COMPOUND CAPITAL. 531 



ing exhibited, as before, transitional forms; for the shares 

 in these undertakings were of different magnitudes, so that 

 while some held eighths, sixteenths, &c., others held sixty- 

 fourths, and even one-hundred-and-twenty-eighths: a sys 

 tem which was followed by the first water-company, founded 

 by Sir Hugh Middleton. 



823. For present purposes details are needless. The 

 things of moment here are the changes of constitution which 

 these industrial institutions have undergone. 



That ordinary partnerships, extending from relatives to 

 others, were the germs of joint-stock companies, was sug 

 gested above. The suggestion harmonizes with the fact that 

 up to recent times the State continued to regard companies 

 only as partnerships as overgrown partnerships which it 

 was desirable to repress. The State opposition to them was 

 due in large measure to the perception that without Royal 

 Charters of incorporation, they were doing things which pre 

 viously could be done only under such charters; and were 

 therefore evading governmental authority. Hence, in 1Y19, 

 was passed the so-called &quot; Bubble Act: &quot; partly prompted 

 by this feeling but ostensibly to stop the mischief done by 

 bubble companies. Men continued, however, to combine, 

 subject to the unlimited liability of ordinary partners, for the 

 prosecution of various undertakings: the persistence in this 

 course being evidence that among the failures there were 

 successes, and that the system was not bad, as assumed by 

 the legislature. Step by step the obstacles were removed. 

 In 1826 it was made possible for the bodies thus formed to 

 obtain charters which did not absolve their members from 

 their individual responsibilities. Later, such bodies were 

 allowed, without incorporation, to have letters patent which 

 gave them a legal status / enabling them to sue and be sued 

 through a representative. And then in 1844 authority to 

 establish a company was gained by simply obtaining a cer 

 tificate, and being publicly registered. 



