x LIMITATION OF STATE FUNCTIONS 163 



various ways be beneficial to the whole community. Let 

 us consider a few of the more familiar cases which corne 

 before the courts. 



First we have the gigantic system of trading on credit, 

 continually offering temptations to fraud and leading in so 

 many cases to bankruptcy. Repeated efforts have been 

 made to improve the law of bankruptcy, but with small 

 results, since, although there has been of late years some 

 diminution in the number of bankruptcies and amount 

 of bankrupts' liabilities, this is far more than compensated 

 by the enormous increase in the liquidations of Companies 

 under the Limited Liability Act, so that both the losses 

 of the public and the temptations to fraud have continu- 

 ally increased. The cost of the Bankruptcy department 

 paid for by the public is about 150,000 a year, besides 

 the legal costs paid by the estates of the bankrupts and by 

 their creditors. Now this vast system of credit, and all the 

 temptation to speculation and fraud that arises out of it, 

 is the creation of the law, and the interference of Govern- 

 ment is in no way necessary for the protection of 

 individuals. Instead of attempting to amend the law of 

 bankruptcy it should be abolished altogether, and no 

 claim for the value of goods sold on credit should be 

 recognized by the courts. The effect of this simple and 

 common-sense principle would be, that no credit would 

 be given to any individual until he had proved that he 

 was worthy of credit ; and even then it would be at the 

 creditor's risk. There cannot be the least doubt, that 

 this would be for the benefit of everybody concerned ; 

 since speculative trading would cease except by those who 

 chose to risk their own capital instead of that of other 

 persons. If a young man was known to be honest, sober, 

 industrious, and with some business capacity, he would be 

 sure to have friends who would advance money to start 

 him in life, on his personal security. If he did not possess 

 or had not exhibited these qualities it is better for himself 

 and his friends that he should not be able to speculate 

 with other people's property until he has acquired experi- 

 ence and given proofs of integrity. There is absolutely 

 no reason whatever for the Government to keep up a costly 



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