JOINT-STOCK BANKING SYSTEM. 539 



banks, first, LIMITED RESPONSIBILITY, secondly, PAID-UP CAPITAL, 

 and thirdly, PERFECT PUBLICITY : we cannot therefore do better 

 than discuss these points separately. 



No practical man scarcely can help being astonished at the objec- 

 tion of the honourable Member, on the score of unlimited responsi- 

 bility. It is this principle which gives efficiency to the business of all 

 partnerships whatsoever ; and indeed we cannot conceive the exist- 

 ence of partnership on any other principle without the most per- 

 nicious consequences. It is quite a fallacy to suppose that such a 

 system affords no real security, and certainly untrue that men of 

 capital are deterred from entering into these partnerships from 

 the dread of so great a responsibility. If Mr. Baring and Mr. 

 Huskisson, who in their places in Parliament advocated limited 

 liability in 1826, had acquired the experience furnished by sub- 

 sequent observation on the working of the system, their opinions 

 would have been very different. The real value of such kinds of 

 banks has been fully tried in Scotland, where an experience of above 

 a hundred years has proved them not only to be safe but highly 

 beneficial and morally useful to that community ; and with respect 

 to England and Ireland also, we are convinced that the mere exami- 

 nation of the partners' lists at the Stamp-office (a work rather of 

 trouble than expense), would immediately show not only that there 

 was a bonji fide security for capital, but also a large connexion of 

 men of property and character with these establishments. On the 

 other hand the evils of a limited responsibility are so great, and the 

 temptations to the managing directors to draw upon the credit rather 

 than the capital in hand so seductive, that we can scarcely conceive 

 an establishment to go on for any length of time on such a system, 

 without first deluding the partners with large profits at the outset, 

 and subsequently sinking every penny of capital and deposit. Mr. 

 Clay says, that the present system is only a fraud on the public, a 

 position exceedingly difficult to prove, it must be confessed, under 

 any of the circumstances in which such banks are formed. The 

 fact is, that ^the dearest interests of every partner are concerned 

 in maintaining the stability of any particular establishment; 

 and even supposing a majority of the shareholders to be needy 

 persons incompetent to meet any sudden call to the amount of the 

 advertised Capital, still in every or nearly every case a sufficient 

 number of unquestionably monied partners will be found who for 



