastern Archipelago Company, in
which the Court of Exchequer Chamber declared the
charter to be invalid,
" becsuse the specified amount of the capital had not
been duly paid up, although it does not seem that the
Board of Trade was ignorant of the true fact, or dissatisfied
with the mode adopted of paying it up."
The time consumed in obtaining a charter varies;
occasionally it is two months, and often six; while in
an ordinary case the cost was more than 4001., and
n another instance of a banking charter nearly 1,0001.
From another pamphlet., by Mr. WOODFORD FFOOKS,
a barrister, we also learn that
" about the year 1800 eight important towns were
estopped from establishing similar institutions to that of
The Metropolitan Building Association' by the difficul-
ties of the law, and the cost and trouble of procuring char-
ters. The association referred to is one for improving the
dwellings of the industrial classes, and the expense of ob-
taining its cbarter exceeded 1,000/. • and this very society
has since had to expend between 301. and 400/. to obtain a
' supplemental charter !' "

Therefore, whether liability should be limited or
unlimited, it is certain that the present condition of
the law requires amelioration ; but, as on other ques-
tions of importance, Ministers are not prepared to
take a definite course. "It is known," writes Mr.
FIELD,

" that there is much opposition of opinion on the sub-
ject in question among the members of onr present
Government. The usual, and, in th►s case, I think, un-
worthy, resource of appointing a Government Commission
has been resorted to. The members of the Cabinet have
referred this one of their differences to an arbitrator. Of
course the report will depend on who are appointed upon
the Commission. A Government Commission to deter-
mine a mere dry scientific truth is strange enough; still
stranger, to determine one on which all our great political
economists (J. S. Mill and others) are already agreed."
In favour of unlimited liability the chief argument
is, that it ensures caution and prevents capitalists
embarking in rash speculations. This is undoubtedy
true ; but it is no less true that it also prevents the
accomplishment of objects some of which would be
beneficial to the world. Many a poor man would
subscribe his hundred pounds or his ten pounds, and
many a rich man his thousands, to carry out an en-
terprise of which he approved, provided his liability
were limited to the amount of his subscription. Then,
again, comes the danger of encouraging rash specu-
lation ; and this appears to us to be the main argu-
ment that can be urged against the principle of
limited liability. Men, if they could at a risk of 201.,
or 1001., or 1,0001., secure the chance of immense
profits, would be very likely, as in the days of the
lotteries, so to waste their money.
The loss annually incurred from insolvencies, tkc.,
is now more than 50,000,000/., and this, in the opinion
of some, proves conclusively that the present law
does not prevent undue speculation ; but the question
is, would the proposed change encourage—neither
can prevent—unwise and " bubble " undertakings ?
The subject has been already touched upbn in Par-
liament ; but to pronounce an opinion before the
report of the Commissioners has been received would
be premature. As the case stands the arguments in
favour of the change seem at present to prepon-
derate.

Multitudes of persons have left London, by the
South Eastern Railway, for Dover, Deal, Ramsgate,
Margate, and other places on the coast of Kent, in
order to get a sight of the magnificent Baltic fleet as
it passes up Channel this day or to-morrow.

Vrotttbings in arlimntnt.

THE BUDGET.
The financial statement for the ensuing year was
brought forward by the CHANCELLOR of the EXCHE-
QUER, on Monday, in committee of ways and means.
The period, he observed, was somewhat earlier than
was generally assigned for that purpose, and would
have the effect of involving a little uncertainty in his
various estimates, seeing that the financial year was
still uncompleted ; and he would be obliged to base
his computations on the experience of eleven months,
and " guess" figures for the twelfth. Notwithstand-
ing this drawback, however, he thought it best to
make his expose without delay; partly because the
country ought to know its position at a moment when
very serious expenditure was already incurred and
heavy sacrifices might have to be demanded, but
chiefly in order that foreign nations might have an
assurance both of our intention and our ability to
prosecute the war with vigour. After this bnef pre-
face, Mr. Gladstone proceeded to develop the results
of past and the prospects of future revenues and ex-
penditure, marshalling his figures and statements
under their successive heads :

THE PRESS.