The Sun.
London, England, 1865-05-02 00:00:00

rHE SUN, LONDON, TUESDAY EVENING, MAY 2, 186,1,

has the feeling against unnecessary legislation
grown that by common consent the tempo-
rary disturbances occasioned by strikes and
lock-outs have been left to right themselves, and
no one has proposed to remedy the evil by Act of
Parliament. All fresh measures have pointed
rather to the conferring of fresh powers on trade
and its representatives, rather than curtailing those
already possessed. Mr. MILNER GIBSON'S Partner-
ship Amendment Bill, which was read the second
time last evening, is of this character, and its claims
to support are so well founded that it is not surpris-
ing that it should have obtained a decisive majority
on the opposition being pressed to a division. The
principle of the Limited Liability Bill has been
almost universally accepted as sound'and beneficial,
and the measure which was yesterday under the
consideration of the House is of much the same
character. Mr. GIBSON reminded the House that
at the time that limited liability was given to joint-
stock companies, it was admitted that private
traders carrying on business with unlimited liability
could not be left under the restrictions which then
affected them. The present measure is intended to
supply the deficiency, and its object is "to simplify
and relax that rule of law which lays down that a
participation in profits constitutes a partnership, so
as to enable a person carrying on trade a sum of
money, on the condition that the remuneration for
the use of that money shall be in the form of a
portion of the profits, instead of a fixed interest."
That is to say, that it will enable the borrower to
make far more advantageous terms than at
present, without the lenders incurring any
additional risk. It is evident that in a
good year a tradesman or merchant can
afford to pay a much higher rate of interest
than in a bad year, and the lender may
honestly accept, during a prosperous season, a rate
of profit which, if extorted at a time of general
stagiiation or depression of trade, would be some-
thing very like usury. We all know that very often
a temporary advance is of vital service to a firm,
and that in other cases an assistance at the first start
may enable a man to do a good business ; and in
both these instances the lender has surely a good
right to participate in the profits. He may be very
willing to let the firm have the benefit of his money,
so long as he considers it a sure investment ; but if,
in case of a failure, he is to be made responsible for
a share in the liabilities, it is easy to see what will
happen. At the first rumour of alarm he will with-
draw his money, and very likely expedite a catas-
trophe that might have been avoided. Reckless or
desperate men may agree for a time to pay a heavy
rate of interest, but the prudent tradesman,
who looks to consequences, knows very well
that such a course is most prejudicial to
his interests. To obtain an advance on
such terms, too, he must deal with the
regular money lenders, quite a different class
from those who might willingly assist him on the
sensible and straightforward inducement of partici-
pation in his profits. In that case both lender and
borrower are alike interested in the success and
well-being of the firm, and consequently •the in-
terests of the general creditors are far safer under
such arrangement than when the one side is only
gusy in extorting a usurious interest, and the other
is straining every nerve to meet the exorbitant
claims of a paramount creditor. Mr. GIBSON
pointed out the inconsistency of the present law,
under which persons accepting this conditional
interest are rendered liable for the debts of the firm
" to their last acre and their last shilling," while if
they advance money at usurious rates, 20 and 25
per cent., and extort the payment of that interest
through prosperity and adversity alike, they are
empowered to come forward as creditors in case of
bankruptcy, and perhaps to carry off half the assets.
It is manifest at once what a restriction such a
law must put upon the more prudent and legi

mate way of doing business, and it cannot be ex.

pected that capitalists should be very willing to
incur such a risk. It is certainly good policy to faci-

Rate as far as possible the conjunction of capita

with talent, prudence, and industry, and this mea-
sure directly tends to that object. It cannot be
observed that the protection which it affords only
applies to the private lender, and does not extend to
those who choose to put forward their names to sup-
port the credit of the establishment which he is
assisting. If a man allows his name to be used as
a means of obtaining credit, he deserves to be ren-

dered liable for the consequences, and the existing
law of partnership takes care that he shall be so ;

but, as Mr. GIBSON observed, if he is a mere
lender, if he was not known to the
creditor when credit was given to the firm,

it is difficult to see upon what principle of
justice he should be called upon, if the firm to which

he has advanced money should fail, to pay all the

debts even to his last shilling. The other portion
of the Bill empowers employers to give their

employes a share of the profits without any risk
At present the law on that point is absurdly incon•

sistent. If a man pays his servant or agent a sum
calculated in proportion to profits it is all right, but

if he pays him a portion of his profits the servant
comes in for the liability of a partner. This is a