XII THE DEPRESSION OF TRADE 205 



supposing that there are an immense number of people 

 who live in the city by speculation who find it convenient 

 to call themselves insurance agents or brokers. I think, 

 as far as I can judge from advertisements in the news- 

 papers, that this mania for speculation has been going on 

 at an increasing rate ; that is, that within the last few 

 years it has increased more rapidly, and its effects there- 

 fore have been more injurious, than ever. 



I now wish to point out to you another indication — 

 another field as it were — in which this speculative mania 

 has produced the most deplorable results, and has acted, 

 in combination with other causes, so as to increase the 

 poverty of one class and the wealth of another class, and 

 has thus, as I shall show you, tended directly to produce 

 depression of trade. Somewhat more than twenty years 

 ago an Act was passed which was considered by the whole 

 commercial world as one of the greatest boons ever given 

 to it ; this was the Limited Liability Act. This Act was 

 universally approved of ; was supported and praised by 

 such a great and thoughtful writer and friend of the 

 working classes as John Stuart Mill. But I do not think 

 he could possibly have foreseen what would come out of 

 it. About two years ago a short parliamentary paper 

 was published giving a kind of summary of the results of 

 this Act. It is a curious thing that this parliamentary 

 report seems to be totally unknown, for I inquired of 

 several friends in the city, particularly of one who is an 

 accountant in the city, and whose business largely 

 consists of winding up those companies, and he did not 

 know of its existence. The report gives us some very 

 startling facts. It covers a period of exactly twenty-one 

 years, and is thus easily divisible into three periods of 

 seven years each. In the first period I find that 4,782 

 companies were formed, being at the rate of about 700 

 per annum. In the next period the number increased to 

 6,900, and in the last seven years to 8,643. Out of this 

 total of about 20,000 distinct companies formed in 

 twenty-one years only 8,000 are now in existence, 12,000 

 having been wound up ! It is also stated in this parlia- 

 mentary report that the actual paid-up capital — not 



