The Sun.
London, England, 1854-06-28 00:00:00

[PRICE SD, ~

Glasgow Lord Overstcrne, Mr. Prescott, Mr. William
Brown, 1-1-P-, and-many others. It would clearly be pre:.
cipitate to ask the house to agree to this resolution before-
they had had time to 'weigh these authorities. The'satue
conclusion Was enforced bya consideration of the history
of this question. In 1837 a committee which sat at thd
instance of Mr. Poulett Thompson reported that the opi-
nions of those best able to form an opinion on this diffi-
cult subject were divided, but that by far the greaterf
number of those they had examined were against an alte-
ration of the present law. Accordingly, no steps were
taken to introduce any changes. The next titne.the sub-
ject came under rconsideratlon was in an, incidental man-
ner, before the joint stock companies committee, in 1844;
they, however, came to no decleion.• In 1850 a committee
was eppOinted to consider the subject, but they separated
without'coming to any formal resolution. In 1851 a com-
mittee was again appointed.. In the report, they referred
to the groat difficulties of the subject; and recommended
the appointment of a. commission of adequate legal, and
commercial knowlelge, not only to consider the propriety
of consolidating the'existing law but also to'sug-gest such
chaii,'e4 as might be- required by existing 'circumstances.
Such a commission was accordingly appointed. It was pre-
sided over by one of-the most eminent lawyers in the
United Kingdom—th&-Master of the Rolls in Ireland. it
contained two of the most eminent members of the English.
and Scotch benches-Mr. Justice Cresswell and Lord Cur-
riehill ; well as two other distinguished lawYers—Mr.
,Anderson and Mr.'Brainwell ' antember of the Bank direc-
tion, the President of the Manchester Chamber of
Commerce; and a gentleman also of great legal knowledge,
but now engaged iu commeree—Mr: Slater. The commis-
sioners in their report stated that they had been mach em 4
barrassed by the great contrariety of opinion entertained
by those. who favoured them with answers to the questions;
that gentleinen of-great experience and talent had arrived
at conclusions diametrically opposite, and in supporting
them had displayed reasoning power of the highest order.
The louse would- certainly not refuse to consider such
opinions, collected at their own. desire. (Hear.) Now of
the eight commissioners, six had decided in favour of the
existing.ltw. Three had not signed the report—Mr. An-
derson, who, althoughiti the Main agreeing with the other
commissioners, differed with theM iu respect to the per-
mission of loans, the interest of which should vary, with the
profits ; and Mr. Bramwell and Mr. Sidon Hodgson, who
were in favour of establishing by Parliamentary enactment
a presumptive limitation of liability-, or that which was
known as coinnzaadite partnership. A committee had been
appointed in 1837, which reported that it was inexpedient
to altar the law. In 1844 the subject was again considered
by a committee appointed on the motion of Mr. Slaney ;
and in 1851 a Cominittee, alainappointed under the same
auspices, recommended that a partial change should be
made in the law, and also that a commission of inquiry
should be instituted: For himself, during the time he
had held the invidious power of granting charters, he had
fulfilled .the pledge he gave. to the house, by keeping the
subject as free as possible for the deliberations of Parlia-
ment, when the report of 'the commissioners should be
laid before theui. Besides recommending that the law of
joint-stock companies should 'occupy the attention of the
Government, the commissioners also recommended the re-
peal of the laws of usury, and in conformity with that re-
commendation his sight hon. friend had given notice of a
motion for leave to introduce a bill on that subject. In
conclusion, he could only say that‘he should be most
happy that the House of Commons should be enabled to
improve the law as it existed in thiecountry, but they
must all feel that the true way to accomplish reforms of
every kind, and particularly commercial reforms, was to
carry along with them the confidence of those whose in-

terests were at stake, and whose property would be affected
by the changes contemplated. 'Under our present law, let
its defects be what they might, this at least had happened,
that our industry had been extended to an unparalleled
degree, and our credit raised higher than was the case in
any other country, for no other could be pointed out in
which the rate of interest was so low, and capital could be
obtained on such moderate terms. If we could, by tem-
perate legislation, add to the stability of our commercial
system, to its expansive power, and to the security on
which that power was founded and directed, let them not
hesitate to enter on that course, and to show the commu-
nity that when they had to deal with subjects confessedly
difficult in the opinion of the most able men, the method
they adopted was to inquire first, and then, having ob-
tained the evidence, to deliberate on it, and finally to ap-
proach it, not by way of abstract resolution—at all times
an unsatisfactory mode of proceeding—but by embodying
their conclusions in the provisions of a bill, which when
carried, into law. might enhance the prosperity of the
country, and secure that it should remain the central point
to which the commerce of all nations would gravitate.
Mr. LUCAS urged the special cese of the condition of
of Ireland, and moved the addition of words to the effect
that the modification of the partnership law was especially
necessary in that country. -
Mr. COBDEN said the arguments against limited liabi-
lity were founded on the fallacy that those people who
had capital to dispose of—and who, he ventured to say,
were among the shrewdest people in the world—could not
be trusted to discriminate between a'good investment and
a bad one. In seeking to protect such persons bylaw they
were engaged in a work of complete supererogation. . An-
other fallacy was, that they were going to pass a law to force
people to trust firms founded on the principle of limited
liability. Nothing of the kind was contemplated. He did
' not believe that firms established on the principle of limited
liability would have less credit than firms established
on the principle of unlimited liability. -In .reading
over the evidence in the blue book he had been struck—,
and he mentioned it without any intention of casting a'
slur upon the class referred to—that the questions had
generally been addressed to men of business of the large
capitalist class, and yet even of that class not one half of
them gave opinions in favour of the principle of unlimited
liability. In another class—the young men in shops and
in warehouses, of whom there were in London alone per-
haps not less than 100,000—he doubted whether a unani-
mity of feeling- would not be found in favour of the: prin-
ciple which gave them a bettir opportunity of entering
into business than they now possessed. :Among skilled
artisans he believed there was a unanimous feeling in
favour of the alteration now sought for. In a social point
of view, he took the deepest interest in this question. In
the committee of 1851 Mr. Wynne Ellis stated that on
1 Several occasions he had been asked by deserving young
men strugglingin the world to enter into partnership with
them on the principle of limited liability, but that he
had been deterred from giving his name, because ho
dared not to risk his whole capital. He believed that
similar instances had occurred in other large towns. In
all such cases the law of unlimited liability was a great
obstacle to young.menerising in the world. With respect
to the arguments in favour of maintaining the present state
of the law, he was surprised on reading the evidence to
find coming from men—whom he had considered sound in
political economy—opinions not only adverse to sound
political economy, but supported with a feebleness -of ar-,
gument which could only come from men who had. a bad
cause to` support. They had ventured to predict what
would be the consequences of an alteration of the-law, but
he had looked in vain for any argument against limitedl
liability.. When he found men arguing in the future tense
as to what -would be or might be, he was always inclined
to think that they had not good grounds_for. their argu-
ment. 'lt was said that limited liability might do in
France, Germany, and Holland—countries Which had not
so much capital as England. He could not understand
that mode of arguing. He did not admit that the prin.-,
ciples of political economy were like certain fruits and)
flowers, only suited for certain climates. If those prin-
ciples were true they were applicable at all times. Bnt
the obvious answer to that question was, that if the win-
ciple of limited liability did not suit' it would not be,
adopted. All that was asked for was, that the law should be
permissive. It was no argument to say that we had a greater
abundance of capital. No one supposed that a future gene-
ration might not possess a greater abundance of capital.
If a fixed amount of capital was to be maintained there
would be an end to all change in their mercantile laws.
Such a dectrine might suit a stationary people like the
Chinese, but if• this country was to be progressive, that ar.
gument could, have no effect. He would not refer thie
question to the arbitrament of any one class, for no class
could be trusted to legislate for its. own interest: -In
legislating on this question, therefore, they ought not to
look exclusively to the opinions of the great capitalists in
this country, because they were unconsciously warped by
their own feelings of self-interest. If the alteration now
proposed
.was carried] °tit, capitalists would find employ-
ment_ for capital for which they were now seeking em-
ployment elsewhere, and- might obtain 10 per cent.; In-
stead of 3i, from the Exchequer Bonds.. The present law
did not permit a free marriage between capital and in-
dustry and skill, - and the bands were forbidden liy this
law of unlimited • liability. If there was a blot in our
social system, it was the tendency which capital had to
accumulate in great masses in a few hands. He believed
that the law of unlimited liability stood in the way of the
diffusion, as well as of the creation, of capital, and that
social considerations rendered it desirable that they should
bridge over the gulf which 'eel:4.l.9les capital and industry.
He hoped, therefore • that the Government would give the
sanction of their authority to the change proposed. (Heir,
hear.) ,
Mr MALINS predicted, from the present state of (*-
then on the subject, that the anomalous condition of _the
law would soon be remedied by legislation in the spt
of the proposed resolution. He regretted 'to gather from
Mr. CardwelPs tone that he was opposed to an alteration
of the law, and he bore professional testimony to the great
mischiefs it occasioned.
Mr. GLYN admitted that the commercial law of 'the
country was in a most anomalous state, but the evidence
which had been taken did not satisfy him that the house
had information enough before them to justify them in
making the proposed change. He observed that the pen-
visions which all the foreign witnesses had concurred in
saying must be taken against fraud, if the change were
made, would render the new system so odious as to defeat
its object. He also urged that the change would necessitate
an immense difference in our system of commercial trans-
actions, and he thought that the discussion should be
entered-upon with the fullest knowledge, but he added
that he advanced these .considerations in no desire to delay
a measure which would We a decided improvement in com-
mercial legislation.
Mr. G. PHILLIMORE ridiculed the idea that the
house had not sufficient information upon a subject which
had been under discussion so many years. It was most
important, he said, to show the lower classes that we
were most anxious to legislate for their benefit. In answer
to Mr. Glynn, he said that it was not the contemplated
societie et commandite but the soczet. ie anonyme that re-
q wired the penal legislation alluded to.
Mr. LEVESON GOWER, in an effective maiden
speech, supported the resolution, expressed his opinion
that the present age tended to atociation, the power of
which was only beginning to be appreciated z and insisted
upon the advantage of extending the benents of associa-
tion to honest and prudent men instead of to gamblers.
Mr. DIGBY SEYMOUR argued -that the speech of
Mr. Cardwell, and the proposed abolition of the usury
laws, indicated steps in advance on the part of the Govern-
ment. He supported the resolution.
Mr. KENNAL briefly explained the advantages given
by the Stannary laws in the case of the Cornish mines.
Mr. W. BROWN said he considered that limited lia-
bility would be injurious to the credit of the country and
to the interests of the lower classes.
Mr. SOTHERON thought that harm rather than good
was done by the affirming abstract propositions, and being
himself favourable to the object of the mover of the reso-
lution, he suggested that, instead of the resolution itself,
a bill should be brought in authorising loans for business