530 INDUSTRIAL INSTITUTIONS. 



trade, whether their capital consisted of indefinite contri 

 butions or of definite shares, were not successful. M Cul- 

 loch s Dictionary of Commerce tells us the extent of the 

 failure. 



&quot; The Abb6 Morellet has given in a tract published in 1769 (Examcn 

 de la Reponse de M. N. t pp. 35 38) a list of 55 joint-stock companies, 

 for the prosecution of various branches of foreign trade, established in 

 different parts of Europe subsequently to 1600, every one of which had 

 failed, though most of them had exclusive privileges. Most of those 

 that have been established since the publication of Morellet s tract 

 have had a similar fate.&quot; 



These examples illustrate the truth, illustrated by so many 

 others, that protected industries do not prosper. The case of 

 the East India Company may be taken as typical. Notwith 

 standing its commercial monopolies and the armed forces 

 behind it, it contracted an enormous debt; and would have 

 been bankrupt long before it was dissolved had it not been 

 for its political connexion. 



Once commenced, the system of raising compound capitals 

 by the contributions of many individuals, in definite small 

 portions or shares, spread in various directions. Companies 

 were formed for insurance, for mining, for redeeming lands 

 from the sea, and so on: not a few being &quot; bubble &quot; com 

 panies. But out of many dishonest schemes and many hon 

 est but unsuccessful ones, there emerged some which became 

 permanent industrial organizations. A natural step from 

 the association of many merchants for defence against 

 pirates, was to the association of many citizens at large to 

 safeguard ship-owners against wrecks: joint-stock insur 

 ance societies grew up. Further development led to insur 

 ance against dangers of other kinds. Then came unions to 

 work mines : enterprises the uncertainty of which, so great 

 as to deter single individuals, were not so great as to deter 

 combinations of many who shared the profits and losses 

 among them. Very significantly, too, the title &quot; Merchant 

 Adventurers &quot; was paralleled by the title &quot; Mining Ad 

 venturers.&quot; The system of compound capital thus extend- 



