TRANSACTIONS OF SECTION F. 827 



Principle of combination : 



Cliaracterised earlier commercial adventures and infancy of trade. 



But allied with or accompanied by principle of monopoly. 



Conflict between tlie ancient corporations and companies and individualism. 



Conflict now probably waged under diflerent conditions. 



The many better able to assert right to share profits. 



Combination of small adventurers rival to practical monopoly of vast 

 individual wealth. 



Yielding of the few to the many characteristics of the age. Levelling of 

 eminences of commercial wealth. Great trade fortunes not now con- 

 centrated and transmitted intact, but distributed. 



Limited liability at once aids and denotes this widening of the borders : 



Affects favourably middle class by creating demand for skill, &c., apart from 

 capital. Powers of initiation, superintendence, and direction differentiated 

 from labour as well as capital. 



Reasons of complaint against results of limited liability : 



Failures conspicuous ; successes attract no attention. 



Growth necessarily slow. 



Capacity for improvements — what are they to be ? 



Functions of the State necessarily preliminary : 



These must be defined. 



Power of State to grant incorporation. 



Incorporation by royal charter. 



Incorporation is act of creation : 



Right of State as creator of incorporations to impress on them as its creatures 



characteristics necessary or expedient to public safety. 

 Limited liability implied by incorporation. 

 Logical extent of that limit ; doubtful expediency of ultimate limitation as 



interpreted. 



Parliament came to relief of Crown in granting incorporation : 

 Relation of State to companies not thereby affected. 

 Nor afiected by general Act instead of separate Acts. 



Limits of interference of State : 



Must provide safeguards. 



But abstain from direction or control. 



Nor institute any preliminary inquiry implying sanction or approval. 



What alterations in law regulating relations of State to companies necessary 

 or expedient ? 



1, Memorandum of association may with advantage be made more flexible 



under sanction of Court. 



2, Powers of borrowiijg must be i-egulated. 



In interest less of creditors than of shareholders and public. 

 Unlimited powers of borrowing without precedent or analogy. 

 Uncalled capital as fund of credit treacherous though more valuable 

 than generally admitted. 



Principle by which dividend paid on partially paid shares delusive : 



Paid-up capital erroneously credited with profits due to uncalled liability. 

 That liability thus obscured and often ignored. 



Proper method interest paid on capital paid up, and profits divided per 

 share irrespective of amount paid. 



