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Victoria, by the Grace of God, &c. : To Our right trusty and wellbeloved Councillor Thomas Berry Cusack Smith, Keeper or Master of the Rolls of Our High Court of Chancery in Ireland ; Our trusty and wellbeloved Sir Cresswell Cresswell, Knight, One of the Justices of Our Court of Common Pleas in England ; Our trusty and wellbeloved John Marshall, One of the Senators of Our College of Justice in Scotland ; George William Wilshere Bramwell, Esquire, One of Our Counsel learned in the Law; James Anderson, Esquire, One of Our Counsel learned in the Law; Kirkman Daniel Hodgson, Esquire; Thomas Bazley, Esquire ; and Robert Slater, Esquire, Greeting :

Whereas We have deemed it expedient, for divers good Causes and Considerations, that a Commission should forthwith issue to inquire and ascertain how far the Mercantile Laws in the different Parts of the United Kingdom of Great Britain and Ireland may be advantageously assimilated, and also whether any and what Alterations and Amendments should be made in the Law of Partnership as regards the Question of limited or unlimited Responsibility of Partners :

Aow know ye, therefore, that We, reposing great Trust and Confidence in your Zeal, Discretion, and Integrity, have authorized and appointed, and by these Presents do authorize and appoint, you the said T. B. Cusack Smith, Sir Cresswell Cresswell, J. Marshall, G. W. W. Bramwell, J. Anderson, K. D. Hodgson, T. Bazley, and R. Slater, or any Three or more of you, to make diligent and full Inquiry, and to report to us whether it will be expedient that any and what Alterations shall be made in the Mercantile Laws of the United Kingdom in those respects in which the Laws of Scotland differ from those of England and Ireland, in order to their being assimilated, and also to report to us whether it will be expedient that any and what Alteration shall be made in the Law of Partnership so far as relates to the limited or unlimited Liability of Partners.

And for the better Discovery of the Truth in the Premises, We do by these Presents give and grant to you, or any Three or more of you, full Power and Authority to call before you, or any Three or more of you, all such Persons as you shall judge necessary, by whom you may be informed of the Truth in the Premises, and to inquire of the Premises by all other lawful Ways and Means whatsoever.

And Our further Will and Pleasure is, that you do, within One Year after the Date of this Our Commission, or sooner if the same can conveniently be done (using all Diligence),

Certify to Us in Our Court of Chancery, under the Hands and Seals of you, or any Three or more of you, what you shall have done in the Premises.

And We further_will and command, that this Our Commission shall continue in full Force and Virtue, and that you, Our Commissioners, or any Three or more of you, shall and may from Time to Time proceed in the Execution thereof, and of every Matter and Thing therein contained, although the same be not continued from Time to Time by Adjournment.

And for your Assistance in the due Execution of this Our Commission We have made choice of our trusty and wellbeloved William Dashwood Fane, Esquire, Barrister-at-Law, to be Secretary to this Our Commission, and to attend you;

whose Services and Assistance We require you to use from Time to Time as Occasion shall require.

Given at Our Court at Saint James's, the First Day of June 1853, in the

Sixteenth Year of our Reign.

By Her Majesty's Command,





Your Majesty having been pleased to issue a Commission directing Your Majesty's Commissioners to inquire and ascertain how far the mercantile laws in the different parts of the United Kingdom of Great Britain and Ireland may be advantageously assimilated, and also whether any and what alterations and amendments should be made in the law of partnership, as regards the question of the limited or unlimited responsibility of partners, Your Majesty's Commissioners have proceeded to consider the matters so confided to them; and having completed their inquiries and deliberations as to the expediency of making alterations in the law of partnership, so far as relates to the limited or unlimited liability of partners, deem it right at once to lay before Your Majesty the conclusion at which they have arrived.

With a view to obtaining well-considered opinions on the subject, Your Majesty's Commissioners framed a series of questions which they thought calculated to elicit information, and caused them to be widely circulated both at home and abroad ; and those questions and the answers received are printed in an Appendix to this Report.

Your Majesty's Commissioners have been much embarrassed by the great contrariety of opinion entertained by those who have favoured them with answers to their questions. Gentlemen of great experience and talent have arrived at conclusions diametrically opposite ; and in supporting those conclusions have displayed reasoning power of the highest order. It is difficult to say on which side the weight of authority in this country preponderates. The opinions received from foreign countries preponderate in favour of limited liability; but many of the foreign correspondents, while bearing testimony to the beneficial operation of the law as to partnerships with limited liability in their countries, suggest that it may nevertheless well be, that the circumstances of the trading interests in the United Kingdom may give it a very different operation here. Your Majesty's Commissioners have carefully perused and considered these various opinions; two of their body, Lord Curriehill and Mr. Slater, have put into writing their thoughts on the subject, for the assistance of their fellow Commissioners, who have thought it right to make these communications public by printing them in the Appendix.

In considering this subject, the question which appeared to Your Majesty's Commissioners of paramount importance was, whether the proposed alteration of the law would operate beneficially on the general trading interests of the country? and they have arrived at the conclusion that it would not. They have not been able to discover any evidence of the want of a sufficient amount of capital for the requirements of trade ; and the annually increasing wealth of the country, and the difficulty of finding profitable investments for it, seem to them

sufficient guarantees that an adequate amount will always be devoted to any mercantile enterprise that holds out a reasonable prospect of gain, without any forced action upon capital to determine it in that direction ;-while any such forced action would have a great tendency to induce men to embark in speculative adventures to an extent that would be dangerous to the interests of the general commerce of the country. Moreover, Your Majesty's Commissioners find no reason to suppose that the reputation of British merchants, either at home or abroad, would be raised by the establishment of firms trading with limited liability, but the contrary; for many of the opinions in favour of such a system are coupled with a recommendation of more stringent regulations than those now existing for the prevention of fraud. But if such partnerships would increase the danger of fraud, they can hardly be otherwise than prejudicial to our mercantile reputation.

Your Majesty's Commissioners have also considered the subject with regard to the benefit which it may be calculated to confer on individuals, by enabling them to obtain capital and establish themselves in business by the aid of partners incurring a limited liability only. It cannot be doubted that instances occur where men of probity and talent would derive benefit from such a system, but Your Majesty's Commissioners are of opinion that such benefit has been greatly overrated.

Further, it appears to your Majesty's Commissioners that the benefit to be acquired by the managing or limited partners will be at the expense of a more than countervailing amount of injury to traders bearing the burden of unlimited liability, who will have to enter into competition with those who enjoy the protection to be given by the proposed law.

But while Your Majesty's Commissioners are of opinion that it is not expedient to alter the law and allow all persons at their own election to trade with limited liability, they are aware that many useful enterprises calculated to produce benefit to the public and profit to those who engage in them, are of such magnitude that no private partnership can be expected to provide the funds necessary to carry them into effect, or to have the means of superintending and managing them, of which docks, railways, and extensive shipping companies may be taken as examples. And there are others of a more limited character, from which benefit to the humbler classes of society may be expected to accrue, such as baths and washhouses, lodging-houses, and readingrooms, to the establishment of which by large capitalists there is little inducement. These two classes of undertakings it may therefore be desirable to encourage, by limiting the liability of those who embark in them. But with regard to both, Your Majesty's Commissioners think they should be subjected to some previous inquiry as to the means of carrying them into effect, and the prospect of benefit to the promoters and the public. With regard to those undertakings the execution of which involves an interference with the rights of property, the sanction of Parliament always has been and still ought to be required. With regard to others, the privilege of having a limited liability may be granted by charter ; and for the purpose of regulating the granting of charters, Your Majesty's Commissioners recommend that a Board be established to decide upon all applications for them ; and this Board should require, in all cases, compliance with certain fixed regulations.

Much observation has been made



expense of obtaining charters of private Acts of Parliament. Where a charter is applied for calculated to affect injuriously the interests of others it seems contrary to natural justice to refuse them an opportunity of stating and proving the validity of their objections, but regulations should be made to keep the expenses of such inquiry as low as possible. Your Majesty's Commissioners feel that it is beyond their province to offer any suggestion respecting the expense of obtaining private Acts of Parliament. If a charter is asked for the establishment of baths and wasbhouses, or other things of that nature, opposition is hardly to be anticipated, and the Board would have little to do beyond seeing that their fixed rules have been complied with, and the expense ought to be very small. .

The attention of Your Majesty's Commissioners has been directed to another subject which appears to them within the spirit if not within the letter of their commission, viz., the expediency of a further relaxation of the Usury Laws, and of enabling capitalists to lend money to traders at a rate of interest, and agents and servants to receive remuneration for their services by money payments, varying with the profits of the business, without being exposed to the hazard of being rendered liable as partners to the creditors of the concern.

In ex parte Hamper, 17 Ves., page 403, (a case relating to the remuneration of an agent or servant,) Lord Eldon appears to have considered that such contracts might exist without constituting a partnership, provided, of course, that they are made in good faith and are not partnerships in disguise ; and in Pott v. Eyton, 3 Common Bench Reports, page 32, Lord Chief Justice Tindal expressed an opinion, that it made no difference whether the money was received by way of interest on money lent, or wages, or salary as agent, or commission on sales. But it appears to Your Majesty's Commissioners that in practice they would be attended with so many difficulties and with so many results, which the contracting parties would probably consider very objectionable, that Your Majesty's Commissioners do not expect they will ever be extensively made.

In the report of the Committee of the House of Commons on the Law of Partnership, dated 8th July 1851, it was recommended “ That power be given “ to lend money for periods not less than twelve months, at a rate of interest varying with the rate of profits in the business in which such money may

be employed, the claim for payment of such loans being postponed to that of all “ other creditors ; that, in such case, the lender should not be liable beyond “ the sum advanced ; and that proper and adequate regulations be laid down to “ prevent fraud."

As to the expediency of adopting that suggestion, Your Majesty's Commissioners, who concur in the residue of this Report, are not agreed in opinion.

With regard to the Usury Laws, Your Majesty's Commissioners are of opinion that it would be expedient to repeal them altogether, as far as they affect personal securities, but offer no opinion with reference to real securities.

In concluding their brief Report, Your Majesty's Commissioners feel, that although the details of our mercantile laws may require correction, yet while

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