The Northern Daily Times.
Liverpool, Merseyside, England, 1856-02-25 00:00:00

NORTHERN TIMES.---LIVERPOOL, MONDAY, FEBRUARY 25, 1856

required, and through it the greatest opportunities would
be afforded to commercial dishonesty and to the breaking
down of that confidence between the banker, the merchant,
and the trader in their dealings, from the simple fact that
the lender having withdrawn his money the ostensible
party would be trading on a false capital and under a
false name. (Hear, hear.) His third objection was that
while on the general discussion the advocates of limited
liability argued that it, would only apply to firms or to
joint-stock companies and not to individuals, in this bill
they saw it applied to the case of individuals, and in a
still more latitudinarian principle it was applied to joint
stock companies. He never yet knew a man who bad a
prosperous business anxious to turn it into a joint-stock
company or into any concern with limited liability, though
indeed they now heard of such cases ; but on the other
hand it was said that there were many men who having
good concerns were yet limited in their means and
cramped in their resources, and that they might be
anxious to obtain funds under the conditions set out in the
bill. In reply to that he would say that if a man so
circumstanced were truly honest, intelligent and indus-
trious, he had a source already provided where he could
get money. He could go to his banker, who was generally
a shrewd man, and with a large knowledge of men and the
world, and he could obtain from him money, and also advice
and counsel much better than from the man who, putting,
say .£5OOO into the concern would suggest "go and trade
and if you make a profit I will share, and if you lose you
will then give my money back again." How many con-
cerns did they not know that were already half bankrupt
and, what shifts were made to recover them--the parties
being buoyed up with the nope that they could now turn
them into joint-stock companies' or into limited liability
concerns. The measure was not long passed, and yet three
or four such attempts had come to his own knowledge.
He knew one or two concerns that were propped up by such
a hope ; in one instance the change had been effected, but
he would not anticipate results which would be known
hereafter. Under those circumstances he was confident
that. no one however enamoured he might be with the system
of limited liability could allow the present bill to pass with-
out the strongest. remonstrance against the total want of
protection in it to the public and the premium which it
held out to fraud. (Hear, hear.)
Mr. Christopher Bushell said : I have great pleasure,
Mr. Chairman, in seconding the resolution which has
been moved by Mr. Torr, because I believe that the
language of that resolution is perfectly full of truth, when
it says that the bill as introduced by Mr. Lowe, is fraught
with evils of the greatest magnitude, to the true interests
of commerce, and the credit of the cosntry. I shall cer-
tainly, cndeavour as far as possible, to act upon the sug-
gestion of my friend Mr. Torr, and be as brief as I can,
for I agree with him that we are not to enter into the
question of, joint stock partnership, but to confine our-
selves to the-probable action under the bill, which I think
opens the whole question of limited liability. I shall
therefore address myself to that especially. It seems to
me, sir,"that Mr. Lowe's bill--although this may seem to
be a paradox—if carefully looked into,-will clearly appear
to be either the result of the grossest ignorance, or of the
most acute subtlety. It is the result of the grossest ignor-
ance if those who framed it, did not see that it opened
up the whole question of limited liability, and gave per-
mission to every man to do almost every thing he pleased ;
and it is the result, and the indication of the most acute
subtlety, if it was intended under two simple clauses of
that kind to pass under such a disguise, this bill which
will open the whole question of limited liability, while it
seems to be a bill merely for the permission of loans
without restriction. Now, sir, our position as regards
the existing law, is this, that every partner is liable
for the last pound and the last acre. As regards loans,
since the usury laws ware repealed, a man can borrow any
sum-of money he can get, at any fixed rate of interest. The
security in relation to that freedom is this, that no man
who has any status, or is possessed of any capital, would
like to have it appear that he was lending money at an
exorbitant rate of interest, even supposing that he could
find any man fool enough to borrow it. Ido not think
that any man of capital and standing would be , fbol
enough to put himself in such a position, that it might be
said of him, and brought against him, that he lent money.
at 20 or 25 per cent interest. But, under this bill, that
result might be producecl without such a man involving
-himself in the penalties of having such a charge made
against him. -Now, sir, what is the amended bill ? I
believe the amended bill to be an embodiment of the Most
dangerous character of a principle, which I think to be as
dangerous as the embodiment of it. I believe, in my
heart, that it would have been found extremely difficult to
put limited liability in a shape more subtle and more
dangerous, more likely to be passed over, and not to be
seen or understood, than the shape in which it comes
before us under this bill. (Hear, hear.) Now, sir,
what does it permit ? It permits the existence of a system
of loans, it-permits a system of unlimited private partner-
ships, without any restrictions of any kind whatsoever.
There is no Gazette, no registration, there is no penalty
for fraudulent withdrawal, and yet I can prove to you
very simply, that the working of the bill will throw open
the whole question of limited liability. Even if the
money were withdrawn on the eve of bankruptcy no
penalty attaches 'to it in the slightest degree. Mr. Torr
has already addressed himself to that point, and therefore
I shall not enlarge upon it. Now under that simple
clause we have the freedom, certainly, which was so
strongly contended for by many gentlemen who spoke on
the side to which I was opposed at the last meeting. Here
we have a freedom which I hope will satisfy the most
insatiable desire for liberty. The title of the bill should
rather have been to abolish, than to amend, partnership.
(Hear, hear.) For in point of fact, excepting in such
cases as will readily occur to us all, there would be no
necessity for any man who desires to share in the profits
of a trade to enter into a partnership. He has only to
lend his money, and a similar result is achieved without
the liabilities and risks to which he would be subjected
under an ordinary partnership. We can therefore very
readily see that partnerships would, to a very great
extent, cease, and that a system of loans would be the
result of such a bill as this. I contend that we have in
partnerships, to a certain extent, something like the mar-
riage bond, although not for life, and only
for a fixed period. We have in the law of
partnership something like a very great security for
the integrity and the well-doing of the partners in the
concern. I am not now assuming that they should be men
of'character, but I am speaking of partnerships under
ordinary circumstances. I say that there is a considerable
amount of security in partnership itself, inasmuch as two
men who are brought together for a fixed period must to
some extent conduct themselves with something like
right feeling towards each other. But if you get rid of that
bond and make the tie dissoluble, the very moment you
do so by a system of laws, you get rid even of that security
under the form of partnership. It has been urged against
the existing law that the loans can be withdrawn. Now,
sir, it is perfectly true that the loans can be withdrawn,
and we know that they are withdrawn, and we know that
great evils have existed from 'the withdrawal ;of loans,
but no law is perfect, and do not let us, because we know
one law which does not act perfectly, substitute for that
law a worse law, which will act more imperfectly, and
open thefrioor to a variety of frauds. I am not contending
that the present law acts perfectly. No law which can
be framed is perfect in action, for laws are made by
fallible men, and therefore the result must be fallible.
But. then you must admit that under the present system
we have this security with regard to loans that, as I told
you before, no man of character would venture to exact
a rate of interest which would bring him into discredit if
it were known, even if he could find any one fool enough
to pay the amount. Under the present system the
lender of money at interest will have no interest init beyond
the fixed payment he is to receive to induce him ; therefore,
as no profit can result to him from over-trading, he will take
the greatest precautions as to the character of the man to
whom he entrusts his money. That is the natural result.
He has no interest beyond a certain fixed amount, which,
in any case, he is to receive, and he, therefore, exercises
the greatest caution as to the man to whom he entrusts
his money; Now, we all know that money is is power,
and like every other power, its danger or its utility results
from its application. If you have under the present sys •
tem a security that' that power is not to be entrust Id to a
man, so far as we can possibly guard against it, so as to
give him the means of inflicting injury;upon the public,
your present law, p,O tante), is a safeguard to the public.
But, supposing that by this bill you admit a system of loans
which shall thus precisely reverse the effects-4f instead
of inducing caution upon the part of the lender of the
money as to the party with whom he shall enter into such
an arrangement in order that he :may obtain for himself
the greatest amount of profit, 'you have then the reverse'
inducement, which is that, while exercising, of course, so
much prudence as will enable him to secure his money
from being lost, yet at the same time does give him an
inducement to stimulate his partner in such employment
of the capital as may give him the largest amount of per
tentage, I think the result must be perfectly clear. Now,
then, let us suppose for a moment, 'very briefly, what woad
be the working of the bill. There is nothing like
names, in order to impress the principles of
the matter on our memory, therefore, we will
suppose a Mr. Young—for this bill is intended chiefly to
benefit the young and energetic man, and also intended
to enable the capitalist, without undue risk of his whole
capital, every pound and every acre, to assist the young
man, by a limited amount, taking a limited share of the
profits, thus opening the question of limited liability--
Mr. Young associates himself with Mr. Rich, and the firm
becomes Young and Company. I will take four illustra-
tions, but they shall be very brief. In this first illustra-
tion, we will assume them both to be men of honesty.
Mr. Rich is known to be a man of capital. Mr. Young is
an energetic, industrious man. There is no prohibition
in this bill, which shall prevent Mr. 4ich, who is known
to be worth 50,001., or 106,000/., from appearing in the
counting-house of Mr. Young, taking an active part in the
management cif the business—l will assume, although the
bill does not say so, that he shall net attach his name to
the signature of the firm. But according to this last
clause, under whatever name he calls himself, either as
servant, manager, director, or friend of Mr. Young, it is
perfectly clear that he may appear in the counting-house,
and take an active part in advice, if not indeed in the
management of the concern. (Hear, hear.) Now, look' at
the effect of this. Impress upon your mind the fact, that
Mr. laical is known to be worth 50,0001., or 100,0001., is
to what extent is not imewl4, in the firm of Mr. Young.
openly avowed to be interested to some extent at least,
large
He appears there with all the prestige which belongs to his
Possessions, and the firm goes on trading. Well, now,
I shall assume of course, because the law is only brought
into action in the, event of a failure, that, under some cir-
cumstances, although both men are honourable—for there
may he nothing distumourable in a failure—the firm fails.
They fail
He says, ,F had .`
than 5,00Q7 in the concern. I
What then turns out with regard to Mr. Rich?
never more
says, "I removed it ; it is true it is lost. It has occurred
in unfavourable trade; my money is gone. lam very
sorry, but still I have fulfilled my engagements to the
utmost. I lent 5,0001. I controlled the trading to the
c
utout extent of my ability, and to the best of my power, but I
am very sorry, that although I only lose 16,0001, you, gen-

tlemen, have lost 20,0001." (Hear, hear.) Now, I will
assume that Mr. Young is prudent, and that Mr. Rich
onehyi.lnsMelfr.
isY oulenggallhyavliinaghlae
a
character,wants goodinterest er
knowingestfor
histh mt
for all he is worth, (and that is his character—the most
important part of any man,) is anxious to go on steadily
a
and carefully in the prosecution of his business. He might
go on thus for years, but Mr. Rich says to him, " this
will never do—l am only getting 10 per cent for nr•
money; you must enter into such a business as will give
me a larger result. Mr. Young, who, under the old
system, would have been a prudent and a prosperous
man is, under this system, stimulated by Mr. Rich, (of
whose character I shall not say anything,) he is taunted,
and told that if he does not make the concern more
prosperous, the capital will be withdrawn ; he has a wife
and children, perhaps young like himself, dependant upon
him; he is compelled and forced, in order to pay a higher rate
of interest, to give up his prudence and his character, and
seek to make large profits for Mr. Rich. I need not
describe the result. Now let us take a third illustration.
Mr. Rich has been deceived in Mr. Young. Mr. Rich is
a capitalist- and an honest man, and associates himself
with Mr. Young, whom he took out of a friend's counting
house, the friend having a good opinion of the young man.
and sets him up in business. I will take it that Mr. Rich
may or may not appear in the counting-house, but he is
known to be associated with Mr. Young. Inconsequence
Of Mr. Rich taking his ease Mr. Young rushes into large
speculations. Mr. Rich loses his £5,000, and the public
suffer. That would not have been the case under a system
of unlithited liability. He was tempted to Join the firm
by the facility of limited liability. Now the fourth
case I assume is one even more dangerous and injurious
in its consequences. I will presume them both to be
unprincipled scamps—and you will agree with me that
both among the rich and the young such men are to be
found. (Hear, hear.) Now, if you can conceive such an
alliance as that of the young and the rich, both regardlesQ
of character, you may easily understand, for your imagi-
nations will fill up more than I have time to describe,
how these two men will make it work under such a bill
as this. Mr. Rich is an old stager, and he has gone
through a long process of careful and cautious villainy.
He says —" Now, my good friend, we will begin fairly.
I lend you £lO,OOO, and you will go in as corn merchant.
You go into the corn market and buy and pay,
and buy and pay, and make yourself a character
which shall be unmistakeable. In fact, Mr. Young, I
will give you the plating of my bullion, which we will
make very useful by and bye, and as there does not happen
to be an assay-office where you could be tested, I have no
doubt we can make things very comfortable." They do
go to work. For years Mr. Young's character is gradually
growing into reputation for: caution and ready money
transactions. Suddenly, when the right time comes, when
war has ceased or war is about to break out, or at some
critical period or other, Mr. Rich says " now, my boy,
now is our time, I have made you a credit. You will not
be suspected. Wherever you have got credit go and use
it. It it turns out well, you and I understand each other,
if ill, you shall not be the worse for it. I will lose
my.£lo,ooo, if .I don't draw it out—but we will take
very good care that I do." Well, now, gentlemen, we will
pass on. Do you see how very easily clerks may be with-
drawn from their employer's service to carry on such pro-
jects as this ? Just think of it and you will see that this
is one of the great evils which will result from this bill.
Well, it has been asked, "is a young man the worse for
having £2,000 or .e 3,000 ? " I say he is not worse, if the
money be his own, or be lent to him at a fixed rate of inte-
rest, so that prudence and caution are not interfered with.
But I do maintain that he is worse if you give him £2,000
or .€3,000 under the system of this bill. He is no
longer his own master. He can no longer exer-
cise that prudence and discretion which may
belong to his own natural and personal 'character. It
has been said that under the limited liability law much
capital ,would come into trade which is diverted from it
in consequence of the great risks which capitalists under
the former system had to incur. Gentlemen, is there any
such thing as another side to the question ? Can you
not conceive how a great deal of capital may be with-
drawn, supposing such a system as that introduced by
this bill to prevail? There is nothing like a home illus-
tration—suppose the case of our respected friend, Mr.
William Brawn. We know very well that he is get ing
old, we know very well that he has undertaken parliamen-
tary duties. Some of us know very well that if he could
ho would retire from business. Now does any one
pretend to say that if he retired from business commerce
would be the better for it ? Does any one pretend to say
that an increased amount of capital would be brought into
trade ? I maintain the reverse. It may be true -that some
inexperienced capital would be brought in, and inexperi-
enced persons who had better put their money into the
Funds at a fixed rate of interest. But trade and commerce
lose all his capital, his experience, his caution, his inter;-
-city, from which has resulted the immense wealth he
possesses ; and not only is his wealth lost:but also the
elements I have spoken of, which have produced that
wealth. This is one of the effects which would be pro-
duced by such a law as this. If it be said that
Mr. Brown would not go out of business, I have no
answer to that. If he stays in it, that which was
most earnestly desired for those who wished to retire
from business, is not applicable in that case—he does not
get the advantage you desire to give him by this law.
Now, I ask, why should not government, if money be a
power, undertake legislation in relation to such a power
as well as to every other power? I believe there is some
law to prevent a steamboat company putting more than a
certain amount of pressure upon their boilers when they
carry passlngers. Now, I say this is to protect the
ignorant and apathetic. Government steps in and says
to the steamboat proprietors, "we will not allow you to
go as fast as you might--we will protect the public who
are mixed up with you in your boats." I say money is a
motive power, and government is decidedly bound
to protect the public in relation to such a power as
that, and not to throw open, as the bill does, the
:unrestricted exercise of that power. (Hear, hear.) I agree
with the president of our chamber that this is not a party
question, and that we are all equally bound, as merchants,
who have all the same interests—and who can doubt that
we have all the same good intentions I—to endeavour that
a bill shall be framed which shall be beneficial to the
commercial community. (Hear, hear.) I would scorn to
ceal with the question as a mere partl-question. I feel
that we should r Tard it as a great social and moral *SINS."
If you will receive my words, weak as they are, with any-
thing like power, do believe me at least, however ill-
guided I may be—do believe me, and those who act
with me, to be sincere. (Hear, hear.) Believe this,
for there we have a good starting-point, that we
will not be actuated by any party feeling whatever, but
really by the desire that the commerce of this country
may have the highest standard, by which to be measured,
a standard of the highest honour and integrity. I am
sure we all feel that the commercial standard is far too
low at present. Events are occuring every day-„I need
not use names—which demonstrate it. We have had
failures in the town of Liverpool lately—I say, if the
moral standard of commerce had been as high as it should
have been, the persons who failed ought not to have
failed, for they ought never to have had the credit, after
all they had gone through, which gave them the
power so to act, as to cause men to commit the most
fearful acts which can be conceived. I say we
should raise and not lower our commercial standard.
(Hear, hear.) I mast speak of these things. Let us
standard we can in commercial transactions, and
shall respect ourselves and our. fellow-men. I am
happy
w highest
say, maintain our integrity, and let us maintain the
to know that the Chamber of Commeroe of Glasgow,
Manchester, and Liverpool, have all declared, not selfishly,
as though for their own interest, in favour of limited
lialAity, bat against it. This is a proof that there is a
great deal of sound integrity in the country, and also a
proof ,that they do believe, in their hearts, that evil and not
good would result from it. With these few observations, I
beg to second the resolution, which, I trust, will be carried
by a large majority, if not with unanimity. (Hear, hear,
and applause.)
Mr. B. Heath, in moving an amendment to the resolu-
'ion, said that he would feel that lie was denying the senti-
ments which he on a former occasion expressed, if he did
not take the opportunity also to state that be still held
those opinions in reference to the particular form of limited
liability which was proposed by the present bill ; and the
reason why he thought it necessary to meet the resolution
by an amendment, instead of a direot negative, was, be-
cause all the arguments that' had been urged against the
bill had been urged almost entirely against its defects, and
not against its principle, and because there was no gentle.
man who, however in favour of limited liability, but would
yet concur in the sentiments expressed as to the nakedness
of the present bill. It was shorn entirely of those guaran-
tees and 'protection to the public which the.bill of last ses-
sion contained; but there might be differences of opinion as
to how far all those guarantees were necessary. Some of them
believed that all the provisions for registration to be necessary
that they might be easily avoided ; but:there were many
other provisions in it which the majority of men would
think of preserving. The amendment which he should
propose was this,-f‘ That the bill was sound and worthy of
adoption ; but that provision should be made for capital
lent under its clauses, remaining liable to all debts con-
tracted while in the hands of the borrower , also to connect
responsibility strictly with ostensability, and to give facili-
ties to the public for ascertaining when loans were with-
drawn." (Hear, hear.) He considered all the objections
that had been urged against the principle of capital lent on
the condition of participation in the profits of trade, might
lOTA, finder the open system as it at present existed, and
that the illustrations of Mr. Bushell were' ad captandum
ones,
be equally applied, and perhaps with more truth to capital

presented.to them in a form calculated to excite their

prejudices against the bill ;—(cries of " hear, hear," and
" no, no)"—but then other illustrations might be presented
_ _

to thetri which would show the results of capital

borrowed t Under the act in a different aspect,
and in a manner calculated to engage their sympathies in
favour of the principles of the bill. (Hear, hear.) Upon
a former occasion he did present a few illustralions which
he would venture to read : "Suppose two firms, A. B. and

Po., and Y. Z. and Co. commencing hu,iness at the same
time, the forther with unlimited liability, and the latter as a
partnership en oommandite, and both seeking public patron-
age and support. On being questioned by parties with
whom they sought to do business, A. B. and Co. explain
that they have only a small capital of their own, but that
they had a friend at their back who had lent them £lO,OOO
though at rather a high rate of interest, five ten per cent, or
as the case might be; that they were under promise to give
him security over all the goods they might hold when
required ; that the loan might be withdrawn on very abort
notice, and should they be unfortunate before that Gould be
effected, their friend would rank on their egtate as

a creditor. On the other hand, Y. Z. and Co. explain
that they also had a small capital, but they
bag boorowed £lO,OOO from five of their relatives en corn-
mandite, that is to say, it was to share the profit or loss,
but it could not be withdrawn for five years, and should
misfortune overtake them in the mean time, the lenders
could not rank as creditors. Now, with which of these
firms would it be safest to enter into business? He himself
should not hesitate a moment in preferring Y. Z. and Co."
It appeared to him clearly that partnerships en comrimndiie
formed under the principle of the capital participating in
the profits of the business, combined with certain checks
and guarantees, would decidedly be the safest for the public,
and although there might be cases where fraud was de-
signed, or where there was great rashness or want of proper
mercantile integrity and honesty, yet he contended that
they were the exceptions. (Hear, hear.) It was a libel on
tha mercantile community at large to say that part-
nerships under the provisions of the present bill,
would not be made as honestly and as bona fide
an intention as partnership formed under the existing
regulations—(hear, hear,)—and he contended that with
proper provisions they would be safer than the system
under which they at present acted. (Hear, hear.)
Mr. Dixon seconded the amendment. He said he
thought that in the first place they had gone somewhat
beyond the object at which the bill seemed really to aim ;
they had gone off into the question of limited liability
when, perhaps, the bill itself it criticised did not purport so
much. All that it purported was somewhat of a negative
character. It provided that whereas hitherto participation
in profits or as a muneration for the loan of money involved
a partnership in the eye of the law of the land, whether so
designed or not, in future such participation in profits and
losses should not involve a partnership. That was about
the extent of the bill. (Hear hear.) Now be for his
own part had no objection to the bill simply as it stood, but
at the same time he should say that it did bear incidentally
on the question of limited liability, and probably required
some safeguards, It might be wisa to say a little more than
the bill said ; and as that to some extent necessarily
brought them into the question of limited liability, he
would make a few remarks in answer to the objections urged
in the matter. Most of the objections that day, which ware
against the principle of limited liability, or rather of limited
liability without safeguards, or the ability of a capitalist to
lend a portion of his money and participate in profit
and losses without incurring a partnership, went to the
effect that the borrower of the money would receive a credit
to which he was not entitled, t nd so perpetrate a fraud and
a swindle on the public. Now in all the cases that Mr.
Bushell had put as illustrations, it appeared to him (llfr.
Dixon), that there was one great omission. He did not
at all consider what the parties before trusting "Mr.
Young" would do. (Hear, bear.) They tniAt give him
credit, but would they not first ascertain what means he had
to repay them ? (Hear, hear. They would find out that
a certain " Mr. Rich" had lent him money, but was it a
sufficient reason that they should trust him because he had
received a loan of money, which he was liable
to be called on for under the first adverse
circumstances ? He was certain that in his commercial
experience he had never seen credit given to such a person
tinder such circumstances, and he doubted whether any-
body else had. (Hear, hoar.) He should say it is ail very
well, Mr. Young, that you have the present use of this
money, but I have no guarantee that it will remain in yonr
possession, and liable to your obligatons to the extent of
the time of the credit you ask of me. (Hear, hear.) Mr.
Young might respond that he was sure !Ir. Rich was such a
friend of his that in the event of loss ho would not ask for
his money when all of his (Mr: Young's) creditors would
want. He might say that, and think so, but most certainly
any party would decline to give him credit on such a repre-
sentation—(Hoar, hear)—and therefore Mr. Bushell's
illustrations failed. That was not the principle of limited
liability—the principle was where a capitalist publicly
acknowledged himself to be liable for a certaim amount of
money, which he could not withdraw until the expiring of
the term of partnership, when all the liabilities of the
debtor were contracted

Mr. Bushell remarked that that was not the principle of
the bill before them, and it was to it ho had applied his
remarks.

Mr Dixon continued : He would take them on that
ground if they were dealing only with the bill, and would
say that the bill made no provision for any partnership
under limited liability or any other form. There was rather
a misnomer in the heading of the bill. Instead of being
entiled " a bill for the amending of the law of partnership,"
it ought to be called "a bill for amending the law of
interest"--a bill providing "that whereas the receiving of
a varying and fluctuating rate of interest had hitherto
involved a partnership, it should no longer do so." On that
ground alone the merits of the bill should be discussed, but
inasmuch as other persons considered that it involved the
question of limited liability generally, which, no doubt, it
incidentally affected, and would not take it on its honest
merits in what it plainly said, he was willing to meet them
and to provide which would ensure safeguards, and which
would result in establishing in one form or other something
like those which limited liability ought to bring with it.
The law now as at present in force admitted that to be done
in a circuitous mode of action, which the bill before Them
sought to have done directly. They knew that parties
might now lend money at rates of interest contingent on
the profits to be made out of it. (Hear, bear.) And Mr.
Lowe in the speech with which he introduced the bill,
stated that two of the judges of the land had affirmed the
principle, that a person rmight lend money under bond to
i
receive fifty per cent. on t, the condition of the bond, how-
ever, to be fulfilled in case the borrower paid to him ten
per cent., or fifteen per cent, as it might be of his profits.
Where then was the d:fr Tence between the two systems ?
There was none. (Hear, hear.) But he thought it would
be better if that which could now be done circuitously, and
by the introduction of a few amplifying words, were done
straightforwardly and openly. (Hear, hear.) What was the
nature of interest ? It was part of the profits that could
be made out of the money. And what was the legal rate
of interest—a composition between the chances of making
no interest, or making a loss. or of making a very heavy
He of interest ; in a word, It was the average composition
of the rates of interest. On that account, some persons, in-
stead of leaving the matter subject to fluctuations, proton ed
to have a certain fixed rate —5 per cent. or 6 per cent. ; hut
he wished to know what was the difference between that
system and that under which a man could lend his money

on condition of sharing in the profits of the borrower iThat
is, if the borrower made 8 per cent., he would retAve a
certain proportion ; if only 4 per cent., then only a certain
other proportion. (Hear, hoar.)
Mr. Bushell explained that Mr. Dixon had misunderstood
the tenor of his argument. He had spoken of money lent
at a fixed rate of interest. and had urged that men would
hesitate to lend out 20 per cent., because it would be a slur
_ _

on them, while they would not hesitate to take as large rate
in profits. _ _

lfr. Dixon, in conclusion, urged that it would be foolish
to expect that any provision introduced into an act could
protect them as merchants and traders, if they would not
themselves look after their own interest.

Mr. Lamont suggested the adoption of the following'
amendment—"P That the principle of the partnership amend-
ment bill, permitting the lender of money to receive re-
muneration, contingent on the profits to he made out of
it by the borrower; although good in itself, and by itself,
yet requires, in the opinion of this chamber, a provision,
that the lender, under the bill, should have no right in
bankruptcy, as against the assignee of the borrower; and
also, that any one knowingly using a name or designation,
or representing' other than the aotual partners to be partners,
shall be guilty of a misdemeanour."
The Chairman thought the first amendment left the
question open for any such suggestion to be embodied.
Mr. Robertson asked whether the meaning of the tug-
gestion of Mr. Lamont was that the lender should not rank
equal to the other creditors upon the estate, but that his
claim should b 3 postponed until all the other creditors were
satisfied.

Air. Lamont said that was precisely the meaning of his
amendment.

On the suggestion of the Chairman, Mr. Lamont did not
press his amendment.
Mr. Swinton Boult agreed with Mr. Dixon. that parties
would be enabled to do by a direct contract what they now

accomplished by a circuitous route, and he thought there

could be no more objection to making the return for capital
lent defendant upon the profits or losses of a concern, by

allowing an actual share in the profit or losses, than
there was to allowing a rate of interest to be calculated

on the profits or losses afterwards to be ascertained. Bnt
what he objected to was, that any confusion should be
introduced into what constituted a partnership • and he did
not think that bill gave to the lender ofm°
lent'
his money, money, under the
bill, any right whatever as a partner. He
and the only change which the bill made in his relations
was, that he should be dependant for the return of the
money upon the result; of the trading. He retained to
himself all the rights and privileges of a creditor, just
exactly the same as if he took the return of his interest, as
a compensation for what the profits might be. Therefore,
the members of the chamber were not, he thought, in voting
upon the bill, voting pro or CO2I, in reference to the law of
limited liability. (Hear, hear.) Under these circums'ances,
he confessed he felt very considerable difficulty in voting
either for the resolution or for the amendment. He saw no
objection whatever to loans of that description, so long as
the character of the individual who advanced the money
was maintained strictly to be that of a lender. All he was
anxious for was, that the two characters of partner and
lender should be kept clearly and explicitly distinet, and
that the question should not be involved in any difficulty
of determining whether a man was a lender or a partner.
His objection to the title was, that it did, not sufficiently
define what the character of partner would be, when the
great cardinal distinction was removed. The only expla
nation they could infer was, that when a man became a
member of a firm, signed as of the firm, used the rights of
a parter in frequenting the counting-house, and taking an
active part in the business, he then became a partner—and
that was the only test left to them. If the distinction
between partner and lender were maintained clearly, he
could see no objection whatever to the bill brought ja by
Mr. Lowe.

Mr. Fisher expressed a hope that the effect of the legisla-
tion would not be so much to protect the rich and the few,
as the poor and the many. He greatly feared that the

protection given was to those who did not need it, and that
the poor, industrious, third parties would be left unpro-
tected. If they legislate at all, he contended they should
legislate for the protection of the poor and industrious
people, who did so much to promote the wealth of the
country, and to keep the wealth there, while legislation
was driving it away to other countries. He did not see how
it was possible to support either the resolution or the
amendment. It was a bill to tempt the timid, unsuspecting,
capitalist to join with the adventurous schemer—not to
protect the people who ought to be protected, but to protect
those who ought not to require it, and did not require it.
lie declared that the principle of the gambler was a higher
principle than that of the bill, and he trusted the chamber
would not make themselves parties to clothe a bill so naked
and so deformed.
Mr. Maefie said, the unanimous feeling was, that the bill
was not satisfactory. He accused the council of not having
evinced sufficient attention in examining the bill, which had
been before the commercial world for more than a fort-
night. He declared that, day and night, they should have
been examining the bill, studying it incessantly, so that
they could lay before the chamber that day their matured
opinion upon it. Had the chamber not existed, no doubt
others would have studied it. A firm of the greatest
position in the legal world told them that the bill was one
of a most dangerous, and he supposed he might add
iniquitous, character.
Mr. Real : Not quite ; not so far as that.
Mr Macro? : I allude not to the opinion of the Guardian
Society's solicitors, but to one addressed to a private
individual.
Mr. Bushell : " It would be the most dangerous innova-
tion possible," that is the opinion.
Mr. Heath objected to introducing the opinions of law-
yers. He thought the value of the chamber depended
upon its expressing the opinions of mercantile men. If
they became the mere mouthpiece of lawyers, they should
lose their value and might as well dissolve. (Hear, hear.)
Sr.
Macfie charged the Council with having failed to
take the proper means, or rather with having taken no
means at all, to ascertain the character of the bill. For
the three or four faults which had been pointed out in it, he
could point out a dozen. Let them carry unanimously
to-day the resolution that the bill would not do, and
they could subsequently consider what amendment should
be suggested.
Mr. Alderman Bennett conceived that the bill was fraught
with great danger to the trading community. He took the
second view suggested by Mr. Bushell, and considered it a
most subtle and dangerous bill. The word " person " was
introduced in the second clause three times, and what were
they told it was ? That it included partnership, firm,
joint stock company, and corporation. What was easier
for a rich man than to raise up a man of Straw to stand
before the public for the purpose of working his capital
without risk ? If the thing turned out unfortunately, the
capitalist could, before it had gone too far, withdraw his
money. Credit to a largo amount might have been obtained,
and if the public were such fools as to give credit, the con-
sequence would he that they would lose every farthing.
Ile thought the first resolution comprehended fully every-
thing which could be said in detail or argument upon the
bill; that, in fact, it was the cream of all that could be said,
and condensed into a few words the real nature of the bill.
He thought, therefore, that the only safe course to adopt was
that which the resolution recommended to them. He joined
with Mr. Maci,e in expressing regret that the council had
not fully considered the I. ill, and laid the matured result
of their opinion before the geeeral council that day.
The Chairman observed that he believed all would agree
that the less interference there was of law, in all bargains
between man and man, the better, They knew that, under
the present system, the lender of money had the sanction
of the law for receiving a certain fixed rate of interest, but
they knew, likewise, of a number of incidents connected
with that mode of lending money which were very disad-
vantageous to the public. (Hear, Lear.) Not a day passed
in which experience did not show that the lender, in the
majority of cases, was not actuated by that high principle
which should govern all men in their dealings, but that,
actuated by the primness mobile of the human breast—self
interest—he took every alvantege, and insisted on receiving
not only a fixed rate of interest, 5 per cent, or 6 per cent.,
but that the borrower, particularly in the case of persons of
small capital, should also deposit with him whatever
securities he held, and that he should claim in all oases for
a dividend on the estate. He did not say whether that
principle was good or bad, but he would ask whether the
system shadowed in the bill before them, with a guarantee
that no preferential claim should be allowed to the lender,
but on the contrary, that all creditors should be paid before
any claim of his could be filed against the assets, would not
ba better than the old system which he had described.
(gear, hear.) Ile would also ask any commercial gentleman
whether, when the two systems were before them, Mr.
Rich would set up a man of less morality and character as a
party to whom he would confide his money than that Mr.
Young who was set up every day and with whom they were
compelled to trade? hear,) He thought Mr.
Rich would be just as careful in the one case as the other,
and viewing the bill in that light he would recommend
that the bill be sent back to the council of the chamber to
endeavour to have it perfected by the introduction into it
of certain clauses. In conclusion the chairman stated that
the law society of London ware of opinion that the bill
would be a good and safe one if two clauses were added to
it—one providing that in case of bankruptcy the lender of
the money should have nothing until after the full payment
of all the public creditors ; and the other providing that
all payments made on account of the principal to snob
lending party within three months Preceding the bank-
ruptcy should be void as against the !said other public
creditors.

After some fu ether discussion the amendment was put
and lost by 10 to 27.
Mr. S. Boult then moved as an amendment, " that it is
the opinion of this chamber that the principle of allowing
money to he loaned for a share of profits and losses icstead
of at a fixed rate of interest is sound, but that it be recom-
mended to the government to add to clauses one and two
of the bill the words not to give him any of the rights to
which as a partner he would be entitled." He thought
that would prevent aA interference of the lender with the
borrower in the conduct of his business.
Mr. Summer seconded the amendment.
Mr. Bushell opposed it. No legal provision could
prevent the lender from interfering with the borrower.
It was done, and would continue to be done, indirectly if not
directly.

On a show of hands the amendment was lost,
Mr. Charles Robertson proposed a second amendment, to
the effect, that it be an instruction to the council of the
chamber to consider Mr. L;we's bill, and to prepare such
provisions as they might think necessary for the practical
working of it, and report the same to an adjourned meeting
of the chamber.

Mr. Mactie : When does Mr. Lowe's bill come on ?
Mr. Robertson I cannot tell.
Mr. Macfie : It comes on on Monday, and this is
Saturday.
The Chairman said Monday was appointed, pro forma,
to go into committee upon Mr, Lowe's bill, but he thought
they could pretty well guess that nothing would be done
with it on Monday.

Mr. Francis Boult seconded the amendment. ire
observed that there could be little difference of opinion
that the present state of the law was eminently unsatis-
factory. It afforded the minimum of protection to the
industrious third creditor, and the maximum of protection
to the large capitalist, who put forward a man of straw.
They found, in experience every dav, that men who never
Lad the smallest capital, had done business to an enormous
extint, by means of large capitalists, who protected them-
selves at the expense of the creditors. This was a crying
evil in the present law, and such arrangements had all the
effect—although he did not say they were so intended—of
a conspiracy to defraud, (Hear, hear.) Any alteration
which would facilitate the employment of capital upon the
ground of character, and not of bales of cotton, or railway
stock, which could be got hold of, the capitalist oared not
how, if his l< an was secured, the chamber
ol!ght to look upon with the greatest favour. (Hear,
hear.) If such a measure were proposed, the chamber ought
do all it could to see whether it could not be licked into
shape and made practicable. lie contended that Mr. Lowe's
bill was an enormous amendment upon the present law—a
wonderful improvement even as it stood, and that the bene-
fit of it would be soon found in a far healthier state of com-
merce than they had at present.
Mr. Lamont was in favour of referring the bill back to
the
Fisher Mr. Ton., and other gentlemen having spoken
tho council.
Air.
divided, when the amendment was lost by as
large majority.
Mr. Macfie proposed a resolution to the effect that the
council of the chamber of commerce be recommended to
take immediate action upon the foregoing resolutions,
an 4 hat a petition embod3ing them be presented, supported
by a. deputation from the council.
Mr. Gill seconded the motion,
Mr. Heath strongly opposed the motion on the ground
that the council, who were not all in favour of the resolu-
tion, shou'd not be called on to carry out its vlsws, and
proposed, as an amendment, that the s-cretary, assisted by
the mover and seconder of the resolution, be instructed to
draw up a petition in accordance with it.
A long and very desultory discussion followed. as to the
course which the Council was bound to take. The amend-
tr,nt was finally withdrawn, and the resolution passed in
a somewhat modified form, the drawing up and presenta-
tion of the petition being entrnsted to a committee of the
council' composed of the following members :—Messrs.
Torr, Ilolderness, Bushell, Kelly, Parnworth, and William
Brown, M.P.

mr. Tomlinson proposed a motion to the effect that the
bill for the incorporation and rezulation of joint stock
conipanies, &c., required the vigilant attention of the trad-
ing community,Lnd that the council be recommended to
ask for further time from the legislature for the considers.
tion of the complicated provisions contained in the 108
clause of the bill.

~..
This resolution was also adopted.
Mr. Torr proposed a vote of thanks to the chairman,
which was seconded by Mr. Bushell, and carried by accla-
mation.

The proceedings then terminated, after a very protracted
sitting of the chamber.