The Sun.
London, England, 1856-07-05 00:00:00

feesed to leave in the c mcern over and ever again.
Where, then, was the principle of limited liability ? Tois
was an act to enable pereons to share in the profits of •
business without being liable for a single farthing. It
would give facilities for all sorts of fraud.
Viscount PALMERSTON said that most of the ob-
jections which had been raised against the bill were
more objections for the' committee than to the principle
of the bill. It was said that the bill was not founded
upon the principle of limited liability. At all events, it
was founded upon .the principle of doing away with un-
liMited liability. Several hon. gentlemen had given in- I
stances of the operation of the law as it stood ; he would
only mention that well-known instance of Sir Walter
Scott, who was a dreadful sufferer from the application
of the present unlimited liability laws. It was said that
merchants in general were opposed to this bill ; on the
contrary, he believed that public opinion was strongly
in its favour. The public opinion had been convinced
that the present law of partnership required funda-
mental alteration ; and he was confident that nothing
would tend more to the relief of a large pertion of the
community from those impediments which now 'pre-
vented them from turning their small capital to a pro-
fitable account than the bill proposed by his right hon.
friend. It was singular that the great opponents of the
.bill were chiefly great capitalists, or those connected
with and having dealings with great capitalists—(hear,
hear)—while, on the cemtrary, the advocates of. the, mea-
sure were connected with that great number of persons
who pcsseesed small capitals. (Hear, hear.) The prima
facie inference was that the bill must be a good one.
(Hear, hear.) It was opposed by thosehe would not
use the word monopolists, it was an odious and offensive
term—but it was opposed by a email number of persons
who, -by their great capital, had a command of commer-
cial operations ; and it was supported by those capitalists
who would be let loose by a bill of this sort, and thrown
into the general market. (Hear, hear.) He therefore
hoped .that the boase would go into committee, and tbat
when the bill was discussed in committee it would be
found worthy of the acceptance of the hoase, as tending
to the advancement of commerce and industry. (Hear.)
Mr. T. BARING said the noble lord had stated that
the question was between those who had the command
of capital and those who had very little. He regretted
that the Prime Ministe, and the leader of that house,
should have sought to excite a cry of numbers against
property. (H ar.) The noble lord said that the objections
t the bill would be-beet--dealt with in committee. But
same of them were objections to the principle of the bill.
For instance, the bill would encourage perfect secrecy ;
it would never be known when capital went out of a firm.
(Hear, hear.) This proposal was one which had never
been received as law in any country ; it was also dis-
tinctly opposed to the bill that had been brought forward
by the Government two years ago. The general credit
of the country must be affected by such a meamre.
(Hear.) Considering bow important it, was to rnain•ain
that credit, he looked with suspicion on a change which
was not called for, and which must tend to diminish
confidence. On these grounds he should vote against
the bill going ,into committee. There was no want
of capital under the present system.' Both the cola:
missions were opposed to . the provisions of this
measure ; and though the evidence embraced many
opinions in favour of a change, there were as
many against it. But the whole of the witnesses were
opposed to a system of limited liability without any re-
gistration or publicity of any kind ; the witnesses from
America and France were all opposed to this. •
Mr. MITCHELL said the house had now to deter.'
mine on the principle of the bill, which was in fact that'
of limited liability, without regietration, publicity, Or any
other eafeguard. .He wished to know whether the pro,
rooters of the bill would consent to intreduce such safe-
guards
committee as existed in the Joint Stock Com-
panics Act ?
Sir J. GRAHAM said. his vote on this occasion would
depend' on the answer which the Vice-President of the
Board of Trade might please to give to the 'qaestien
asked by the last 'speaker. This bill was opposed to the
report of a commission and of two,cenunittees--(hear,
,hear)-and though it • rested upon evidence, that evi-
dence was not borne out by the bill in its, present shapes,
The .great, weight of evidence in favour of a bill of
this description was accompanied with a statement
of the necessity of: publicity and various safeguards.
(Hear.) It was quite apparent to him that there was
a broad distinction between a creditor tending at usuri-
ous interest and a party being admitted to a share of
the profits. (Hear.) A creditor ateistirieus interest was.
attracted by the high rate of that interest,' and was wil-
ling to bear great risks ;' but he had no access to the
accounts, and did not know the state of the profits
A party receiving a share of the profits was entitled
to the accounts access, and was cognisant of all the
secrets of the concern. He did not run the risk of
the usurious creditor ; he knew the state of the con-
cern,, and might. chooee his opportunity for either im-
mediately or gradually withdrawing his capital. (Hear,
hear.) He' entirely agreed with Mr. Hadfield thrt
the whole matter turned upon the question whether
there sheeeld. be Publicity or not as a test of these
transactions. If Mr. Lowe would state that he was
prepared to entertain in committee propositions for
ensuring that publicity and giving these safeguards, he
would vote for the bill. If, on the other hand, the right
hon gentleman regarded any such propositions as at va-
riance with the principle of the measure, and would re-
sist their introduction, as the time of the house was pre-
cious at that period of the session, he (Sir J. Graham)
should certainly j in in opposing the further progress of
the bill.
Mr. LOWE said that gold might be bought too dear.
The conditions which were sought to be imposed upon
him were a sort of price which'he could note msent to
pay. This bill had already been twiceread a second time,
and he should have thought it unnecessary to fatigue the
house with a further discussion, bet being challenged to
state the course which he meant to pursue, and the last
words of the right hon. baronet sounding as though 'ne
thought the bill was doomed te rejection (and he was a
good judge), he.(Mr. LOwe) felt it his duty again to call
••the attention of the house te the provisions ot the,mea-
Sure before them. The bill did not deal with partnership.
eroperty; properly so celled. He thought it extremely
doubtful Whether the law of limited iiability ought to'bu
carried out in the way some persons wished in' reference
to 'partnerships. Therefore this bill did not touch the law
of partnership, but eimplY regulated the terms on which,
• capital might be advanced. It would be a most useful
measure, as tending to facilitate the uniMief capital and
Went. Unless it' were passed, a great injury would be
done to individual traders by the Joint. Stock Companies
Bill being passed. He was no advocate of'monopoly in
anyform, and on that accou it he wished to see this bill
,become law. Its principle 'was that of lending on profits,
which he thought an extremely benefiCialaitateof things.
Re was told that the bill ought not to pass without
safeguards.. He feared that such safeguards as were de-
sired would render the bill a dead letter. Recently two
very great changes in the law had taken place, the re-
peal of the usury laws, and the Joint-Stock Companies
'Act c and if they declared registration or publicity ne-
cessary under this bill, who would take advantage of it
at all ? Would not persons who had money to lend pre-
fer to advance it. as under the present system ? .He
'thought it .an injurious plan for capital to be supplied,,
fir Short periods, by ptreoias who.dwelt in it; he should
'prefer to see ieplaced on a more permanent and regular
footing. While the wideSt facilities were allowed to the
regular 'money lender, why should the person who lent
'on profits be tied up by all sorts of restrictions ? Ile,
denied that persons advancing money. in that way would
be entitled to go over the books; all they could do would
be to have an account taken, if necessary, under a court
Ofequity. At present a creditor. Might not only stipulate
fir exorbitant interest, but also for security, and might
have the stock taken ones a week .if he chose. Why
should. a perscn who lent on profits be' subjected to
greater restrictions ? He should be inexcusable if he con-
' tseeted to introduce into this bill a provision for registra-
tion.' Such 'a provision would be a cruel trap, a miserable
delusjen, and would inflict more hardship, and lead'to
more fraud, than any species of iniquity. If there were
`the slightest informality in the register; the party would
he rendered liable to his uttermost farthing. With such
provisions as were proposed by Mr. Hadfield, it would
be far better to have no bill at all; and.-he could not un-
deretand how those who professed to be in favour of the
principlwof the bill could give their sanction to such
:mane and. pitfalls. 'lle.sliould stand on the bill in its
present -forth. Its object was not to alter the laws of
partnership, but to enable-individuals to advance capital
without incurring those heavy penalties to which they
were now subject. (Hear, hear.)
Mr. CALDWELL complained that the same princi-
ciples of publicity which was considered to form the
chief merit of the Joint-Stoelt Compinies were declared
in this bill to be impracticable and illusory. He went at
some length into the state of the law Upon this subject
in other countries to show that in every case publicity
was an essential featore of all these transactions. The
kiffect of the bill as it stood Might be this :-A gentle.'
man hat leg 10,000. to speculate with, send two men,
down to Liverpool, with 5,000/, each, to speculate on
some article, in which speculation might run high. One
ltkheeler fortunet o t tail, was to speculate for a rise, and the other for a fall. The
one
bii wast i
es
the other make a fortime. By
.Toasnscpe
then t e
firstmo n money.
Imlweri'vuhidae!cl'a:tsluotoegfdtf;aoiiltnuhrteetenithaneilec'xrictehtploilt4oac'ed:s:,.
lie bad stood as'a creditor for the 5,000/. he had ad-
venced, and in the third place be would be a creditor
with means of nowledgo which-no other creditor. pos-
sesited. 'Under those circumstances ho would oppose
going into committee.
,Teo LORD-ADVOCATE defended the bill, contend-
ing that it placed the law.of lender . and hot rower on a
proper fooling. The case which Mr. Cardwell had put
would not apply. In the first place, he doubted whether
thee speculatiim would be a good one ; but if it were, the.
fact that the Speculator had sent instructions to his men
Elf straw would make him out to be a partner: All this
bill would do was to describe a creditor as a creditor—
a principle which
.had first been departed from in cense-
qiience.of the usury laws,
Mr. LINDSAY thought that in the course of the de.
bete letr.z.. members who had argued against the bill had
appeared to overlook the fact that the creditor acted in
a'perfectly voluntery mariner, and be thought it would be
fur better:to-leave this creditor alone to his own exertions
and indhietre. He looked, upon it a 3 perfectly impossible
fot 'any acts, of Perliament to prevent fraud, and he
thought that cominercfa,ltransmaimis ,ought not to be
left. too free from legislative interference. He thought
that the proposed en stern of registration would be falla-
cious, and would fail to secure the ends for which it had
I een 'proposed. :
Mr. M. CHAMBERS lookethipon the question with
which the bill proposed to deal as one of extreme dill-
hillier, and one which required great caution in dealing
'with..• lie thought that some system of checks ought
to be,previdedin connection with the
,alterations pro- I
I)se to be made in the law of partnership by this bill. He
ehoitici vote for going into committee, in the hope that