COMPOUND CAPITAL. 533 



the proposal for the first railway, sufficiently shows that 

 little would have come from State-action. Moreover, the 

 joint-stock system has opened channels for the reproductive 

 use of capital, which else would either have been lying idle 

 or would have been used for less productive purposes. For 

 the goodness of the interest obtained by shareholders, is a 

 measure of the advantage which the public at large derives 

 from the easy distribution of raw materials and manufac 

 tured products. 



824. The last stage in the development of these indus 

 trial associations which have compound capitals has still to 

 be named. In modern forms of them we see the regulative 

 policy, once so pronounced, reduced to its least degree. Both 

 by the central government and by local governments, 

 individuals were, in early days, greatly restricted in the 

 carrying on of their occupations ; and at the same time the 

 combinations they formed for the protection and regulation 

 of their industries, were formed by governmental authority, 

 general or local, for which they paid. Of the various hin 

 drances to combinations, originally for regulating industries 

 but eventually for carrying on industries, the last was re 

 moved in 1855. Up to that time it had been held needful 

 that the public should be safeguarded against wild and 

 fraudulent schemes, by requiring that each shareholder 

 should be liable to the whole amount of his property for the 

 debts of any company he joined. But at length it was con 

 cluded that it would suffice if each shareholder was liable 

 only to the amount of his shares ; provided that this limited 

 liability was duly notified to men at large. 



Everyone knows the results. Under the limited liability 

 system many bubble-companies, analogous to those of old 

 times, have arisen, and there has been much business under 

 the winding-up Acts : the public has often proved itself an 

 incompetent judge of the projects brought before it. But 

 many useful undertakings have been proposed and carried 

 out. One unanticipated result has been the changing of 



