The Sun.
London, England, 1856-02-02 00:00:00

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Acted the fraud of a n-,anager resolved to def.. It 11
is rather remarkable that just at this moment the _ sare-
holders of this country should be entering into an Ottani-
sation to do that which all Englishmen were supposed
capable of doing before, and which it may fairly tossup-
Posed.they would have been able to do, had . they been ac-,
customed to commercial association. In France the *in:- • '
ciple labeller understood, the power of self-gevernment is
more developed, and ass natural consequence, railways
conducted at two or three times the profit thati are-
they are in
this country. No doubt, where responsibility is much di.
vided and spread it ia apt to be weakened. Tlaelaw, too, Mild
have its means of enforcing the fulfilment of obligations,
whether the contractors be one or many. A law that
seizes not only the property, bat the pereen of the, debtor,
that lodges him in prison on the slightest evasion' end - -
punishes him as severely as if he-were a pickpocket or a
footpad shrink from confounding and '-
chastising the more reckless dishonesty of a com
mercial association, if need be. The crimes it will have
to deal with in these instances are rather the malversation
of the officers than the extravagance or dishonesty of the
tas ohnd
aar ec
goodhhoolsdeeurpelreciTernthmea ga ul:a.tgt:lrrts ghiesanyteile agll
confine their ambition
their shares
treasurer, the directors,
the lawyers, and other officers who are apt to speculate on
tho funds left in their grasp. This is the sort of offence
the law will have to deal with in the case of partnerships
and large companies with limited liability; and we have
little doubt everything will be done to protect a sound
principle and a salutary reform from the scandal of giving
a new occasion for commercial immorality.

[PRICE 4D. STAMPED 5D*

Spirit of the Public Journals. •

( From the Times of this day.)

The omission of the United States from -the Queen's
Speech provokes the criticism of Lord Derby, and may
possibly be a source of some additional bitterness on the
other side of the Atlantic ; but probably the United States
were well left out, for there is nothing that we could say
about them just now that is likely to please them. For
our own sake, as well as hers, we could most sincerely
wish that the machine of government in the great Republic
worked a little more smoothly, and was not so 'apt to get
slogged in some places and stimulated to violent and de-
,istructive action in others. Differences have arisen, as
odious
they
us sasyniaal
and
da
timesrdi se es
tormeucocartsieivoen occasionally between the best friends, be-
tween' us and the American Republic. War, always
sweep her commerce from
nst
h
ravage her seaboard, would be feats neither difficult nor
revoltingt wouldh es be
eah seas, to aai
destroynssutdtk hyaenr other.ennaev enemy
navy, To
dangerous to a Power with such forces as Great Britain ,
now possesses, but little would be the honour and heavy
the loss of this suicidal trium'ph. We are unwilling to
fight, not because we fear our enemies, for never were con-
ditions of combat more unequal than those would
be between Great Britain and the United States at
this moment, but because we cannot bring our-
selves to regard them as enemies at all. When Lucan
spoke of a more than civil war, he must surely have
alluded to such a war as would be waged between
Great Britain and North America. The parent devastat-
ing the fair inhelitance of the child, kindred hands em-
ployed in rooting out that prosperity the increare of which
has overflowed in a tide of riches into this island, are sub-
jects too painful for contemplation, and from which the
mind of every Englishman turns aside with unconquerable
disgust. Let us have war, if need be, with any other na-
tion, but not with those colonies—the proudest historic
monument we possess, the most euduring memorial of
Anglo -Saxon greatness.
Yet what can wo do, and how avert that which this exs
tvaordinary_nation or those who have. at least. the legal
rititielfspealeinds asausas.'eeeni 46be.datermilled boring
upon us ? Were the whole attention of the whete - public
mind of America bent upon the question, we might hope.
for a satisfaction and reconciliation; but what is to be
done with a nation which is drifting heedlessly into war
with a people possessing a splendid army and the finest
navy. in the world, while it possesses, in truth, neither the
one nor the other ? A few thousand soldiers scattered over
an immense continent, and vessels carrying in all about i
500 guns, are literally all the resources with which the
United States confront the enormous fleet and well-trained.
armies of England, about to be set at liberty by the impend-
ing peace with Russia. If we were the aggressors—if, taking
advantage of the enormous disparity of our forces, we
had been mean and base enough to force a quarrel on
an unoffending neighbour, no words would have been suf-
ficiently vigorous to reprobate our conduct; but what is
to be said when a Power utterly, helpless in military and
naval resources insists on fixing us with a quarrel which
we have as little power to avoid as it has adequately to
carry out ?
We find, indeed, in America an Executive Government, I
which is ready enough to exchange defiance with us, but
that Government is on the very eve of dissolution, and is
well known to be using a quarrel. with Great Britain as a
means of courting popularity for the coming elections.
We have a difference with it with regard to certain places
in Central America and the interpretation of treaties re-
lating
to them. Whether we are right or wrong in our
view of the case we will not stop to inquire ; at any rate,
we have adopted the most conciliatory step in our power,
for we have offered to leave the quarrel to the arbitration
of any impartial State, and to abide by whatever award
may be given. America rejects this offer, and continues
the argument, which a succession of letters and memorials
has worn completely threadbare. Meanwhile, a band of
pirates, issuing from her own shores, seize upon a por-
tion of the disputed territory, and, so far from repres-
sing their outrages, we find the naval forces of the
United States engaged in assisting them against the
authorities of the State which they have invaded.
Our offers of amicable reference are refused, and armed
violence, seconded by the forces of the State, is lot loose to
seize by force that which we in vain beg them to refer to
friendly arbitration.
If we turn to another cause of quarrel—the enlistment
in Canada of American citizens for the English service in
the Crimea, we find a quarrel intemperately urged and
vehemently pressed by the American Government, not-
withstanding our disclaimer of any intention to violate
their municipal laws, and our offer of the amplest satisfac-
tion to the offended dignity of the States. Amends more
than enough to satisfy the offended pride and wounded
sensibility of any private gentleman have been offered to the
American Cabinet, but offered in vain. They cannot be
content with satisfaction unless it be attended with
humiliation, and require that we should withdraw-our de-
servedly popular Minister from Washington as an expia-
tion to the injured dignity of the Union. We trust that
this rash intention is not finally determined on, or, after
so flagrant and unprovoked an insult, it may be long in-
deed before Washington will beheld another representa-
tive of the Cabinet of St. James's. . .

(Prom the Daily News.)
Last night the House of Commons did itself infinite
credit. The Vice-President of the Board of Trade, in
blinging forward his motion with respect to the Law of
Partnership and Joint-Stock Companies, displayed a grasp
of philosophic statesmanship and a felicity of expression
which are rarely seen within the walls of Parliament. And
the effort was appreciated. It was indeed fitting that in
discussing, perhaps, the greatest question of commercial'.
reform which has ever been mooted, the representatives of
this great country should forget their pasty prejudices,
and apply themsAves dispassionately to the consideration
of the proposal. The House of Commons proved itself
equal to the occasion ; and we must confess that to witness
men of all parties abandoning political differences and
uniting to carry a great measure of legal and commercial
reform was singularly gratifying. Nevertheless this very
unanimity may well teach legislators caution. For more
than a century succeeding Ministers and succeeding judges
have vehemently supported wl.at ae maylnow. perhsna,
call the exploded (latrines in regard to partnership. For
more than a century joint-stock companies, withlimited
or 'w&th unlimited liability Nsve JAkensjegarded by most
men as hotbeds of frentamisoeie trk tor,tlasAbalseempat
of ruin. Only some few years 'ego-the present Joint-
Stock Registration Act was passed, the elaborate provi-
sions of which, although intended to check, fraud and to
curb speculation, have, in fact, protected the one and in-
creased the other.

The propositions of the Vice-President of the Board of
Trade are twofold—they deal with two different subjects,
and are embodied in two distinct bills. The first relates
to private partnerships, the second relates to joint-stock
companies. Both, however, are founded upon the seine
principle—namely, freedom of contract. At present, if A
contracts with B, A is not only entitled to call upon B for
payment, but if B is unable to pay, and it turns out that
third party, C, has supplied B with money, and shares
the profits, A is entitled to sue C to the uttermost farth-
ing. But if C, instead of taking theprofits as profits, only
takes a sum proportioned to the profits, then C escapes all
liability. So that by a technical dodge one man may ren-
ter himself liable to the extent of his whole fortune, whilst
another man may enjoy the benefits of limited liability. In
more popular phrase this is the rule of law under which
dormant partners are made liable to the whole extent of
their fortune for the debts contracted by the active part-
ner. A creditor who lends his money or supplies goods to
a man who afterwards turns out to he insolvent may come
upon a dormant partner, of whose existence ho was in.
utter ignorance at the time he made the contract, and he
way thus obtain repayment out of resources which never
entered into his calculations when he made the contract.
This absurdity it is proposed by the first hill to abolish—in
other words, by a bill of two clauses it is proposed to re-
peal the case of Waugh v. Carver, which originally estab-
lished the liability of dormant partners ; and the effect
will be to keep them safe, and to throw the whole liabili-
ties of a concern on the active partners. The ruin of bene-
volent old gentlemen who have remained as sleeping part-
ners in firms, and have been ruined by their benevolence,
will no longer be heard of, and this is a benefit of no slight
importance in a commercial country.
But the second bill is wider in its scope, and will bo
more extensive in its consequences. As Mr. Cardwell ad-
mitted, it is impossible to dispute the principle that every
man is entitled to make what contract he pleases, provided
he gives ample notice of the contract which he intends to
make. The right of associatieg together for the purposes
of trade is not a privilege—it is a matter of mere agree-
ment of contract ; and when men talk of the privileges
granted to corporations, it would be more correct to speak
of the rights restored to them which they have been wrong-
fully denied. The freedom of contracting as you will, arid
with whom you will, being admitted, the only thing which
it is absolutely necessary to provide for is, that ample
notice shall be given tot he public., in order that they may
know with whom they are contracting. Alen must not be
deceived into contracting with shadows which will elude
their grasp when they are to be made responsible. Th•
coutreoting parties must be certain and definite, and every
facility must be given for the creation of those societies,
and for the enforcing of their mutual rights.
It is surely a singular instance of misguided legislation
that, although the greatest public works which adorn this
country are the product .f aggregate capital, that power
of aggregation is hampered by a thousand difficulties. It
present the law depeude to ou the 7 and 8 Vict , e. I ie,
andthe Limited LiabilitylAct of last mesion. Tho elalorate
machinery of the former act has proved an utter failure.
The provisional reeistretion which was required under that
act. and which was intended to give a'Varliarnentary states
to inch. ate con pinies, instead of protecting the public,
powerfully tetided to deceive them. Shareholders ima-
gined that there was eoinethiug respectable in being tinder
the aegis of au Act of Parliament. Their suspicions were
lulled, enormous frauds were perpetrated, auct the unde-
fined lights el t he parties during this state of embryo exist-
ence proved the ruin of thousands. The Act of PaTliAln.nt
indeed prohibited the sale of scrip, but the Stock Ex•
change—which holds the law of honour above the law of
Parliament—dealt with the sciip as if no such prohibition
existed. Alen of straw subscribed the deals, and corn •
panics nominally for one purpose were turned to other pur-
poses. A thousand vexatious and expensive conditions
were imposed, which, even according to the admission of
Mr. Cardwell, have proved utterly nugatory. And even
if the restrietione bail beets loss annoying thin they appear
to have been, no provision at present exists by which the
poor man can combine his labour and his small capital for
th a purposes of commerce. Even under the L;mited Lia-
bility Act of last session a It. share is impossible. And
yet upon no principle whatever jail possible to justify any
such restriction. But all these anomalies Ale. 140W(3 pur-
poses entirely to abolish. lie proposes to repeal the 7 and
8 Vic., cap, 110, and the Limited Liability Act. When
the number of partners is under seven, the row Act doses
not apply, for it is thought to be better that any number
of persons below seven should be considered as mere com-
mon partners. But if the number of persons associating
together for the purpose of gain is greater than six, and
less than twenty, the Act may be adopted. And if the num-
ber exceeds twenty, the Act must be adopted. The only
associations to which the act does not apply are banks and
insurance companies. In order to form a company under
this act, the only thing necessary is that seven persons
shall sign what is called a memorandum of association.
containing the name of the company, the object for which
it is instituted, the liability of the shareholders. and the
number of shares held by each. Up'n this being filed
with the proper officer the company is formed. It is a
corporation, and the several shareholders will incur no
greater liability than is involved in the amount of their
shares. To this memorandum is added a set of bye-laws
which are contained in a schedule to the act. These bye.
laws provide for the internal management of the associa-
tion, and they may either be adopted simply from the
scedule of the act, or with such changes as the directors
may think convenient. Thus a company may be consti-
tuted at an expense of some 5/., and the option of forming
such an association is open to all. The creditors of the
company will be perfectly informed of those to whom they
must look as responsible, for the company will have a cor-
porate name, and provision is made that a list of share-
holders shall be kept at the office of the company itself.
In short, the true principles of economical science, the
freedom of commerce, logical completeness, method, and
succinctness, are the characteristics of this bold and com-
prehensive measure, which has already extorted the ad-
miration of the House of Commons, and which w• hope
will, ere long, by the wisdom of Parliament, be permitted
to stand as a noble monument to the enlightened spirit of
hose who framed it.

- - -
But let us appeal from the Executive Government to the
people, and see whether the representatives of the commu-
nity will support the Government in forcing upon us, in
spite of offers of satisfaction and appeals to arbitration, a
quarrel to ns most unwelcome and unnatural, and to them
assuredly most disastrous and calamitous. Alas ! tho re-
presentatives of the people can give U 3 no answer. They
have eyes and see net, earshave they and hear ..net:. They
have met together now for seven weeks, but they have con-
cerned themselves with nothing relating to the public ex-
cept fruitless attempts to elect a Speaker. The American
press, to its honour, raises its voice against this state of
things, but raises its voice in vain. In the anarchy and
suspension of all the functions of government into which
the country has fallen the Executive seems emancipated
from all control, and disposed to use its power to drive
things to a point at which, though the reason of the coun-
try may condemn, its patriotism will be bound to support
them. The situation is becoming every day more critical,
and we must await the result with a firmness inspired by
a confidence in our own strength, and the knowledge that
we have done and will yet do all that a pacific and hon-
ourable nation can do to avert the catastrophe which
seems impending, not over us, but the nation that has
surrendered the care of its honour and peace into such
hands at so anxious a moment.

THE LAW OF PARTNERSHIP AND JOINT-STOCK
COMPANIES.
(From the Times of this day.)

One must dive rather low into human motives to get at
the foundation of the commercial prejudices described last
night by the Vice-President of the Board of Trade. The
law of partnership in this country has hitherto been,
in the words of the old proverb, " In for an inch, in for
an ell." It was assumed as a matter of course that most
people, on going into any business or commercial
undertaking, would be glad enough to go just so far and no
further. Of course, if a man could put himself in the way
of indefinite gain by a moderate stake, so much the
better ; but the very wish to do E 0 was thought only the
dictate of a corrupt nature. Generosity, fairness, and
honour required that a man should risk in proportion to
his chance of profit. But, what was more important, the
man who did risk his all thought it very hard if others
did not do as much. There is no principle that admits of
such gross perversion us that of fairness. At school it is
not fair in a boy to do twenty verses when the rest of the
class have agreed to the average of a dozen ; nor is at all
fair to exhibit a more than average propriety of language
and demeanour. In trade it has hitherto not been fair
that people should assist one another to carry on a business
unless they run the same risks as everybody else, or even
greater risks, in consideration of their greater advantage.
When a man conducts his business alone he has only his
own follies to answer for ; but when there is a dozen part-
ners he may be at the mercy of any one of thorn. That
might have suggested that a largo partnership was so far a
condition of greater risk, and that each partner might
therefore reasonably be excused from risking his all on the
integrity and wisdom of a dozen partners, But no; the I
jealousy of private partnerships and single traders has al-
ways insisted that everybody who can ho made out a trader
shall be liable to the same pound of flesh as the rest. "Drink
deep, or taste not," has been the cry, inspired, as it
was thought, by eternal justice. Could sup shift be ima-
gined by which a man might alleviate his risk, he was
thought to steal a march on his fellows, like the pilgrim
who boiled the peas his penance required him to put in
his boots, or the man who occasionally prefers a gap in the
fence to a five-barred gate. Everybody may have heard
partners, sleeping partners, unknown partners, poor old
ladies, young gentlemen, and others of a condition to de-
serve pity, described as shifty because they wished to risk
only their 10,0001. or so expressly advanced. Of course,
whenever the opportunity occurs, they are eagerly seized
and despoiled by creditors to the last farthing, not only as
lawful prey, but as the victims at the shrine of immutable
justice. The old lady who one morning finds herself not
only minus the 20,C00/. loft under her father's will in his
business, but a penniless outcast, and the young gentleman
who was a Cambridge wranghr one week, and a bankrupt
and a beggar the next, without in the least knowing why
er wherefore, only adorned the shrine at which they vs re
immolated. Trade is a craft of that sort that a man must
bo made free of it, and the process of adoption, it :"1e ::
seem, must be painful and degrading. It must t
treected
much of a man's liberty and substance as canibew
eaxs called
from him. All this was thought fair,
eisaud right to make
good, and good evil It was wrong to. w hE,
privately did, to trade with a limited risk,
vain most peeple
hasszf time enterpriseswif.
ueog marriage
u ag r beanriagse
everybody put his foot into a
but high legal au.
deeply as possible. So far, indcei
carried, that not only angry cre
thoritios, have disputed ti! proprietyircs ances, to stand ageinst
settlements, under
cshould be allowed to do •
nature against the general rigour
that in this case we do se(l'llelswana
bankruptcy.ex traerdnor y Thatwitne
stßshx"oeY.fy
of the law.
sleeping partnelrt.w°iPtrlirrogit_ed abilit— smited, that is, to
tho amount reserved ; and, whatever may be the opinion
of a few crotchety lawyers, no person of common humanity
would object to the practice.
The object of the proposed measures is simply to reassert
the law of liberty with no more than the usual securities
egainst fraud. In the nature of things these is no reason
why half-a-dozen persons should not subscribe their
carrythou-
-tpoce;
on a trade, or a hundred per-
sonsB 1 thou-
sand
their pounds
pound Leanch daie
as much as they can ; and or any number of persons each
the law, which last session was
timidly amended, will now leave people at liberty to do
this. Certainly it was time for it when it is considered
that within the present generation three hundred mils
lions have been invested, and a large proportion of
it thrown away, in one particular farm of commer-
cial enterprise with limited liability—the construc-
tion of railways. Indeed, the nianegement of
these companies and the utter incompetency of the
shareholders generally to protect their own inte-
rests betray the very weakness in our commercial habits
which it is row proposed to amend. We boast in England
of our self-government, our powers of combination, and
our representative system. It is true that as politicians
we may lay claim to these things. But in trade our boast
has hitherto been individual enterprise rather than asso-
ciation and self-government. Our commercial authorities
seem to take for granted that it is quite impossible for any
number of mon to conduct a business together, to watch
over the proceedings of their offieees, and secure their
honesty. Thus it was lately urged by a correspondent, in
the Tory face of what takes place °yen' dsY the Date