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and on Sundays, and in comfortable bake-houses, instead of miserable cellars.

The mode in which their business is at present conducted and the difficulties under which they labour, thus stated by the representatives of the tailors and the bakers, are common to all other associations, whether of shoemakers, or needlewomen, or printers, that now claim the public sympathy, and in some persons excite no inconsiderable alarm. It was, perhaps, from some feeling of apprehension that the Frugal Investment Clause was omitted in the Friendly Societies Bill brought in last session. The remonstrances against this omission, which were strongly stated by many witnesses before the Savings Committee, have led to its restoration in the recent Act, with the introduction of rather an important word. We now read, "for the frugal investment of the savings of the members, for better enabling them to purchase food, firing, clothes, or other necessaries, or the tools, implements, or materials of their trade or calling." With tools, implements, and materials, such friendly societies may become working associations, as far as regards the supply of their own wants, under all the usual protection which belongs to such friendly societies; but they cannot become trading associations in the extended sense of the word.

To meet, then, the difficulties which are opposed to carrying out their principle of industrial associations, would their constitution be improved by any application of the existing laws? First, they might become joint-stock companies. Mr. Hughes, a barrister, disposes of this resource very summarily: "I think the great legal obstacle is the Joint Stock Companies Act, which requires (whenever a body of men trading together amount to 25) that they shall have three directors, that the capital shall be divided into shares, and that the shares shall be transferable. There are 38 objects in the schedule; and the expense of registering is so great, and the general cumbrousness of the act, except as applied to very large concerns, is such, that it precludes people with small capital from availing themselves of the benefits which it gives. It is not applicable to working men particularly, because in every joint-stock company the shares must be transferable, and the very essence of these associations is, that the shares shall remain untransferable."

Secondly, they might become chartered companies, the object of which would be, to limit the liability of partners. The Committee in their report have disposed of this suggestion: "The Crown is empowered by Act of Parliament, in certain cases, by charter, to limit the liability of partners. This power, however, has seldom been exercised, does not seem guided by any clear rule, and involves expense greater even than that of obtaining an Act of Parliament. Your Committee has in evidence that the benevolent projectors of an useful undertaking (the Metropolitan Model Lodging-Houses for Workmen) obtained a charter from the Crown, which put them to great delay, and cost them upwards of 1,000l. In like manner many enterprises for similar objects are stated to have been prevented by the trouble and expense of such a charter."

If, then, industrial associations are to be formed with those safeguards and securities which prudent men would require, either by the co-operation of workmen amongst themselves, or by workmen united with capitalists, it seems impossible to conduct them as such partnerships, at all extensively, without a law of limited liability. The eminent political economist, Mr. John Stuart Mill, was examined before the Savings Committee on this point; and his evidence as to what the law should be is so clear, that we should injure its effect by any abridgement. We shall select Mr. Mill's opinion, from his answers to various questions:

"There are two questions of limitation of liability; one is that of allowing commandite partnerships, under which the managing and acting partners are under unlimited liability; and the liability that is limited is only as to those who advance capital, but do not take part in the management. The other is the question of allowing perfect freedom of forming joint-stock companies with unlimited liability; and that is a question much more difficult than the other. If there were a general law, by which persons might form themselves into joint-stock companies with limited liability whenever they pleased, I think you ought to allow individuals also to limit their liability, giving due notice; in order that the competition might be equal. It would be a very great alteration in the present state of the law, but one to which general principles are favourable. On general principles, one sees no sufficient reason why people should not be allowed to employ their capital and labour on any terms that they please, and to deal with others on any terms that they please, provided those terms are known, and that they do not give themselves out for what they are not. Still that is a more difficult question than the question of commandite partnerships; and it is very possible that in the case of jointstock companies with unlimited liability, that it might be better to consider each particular case on its own merits; to facilitate the obtaining of a charter where the purpose was of public utility, and to take away the expense in cases where the public advantage was recognised. * I look upon commandite partnerships as a mode of lending. So long as it was the principle of the law that you ought to prevent people from lending at more than a limited rate of interest, it was necessary to prevent them from evading the prohibition, and doing the same thing in an indirect way; but that principle the law appears to have given up, with a single exception, for which reasons other than those of public utility may be assigned; the case of contracts relating to land. I think it an inconsistency to say that people are free to lend money in the ordinary way at any rates they like, but that there shall be one particular mode of lending from which they are interdicted, namely, lending at the rate of interest varying with the profits of a concern; which is the only difference between commandite partnerships and any other loan, except one other difference which is greatly to the advantage of all parties, namely, that the loan by commandite increases the security of all the other creditors instead

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of diminishing it, because all the other creditors must be paid out of the capital of the commanditaire before he can recover anything. * The introduction of the law of commandite, with such safeguards, or regulations, or limitations, as the wisdom of the Legislature might introduce, would give additional facility for enterprises directed by intelligence, and create additional facilities for the investments of the middle and working classes. Above all, which is very important, it would enable personal qualities to obtain in a greater degree than they can now the advantages which the use and aid of capital affords. It would enable persons of recognised integrity and capacity for business to obtain credit, and to share more freely in the advantages which are now confined in a great degree to those who have capital of their At present it is in the power of anybody to commence business with borrowed capital. Now the same person who has sufficient confidence in the undertaking to risk money en commandite upon it, would probably advance the same amount on loan; which would be a less advantageous mode both to the borrower and to all persons with whom he might deal, because the lender would come into competition with the other creditors in the event of failure, instead of supplying funds out of which their claims might be satisfied. The Legislature does not think it necessary to restrict people from carrying on business with borrowed money, lest it should give a stimulus to speculation; and there seems no reason why, when it permits borrowing in every mode, it should select for prohibition the one mode which is at the same time the most useful to the borrower, and the most advantageous to the security of all other creditors. A person to whom 5,000l. have been advanced in commandite, is in exactly the same position with regard to those who have transactions with him as if he had inherited, or acquired, that sum in his own right. * Where the law of commandite exists, no person whose responsibility is limited is allowed to do any act whatever as a partner; he may inspect the accounts and give his opinion, and that opinion will have weight, but he cannot act towards any third party as a partner, nor even as an agent, nor can his name appear in the firm, nor can he be held forth as a party concerned; so that he is in reality merely a creditor; but he is a creditor on peculiar terms; that is to say, he receives nothing at all unless the concern is profitable; if it fails he is the last satisfied, and may lose all, when no other creditor loses anything. * *Even without publicity, I see no greater objection to commandite than to any other mode of carrying on business with borrowed money. As long as a person in business can borrow at all, persons may deal with him under a supposition that the capital with which he is trading is his, when in point of fact it may all have been borrowed. Still the case of commandite partnership affords facilities for giving publicity, which are taken advantage of in the American and French law. Both in the law of New York and in the French law the amount of the sum advanced en commandite must be registered, and the number of persons from

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whom it comes; and the fact that the amount is registered enables persons dealing with that firm to be acquainted with the resources of the firm much more than with those of any other firm whatever.'

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The question which was raised by the Committee, and which elicited Mr. Mill's opinion as to the operation of commandite partnerships, was this: "Do you not think that if such limited liability were introduced, under reasonable safeguards, many benevolent persons, or persons desirous of giving facilities to improve the condition of the working classes, would be willing to lend moderate sums, say from 1007. to 2007. or 3007., to put them in action ?" Mr. Mill had previously said, that "an alteration of the law in regard to the responsibility of partners would be of great importance to those associations, not for the sake of the responsibility of the operatives who may be members of such associations, but in order to induce persons of capital to advance it to them for those purposes." It appears to us, therefore, that in this particular inquiry into industrial associations for the working classes, the question is not whether there should be a sweeping alteration of the law of partnership, so as to give limited liability to capitalists, but whether the application of the principle of limited liability is not called for by the urgent desires of a very numerous portion of society, becoming every day more and more influential. It is easy to understand the objections that may be made, even with the most benevolent intentions, to a sudden and total change of the law of partnership, as regards unlimited liability. Mr. H. Bellenden Ker, of whose anxiety to promote the welfare of the working classes we have on many occasions had ample demonstration, records his opinion in the most deliberate manner by a written paper handed to the Committee on Savings, in which he says, "It appears to me that the only point to be considered with respect to the existing law of partnership (taking it in its widest sense, so as to include joint-stock companies, and companies established by Act of Parliament, or charter) is, whether that law is apt and convenient for parties engaged in commerce, or in the different undertakings for which partnerships were established, and whether due facilities and protection are afforded to them and to persons dealing with them." But, are there no parties to be considered but those "engaged in commerce, or in the different undertakings for which partnerships are established?" Mr. Ker adds, "it would be idle, it appears to me, to consider whether the law should be altered, merely to afford a convenient investment for small portions of the capital or savings of the middle and working classes." But if these same classes find that "the existing law of partnership" works injuriously against them, why should not a principle be introduced concurrently with the principle of that existing law, which would also be "apt and convenient for parties" not "engaged in commerce," but who believe that their money savings, and their great capital, their labour, would be more productive if they were "engaged in commerce ?” Mr. Ker puts in a paper, as furnished him "by a person of very great intelli

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gence and extremely valuable," in which we find the following passage:

"With respect to the last class especially, that of trading associations of working men, it may be suggested that few investments seem more adapted to the working man than investments in his own trade and labour.

"Whilst nothing appears simpler and more natural than that, where men are engaged in the same labour all day long, and the whole provision for themselves when out of work, for their families in sickness, after their death, &c., must come out of that labour, they should be encouraged directly to connect the labour itself with those provident purposes, by adopting the machinery of a friendly society.

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"It should be observed, that nothing can prevent these associations from starting up as joint stock-companies of working men. is a tailors' joint-stock company in Oxford Street already, composed exclusively of working men. The question is, therefore, are the working men to be compelled to adopt that machinery of the jointstock company which the experience of the last few years has shown to be so fruitful of speculation and fraud; or are they, by a very slight extension of the law, to be preserved as far as possible from speculation, by bringing under the friendly societies jurisdiction these trading associations?

"The extension of the law is indeed very slight, if the frugal investment clause be considered. That clause allows the saving of the trader's profit, by the formation of a society for the purchase of necessaries; all that is wanted here, is the gaining of that profit by the formation of societies for purposes of sale instead of purchase. The restrictions of the frugal investment clause, as to the nontransferability of shares, and the confining the whole benefit to the members and their families, are such as form part of the very scheme of these associations."

The question, therefore, would appear to narrow itself to the consideration of which is the best mode of effecting what would appear to be a social good. The experiment of Trading Associations of Working Men has only yet been tried upon a very small scale. Their benefits may be altogether visionary. The Committee in their report, express a belief that in ordinary cases individual energy and larger capital will prevail against the necessarily inferior advantages which these Associations must possess." They very sensibly add, "but this is a consideration which the parties desirous to associate are justified in deciding for themselves." Mr. Mill is of opinion that it would be just and politic, under reasonable safeguards, to provide facilities for the experiment being made.

There is a question from the Committee, and an answer from Mr. Mill, that may well make all thoughtful persons especially solicitous that this important subject should receive that speedy attention from the legislature which the Committee have strongly urged :

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