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

THE LA TV OF PARTNERSHIP.

The British law of partnership is so different from that
of the world at large, so little in character with our gene•
ral practice, and with so little to say for it, that it would
seem to have originated in the interpretation of lawyers
rather than in custom or legislation. The principal sting
of that law may be soon described. You may, for various
unexceptionable reasons, wish to lend a thousand pounds
to a trader on the condition, not quite of sharing the pro•
fits, but of receiving a small profit, or none, so long as the
business is unproductive, and a larger profit, enough to
make up for the previous shortcoming, if the business
should prosper. If you do so, and if the trader should be-
come bankrupt either from misfortune, indiscretion, or
fraud, you find yourself drawn in to the whole amount of
your property, /and we might almost add, of your cha•
meter, for you will see your name in the Gazettt. That
hardly seems like English law, but English kw it cer-
tainly is, and many a man has lost all his property
and ruined his family by the merest oversight in re-
spect of this law. You may do many things more
foolish or more mischievous. You may first settle your
property beyond the control of creditors, and lend
your name, and nothing besides, to a concern the success
of which depeads on the credit of its partners. You may
give the prestige of your honesty and your talents to the
management of a railway, which you may jab or neglect
as much as you please, and be only accountable to the ex-
tent of your shares in it, if any. Under the protection of
a charter, or an act, you may commit any folly or iniquity
and come off comparatively scathless. You may carry on
a flourishing business for many years, with the reputation
of enormous capital, and it shall be found at your death,
or disappearance, or detection, that yoUr huge wealth was
never anything else than a huge insolvency; but if you
should commit the little error of not defining exactly the
interest you aro to receive for• your assistance to a concern,
and have not stipulated for the same interest in good years
as in bad, you are liable to utter ruin. Through that little
flaw your whole substance mayfly away, and you are at the
mercy of all the accidents that may happen to another per-
son not under your control. Let it be once proved in
court that, from a charitable slackness of dealing, or
from a conflict between prudence and kindness, you have
taken more interest in one year than another upon a debt
you have suffered to remain in the hands of the trader
owing it, and your doom is forthwith sealed, and you pay
the penalty of your whole estate. This trifling irregularity,
or rather variation in your dealings, makes, for all pecu-
niary purposes, a much closer union and even identity
between you and the trader than the law creates between
husband and wife. The wife can have antenuptial settle-
ments to reserve a portion of her property from her hus-
band's extravagance or indiscretion. There can be no such
reserve in your case ; you are ingulfed whole and entire to
the last sixpence of your estate, if there can be found in
the books of your trading friend 3 per cent. paid to you on
the , money due to you in one year, and 5 per cent, in
another.

The presumed objects of this law, or rather the reasons
alleged in its defence, are the protection of those per-
sons who are supposed to be incapable of taking care of
themselves from hollow credits and from bad investments.
Under the present state of the law they have the secu-
rity that the persons they are called on to trust are
liable to the whole amount of their property ' • 'and, on the
other hand, they are induced to pause ere they commit
themselves to a business or an undertaking that may cost
them the whole of their fortune. Neither of these objects
is actually attained in this country to an extent at all cor-
responding to our national character fur prudence and
thrift. In no country in the world is there so vast an
amount of commercial imposture, and so many great names
that are nothing but names—mere bubbles, that will burst
at the next crisis; and in no country are the savings of the
industrious poor and the. striving middle classes more
generally dissipated. It is evident the English law of
partnership has not the effect pretended, and there is even
a fair presumption that it has the contrary effect. We
believe that it has. Most people, especially those who
have earned their money by labour or trade, are reluctant
to give up all hope of profit, and to rest content with 3
per cent. Thpy desire some chance of improvement.
They wish to invest in something more promising than the
funds, but have little choice. We have often enumerated
the various ways in which the small English capi-
talist too often Invests and loses his money, and need.
not now repeat them. Whenever be lends his money, he
must trust somebody; and that somebody is either a
speculative individual, or a speculative society existing by
charter or by act. In either, the ordinary inverter of his
few hundreds has no control over the conduct of the person
or society that he makes the depository of his money, and
is very apt to lose his all. Thus, by charter and act he
may be lured on to his ruin. What can he know, indeed,
about the prospects or the management of a railway com-
pany or a canal, especially when the company has twenty
or thirty different acts of Parliament, four or five hundred
miles of line, and all sorts of complications with rival or
auxiliary lines? Certainly, if people could invest a few
hundred pounds in a smaller concern more within the
scope of their experience, and not too large for examina-
tion, they would have at least as good a chance of seeing
their money again as if they threw it into the capital of a
railway or the pocket of a speculative attorney. Mr.
Glyn, indeed, observed with triumph last night, that
neither the report of the commissioners nor yet Mr.
Cobden bad noticed an important difficulty,—viz ,
how to prevent the frauds which would. be certain
to occur under a system of registration and limited liabi-
lity ; but, while noticing this omission, he made, himself,
the still more serious omission of not inferming the house
how a fraudulent management of railway and other joint-
stock companies is ever to be prevented. Whatever evils
are apprehended from a relaxation of the present law of
partnership, they already exist, and no one asks how they
are to be prevented. Indeed, they are assumed to be part
of the English character, and therefore vain to contend
against.
At the present period of the session, and in the face of
two conflicting reports from the Parliamentary committee
on the subject—one from. the majority of five, and the
other from a not less respectable minority of three—it was
hardly to be expecte& that Mr. Collier would carry his
resolution in such a form last night as to leadtoimmoediats,
action upon it. Bathe question is now settled. N
a itself
t by the number
indeed, can stand long that condemns
much to the
and the mode of its exceptions, th
prejudice of one trade as compared_ owitra aeisiostoherand thatea
places our merchants. at such disadvantage as compared
with are the means of incorporation to
with .foreignei s..
parliamentary conflict or a large sum of money,
cost either a
besides the precarious favour of a Ministerial officer? Why
is one President of the Board of Trade to grant 'any appli-
cation for a charter, and the next to refuse every applica-
tion, just as his opinions may dictate?- Why should the
trade of a carrier -that is of a railway company--be con•
signed to a partnership with limited liability, and not any
branch of manufacture? Why are foreign houses to in-
I every day in the metropolis, and get possession of
our trade, all of them supported by ea.pital advairced upon
conditions forbidden iu this country? Why is our own
trade to be fettered, and that of our competitors free ? We
arc content to press for sonic relaxation of the law suffi-
I cient to enable us to compete on even terms. At all events,
we_shall not suffer more scandal and loss by spurious credits
and treacherous investment than we do already wider the
operation of it law intended to spare us the trouble of
thinking fur ourselves.

111:5§11S. DAVIDSON AND GORDON'S SUSPENSION.—
The recent suspension of Messrs. Davidson and Gordon,
which is likely to prove very unfavourable as regards
assets, has led to other difficulties, the bills of Messrs.
Cole, Brothers, East India merchants and metal dealers,
with whom they had extensive transactions, having to.
day been dishonoured. The liabilities of Cole, Brothers,
have not transpired, but they ure believed to be heavy.
The firm was partly formed from that of Johnson, Cole,
and Co., who failed during the crisis of 1847 for
153,0001., with assets which yielded under bankruptcy
only a fractional dividend.