HC Deb 17 February 1852 vol 119 cc668-87

begged to move for a Standing Committee, or unpaid Commission, to suggest measures to remove the obstacles which impede the investments of the humbler classes. The object which he had in view was not to abolish any existing law, but the introduction of such measures as would remove the legal obstacles which impeded the investment of the savings and the capital of the middle and humbler classes of the people, leaving them to display their own care and forethought in the disposal of their money. The proper direction given to investments and labour was a subject of the utmost possible importance to the welfare of the country. It was second to no other, and he therefore asked the attention of the House while he endeavoured to place before them his views upon the subject. In looking back to antiquity they would find the direction of the labour of the people was evidenced by the erection of useless monuments in commemoration of the power of their rulers. In the middle ages it was exhibited in the erection of fortresses or palaces for the selfish gratification of their governors; or subsequently, when their manners were softened and refined by the arts, in building picture galleries, or opening public gardens, where all classes might seek some recreation from their toils. In ministering to the pomp and splendour of the rich and powerful, the labour of the people but little benefited themselves. Upon this part of the subject he would not further dilate, merely observing that subsequently a light broke in upon them, when freedom bestowed the power of combining upon those questions which related to the advantage of the country. During the last century, owing in a great measure to the spirit, patriotism, ability, and intelligence of one nobleman—the Duke of Bridgewater—the English people were first permitted to engage in large partnership undertakings. No humble man should look with an envious eye upon the palace which the successor of that great and good man built, for he directed his time and intelligence to their benefit, and turned his great wealth into the formation of those canals which were of so much use to this country, and which contributed so largely to its internal prosperity. This was the first investment for their capital in which the middle classes were permitted to join, in which they were allowed to unite for one great and common purpose for the general advantage of all. After that they saw a wonderful invention—he meant railroads. This, again, formed for a great length of time an investment for the capital of large bodies of the people. During the last twenty or thirty years 300,000,000l. had been invested in this particular direction. At present, however, this channel was almost exhausted; nearly all the great roads of the kingdom possessed railways, and we saw in this country no means of enlarging this kind of investment. It was, therefore, absolutely necessary that we should relieve from legal obstacles any other form for the employment of their savings that might be open to the middle and humbler classes. During the war there had been a form of investment in the shape of public loans, which took up 20,000,000l. a year for twenty years, and which served, therefore, as a mode for the people to dispose of their savings; but he should be sorry to anticipate a war which would reopen such a method for the investment of capital. They had then about 75,000,000l. of money per annum seeking for investment on every side. It was therefore necessary, for the sake of encouraging the industry of the country, to afford facilities for the disposal of this large sum. There were three difficulties which stood in the way of persons seeking to invest their capital. The main difficulty which applied to the investment of the richer and middle classes arose from the law of partnership. The difficulty was, that no parties could join together to carry out any plan, no matter how beneficial to the public, without making themselves liable to the penalty of the loss of their whole fortunes should any misfortune occur. Again, supposing that any difference should occur amongst the partners, the only remedy was a suit in Chancery. Those who heard the eloquent Mover of the Address (Sir R. Bulkeley), knew what his opinion upon that court was. Why, it was an absolute denial of justice to compel a man to go before that tribunal. What was the first step taken? The partnership was dissolved. But when it was imprudent for the rich man, and exceedingly dangerous for the middle man, must it not be absolute ruin for the poor man, to go into the Court of Chancery? He therefore said, with regard to the rich and middle classes, that the law of unlimited liability was such as to prevent investments of the greatest value. It prevented prudent and careful men from using their capital—just that very class of men who it was expedient should guide enterprises of public utility. This subject had been referred to a Commission, and the late Lord Ashburton gave valuable evidence before that Commission in favour of a limited law of partnership. But this very law, for which he contended, was the law of almost every other country in the world. America, Holland, France, and Spain, possessing the advantages conferred by this law. The second difficulty or impediment to the investment of capital arose from the expenditure which it was requisite to make in order to obtain a charter of limited liability. Parliament enabled the Queen in Council to give a charter of limited liability. But as he had already observed, this boon was almost rendered nugatory by the clogs which impeded its action. It had been proved in evidence before the Committee of 1850 that it was the desire of several benevolent persons to erect lodging-houses for the use of the labouring classes, and it was intended that there should be some very moderate per centage returned upon the outlay. The same thing was intended with regard to washhouses, and it was found that those Gentlemen had no security, in case of any misfortune, that they would not be liable to the whole extent of their fortunes. The intention was abandoned; but in cases where the charter was desired, it was only secured at an expenditure of from 1,200l. to 1,300l. It was proved that there were twenty large towns in the country where benevolent people had subscribed money for similar objects; and they would have joined to carry out sanitary and moral improvements, did not the operation of the present laws of partnership impede them, and were not the expense of obtaining a charter so excessively great. The Committee of which he had the honour to be chairman recommended that these charters granted by the Queen should be obtained at a much more moderate rate, when men joined together to carry out local improvements. There was also added another difficulty to that which he had already pointed out. Then, as to local enterprises of public good, such as gas companies, water companies, bridges, roads, and other objects of local benefit, which might be carried out by the capital of the middle classes themselves, it was absolutely necessary to have some power that could only be given by the Act of Parliament. If there were fifty plans of improvement, fifty Acts of Parliament would be necessary, although one, to all intents and purposes, would be sufficient. For a long time they themselves laboured under a difficulty not very unlike the one of which he complained. They were obliged to obtain a separate Act of Parliament for every bit of common or field it became necessary to enclose, until the right hon. Baronet (Sir J. Graham) introduced one single Act of Parliament, by which these matters were now regulated, and which greatly reduced the expenses—indeed, diminished them fiftyfold. Where there were investments open to the great mass of the people, they ought to remove those forms which were found so useless and prejudicial. There had arisen lately in this country a number of benevolent persons who were desirous of improving the condition of their fellow-subjecst, and their desire was shown in the establishment of co-operative societies. He had just received intelligence of one established some years ago at Leeds; it was called the People's Mill, and it was prospering exceedingly, producing much benefit and spreading much contentment. Could anything be more fair than that these humble persons should have fair play in endeavouring with their own money and their own industry to benefit themselves and others? But if a benevolent person lent them 100l., he risked the whole of his fortune; and the humble partners in such a concern, in the event of a dispute in the partnership, had no remedy but to go into the Court of Chancery, which was nothing less than ruin to the poor man. These persons asked to be permitted to have a cheap, simple, and expeditious tribunal for the settlement of their disputes, such as were given to provident societies, and to be enabled, like them, to go before a magistrate to decide their differences. It might happen that one out of 200 or 300 of the parties in such a society might be dishonest, and might take some of the partnership property away. He could not, however, be proceeded against, because he was a partner; and could anything be more unjust than a system of laws which bore thus unequally upon the humbler classes of the community? His third point was, that they should have either a Commission or a Committee appointed, who should have the power of investigating this great subject, and who should report from time to time to Parliament upon what measures should be introduced. It was not his intention to seek for a repeal of the present partnership laws. All he required was that the law of limited liability should be permissive, and should run side by side with the present laws. He desired that parties should be permitted to lend any given sums for a period of not less than twelve months, taking a share in the profits; and that any claims of a partner should be postponed to those of all the other creditors, the partner being only liable for the amount of his capital invested. If this proposal were carried out, he thought it would be going a great way to remedy the evils of which, he complained; and he trusted that his right hon. Friend the President of the Board of Trade would give the House an assurance that the charters to which he referred would be issued at a much more moderate rate than heretofore. There was a great and increasing desire upon the part of the mass of the people to obtain this boon, and that they should be permitted to display their own intelligence in the disposition of their capital. Mr. Porter, Mr. John Stuart Mill, and several other intelligent persons, had declared their assent to the proposition which he submitted to them, as well as several other individuals eminent for their talents and their benevolence. As an instance of the salutary effect of giving the workpeople an interest in order, he would repeat an anecdote related to him by a most intelligent gentleman, the Secretary of the American Legation. In the city of New York, upon the occasion of a riot, it was feared that some of the common people who had joined together would unite to put out the gas lights. "I have got no fear of that," said a resident of the city. "There is not a man possessed of 10l. who has not a share in the company. These will perform the duties of most efficient constables." And he was right; no violence of the kind was attempted. He would give another example of the salutary working of these co-operative societies:—In the town of Bilston, which he visited as a Commissioner of the Board of Health, some persons established a gas company, and they had the good sense to place the shares at so low a figure as 5l. The consequence was that almost all the intelligent workmen in the town had a share, which paid seven per cent upon their capital. It was necessary, however, in the first instance, to have an Act of Parliament, and a hundred other places might do the same thing but for the expense of a separate Act. He believed there was nothing of greater importance than removing the legal obstacles which stood in the way of the investments of the humbler and middle classes, and he therefore trusted his Motion would be agreed to.


seconded the Motion.

Motion made, and Question proposed— That a Standing Committee, or unpaid Commission, to consider, suggest, and report from time to time, measures to remove legal and other obstacles which impede the investments and industry of the humbler classes.


could assure his hon. Friend that he was not disposed to undervalue the importance of the subject, or withhold the tribute of sincere respect which the great time and attention he had bestowed upon the subject richly merited. He quite agreed with him that nothing could be more important than that habits of industry and economy should be encouraged amongst the humbler and working classes, by removing any obstacles which impeded the investment of capital. But he might differ from his hon. Friend in believing that it ought to be the object of the Government to encourage the humbler classes in undertakings of a speculative character, that promised great gains, but which, on that account, were more or less insecure. It was most important that, as far as advice and direction could be given to the working classes, they should be exhorted, in laying by their savings, to look to the security of their investments, and not to those large returns which were by a natural law always connected with some degree of insecurity. It was therefore that he ventured to express a doubt of the soundness of the opinions advanced by his hon. Friend. The discussion in which they were now engaged most materially affected the other question previously under the consideration of the House. He held, that no more important subject could occupy the attention of Government and the Parliament than that of the savings banks; and he confidently expected that his right hon. Friend the Chancellor of the Exchequer would be able to introduce a sound, just, and secure system, which he trusted would receive the assent of Parliament. When he (Mr. Labouchere) talked of the encouragement or the advice given to the humbler classes, he held that this class of the community should be as free as any other, and that the most entire freedom was best for all parties. He desired that there should be no restrictions in law upon the investments of either the humbler or the richer classes, further than those which experience showed were necessary to guard against fraud. With regard to the Motion of his hon. Friend, he could not assent to the expediency of having a Commission or a Committee to make suggestions, neither could he recollect any precedent for such a course being adopted. It was the intention of the Government to issue a Commission carefully to consider the whole law of partnership. He was of opinion, considering the enormous amount of capital existing in this country, and the great changes which had of late years taken place in the commercial relations of the whole world, that the law of partnership ought to be carefully considered and revised, with a view to make any improve- ments in the present state of the law of which it was susceptible. At the same time, with regard to the great question, whether this country should abandon the principle of unlimited liability which it had always observed, and adopt that system which he admitted more generally prevailed among the countries of the world, of a limited liability, by which persons might give their names to undertakings though liable only to a small portion of their fortunes, his own private opinion always had been and still remained averse to any such great fundamental change in the practice of the country. His hon. Friend had complained that there were three great causes which acted as obstacles to the investments of the working classes. The first was that very law of partnership to which he had alluded. His hon. Friend said truly that it was found to work against many of those associations and schemes which had lately been devised, especially those undertakings in which the working classes united together for the supplying of capital as well as labour. His own opinion was, that men should be allowed to judge for themselves with regard to these working associations and co-operative societies. He was not unobserving of what was taking place in this country, and he was quite aware there existed, and was spreading, a system of establishing societies of that description. He did not entertain any sanguine expectation of the success of such associations, in a commercial point of view; but, believing that the working men thought differently from himself—that they could unite the profits of capital with the gains of labour—he should be sorry to leave them with any just grounds of complaint that anything in the law prevented their making the attempt. He had looked lately very carefully into the law on that subject, and he found that the Joint-Stock Companies Act did interpose an obstacle; and, as he believed, an obstacle which was never intended by its framers, to the working of societies of that description. If it had been enough to have repealed that portion of the Joint Stock Companies Act, he should have felt it his duty to have proposed such a measure to the House. But he found also that it was necessary to go further, and not merely to repeal obstacles, but to alter the general principles of the law of partnership. He was not there to pronounce whether that ought to be done or not; all he said was, he thought it a very grave step, and a very serious thing for Parliament to give such encouragement as must be implied from their sanction of that alteration. The Government was anxious, however, that this question should he carefully considered by the Commission which it was their intention to propose, and he trusted the recommendations which would be offered would allow of sound improvements, and, in case relief should be denied, present the reasons for such denial, after a deliberate and searching inquiry. The other complaint made by his hon. Friend was, of the expense of the charters of limited liability, given by the Board of Trade. He (Mr. Labouchere) must admit those expenses were greater than he wished. He took advantage of the Bill of last Session considerably to reduce them—he thought by one-fourth—but he was in hopes that diminution would have been greater, and he should very gladly avail himself of any opportunity which might offer, further to reduce those expenses. The case instanced by his hon. Friend of a charter having cost 1,200l., was not likely to recur again; it was a peculiar one; the provisions were very cumbrous, and therefore the fees were more than ordinarily heavy. With regard to the other modes of investment of the savings of the working classes, he need not advert to them at any length. There was one mode which he believed was as natural to the human heart in the humblest as in the most exalted rank; he meant the acquisition of land. He believed the Statutes of last Session had very considerably facilitated the acquisition of land, and whoever had lived in those parts of the country where small parcels of land were sold, well knew the great desire which existed amongst the humbler classes to become possessed of however small a portion. He was of opinion that feeling ought to be encouraged. He believed it added to the means, the happiness, and the self-respect of those possessed of a portion of the soil of the country, without being merely the means of profitable investment; and he should, therefore, rejoice at any further facilities being given to the acquisition of land among the humbler classes. Having already stated to the House that it was the intention of Her Majesty's Government to issue a Commission to consider the whole law of partnership, he supposed he need not go further into that question. He thought the Joint Stock Companies Act required some alteration; it had effected great good, but was most cumbrous in its structure, and might be simplified with advantage. He confidently expected some useful improvements would result from the labours of the Commissioners, At the same time his own opinion led him to hope that the result of those labours would not overturn those fundamental principles on which the law of partnership rested, suited, as he considered them to be, to the circumstances and habits of the country. The Government, believing that the time was come when inquiry ought to be made, would issue a Commission for the purpose, as being more suitable than a Committee of the House; and, therefore, he trusted his hon. Friend would not persist in his Motion, but feel satisfied with the assurance now given.


said, that the satisfaction he had felt at the announcement of a Commission on the law of partnership had been considerably qualified by the fact, as he had understood the right hon. Gentleman, that the gravest and most serious principle involved in it, namely, unlimited liability, would not be approached.


could assure the hon. Gentleman that the instructions to the Commission would be of the most unrestricted nature. He had only been endeavouring to explain his own sentiments upon the subject.


was glad to hear this avowal; because it seemed to him that the whole weight of evidence taken before the Committee last year was very much in favour of limited liability as it at present existed in most parts of the United States, Holland, France, and some of the commercial States of Germany.


congratulated the hon. Gentleman who had moved the Resolution, that there was a good hope of the favourable termination of his exertions. He did not think the right hon. Gentleman (Mr. Labouchere) had been quite fair in attributing to the hon. Gentleman a desire to encourage the investments of the savings of the humbler classes in schemes of a speculative character. The hon. Gentleman's object was, to put it in the power of poor persons to obtain capital on better terms, with which to carry on their business. In 1847, he (Mr. Headlam) had moved for leave to bring in a Bill for the formation of joint-stock companies on the principle of limited partnership; and he was still of opinion that that principle would be much more advantageously applied to such companies than the present. He was perfectly satisfied that the existing law of partnership did not act well upon a wealthy body, either as regarded the parties themselves or their creditors. There was no tribunal to decide between partners except the Court of Chancery; and even that did not decide for the disputes of a continuing partnership, so that there was really no power by which shareholders could call their directors to account, or settle their disputes amongst themselves; and, even if they submitted to a dissolution, the appeal to the Court of Chancery would involve a ruinous expense. Nor did he think that the principle of unlimited liability was so embedded in our law as the right hon. Gentleman seemed to think. The railway companies, the companies which had charters, and the Bank of England, were all founded on the opposite principle; and it was acted upon in nearly all foreign countries, without causing any of those evils which the right hon. Gentleman seemed to anticipate from its adoption at home.


said, the great question with the working classes was not generally so much the amount of the yearly interest they obtained upon their savings, as the certainty that they could recover them whenever they pleased. He thought that encouragement to the associations which had been spoken of would do much injury by fostering habits of speculation or of improvidence, which would be sure to result when the working people found that the savings which they had hoarded with such care were wasted by imprudent investments. He did not think, however, that there would be any great or important difficulty in giving persons desirous to associate together with a small capital the means of settling their disputes inter se, the want of which he believed formed a much more serious obstacle in such associations than the question of limited or unlimited liability. He begged therefore most earnestly to draw the attention of the right hon. Gentleman the President of the Board of Trade and of the Government to this point. If the House would read the evidence given before the Committee last year, they would find that all the witnesses considered this their chief grievance; and it was in fact a grievance which had created more discontent amongst the working classes than any other whatever. In conclusion, he felt sure that the importance of the general question would secure for it a prompt and close attention, intimately connected as it was with the prosperity of the country and its future progress amongst the nations.


said, he had been appointed on the Committee last year, but as he was also then a Member of two other Committees he was prevented from giving more than a partial attention to the subject; but as the whole question was to be referred to a Commission, and as the subject was one which had occupied considerable attention in the commercial world, he should like to say one or two words upon it. He did not intend to refer to the legal settlement of partnerships, for there was one branch of the question which was a total legal one. No doubt there was a great grievance in the want of some more summary mode of settling disputes between partners. That was a matter, however, which he left to the legal Gentlemen; but the question of limited liability was one upon which commercial men ought to be consulted. Now, the remarks of the hon. Gentleman (Mr. J. A. Smith), whose opinion was certainly entitled to great weight upon commercial subjects, were adverse to those entertained by the majority of commercial men, and the observations of the right hon. Gentleman (Mr. Labouchere) seemed to go in the same direction; but neither he nor the commercial men whom he had been able to consult, could see any valid reason why this country should be an exception to the rest of the commercial world with regard to the question of limited or unlimited liability. The question divided itself into two propositions, namely, as it regarded joint-stock companies and private partnerships; but he could never see why any given number of gentlemen, because they had capital, power, and influence enough in that House to carry their Bill, should obtain a privilege which they denied to humbler individuals who had not more than 5,000l. or10,000l. with which to caary on their business. It was surely only justice to give the same facilities to small undertakings as were enjoyed by large ones. He said this not with the view of tempting the working men to enter largely into those speculations which the hon. Member for Shrewsbury (Mr. Slaney) had alluded to. He thought that working men in this country laboured under a very great delusion in supposing that they should derive a greater amount of benefit from the investment of capital by being themselves capitalists, than they did now by being labourers paid by wages. Take a large manufacturing concern, where the capitalist had 1,000 people in his employment, and it would be generally found that, at first sight, there was a feeling of grievance on the part of the great multitude of working men that they should be receiving wages, while the capitalist was deriving profit from his capital. But, on analysis, it would be found that these working men got a great deal more of the profits in the shape of wages, while the concern was managed by one responsible capitalist, than they would do if they were joint-stock partners, who elected their own manager, and share the profits of the stock. He was decidedly of opinion that the working classes had nothing to gain by upsetting the present system of society, in which the profits and stock went to one, and the labour and wages to another. But, while holding this opinion, he was for giving to the working classes the fullest opportunity of trying experiments for themselves. And so long as they were prevented, or deprived of facilities for entering into joint-stock associations—so long as obstacles were put in the way of this by the enormous trouble and cost of obtaining Acts of Parliament or charters—so long the sense of grievance would be left on their minds, and they could not be persuaded that they would not enjoy greater advantages provided they were allowed to carry on their business on the co-operative system alluded to. With regard to the other branch of the question, private partnerships, he was an advocate for the system of limited liability. There would be very great advantage in allowing an individual possessing capital to place at the disposal of a partner who had not capital, but who had skill, a certain amount, on which he should receive a share of the profits of the business. According to the present English law, a man putting any portion of his capital into any concern, and receiving a share of the profits, was liable to the whole amount of his fortune, as Lord Eldon said, to his last shilling, and the last acre he might possess. On the Continent, and in great part of America, the system of limited liability prevailed. Its advantage was this, that men of ingenuity, men of character, inventors, those who had the skill and the conduct necessary for successfully carrying on a business, had the opportunity of profiting by an advance of capital, of limited amount, from a capitalist, who would be willing to advance a limited sum, with a limited risk, on condition of sharing fairly in the profits of the business, which he would not do under the present law, knowing that the whole amount of his capital would be at risk, and responsible for the conduct of the business carried on by the acting partners. It was said, that by a system of limited responsibility the commercial world would be deceived, and the people would be induced to trust a concern carried on under this system, because they knew a certain rich man had a share in the business, and would thereby incur a loss, owing to their undue confidence. What did this argument amount to? It proclaimed that the commercial world, the great bankers, the capitalists of this country, were not competent to take care of themselves, and to judge whether people were trustworthy or not. On the Continent, and in America, he believed, it was customary to advertise the names of the partners who advanced capital to a concern, and the amount they advanced. Thus the whole commercial world knew what they were trusting. They trusted perhaps two or three young men, who were the gérants, as they were called, in carrying on the business; they trusted to the character and skill of those, and also to the 10,000l. or 20,000l. that might be known to be advanced by a partner who was not actively engaged in the business, and not actually responsible beyond the amount of his advance. They knew that these young men were liable to the whole extent of their fortune; they knew what security they possessed; and if, knowing all this, they choose to give credit unduly, it was their own fault, and they must take the consequences. That House had no need to legislate to protect the very intelligent people on the other side of Temple-bar from losing their property by giving too easy credit. That was a matter which might fairly be left to themselves. He argued in favour of this system, because he thought it would diffuse capital in this country. It would tend to attract capital from the wealthy into the hands of the deserving and meritorious persons who could give profitable employment to that capital. It was said there was always plenty of capital to be had by anybody in this Country. There was, no doubt, plenty of capital in few hands; but there was a great want of diffusion of capital; and there was a greater inequality of fortune in this country than in any country in the world. He would not pass any law to forcibly diffuse capital, but he would remove every obstacle which prevented it diffusing itself. The complaint of the present law was, that it stood in the way of transactions between man and man; it prevented the marriage of skill and capital by means of limited liability; it forbade the banns between them in this matter. Let skilful and industrious men who wanted capital be left to make their own arrangements; and so long as they made public their bargains, there could be no complaint on the part of those who trusted them. A most intelligent witness, Mr. Commissioner Fane, of the Court of Bankruptcy, who was examined before the Committee last year, went still further, and thought he had impregnable ground for the position he took up. He argued in favour of limited liability, even when there was no publication of the banns of marriage between the parties; he said that if parties liked to make a private contract, if people knew that they were trusting A, B, and C, they had no right to complain that D, who was behind the scenes, had made a private bargain to share in the profits. But, without insisting on this view of the subject, he contended that in the other species of partnership, where full publicity was given to the terms, and where the public knew whom they were trusting, they would have no reason whatever to complain if they lost their money by undue confidence. What we wanted in this country was greater facility for the employment of capital—greater facilities for those possessing capital to employ it. He knew that in some parts of the City there was a strong feeling against this system. One day when be was absent from the Committee last year, Mr. Cotton, of the Bank of England, and others, had expressed a hostile feeling towards the system of limited liability; but there was a total absence of argument on the part of these gentlemen when their reasons were brought to the test. They gave their opinion; that opinion might have been a prejudice, or it might have been something derived from other people. But let hon. Gentlemen weigh the evidence, and they would find on the side of those who argued for limited liability, reasons, facts, arguments, and strong principles; and on the other side something very like arbitrary opinions, the dicta of men accustomed to decide the course of the market by their will and word, and not accustomed to give reasons for what they did. He thought the great capitalists of the City took a wrong view of this matter. It would be more profitable to them to have the opportunity of investing capital in the concerns which would certainly be opened by an alteration of the laws of partnership, than to have their money lying at 1 or 1½ per cent. At present capital was dammed up, and instead of gradually diffusing itself in fertilising streams, it occasionally devastated its banks, and produced ruin and misery through the whole field of commercial enterprise, instead of advantage. Let them offer every facility they could for the investment of capital, or, at least, remove every obstacle that stood in the way of its fair investment; and he had no doubt whatever the great capitalists of the country would derive quite as much advantage from the alteration of the law as any other class of the community. He hoped the hon. Member for Shrewsbury would not press his Motion to a division. He thought the proposal of the right hon. President of the Board of Trade to refer the subject to a Commission, was the best course that could be taken. The whole question was contained in that of the law of partnership and limited liability; and the hon. Mover would not serve his purpose by pushing his question into any more vague field of inquiry. A full investigation was the great object in view; and, notwithstanding the many difficulties he had had to contend with, the hon. Gentleman might console himself with having already conferred great advantages upon the commercial world.


feared that the humbler classes, for whom the hon. Member for Shrewsbury (Mr. Slaney) had appealed to the House, would after the Commission be as far from their object as they were at the present moment. He quite agreed that unlimited liability deterred the risking capital in concerns; but in that question those parties were not at all interested. The real grievance with them was not the risk of their small capital, but the absence of some means of adjusting disputes among themselves, and to the laws for regulating friendly societies they must look for the means of affording a remedy. He believed that co-operative societies would do well in looking to the enactments contained in the Friendly Societies Acts for assistance in the settlement of disputes. With regard to the law of partnership, he must repeat the opinion which he had expressed before the Committee, that the best way of giving the go-by to partnerships in the nature of co-operative societies was by encouraging persons who had small capitals to advance them to partnerships by way of loan, and to pass an enactment authorising interest to be paid thereon in proportion to the amount of the profit realised. What his hon. Friend aimed at would be best carried out by these means.


hoped that there was a mistake in supposing that the right hon. Gentleman the President of the Board of Trade intended to limit the inquiry to the law of partnership. He was anxious, however, to express his opinion that the question of limited or unlimited liability was not interesting merely to a particular class of society, but was a principle of general application. Capital was constantly struggling to break the bonds which beset it, and they said that railway companies and other undertaking were based upon the system of limited liability. Therefore, the law of limited liability in partnerships was not so alien to the practice of this country as had been represented. In America and other countries parties looked to the amount of capital subscribed, and not to the names of the proprietors. Why should not they do the same here? He rejoiced to see the probability of some practical result being now attained from the discussions which had taken place on this subject.


would not have trespassed upon the House, but for the observations of the hon. Member for the West Riding (Mr. Cobden). The hon. Gentleman said, limited liability in the case of the poor would be, if not productive of injury, at least of very doubtful advantage; but then he urged that the House should at once decide in favour of limited liability for commercial purposes, and for trading concerns. Why, the very object of the Commission to be appointed was to make inquiry, and to take the opinion of the commercial classes upon the subject; but the hon. Gentleman prejudged the question, and contended that all the arguments were in favour of the scheme. He (Mr. T. Baring) admitted that it was a difficult question to decide—there was something to look at on both sides. But the hon. Member said, that on looking at the evidence taken before the Committee, he found that the gentlemen on the other side of Temple-bar urged their opinion without one word of argument; that there was nothing but the simple wish of men accustomed to the arbitrary dictation of the employment of capital. He should have thought the hon. Gentleman was treading on rather tender ground when he alluded to the arbitrary dictation of the employment of capital. He must have forgotten that he himself had, on more than one occasion, been a party to prescribing the manner in which there should be an employment of capital for particular purposes. And then the hon. Gentleman was for perfect freedom of capital. He would tell the hon. Gentleman, who said no argument had been brought forward on that side, that limited liability might be defended in one country, and in one state of the circulation of capital, and might not be wanted in another. They might have France, where there was plenty of capital, but a limited spirit of enterprise, and where people would not embark their capital in business without limited liability; or they might have America, where there was unlimited enterprise, but limited capital; and then came the want of the union of capital contributed from a variety of quarters for purposes of commerce; and there partnerships with limited liability might prove useful. But in this country they surely had enough of capital, and no want of enterprise; and if he were to say why we did not require limited liability, he would ask whether the competition in every branch of trade and commerce was not so great as to have reduced profits to the lowest scale; and whether they could have any better proof that there was no want of the diffusion of capital than the very small profits that existed? The hon. Gentleman said, "Marry capital with enterprise; take some fat easy man, with plenty of money, and join him with one or more active men of business who has plenty of enterprise." He was afraid, however, the fruits of that legitimate union would not be so favourable to trade as the hon. Gentleman supposed. He rather believed that when a man with no money united in this way with a rich man, the poor partner having only skill and enterprise, and no capital to lose, the rich man having money but no responsibility in the business, and no character to lose, the result would be that in cases of failure the man whose character was at stake lost no money, and the man whose money was at stake had still an unblemished character. What was necessary for credit in this country was, that the man with the money should be responsible for the character of the business; and they ought never to do away with that which fixed in the right quarter that amount of censure which to a certain degree attached to the man that failed in business. He did not mean to have said anything on this question, but could not allow the hon. Gentleman to taunt those who held these views with going before the Committee, and not having a shadow of ground for the opinion they entertained. He was ready to admit it was a difficult subject—that it was an open question, and if the result of this Commission was the introduction of a Bill, he very much doubted whether it would be possible to guard against frauds. It was very doubtful indeed, whether, in the present state of trade in this country, any fresh stimulus to enterprise was required. Another point to be considered was, that they might have great commercial companies established with limited liability, and that there was great danger of these large companies underselling and crushing all the small traders.


said, he had read the blue book on the subject, and was of opinion that it was one which ought to be approached with great caution. There was, however, an instance in which the principle of limited liability was in actual operation to a great extent. In Cornwall, under what was called the cost-book principle, thousands of shares in mines were held without any liability beyond their amount, and were transferred with facility. This system had been at work in that part of England for years, was generally well understood, and was not found to have occasioned any evil. His opinion was, that, if a Commission were appointed, it ought also to inquire into the banking laws, because the subject, as limited by the terms of the hon. Member for Shrewsbury's Motion, was apt to lead the working classes to form expectations of millennial happiness which could never be realised. There was, at the present time, too much already of this spirit abroad; and it was owing, he believed, in a great degree, to the manner in which certain subjects were debated in that House. Protectionism, for instance, was a sort of socialism in disguise, founded on the doctrine that it was necessary to foster one trade because it was better than other trades—an idea analogous to that of socialist co-operation—as much so as the doctrines of Louis Blanc or Cabet. The House fostered socialist views too much, and then wondered at the fruits that they produced. The present strike of the engineers had arisen from the support given by the noble Lord at the head of the Government to the Factory Bill. He believed that those two cir- cumstances were as much cause and effect as any two facts which bore that relation to each other. He warned the labouring classes not to compete with capitalists, under the delusive idea of realising a millennial happiness.


, in reply, thanked the House for the kind notice which had been taken of his own humble exertions in the matter, and he wished to say that his Motion was not confined to the working classes, but had for its object the removal of obstacles to investment which pressed upon all classes. He was glad the Government had conceded an inquiry; and, although he knew that men of the greatest abilities entertained different opinions on the subject, he had great hopes of a satisfactory result. He should therefore depend upon the promise of the Government to issue a Commission for that purpose, and would beg leave to withdraw the Motion.

Motion, by leave, withdrawn.