of a local administration, than by the general revenue of the state, of which the executive power must always have the management. The abuses which creep into the local and provincial administration of a local revenue are trifling in comparison of those which commonly take place in the expenditure of the revenue of a great empire, and are also much more easily corrected, pp. 314, 315.

Of the Public Works and Institutions which are necessary for facilitating particular Branches of Com

merce.

Those branches of commerce which are carried on with barbarous nations require extraordinary protection. An ordinary store-house could give little security to the goods of the merchants who trade to the western coast of Africa. To defend them from the natives it is necessary that the place where they are deposited should be fortified. The disorders in the government of Hindostan have been supposed to render the like precaution necessary there. Hence the forts erected by the French and English East India companies,' p. 315.

In other nations, where strangers cannot possess any fortified place within their territory, it may be necessary to maintain some ambassador, or consul, who may decide the differences arising among his own countrymen and in their disputes with the natives, may interfere with more authority than they could expect from any private man. It seems not unreasonable that the extraordinary expense which the protection of any particular branch of commerce may occasion, should be defrayed by a moderate tax upon that branch. The protection of trade in general from pirates is said to have given occasion to the institution of the duties of customs, pp. 315, 316. The protection of trade in

From the first these companies (like all other great Indian landowners) exercised considerable jurisdiction in their own domains.

general has ever been considered as essential to the defence of the commonwealth, and upon that account a part of the duty of the executive power. The collection and application of the general duties of customs, therefore, have been left to that power. In many commercial states of Europe, particular companies of merchants have persuaded the legislature to entrust to them the performance of this duty as it respected some particular branches of trade, p. 316.

These companies have proved universally either burdensome or useless. When these companies do not trade upon a joint stock, but are obliged to admit any person properly qualified, they are called regulated companies. When they trade upon a joint stock they are called joint-stock companies. Such companies sometimes have, and sometimes have not, exclusive privileges. Regulated companies resemble the corporation of trades, and are enlarged monopolies of the same kind. They are the Hamburg company, the Russian company, and the East-land company, the Turkey company, and the African company,' pp. 317, 318.

The terms of admission in the Hamburg company are now said to be quite easy. The fine for admission into the Russian company was reduced to 5l., and that for admission into the East-land company to 408., while, at the same time, all the countries on the north side of the Baltic were exempted from this exclusive charter. Though such companies may not be very oppressive, they are certainly useless, which, perhaps, is the highest eulogy which can ever be justly bestowed on a wellregulated company. The terms of admission into the Turkey company are less easy; and the trade, though in some measure laid open by Parliament, is still considered as far from free. This company contributes to maintain an ambassador, and two or three consuls, who

These companies have now ceased to exist.

ought to be maintained by the State, and the trade laid open to all his Majesty's subjects, pp. 318-20.

Regulated companies, it was observed by Sir Josiah Child, have never maintained any forts or garrisons in the countries to which they traded; but joint-stock companies have. The former are in reality much more unfit for this service than the latter. (1) The directors of a regulated company have no particular interest in the prosperity of the general trade of the company, for the sake of which such forts and garrisons are kept up. The decay of the general trade may contribute to the advantage of their own private trade; but the directors of a joint-stock trade have no private trade of their own. (2) The directors of a joint-stock company have always the management of a large capital, a part of which may be employed in building, repairing, and maintaining forts and garrisons; but the directors of a regulated company have no fund to employ in this way, pp. 320, 321.

Long after the time of Sir Josiah Child, the African Company was established, which was charged at first with the maintenance of all the British forts and garrisons that lie between Cape Blanc and the Cape of Good Hope, and afterwards with that of those only which lie between Cape Rouge and the Cape of Good Hope. The act which establishes this company had two distinct objects in view-(1) to restrain the monopolising spirit which is natural to the directors of these companies; and (2) to force them to give an attention which is not natural to them towards maintaining forts and garrisons, in the proper construction and expense of which neither they nor those who check them can be supposed to be profoundly skilled. Nor can any good reason be given for exempting the forts and garrisons to the south of Cape Rouge from the immediate government of the executive power to which Gibraltar and Minorca (garrisons said to be kept up for the benefit of

K

the Mediterranean trade) have always been submitted. Minorca is now probably lost for ever, and the possession of Gibraltar possibly serves no other purpose than to alienate from England her natural ally the King of Spain, and to unite the Bourbons in an alliance stronger than the ties of blood,' pp. 321-24.

Joint-stock companies differ in several respects, not only from regulated companies, but from private copartneries, p. 325.

I. In a private copartnery, no partner, without the consent of the company, can transfer his share to another person, or introduce a new member into the company. Each member, however, may, upon proper warning, withdraw from the copartnery, and demand payment from them of his share of the common stock. joint-stock company, on the contrary, no member can demand payment of his share from the company; but each member can, without their consent, transfer his share to another person.

In a

II. In a private copartnery, each partner is bound for the debts contracted by the company to the whole extent of his fortune. In a joint-stock company, on the contrary, each partner is bound only to the extent of his share.2

The trade of a joint-stock company is always managed by a court of directors. The proprietors as a

This argument had great weight during the greater part of the last century. But an alliance of Spain with any other power against Great Britain is not now to be apprehended, and the importance of Gibraltar has been greatly increased by the opening of the Suez Canal, and the increasing rigour of the interpretation put upon neutral duties, with reference to the supply of belligerent men-of-war, &c. Gibraltar, Malta, and Perim thus form a valuable chain of posts, guarding the route to India, and useful bases of operation for British Fleets.

Limited liability is now better known in this country, and ⚫ commandite' partnerships have made some progress. But, as Rogers justly remarks, if there be no labour of superintendence, and risks be eliminated, the rate of profit will not be in excess of the ordinary rate of interest. (See his note on this passage.)

rule give themselves no trouble about it, but contentedly receive their dividend. This exemption from trouble, and from risk beyond a limited sum, encourages many people to become adventurers in the jointstock companies who would not hazard their fortunes in any private copartnery. Such companies, therefore, draw to themselves very great stocks; that of the South Sea Company at one time amounted to upwards of 33,000,000l. The dividend capital of the Bank amounts to 10,780,000l.1 Joint-stock companies for foreign trade have seldom been able to maintain the competition against private adventurers. They have seldom succeeded without an exclusive privilege, and frequently have not succeeded with one, pp. 325, 326.

2

The Royal African Company, the predecessor of the present regulated African Company, had an exclusive charter, which not being confirmed by Act of Parliament, the trade was laid open. Such also was the situation of the Hudson's Bay Company. The South Sea Company, as long as they continued a trading company, had an exclusive privilege, as the East India Company has at present. The Royal African Company, with all its advantages, could not maintain the competition against private adventurers. No private adventurers ever attempted to trade in competition with the Hud son's Bay Company, which has always enjoyed an exclusive trade in fact, although it may have no right to it in law. Its capital is supposed not to exceed 110,000l., and to be divided among a small number of proprietors.. Hence it approaches very nearly to the nature of a pri-. vate copartnery,3 pp. 326-29.

The capital of the Bank of England is now 14,553,0007.

2 The East India Company ceased to be a trading company after 1833, and was virtually dissolved after the mutiny of 1857, by an act passed in 1858. But it preserved a nominal exis ence as a receiver of dividends until its stock was paid off.

3 For an account of the terms obtained by the Hudson's Bay Company on surrendering its regalian rights, see Rogers's note.