CHAPTER IX.

Interference of Government with the Pursuits and Property of Individuals—Cases in, and Objects for which such Interference is necessary—Limits within which it should be confined.

The discussions in which we have been engaged in the previous chapters, sufficiently evince the vast importance of the government being powerful, and at the same time liberal and intelligent—that is, of its having power to carry its laws and regulations into effect, and wisdom to render them consistent with sound principles. Far more, indeed, of the prosperity of a country depends on the nature of its government than on any thing else. If it be feeble, and unable to enforce obedience to the laws, the insecurity thence arising cannot fail of being most pernicious; while, on the other hand, if its laws, though carried into effect, be founded on erroneous principles, their operation cannot be otherwise than injurious; and though they may not actually arrest, they must, at all events, retard the progress of the society. An idea seems, however, to have been recently gaining ground, that the duty of government in regard to the domestic policy of a country is almost entirely of a negative kind, and that it has merely to maintain the security of property and the freedom of industry. But its duty is by no means so simple and easily defined as those who support this opinion would have us to believe. It is certainly true, that its interference with the pursuits of individuals has been, in many instances, exerted in a wrong direction, and carried to a ruinous excess. Still, however, it is easy to see that we should fall into a very great error if we supposed that it might be entirely dispensed with. Freedom is not, as some appear to Edition: current; Page: [188] think, the end of government; the advancement of the public prosperity and happiness is its end; and freedom is valuable in so far only as it contributes to bring it about. In laying it down, for example, that individuals should be permitted, without let or hindrance, to engage in any business or profession they may prefer, the condition that it is not injurious to others is always understood. No one doubts the propriety of government interfering to suppress what is, or might otherwise become, a public nuisance; nor does any one doubt that it may advantageously interfere to give facilities to commerce by negotiating treat es with foreign powers, and by removing such obstacles as cannot be removed by individuals. But the interference of government cannot be limited to cases of this sort. However disinclined, it is obliged to interfere, in an infinite variety of ways, and for an infinite variety of purposes. It must, to notice only one or two of the classes of objects requiring its interference, decide as to the species of contracts to which it will lend its sanction, and the means to be adopted to enforce their performance; it must decide in regard to the distribution of the property of those who die intestate, and the effect to be given to the directions in wills and testaments; and it must frequently engage itself, or authorize individuals or associations to engage, in various sorts of undertakings deeply affecting the rights and interests of others. The furnishing of elementary instruction in the ordinary branches of education to all classes of persons, and the establishment of a compulsory provision for the support of the destitute poor, are generally, also, included, and apparently with great propriety, among the duties incumbent on administration. And, in addition these duties and obligations, government has to undertake the onerous task of imposing and collecting the taxes required to defray the public expenditure, and of providing for the independence and security of the nation. It is not easy to exaggerate the difficulty and importance of properly discharging such duties, and the powerful influence which the policy Edition: current; Page: [189] pursued in regard to them must necessarily exercise over the public well-being. But without further insisting on these considerations, it is at all events obvious, when the subjects requiring, or supposed to require, its interference are so very numerous, and when we also take into view the necessity of accommodating the measures of administration to the changes which are perpetually occurring in the internal condition of nations, and in their external relations in respect of others—that it is impracticable to draw anything like a distinct line of demarcation between what may be called the positive and negative duties of government; or to resolve what Mr. Burke has truly termed “one of the finest problems in legislation, namely, to determine what the state ought to take upon itself to direct by the public wisdom, and what it ought to leave, with as little interference as possible, to individual exertion.”

It is, indeed, obvious, that no solution of this problem can be applicable at all times, and under all circumstances. But dismissing for the present all reference to the subject of taxation, of which we have treated in detail in another work,1 we may observe generally, that though it may not be possible previously to devise the measures proper to be adopted in particular emergencies, we may, notwithstanding, decide on pretty good grounds in regard to the description of objects which require the interference of government upon ordinary occasions, and give some idea of the extent to which it should be carried. The discussion of this interesting, though comparatively neglected department of the science, involves many difficult and delicate questions; and to enter fully into their examination would require a lengthened treatise. We shall merely, therefore, endeavour to lay down a few leading principles, touching very briefly upon such topics only as seem most interesting.

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The principles already established show, that without security of property, and freedom to engage in every employment not hurtful to others, society can make no considerable advances. Government is, therefore, bound to take such measures as may be effectual to secure these objects. But it must not rest satisfied when this is accomplished. It will fail of its duty if it do not exert itself to prevent that confusion and disorder in the distribution of property, and in the prosecution of employments, that could either not be prevented without its interference, or not so easily and completely. It is also bound to give every due facility to those about to engage in such useful undertakings as cannot be carried on without its sanction; and it should not only endeavour to protect its peaceable and industrious subjects from the machinations of the idle and profligate, but also against those accidents arising from the operation of natural causes to which their persons or properties may otherwise be exposed. The expediency of interfering to accomplish the objects thus briefly enumerated, is so very obvious, that it may be said to constitute a perfect obligation on government. But the expediency of a compulsory provision for the support of the poor, and of a national system of education, not being so obvious, we shall refer their consideration to a subsequent chapter.

At present, therefore, we have, first, to consider the means of obtaining security and protection.

Second, the species of contracts and of testamentary dispositions to which government ought to give legal effect.

Third, the means of adjusting such disputes as may arise among the citizens, and of enforcing the observance of contracts.

Fourth, the means of obviating confusion and fraud in the dealings of individuals.

Fifth, the species of industrial undertakings in which government may engage, or to which it should lend some peculiar sanction.

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Sixth, the means proper to be adopted to secure the property and persons of the citizens from such casualties as they would be subject to without the interference of government.

I. With respect to the first of these heads, or the provision of a force adequate to afford security and protection, its necessity is too obvious to require illustration. The best laws can be of little use if they may be insulted with impunity. All governments ought, therefore, to have a force at their command sufficient to carry their orders into effect at home, as well as to defend their territories from hostile attack. The question how this force may be most advantageously raised is one of deep importance. Perhaps, however, its investigation belongs rather to politics, properly so called, than to political economy; and, at any rate, our narrow limits forbid our engaging in it here. It may, however, be remarked, that in nothing, perhaps, has the beneficial influence of the division of labour been more perceptible than in the employment of a distinct class of individuals to maintain national tranquillity and security. To be a good soldier, or a good police officer, a man should be nothing else. It is hardly possible for an individual taken to serve as a militia-man, from an ordinary industrial employment, to which after a short time he is to be restored, to acquire those habits of discipline, and of prompt and willing obedience, so indispensable in a soldier. It is now very generally, if not universally admitted, that when a military force must be employed to suppress any disturbance, it is always best to employ troops of the line, and to abstain as much as possible from the employment of yeomanry, local militia, or volunteers. The former have neither partialities nor antipathies; they do what they are ordered to do, and they do nothing more: but the others are more than half citizens; and being so, are inflamed with all the passions and prejudices incident to the peculiar description of persons from among whom they are taken. When they act, they necessarily Edition: current; Page: [192] act under a strong bias, and can with difficulty be kept to the strict line of their duty.

II. The discussion of the second of the previously mentioned heads may be conveniently divided into two branches: the first having reference to the description of contracts between individuals to which government should give a legal sanction; and the second, how far it should legalise the instructions in wills and testaments.

1. It may be laid down in general, that government is bound to assist in enforcing all contracts fairly entered into between individuals, unless they are made in opposition to some existing law, or are such as cannot fail of being prejudicial to the public interests.

Contracts or obligations arising out of purely gambling transactions, have been supposed to be of the latter description, and it has been customary to refuse giving them a legal sanction. The wisdom of this custom seems abundantly obvious. No one doubts that gambling, by withdrawing the attention of those engaged in it from industrial occupations, and making them trust to chance, instead of exertion and economy, for the means of rising in the world, is, both in a public and private point of view, exceedingly pernicious. And we are not aware that any means have been suggested for checking the growth of this destructive habit, so easy of adoption, and, at the same time, so effectual, as the placing of gambling engagements without the pale of the law, and depriving the parties of any guarantee other than their own honour. To interfere further than this, might perhaps be inexpedient; but there appears no good reason for thinking that the interference of government is not beneficially carried to this extent.

We shall afterwards endeavour to show the impolicy of the restraints imposed on the rate of interest, and the injury which they occasion. And it is now pretty generally admitted, that the laws formerly enforced in this country, and Edition: current; Page: [193] still acted upon in various quarters, for restricting the freedom of those engaged in the internal corn-trade, by the prevention of forestalling, engrossing, and regrating, are both oppressive and inexpedient. It has been shown, over and over again, that the interest of the corn-dealer is in all cases identical with that of the public; and that, instead of being injurious, his speculations are uniformly advantageous.1

It is unnecessary, perhaps, to say anything about the attempts that have occasionally been made to fix the price of commodities by law. Every one must see that it is not in the nature of things that such attempts should have any but pernicious results. The price of commodities is continually varying, from innumerable causes, the operation of which can neither be foreseen nor prevented. If, therefore, an attempt were made to fix prices, it would follow, that when the natural price of commodities sunk below their legal price, the buyers would have to pay more than their fair value; and, on the other hand, when their natural price happened to rise above their legal price, the producers, to avoid the loss they would incur by carrying on their business, would withdraw from it, so that the market would not be supplied. Nothing, consequently, can be more obvious than that the interference of government in the regulation of prices is productive only of mischief. It will be shown, in a subsequent chapter, that wherever industry is free, the competition of the producers makes commodities be sold at their natural and proper price.

It was usual in this country, until recently, to punish workmen for combining to raise the rate of wages, or to diminish the hours of working. But the inexpediency of a practice of this sort is so obvious as hardly to require being pointed out. An individual who may not fix, in concert with others, the conditions on which he will sell his labour, is no better than a slave. No bad consequences can result from the exercise Edition: current; Page: [194] of this power on the part of the workmen. If the price they demand for their labour be unreasonable, the masters may, and always do, refuse to employ them; and as they cannot afford to live for any considerable period without employment, it is plain that all combinations to obtain an undue rise of wages, or to effect an improper purpose, carry in their bosom a principle of dissolution, and must speedily fall to pieces. But when workmen may refuse to work except upon such conditions as they choose to prescribe, they have, in this respect, obtained all which they can justly claim; and when they go farther, and attempt, as they too frequently do, to carry their point by violence,—by threatening the property of their employers, or obstructing such of their fellow-labourers as have refused to join the combination, or have seceded from it,—they are guilty of an offence which deeply affects the security of property and freedom of industry, and which should be instantly repressed by prompt and suitable punishment.

2. Various questions, some of which are of the greatest interest, arise in deciding how far government should go in giving effect to instructions in wills and testaments. There is no doubt, indeed, of the reasonableness and advantage of allowing individuals to bequeath their property to their children and nearest surviving relatives. And, without stopping to make any observations on what is so very clear, we shall proceed to inquire—first, whether individuals should be permitted to leave their fortune to strangers, to the exclusion of their children and relatives; second, whether, in distributing a fortune amongst children, the testator should be left to follow his own inclination, or be obliged to abide by any fixed rule; and third, whether individuals should be authorized to fix the conditions under which their property shall in future be enjoyed, or the purposes to which it is to be always applied.

(1.) The power freely to bequeath property by will or testament (the libera testamenti factio) is not recognised in Edition: current; Page: [195] the earlier stages of society. A man’s property is then usually divided in equal shares among his children, who succeed to it as matter of right; and in their default, it is inherited by his surviving relations or nearest of kin. But experience gradually discloses the inconveniences resulting from the enforcement of this strict rule of succession, and power is, in consequence, given to the possessors of property to make testaments, or to dispose by will of a part at least, of their personal or real estate. At first, however, this power is usually confined within very narrow limits, being in general restricted to the making of alterations in the shares falling to the children or kinsmen of the testator; that is, to the increasing of the portion of some, and the diminution of that of others. In Athens there was no power to devise property from the natural heirs previously to the age of Solon; and that legislator confined the privilege to those who died without leaving issue. In Rome, three centuries elapsed before a citizen could dispose of his property by a deed mortis causa, except in an assembly of the people; and in that case his will, as Montesquieu has remarked, was not really the act of a private individual, but of the legislature. “With us in England, till modern times, a man could only dispose of one-third of his moveables from his wife and children; and in general, no will was permitted of lands till the reign of Henry VIII., and then only of a certain portion: for it was not till after the Restoration that the power of devising real property became so universal as at present.”1 In Scotland, down to a comparatively recent period, almost all landed property was inalienable from the lineal heir.

Not only, however, is the power of testators usually augmented as society advances, but in some countries they are permitted to exercise a nearly absolute control over the disposal of their property, and even to bequeath the whole, or the greater part of it, to strangers, to the exclusion of Edition: current; Page: [196] their children and relations, as is substantially the case at this moment in England. A great diversity of opinion is, however, entertained in regard to the expediency of giving this power to testators. It is contended, that, independently altogether of their merit or demerit, every one is under the most sacred obligations to the beings he has been the means of bringing into the world; and that no one who has any property should be permitted to throw his children destitute upon society, but should be obliged to make some provision for their support. But, though the question be not free from difficulty, we are inclined to think that they are right who argue in favour of the uncontrolled power of bequeathing. A legal provision for children cannot be enforced without weakening that parental authority which, though sometimes abused, is yet, in the vast majority of instances, exerted in the best manner and with the best effect. The relations of private life should as seldom as possible be made the subject of legislative enactments. If children be ordinarily well-behaved, we have, in the feeling of parental affection a sufficient security that they will rarely be disinherited. The interference of the legislator in their behalf seems, therefore, quite unnecessary. In countries where the greatest extension is given to the power of the testator, nothing is more uncommon than to hear of the disinherison of a really dutiful family; and it would surely be most inexpedient to attempt to remedy an evil of such rare occurrence, by exempting children from the influence of a salutary check over their vicious propensities; and forcing individuals to bestow that property on profligacy and idleness, which is usually the fruit, and should always be the reward, of virtue and industry.

(2.) The same reasons which show that it is inexpedient to prevent individuals from leaving their fortunes to strangers, show that it is inexpedient to compel them to adopt any fixed rule in the division of their fortunes amongst their children.

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It has long been customary in this, as well as in many other countries, when estates consist of land, to leave them either wholly or principally to the eldest son, and to give the younger sons and daughters smaller portions in money. Many objections have been made to this custom; but mostly, as it would appear, without due consideration. That it has its inconveniences is, no doubt, true; but they seem to be trifling compared with the advantages which it exclusively possesses. It forces the younger sons to quit the home of their father, and makes them depend for success in life on the exercise of their talents; it helps to prevent the splitting of landed property into too small portions; and stimulates the holders of estates to endeavour to save a moneyed fortune adequate for the outfit of the younger children, without rendering them a burden on their senior. Its influence in these and other respects is equally powerful and salutary. The sense of inferiority as compared with others, is, next to the pressure of want, one of the most powerful motives to exertion. It is not always because a man is absolutely poor that he is industrious, economical, and inventive; in many cases he is already wealthy, and is merely wishing to place himself in the same rank as others who have still larger fortunes. The younger sons of our great landed proprietors are particularly sensible to this stimulus. Their inferiority in point of wealth, and their desire to escape from this lower situation, and to place themselves upon a level with their elder brothers, inspires them with an energy and vigour they would not otherwise feel. But the advantage of preserving large estates from being frittered down by a scheme of equal division, is not limited to its influence over the younger children of their owners. It raises universally the standard of competence, and gives new force to the springs which set industry in motion. The manner of living among the great landlords is that in which every one is ambitious of being able to indulge; and their habits of expense, though sometimes injurious to themselves, act as powerful incentives to Edition: current; Page: [198] the ingenuity and enterprise of the other classes, who never think their fortunes sufficiently ample, unless they will enable them to emulate the splendour of the richest landlords; so that the custom of primogeniture seems to render all classes more industrious, and to augment, at the same time, the mass of wealth and the scale of enjoyment.

It is said, indeed, that this eager pursuit of wealth, and the engrossing interest which it inspires, occasion every thing to be undervalued that does not directly conspire to its advancement, and make the possession of money be regarded as the only thing desirable. But this is plainly a very exaggerated and fallacious representation. It is not meant to say, that a desire to outstrip our neighbours in the accumulation of wealth is the best motive to exertion, or that it might not be preferable, could the same spirit of emulation be excited by a desire to excel in learning, benevolence, or integrity. After all, however, it usually happens that the game itself is of less value than the stimulus afforded by the chase. But though it were otherwise, there seems little reason to think that the love of superiority in mental acquirements will ever be able to create that deep, lasting, and universal interest that is created by a desire to mount in the scale of society, and to attain the same elevation in point of fortune that has been attained by the richest individuals, or by those at the summit of society. It is false, however, to affirm that the prevalence of this spirit makes the virtues of industry and frugality be cultivated to the exclusion of the rest. Every one, indeed, who is acquainted with what is going on around him, must know that such is not the fact. The business of those who inherit large fortunes is rather to spend than to accumulate; and while, on the one hand, the desire to attain to an equality of riches with them is a powerful spur to industry, the manner of living, which they render fashionable, prevents, on the other hand, the growth of those sordid and miserly habits that are subversive of every generous impulse. Many holders Edition: current; Page: [199] of large fortunes, and many who are still striving to attain that distinction, influenced partly, no doubt, by vanity and ostentation, but in a far greater degree by worthier motives, are the liberal patrons of the arts, and are eminently dis-dinguished by their benevolence. The example thus set by the higher ranks re-acts on those below them; being communicated from one class to another, until it pervades the whole society. And hence, though the spirit of emulation, industry, and invention be stronger here, perhaps, than in any other country, it has not obliterated, but seems, on the contrary, rather to have strengthened, the social and generous sympathies.

But, to whatever cause it may be owing, we may safely affirm, that an interest in the welfare of others has never been more strongly manifested in any age or country than in our own. Those who contrast the benevolent institutions of England and Holland, (the country which has the nearest resemblance to England), and the efforts made by the middle and upper classes in them to relieve the distresses and to improve the condition of those in inferior circumstances, with the institutions and the efforts of the same classes in France and Austria, will pause before affirming that the strong spirit of emulation, inspired by our peculiar laws and customs, has rendered us comparatively indifferent to the happiness of our fellow men. In the United States, properties, whether consisting of land or moveables, are almost invariably divided in equal portions amongst the children, and there are no very large estates. But notwithstanding these apparently favourable circumstances, has any one ever alleged that generosity is a prominent feature in the character of the Americans? or that they are in that respect superior to the English?

In France, previously to the Revolution, different provinces had different customs as to the division of landed property by will; but soon after the Revolution one uniform system was established. According to this new system, individuals Edition: current; Page: [200] having families, who make wills, are obliged to divide their fortunes, whether they consist of land or moveables, in nearly equal portions among their children; and in the event of their dying intestate, they are equally distributed amongst their descendants, without respect of sex or seniority.

The principles already established show that this law is radically bad. It weakens the desire to accumulate a fortune, over the disposal of which it allows, so very little influence; it goes far to emancipate the children of persons possessed of property from any efficient control; it gives them the certainty of getting a provision, whatever be their conduct; and it is difficult to see how it should do this without paralysing their exertions and checking their enterprise. But its worst effect consists in the influence it has had, and will most likely continue to have, in occasioning the too great subdivision of landed property. In this respect its operation has been most pernicious; and if it be not repealed, some method of evading it discovered, or some countervailing principle be called into operation, it bids fair, in no very lengthened period, to reduce the agriculturists of France to a condition little, if at all, better than those of Ireland.1

In distributing the property of those who die intestate, it seems natural to conclude that the same rule should be adopted which experience has shown is most advantageous in the making of wills. When, therefore, there is a landed Edition: current; Page: [201] estate, it should go to the eldest son; being, however, burdened with a reasonable provision for the other children. If the fortune consist of money or moveables, it may be equally divided.

(3.) We have now to inquire whether an individual, in leaving a fortune by will, should be allowed to fix by whom, and under what conditions, it shall always be held, and the purposes to which it shall always be applied.

Every man should have such a reasonable degree of power over the disposal of his property as may be necessary to excite his industry, and to inspire him with the desire of accumulating. But if, in order to carry this principle to the farthest extent, individuals be allowed to chalk out an endless series of heirs, and to prescribe the conditions under which they shall successively hold the property, it might be prevented from ever coming into the hands of those who would turn it to the best account; and it could neither be farmed nor managed in any way, however advantageous, that happened to be inconsistent with the directions in the will. To establish such a system would evidently be most impolitic; and hence, in regulating the transfer of property by will, a term should be fixed beyond which the instructions of the testator should have no effect. It is, of course, impossible to lay down any general rule for determining this period. According to the law of England, a man is allowed to fix the destination of his property until the first unborn heir be twenty-one years of age, when his will ceases to have any farther control over it. This is, perhaps, as judicious a term as could be devised. It appears to give every necessary inducement to accumulation, at the same time that it hinders the tying-up of property for too long a period.

In Scotland it had been lawful, since 1685, to settle or entail estates upon an endless series of heirs; but a bill was introduced into parliament in 1848, and passed into a law, which has placed the Scotch law of entail nearly on the same footing as the English.

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The bequeathing of property for the endowment of hospitals, libraries, schools, and other public purposes, is of much importance in a national point of view; and though it is a practice that has been and is very apt to be abused, still it would be easy to show that we have derived, and are at present deriving, many advantages from the bequests for such objects. But in this, as in other things, we should endeavour to separate what is good in the practice from what is bad. It is known to every one that the bequests in question are often embezzled and misapplied, and not unfrequently employed to promote questionable or improper objects. Hence it is abundantly obvious that they should be subjected to the control of government. It is difficult, indeed, or rather, perhaps, impossible, to define à priori how far interference should be carried in respect to them; but that, speaking generally, it is indispensable even to the proper carrying out of the views of the testator is sufficiently evident.

To regard the instructions in the wills of those who have established foundations as immutable laws, which are in no case to be altered, is, in truth, to permit the ignorance, folly, presumption, or dotage of an individual to become a standard for all future ages; and to regulate the studies and the institutions of a more advanced and enlightened period by his crude conceptions and views. Surely, however, it is needless to say, that no select number of men, and still less individuals, should be allowed to erect themselves into infallible legislators for every succeeding generation. The regulations of the great Alfred, and of the other benevolent personages who founded and endowed the universities of Oxford and Cambridge, may have been excellent at the time when they were framed; but had they been strictly adhered to, the chairs in these institutions must now have been filled with Aristotelian doctors, and lecturers on the Ptolemaic system of the world, and the infallibility of the Pope!

It is impossible to doubt the piety and generosity of many of those who, in the middle ages, left their property to Edition: current; Page: [203] monastic institutions; but still less is it possible to hesitate applauding the conduct of the Reformers, who diverted this property to other purposes; and who justly considered that the terms of wills dictated in a comparatively barbarous age, should not be permitted to consecrate and uphold a system which had been discovered to be most inimical to the interests of true religion, and to be productive only of mischief.

The establishment of foundling hospitals is another instance of the same kind. They were projected and have been kept up with the best intentions; but, as already seen, (ante, p. 185,) it is doubtful whether they have not been productive of a greater amount of crime and mortality than they have obviated.

Even as respects the educational foundations established in London and most parts of England, their utility is in many instances greatly narrowed, and in not a few all but wholly nullified, by the injudicious rules laid down for their government, and the jobbing and corruption by which their revenues are frequently wasted. Every unprejudiced person acquainted with the circumstances will readily admit, that there are no institutions that stand more in need of a careful revision and remodelling than these foundations. The sphere of their utility might be very greatly extended, at the same time that the education which the greater number of them afford, might be greatly improved. And it will not, surely, be contended, that more regard is due to the whims, caprices, or mistaken, though benevolent views of the founders, than to the interests and well-being of the successive generations, to whom they might be made to furnish an education suited to the varying exigencies and demands of the periods in which they live.1

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III. The third duty of government is, to provide the means of adjusting such disputes as may arise among its subjects, and of enforcing the observance of contracts.

To do this, it is necessary to establish convenient and proper tribunals, accessible at all times, at a moderate expense, to all who have occasion to appeal to them.

Every practicable effort should also be made to simplify the law, and to render it as clear and precise as possible.

Nothing tends more to paralyse the spirit of commercial enterprise than the existence of any doubt in the minds of parties with respect to the nature and effect of the laws bearing on the transactions in which they happen to be engaged. “The property and daily negotiations of merchants ought not to depend upon subtleties and niceties, but upon rules easily learned and easily retained.”1 It is mentioned, in a report by a Committee of the House of Commons on the foreign trade of the country, printed in 1820, that no fewer than two thousand laws with respect to commerce had been passed at different periods; that many of these had originated in temporary circumstances; and that eleven hundred were actually in force in the year 1815, exclusive of the additions made in the subsequent five years! The committee justly and strongly condemned this excessive multiplication. They stated, that the difficulty of deciding between legal and illegal transactions was so very great, that the most experienced merchants could seldom venture to act without consulting a lawyer; and that it was quite impossible for them to proceed in their speculations with that promptitude and confidence so necessary to their success. And they declared that, in their opinion, no more valuable service could be rendered to the trade of the empire than an accurate revision of this vast and confused mass of legislation, and the establishment of some certain, simple, and constant principles, to which all commercial regulations might be referred, and under Edition: current; Page: [205] which all transactions might be conducted with facility, safety, and confidence.

Since this report was compiled, a great deal has been done in the way of simplifying and consolidating our commercial law. A good deal, however, still remains to be accomplished; and as it is an object of the highest importance, it is to be hoped that it may be kept steadily in view, and that nothing may be left undone to give precision, clearness, and simplicity to every branch of the law, but especially to that affecting industrial pursuits.

Government is bound to lend every reasonable facility towards enforcing the fulfilment of contracts. Were it to evince any backwardness in this respect, there would be an immediate diminution of confidence, and comparatively few engagements would be entered into. But when an individual is either unable or unwilling to abide by the stipulations into which he has entered, there is often great difficulty in determining the extent to which government should go in its attempts to enforce performance. The questions that occur with respect to bankruptcy exemplify this.

All classes of individuals, even those who have least to do with industrial undertakings, are exposed to vicissitudes and misfortunes, the occurrence of which may render them incapable of making good the engagements into which they have entered. Individuals in this situation are said to be bankrupt or insolvent. But though bankruptcy be frequently the result of uncontrollable causes, it is far more frequently caused by the recklessness of individuals, and their repugnance to make those retrenchments which the state of their affairs demands; and sometimes, also, by fraud or bad faith. Hence the laws with respect to bankruptcy occupy a prominent place in the judicial system of every state in which commerce has made any progress, and credit been introduced. They differ exceedingly in different countries and stages of society; and it must be acknowledged that they present Edition: current; Page: [206] many difficulties, and that it is not possible, perhaps, to suggest any system against which some pretty plausible objections may not be made.

The execrable atrocity of the early Roman laws as to bankruptcy is well known. According to the usual interpretation of the law of the Twelve Tables, which Cicero has so much eulogised,1 the creditors of an insolvent debtor might, after some preliminary formalities, cut his body to pieces, each of them taking a share proportioned to the amount of his debt; and those who did not choose to resort to this horrible extremity, were authorized to subject the debtor to chains, stripes, and hard labour; or to sell him, his wife, and children, to perpetual slavery, trans Tyberim! This law, and the law giving fathers the power of inflicting capital punishments on their children, strikingly illustrate the ferocious sanguinary character of the early Romans.

There is reason to think, from the silence of historians, that no debtor was ever unfortunate enough actually to feel the utmost severity of this barbarous statute; but the history of the republic is full of accounts of popular commotions, some of which led to important changes, occasioned by the exercise of the power given to creditors of enslaving their debtors, and subjecting them to corporal punishments. The law, however, continued in this state till the year of Rome 427, 120 years after the promulgation of the Twelve Tables, when it was repealed. It was then enacted, that the persons of debtors should cease to be at the disposal of their creditors, and that the latter should merely be authorized to seize upon the debtor’s goods, and to sell them by auction in satisfaction of their claims. In the subsequent stages of Roman jurisprudence, further changes were made, which seem generally to have leaned to the side of the debtor; and it was ultimately Edition: current; Page: [207] ruled, that an individual who had become insolvent, without having committed any fraud, should, upon making a cessio bonorum, or a surrender of his entire property to his creditors, be exempted from all personal penalties.1

The law of England, down to a late period (1861), distinguished between the insolvency of persons engaged in trade and that of others, the former being treated with comparative indulgence. But despite the elaborate reasonings of Blackstone in its favour (Com., book ii. cap. 31.) there was really no good ground for this preference. Vast numbers of traders found their way into the Gazette without being the victims either of accidental losses or unavoidable contingencies. All that was most revolting in the worst cases of insolvency was equalled or surpassed by many of the cases in bankruptcy. Recklessness, improvidence, and the obtaining of loans or advances under false pretences, are as common in one class of society as another; and though this were not the case, the classes excluded from the benefit of the bankrupt acts had to encounter as many risks as the others. There are few trades so hazardous as that of a farmer, and yet if he became insolvent, he was not entitled to the same privileges he would have enjoyed had he been the keeper of an inn, or a commission agent! The injustice of this distinction is obvious; but without dwelling upon it, it is clear that discharges, which under the old law were not given to insolvents, should be granted indiscriminately to all honest debtors. Being relieved from all concern as to his previous incumbrances, an insolvent who has obtained a discharge is prompted to exert himself vigorously, at the same time that his friends are not deterred from coming forward to his assistance. But no one, however favourably disposed, could venture to aid with a loan an insolvent who continued liable to his previous debts; and he was discouraged, even if he had had means from attempting to earn anything more than a bare livelihood; so that, while creditors Edition: current; Page: [208] did not, in one case out of a hundred, gain the smallest sum by this constant liability of the insolvent, his energies and usefulness were for ever paralysed. We, therefore, are glad that the distinction between bankruptcy and insolvency has been practically abolished. Every case of a failure to meet one’s engagements should be tried on its own merits. Improvidence, extravagance, and bad faith, are equally objectionable in the case of traders and non-traders, and should be dealt with in precisely the same way.

The law of bankruptcy is administered by a court which sits in London, and by district courts in Manchester, Birmingham, and other large towns. The county court judges have also the powers of commissioners of bankruptcy, and may act as such.

The acts which constitute what are called a bankruptcy, are specified in clauses of the Act 25 & 26 Vict. c. 134. They all involve either an inability or a disinclination to pay one’s just debts. They consist principally of allowing oneself to be imprisoned for debt, a trader for 14 days, and a non-trader for two months; going or escaping abroad with intent to defraud creditors; filing a declaration of inability to meet one’s engagements; suffering execution to be levied by seizure and sale of goods; traders executing a conveyance of their property to trustees for the benefit of creditors, &c.

An adjudication of bankruptcy takes place upon the debtor, or a creditor to the extent of 50l., presenting a petition to the court, which, on proof of the facts, adjudges the debtor a bankrupt. An official assignee is then appointed by the court, to ascertain and take care of the debtor’s property. The creditors also appoint an assignee, and the proceedings then take place for realizing and rateably dividing the property of the bankrupt among the creditors, or for otherwise winding up and terminating the bankruptcy. But the entire proceedings may, we believe, be characterized as complicated, costly, and unsatisfactory.

Upon the bankrupt passing his last examination under the statute, the court appoints a meeting for considering whether Edition: current; Page: [209] a discharge should be granted to him, and the conditions under which it should be granted. Formerly, discharges or certificates were of three kinds, but these distinctions are now abolished. The court is authorized, according to the estimate which it forms of the conduct of the bankrupt, to suspend his discharge, with or without protection from arrest, for such term as they may think fit, stating in the discharge the reasons for such suspension, and whether he has been imprisoned under the provisions of the Act. It is left to the creditors to determine whether any, and if any, what allowance shall be made to a bankrupt out of his estate.

It is enacted that any bankrupt “who has carried on trade by means of fictitious capital, or who could not have had, at the time when any of his debts were contracted, any reasonable or probable ground of expectation of being able to pay the same, or that, if a trader, he has, with intent to conceal the true state of his affairs, wilfully omitted to keep proper books of account, or, whether trader or not, that his insolvency is attributable to rash and hazardous speculation, or unjustifiable extravagance in living, or that he has put any of his creditors to unnecessary expense by frivolous or vexatious defence to any action or suit to recover any debt or money due from him, the court may either refuse an order of discharge, or may suspend the same from taking effect for such time as the court may think fit, or may grant an order of discharge, subject to any condition or conditions touching any salary, pay, emoluments, profits, wages, earnings, or income which may afterwards become due to the bankrupt, and touching after-acquired property of the bankrupt, or may sentence the bankrupt to be imprisoned for any period of time not exceeding one year from the date of such sentence.”

But, despite these and other penalties embodied in the Act, we are strongly impressed with a conviction that bankruptcy is treated in this country with far too much indulgence. The offences specified in the Act are mostly of a very grave Edition: current; Page: [210] character, and some of them deserve to be very severely treated. But it so happens that it is often very difficult to establish by the evidence of witnesses some of the least justifiable and most common causes of bankruptcy, such as extravagant living, which is its great source, improvident speculation, and so forth. And we doubt whether any such evidence should be required. Bankruptcy, or the failure of individuals to fulfil their engagements, is, and should be considered a very serious offence. But, like other offences, it is of various degrees of magnitude, and may arise from very different causes. There is a wide difference between bankrupts who pay their creditors 10s., 15s., or 18s. per pound, and those who pay them nothing, as is the case with many, or only 1s. or 2s. per ditto, and it is not reasonable that they should be all treated in the same way. Innumerable accidents and disappointments may occur to hinder a man from meeting his engagements; but if he have lived within his income and properly proportioned his speculations to the extent of his capital, it is difficult to see how he should be unable to pay a dividend of 10s. or 12s. per pound on his debts. And supposing this to be a correct view, it might be safely enacted that all bankruptcies in which the estates realised less than 10s. per pound of dividend, should ipso facto be held to be fraudulent, or caused by improper proceedings on the part of the bankrupts; and that they should be dealt with accordingly, unless they succeeded in satisfactorily establishing the propriety of their conduct. In cases where the dividend exceeded 10s., it might, as at present, be left to the creditors to arraign the proceedings of the bankrupts in opposing their discharge.

We do not well see how a system of this sort could be justly objected to. Those who make improvident speculations, or who pursue a line of conduct which involves them deeper and deeper in debt and difficulties, cannot fail to know that they must necessarily become bankrupts; and, if they only injured themselves, few would regret the hardships which Edition: current; Page: [211] they might suffer. But they are sure to injure others—the savings on which the industrious and frugal had to depend being often squandered by the most unworthy parties, and on the most unworthy objects. Bankruptcy, when not occasioned by uncontrollable or unlooked-for causes, is, in truth, a great crime. Individuals who systematically contract debts which they have no reasonable prospect of being able to pay,—who, to obtain loans, misrepresent the true state of their affairs, and pervert them, when obtained, to spendthrift or dishonest purposes, are one of the worst varieties of swindlers. And the vast extent to which bankruptcy is carried, the extravagance and bad faith of many bankrupts, and the often inconsiderable amount of the dividends, and their non-existence, show the extent and malignancy of the disease, and the propriety of taking measures for its abatement.

Imprisonment for debts, honestly contracted, though formerly very general, seems to be a very questionable proceeding, and it is now, indeed, to a considerable extent, abandoned. Notwithstanding the deference due to the great authorities who have endeavoured to vindicate this practice, we confess ourselves unable to discover any thing very cogent in the reasonings advanced in its favour. Provided a person in insolvent circumstances intimate his situation to his creditors, and make a voluntary surrender of his property, he has, as it appears to us, done all that should be required of him, and should not undergo any imprisonment. If, indeed, he have deceived his creditors by false representations, or if he conceal or fraudulently convey away any part of his property, or if he have indulged in an expenditure beyond his means, he should be subjected to the pains and penalties attached to swindling; but when such practices are not alleged, or cannot be proved, and the dividend is equal to or exceeds the legal minimum (if such there be) creditors should have no power over the persons of their debtors, and should be entitled to their effects only. The Edition: current; Page: [212] maxim career non solvit, is not more trite than true. It is said, indeed, that the fear of imprisonment operates to prevent persons from getting into debt; and this, no doubt, is the case. But it must, on the other hand, be borne in mind, that the power to imprison tempts individuals to trust to its influence to enforce payment of their claims, and makes them less cautious in their inquiries as to the condition and circumstances of those to whom they give credit. The carelessness of tradesmen, and their extreme earnestness to obtain custom, are a principal cause of insolvency; and the power of imprisoning merely tends to foster and encourage these habits. If a tradesman trust an individual with money or goods which he is unable to repay, he has made a bad speculation. But why, because he has done so, should he be allowed to arrest the debtor’s person? If he wished to have perfect security, he should not have dealt with him, or dealt only for ready money: such transactions are, on the part of tradesmen, perfectly voluntary; and if they place undue confidence in a debtor who has not misled them by erroneous representations of his affairs, or misconducted himself, they have themselves only to blame.

It would really, therefore, be for the advantage of creditors, that all penal proceedings against the persons of honest debtors should be abolished. The dependence placed on their efficacy is deceitful. A tradesman should rather trust to his own prudence and sagacity to keep him out of scrapes than to the law for redress: he may deal upon credit with those whom he knows, but he should deal for ready money only with those of whose circumstances and character he is either ignorant or suspicious. By bringing penal statutes to his aid, he is rendered remiss and negligent. He has the only effectual means of security in his own hand; and it seems highly inexpedient that he should be taught to neglect them and to put his trust in prisons.

But it is needless to insist farther on these considerations. Their justice has been admitted by the legislature. Individuals Edition: current; Page: [213] can no longer be imprisoned for debts under 20l.,1 and when debts exceed that amount imprisonment can only take place after judgment has been obtained. When discharges are delayed in bankruptcy cases, the courts are in the habit, unless the cases happen to be of an objectionable description, of granting protections against imprisonment.

IV. The fourth duty of government is to adopt such means as may be most effectual for the prevention of confusion and fraud in the dealings of individuals.

In furtherance of this object, the governments of civilised countries have endeavoured to enforce the equality of all weights and measures of the same denomination. By their attention in this respect, additional facilities are given to commercial transactions; and that confusion and difficulty are obviated that could not fail to arise in the making of bargains and the adjustment of contracts, were the standards to which reference is made not legally and clearly defined.

For the same reasons, governments have every where reserved to themselves the privilege of issuing coined money; and it is obvious, were individuals allowed to exercise this privilege, that the confusion that would be occasioned by the issue of coins of different denominations, and of the same denomination, but of different degrees of purity and weight, would go far to deprive society of the advantage it has derived from the introduction and use of money. Government should not, however, confine its attention wholly to the issue of coined money; it is equally bound to extend it to the issue of paper money, or of paper intended to serve as money.

The signal advantages derivable from the substitution of notes or paper for coins, depend, in great measure, on the fact of such notes being issued by parties of unquestionable solvency, and of their being readily exchangeable for the gold they profess to represent. The permission that was long Edition: current; Page: [214] granted in this country, to individuals and associations, to issue notes to be used as money, without requiring any guarantee for their payment, was productive of the most disastrous results; the destruction of country bank paper having on different occasions, in 1793, in 1814, 1815, and 1816 in 1825, and to a considerable extent, also, in 1837—overspread the empire with bankruptcy and ruin. That the recurrence of such calamities should, if possible, be prevented, was not a proposition that could be disputed, and the simplest and most effectual way of doing this, would have been to prohibit the issue of all notes payable on demand, except by those who gave security for their payment. There were, however, great practical difficulties in the way of such a project; and the objects to be effected by it, with others of hardly less importance, were to a great extent secured by the measures for the improvement of the currency, that were carried through parliament in 1844. These effected a separation between the issue and banking departments of the Bank of England. The former was permitted to issue notes of the value of £14,000,000 upon securities; but whatever she may issue more than this must be in exchange for an equivalent amount of coin or bullion. The issues of the country banks were at the same time limited; so that they are no longer able to increase their amount, as was their former practice, in periods of speculation and excitement, to any improper extent. The establishment of new banks for the issue of notes without the assent of government, was then also prohibited; and as the number of existing banks is gradually diminished, provision will ultimately be made, if this regulation be maintained, for confining, as would be most desirable, the issue of notes to a single bank or department. These important measures, notwithstanding they deeply affected many powerful private interests, were passed with little difficulty, and have been of the greatest service.1

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It is, perhaps, hardly necessary to advert to the regulations intended to secure the quality of manufactured goods that were formerly so very general. These are now almost everywhere abolished; and it appears to be universally conceded that in this, as in most other things, the free competition of the producers is the only principle on which any reliance can ordinarily be placed for securing superiority of fabric, as well as cheapness. Wherever industry is emancipated from all sorts of restraints, those who carry it on endeavour, by lessening the cost, or improving the fabric of their goods, or both, to extend their business; and the intercourse that subsists among the different classes of society is so very intimate, that an individual who should attempt to undersell his neighbours by substituting a showy and flimsy for a substantial article, would be very soon exposed, and be obliged to reduce its price to its proper level. Cheaper articles are often advantageously substituted for those that are dearer; but it is not possible to substitute inferior for superior articles, and maintain them in the place of the latter, without making a proportional reduction in their price. A manufacturer has not only the eyes of his customers, but of the trade upon him; and while any scheme for diminishing expense excites their competition, all attempts at fraud are most commonly ruinous to the future prospects of the party. A character for honesty and fair dealing is, in the arts as in everything else, of the highest value.

Wherever public marks or regulations are introduced, their tendency is to weaken or extinguish that spirit of invention and enterprise which is indispensable to manufacturing eminence. When a man’s muslins, or silks, or linens, come up to the official standard, he has little motive to improve them still more. Whereas, when there is no standard other than the public taste, he has, in the more as well as in the less advanced stages of his art or craft, the same desire to attract demand, and to extend his dealings; and this he can only do by reducing the price of his goods, Edition: current; Page: [216] or suiting them still better to the real or imaginary wants of his customers, or of the public.

It is obvious, too, that the plan of subjecting manufactured products to examination by government agents must lead to all sorts of abuse. When this baneful practice used to be carried on, the higher marks were frequently fixed, not to the best goods, but to those whose producers were best able to promote the interests of the examiners.

But there are no absolute principles in any department of political science; and though, speaking generally, the abolition of the examination system has been of the greatest advantage, yet there are a few cases which are so very peculiar that it may be beneficially enforced in them. Fire-arms, for example, cannot be readily tested by ordinary persons; and as any defect in their construction is most dangerous, we agree with those who would prohibit the sale of all muskets, fowling-pieces, pistols, &c. that have not been tried and approved at a public proof-house.

The same reasoning applies, and with still greater force, to the case of chain-cables and anchors. It is but seldom that they can be tested by the buyers. And as the safety of ships and crews, that is of much valuable property and of many lives, may be compromised by cables having a single bad link, or anchors being improperly constructed, it is highly expedient that they should be subjected to an efficient test before being used. The government that neglects to enforce such a test, neglects a most important duty.

The registration of deeds and contracts affecting fixed property, give additional facilities to its transfer, and to the negotiation of loans upon it.

The system of conveying land and other fixed property hitherto existing in England, has been both expensive and insecure, and has been long and justly complained of. This, however, has not been occasioned by the taxes on its conveyance, but by there being no cheap and convenient methods Edition: current; Page: [217] of registering the deeds and bonds affecting landed property. This rendered it a very difficult matter to make out a valid title to an estate, or a title sufficient to secure the rights of the purchaser, and to hinder his being liable for unknown or unappreciated claims, such as those arising out of marriage settlements, &c. Many attempts have been made to introduce an improved system; the obstacles to be overcome were, however, so great that they have generally been abandoned. But in the course of the present year (1863) a measure, the Act 25 & 26 Vict. c. 53., has been adopted, which provides, among other things, for the registration of deeds affecting estates; and which its supporters contended, on apparently good grounds, will give a much greater degree of facility and security to the transfer of property. And now that an Act of this sort has been passed, it will be comparatively easy to remedy its defects, as they may be disclosed by experience, and to render it complete and effective.

A system of this sort was adopted in Scotland at a very early period, and has been productive of the best effects. All deeds affecting landed property are there regularly registered, a special register being kept for the entry of deeds of entail. These registers are open to the inspection of the public; and the first thing that is done by the bidder for an estate, or by a lender of money on bond upon it, is to desire his agent to inspect the register, to ascertain whether there are any burdens affecting it, and their nature and extent. In this way every man is made exactly aware of what he is doing; and if he either buy an estate with a vitiated title, or lend money upon one that is already encumbered up to its value, he has himself only to blame. A degree of security is thus given, both to purchasers and lenders, that is at once highly advantageous, and is not otherwise attainable.

The practice, called the truck system, under which some masters either directly supply their work-people with certain descriptions of goods to account of wages, or open or have an Edition: current; Page: [218] interest in shops to which they oblige them to resort, has given rise to a great deal of controversy. The practice has sometimes, no doubt, been adopted by the masters from a sincere desire to benefit those engaged in their service, by furnishing them, at a reduced price, with some of the principal articles of subsistence. But a system of this sort may be easily perverted to fraudulent purposes; and there can, we apprehend, be little question that it has been, in many instances, employed to cheat the work-people out of a portion of their just claims; and also, by allowing them to become indebted to the accommodation shops, to deprive them, in some degree, of their free agency. The legislature took this view of the practice, which was forbidden, in most trades, by the Act 1 & 2 William IV., cap. 32. It is still, however, extensively practised; and, notwithstanding its sinister influence, and the advantage it gives to the dishonest manufacturer, it is no easy matter, especially when trade is depressed, to prevent its being acted upon.

V. We have, in the fifth place, to consider the species of undertakings in which government may engage or control, or to which it may lend some peculiar sanction.

Perhaps, with the single exception of the conveyance of letters, there is no branch of industry which government had not better leave to be conducted by individuals. It does not, however, appear that the post-office could be so well conducted by any other party as by government: the latter alone can enforce perfect regularity in all its subordinate departments; can carry it to the smallest villages, and even beyond the frontier; and can combine all its separate parts into one uniform system, on which the public may rely for security and despatch. Besides providing for the speedy and safe communication of intelligence, the post office has every where almost been rendered subservient to fiscal purposes, and made a source of revenue; and provided the duty on letters be not so heavy as to oppose any very serious Edition: current; Page: [219] obstacle to the frequency and facility of correspondence, it seems to be a most unobjectionable tax, and is paid and collected with little trouble and inconvenience.

The construction and police of roads, harbours, &c., are among the most important objects to which the attention of government should be directed. In some countries, as France the administration of roads is placed in the hands of government; while in others, as England, it is placed in the hands of the gentry of the different counties, or of great companies, acting under authority of the legislature. Each plan has its peculiar advantages and defects; but the balance on the side of advantage seems, on the whole, to preponderate in favour of the English system. The French system is perhaps preferable, were it applied only to the great lines of road; but these bear a very small proportion to the cross and other roads with which every extensive kingdom either is or should be intersected. And it seems reasonable to suppose that, when the gentry, and those most directly interested in having good roads, and on whom the expense of their construction and maintenance principally falls, have to superintend their execution and repair, they will be made and maintained better, and at a cheaper rate, than if their management were left wholly to the care of engineers employed by government, and responsible to it only.

It is the duty of government to take care that the tolls be not oppressive; and to assist, by making grants, in enabling roads to be carried through districts, and bridges to be constructed, where the necessary funds could not otherwise be raised. The money formerly advanced on account of the Highland roads and bridges was of this description, and was judiciously expended.

Generally, however, government should be exceedingly shy about advancing funds for the prosecution of undertakings that have failed in the hands of private individuals, or that will not be engaged in by them. Grants for such purposes Edition: current; Page: [220] are frequently, indeed, little better than bonuses to political partisans; and are almost always unprofitably expended. The money laid out on the Caledonian Canal, on Leith harbour, and on several canals and river works in Ireland, executed by government, has been, in so far as the public interests are concerned, all but thrown away.

There are some branches of industry which must be carried on in some degree in common, but with respect to the prosecution of which the views and interests of individuals are so very various, that government is obliged to interfere to regulate their respective pretensions. The salmon fishery is an instance of this sort. Government has not only to fix when the fishery shall begin and terminate, but it has also to decide how far the proprietors, near the mouths of rivers, shall be entitled to carry weirs and other fishing machinery into their channels.

Undertakings in which the hazard is considerable, or that require, in order to their successful prosecution, a larger amount of capital than can be conveniently furnished by individuals, are usually carried on by companies, which frequently require the sanction of the legislature to their formation. And when these bodies claim no peculiar privileges, but are formed on the principle of coming into fair and open competition with each other and with individuals, there does not seem, in ordinary cases, to be any good reason for opposing their incorporation. But in the event of their claiming any peculiar privileges, or if the purpose for which they seek to be incorporated would necessarily give them such privileges, the fair presumption being that they will employ them to promote their own private interests, in preference to those of the public, they should not be incorporated without the maturest deliberation. Still, however, there are many cases in which it is for the public advantage that companies with such privileges should be established, under proper regulations. A city is ill supplied with water; there is a copious spring ten or twenty miles Edition: current; Page: [221] distant, and a company offer to bring this water into the city, on their getting an act authorising them to appropriate the spring, and to lay pipes or to construct an aqueduct for the conveyance of the water. In this case the object in view is most desirable; but it is plain that, were the authority they require given unconditionally to the company, it would be in their power to raise the price of water to the highest level, and perhaps to make an enormous profit, to the great injury of the inhabitants. The same is the case with railways and canals. It is of the greatest importance, that the best means of communication should be established between all great towns; and every facility should be given for the formation of companies for their construction. But then is is to be borne in mind, that there is always some one line between any two places decidedly better fitted for a railway or canal than any other line; and if a company get an Act of Parliament, authorising them to appropriate that line, they get, in fact, a substantial monopoly of the traffic between the places connected by the railway or canal, and may, in consequence, supply the public with inferior accommodation, and add proportionally to their charges. And hence, in authorising the establishment of companies for such purposes, such conditions should be inserted in the acts as may be adequate for the protection of the public interests. This important consideration has, however, been far too little attended to. In this country, we have in most cases contented ourselves with endeavouring to provide against overcharges, by fixing maximum rates of profit on the company’s stock, and maximum rates of charge for the services to be performed by them. But overcharges are not the only evils to be guarded against; and if they were, experience has shown that the restrictions referred to are ill fitted to attain their object. A limitation of the rate of dividend tempts a prosperous company to engage in subsidiary undertakings, though of doubtful utility and profit; and it farther tempts them to countenance an extravagant system of management; Edition: current; Page: [222] to give, by underhand methods, unfair advantages to their proprietors; and, in short, to adopt every device by which they may retain the highest (or unnecessarily high) rates of charge, without apparently raising their revenue above the sum required to defray the maximum rate of dividend. A limitation of the rates of charge is equally ineffectual. The rates are uniformly such as it is supposed will yield, when the railway or other public work is about to be constructed, an adequate remuneration for the capital to be vested in it. But the fair presumption is, that the country will continue to increase in wealth and population, for an indefinite period, with the same rapidity that she has increased since the close of the American War; and if so, these rates will, in a few years, yield a profit or interest far beyond any that was in the contemplation of the parties when the work was entered upon. Now, it is plain that in such cases there will be no way of abating the company’s profits, or, which is the same thing, its charges against the public, except by the formation, at a vast expense, of a new, and otherwise, perhaps, a perfectly unnecessary road! Hence the obvious expediency, in passing Acts for the formation of railways, canals, docks, water and gas companies, and other public works, of reserving power to government to make periodical revisions of the tolls or rates of charge for the services to be performed; to control their management, in the view of providing for the greater security and convenience of the public; and, if needs be, to purchase up the works on reasonable terms.

The French have adopted the plan, in legislating for railways, of fixing upon lines and rates of toll, with plans for their construction, &c.; and of submitting these lines to public competition, and assigning them to those who offered to construct them and work them for the shortest lease or term of years, at the expiration of which they were to become the property of the public. This plan is preferable, perhaps, in some respects, to that previously mentioned. But we have Edition: current; Page: [223] neither adopted the one system nor the other; and it is all but universally admitted that our legislation, with regard to railways and other public works, has evinced a highly culpable inattention to the public interests, and been discreditable to the intelligence of the country. Eventually, however, the extraordinary extension of railway projects forcibly attracted attention to the subject; and though the most important lines have been, others still remain, to be conceded, while the older companies are frequently obliged to come to Parliament for new Acts, so that, by adopting a well-devised system, we may yet check abuse, and provide for the public interests, not only in the lines that remain to be granted, but may also be able to repair, in part at least, the errors committed in the cession of the others.

It is sometimes necessary to encourage the formation of a company for some desirable object—such as the lighting of a middling-sized town with gas—that it should get an exclusive privilege for a given number of years. But this should in no case be ceded without due examination, and without the insertion of conditions, to protect the public from any extortion on the part of the company.

No exclusive company should ever be established for carrying on any sort of manufacture, or for conducting any branch either of internal or external commerce. No such institution, formed for such an object, has ever been anything else than a public nuisance. If it be necessary that those engaged in any particular trade should contribute to defray some public expenses required for its prosecution, they may be formed into a regulated company; that is, a company into which every one may enter on paying a moderate fine, or annual premium, being then at liberty to trade on his own account, and to act in all respects according to his own judgment and discretion. The necessity of providing for the expense of the armaments, without which it was alleged the trade with India could not be conducted, formed, during a lengthened period, the only circumstance urged in defence of the exclusive privileges Edition: current; Page: [224] granted to the East India Company. But admitting that these armaments were necessary, and that government declined to provide them, their cost might have been defrayed by a peculiar duty on Indian exports and imports appropriated to that object, or by forming the traders into a regulated company. The latter, indeed, was the mode in which the Levant and Russian trades were long conducted, and the expenses of a public nature attached to them provided for. And had either of these plans been adopted in conducting the East India trade, it is abundantly certain that it would have proved more extensive and beneficial than it did.

The businesses of insurance and banking are those which are most commonly prosecuted in this country by companies. With the exception of the Bank of England, none of these companies enjoy any peculiar privilege. But the monopoly granted to the Bank is one which may, under certain conditions, be advantageously continued to that establishment. (See post, chapter on Co-operative Societies.)

No authority should ever be granted to companies or individuals to undertake any work, however useful, by which the private property of others may be affected, without providing for the full indemnity of the latter. To act on any other principle would shake the security of property, and injure one set of individuals for the benefit of some other set.

The law with respect to patents for new inventions and discoveries in the arts, is encumbered with several difficulties. The expediency of granting patents has been disputed, though, probably, without sufficient reason. Were they refused, the inducement to make discoveries would, in many cases, be much weakened; at the same time that it would plainly be for the interest of every one who made a discovery to endeavour, if possible, to conceal it. And, notwithstanding the difficulties in the way of concealment, they are not insuperable; and it is believed that several important inventions Edition: current; Page: [225] have been lost, from the secret dying with their authors. On the other hand, there can be no doubt that great inconvenience is experienced in the application of improved machinery and inventions by the immense number of existent patents, and the difficulty of avoiding a collision with some of them. On the whole, it would seem that some considerable restraint should be laid on the granting of patents, and that they should not be conceded, except to protect some invention or discovery of importance. Perhaps, also, it would be expedient to enact that no extant patent should be allowed to bar or nullify a new invention of the same kind, unless it have been carried into actual effect, or acted upon, some time during the previous five or six years. It is not easy to decide upon the term for which a patent or exclusive privilege should be granted. Some have proposed that it should be made perpetual; but this would be a serious obstacle to the progress of improvement, and would lead to injurious results. Perhaps the term of fourteen years, to which the duration of a patent is limited in England, is as proper a one as could be suggested. It may be too short for some inventions, and too long for others, but, on the whole, it seems a pretty fair average.

Previously to the reign of Queen Anne, it was common to grant patents without any condition, except that they should be for really new inventions. But it was then ordered, that those who obtained patents should deliver a minute and accurate description or specification of the invention for which the patent is granted, into the Court of Chancery. This is a judicious regulation. It secures the invention from being lost, and the moment the patent expires every one should be in a condition to profit by it.

VI. We have, in the sixth and last place, to consider the means proper to be adopted for securing the property and persons of the citizens from such casualties as they might be subject to without the interference of government.

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Of the measures of a public character, devised for the protection of property from casualties, a principal class is intended to give security to navigation. Without the cooperation or sanction of government, light-houses could not be erected or managed on any general system, nor safe and convenient harbours be constructed. To defray the expense of such works, a revenue of some sort or other must be provided; and as it belongs to the legislature to say how this revenue shall be raised, it must also belong to it to decide upon the propriety of their construction. No doubt can be entertained that great additional facility and security has been given to navigation by the erection of light-houses, and by the formation and improvement of docks and harbours, during the last century. At the same time, however, it is highly expedient, with a view to the encouragement of commerce, that the charges laid on shipping, on account of these works, should be kept as low as possible. Where they are heavy, the navigator is tempted to resort to less expensive though less secure channels.

Except in so far as they may be obviated by the establishment of a good system of police, government can do but little to protect property on land from casualties. It may, indeed, enact regulations to guard against fire, respecting the thickness of party-walls in cities, the materials to be used in roofing, &c.; but farther than this it had better not interfere, but leave the care of property to the vigilance of its owners.

The measures of a public character, contrived to protect the persons of the citizens against casualties, are principally intended to prevent the spread of contagious diseases, and to secure the proper education of medical men.

From a belief that the plague is contagious, and that the infection may be conveyed to a great distance, it has long been usual to adopt precautions to hinder its importation. For this purpose, ships coming from places where the plague is prevalent, are usually obliged to anchor for forty days in Edition: current; Page: [227] some particular port, or roadstead, the passengers by them being obliged to resort for the same period, to a public building prepared for their reception, denominated a lazaretto, where they are placed under surveillance, and not allowed to have any intercourse with any one except the officers of health. The ships and individuals so confined are said to be performing quarantine. If at the end of forty days no symptoms of disease appear, they are set at liberty.

It should, however, be stated, that the fact of the plague being contagious has been denied, and that the precautions referred to have been said to be useless, and fitted only to impose vexatious and burdensome restraints on commerce. But though these precautions may, in some instances, have been carried too far, yet, in a matter of this sort, innovations should not be rashly adopted; and much better evidence than any hitherto laid before the public would seem to be necessary to warrant the abolition of all restraints on the intercourse with infected countries.

When a virulent contagious disease breaks out in a particular district, it is the duty of government, by surrounding it with a cordon of troops, to prevent, if possible, its further progress. A measure of this sort may, indeed, occasion a greater intensity of mortality within the infected district; but the safety of a few individuals is not to be purchased by seriously endangering the lives of many more.

Much difference of opinion has existed in regard to the extent to which government should go in recommending or enforcing the adoption of any efficient remedy against a mortal disease; such, for example, as vaccination. In such cases it had better, perhaps, confine its attention to the institution of experiments and examinations as to the facts, laying the result before the public, and leaving individuals to use their own discretion with respect to them.

It has been argued, that government is only imposing on itself a needless task when it interferes to regulate and ascertain the qualifications of those engaged in the medical Edition: current; Page: [228] profession; inasmuch as the desire of promoting their own interest will, in that, as in all other businesses, ensure proficiency. But there is a wide difference between the employments of those who exercise their art on the bodies of men, and those who exercise it on some sort of raw or manufactured produce. If I employ a tailor to make me a coat, I will not employ him again unless it be made to my mind; nor, though the cloth were spoiled, would the loss be considerable; but if I employ a physician, surgeon, or apothecary, to prescribe for me, I may, in the event of the person so employed being ignorant of his art, lose my life; while, owing to the difficulty of ascertaining when death is occasioned by the natural progress of disease, or by the unskilfulness of the practitioner, the business of the latter may not be materially diminished; and he may continue, for an indefinite period, to prosecute his destructive career. It does, therefore, seem that government is bound to take such measures as may be effectual to secure the proper education of medical men; and that none should be permitted to act as such who have not been properly educated, and have not been examined and obtained a certificate of their capacity to practise from some public board constituted for that purpose. All individuals, though very many are nowise fitted to judge of their qualifications, must occasionally resort to medical men; and it is the duty of government to provide that the lives of its subjects be not sacrificed to ignorance, cupidity, or quackery.

In some countries it is usual to prohibit the sale of poisons, except under certain regulations; and the many crimes that are perpetrated by means of arsenic, prussic acid, &c., seem to evince the propriety of making their sale illegal, except when the buyer brings a note from a physician or other authority, specifying the quantity required, and the purpose for which it is sought.

It has been usual, in order to guard against accidents, to limit the number of passengers to be carried by stage Edition: current; Page: [229] coaches, and to subject packet boats and other public conveyances to examination.

Notwithstanding the introduction of Sir Humphry Davy’s safety lamp into mines, explosions still frequently take place in them, which occasion the most frightful disasters; while, owing to the recklessness and apathy of the workmen, there is but little prospect of these calamities being abated by greater care or attention on their part. But what will not be done by the miners might, perhaps, be done by making the masters responsible for the injuries inflicted on the former by explosions and such like accidents. By throwing the support of the families and others dependent on workmen killed or injured in the mines on the masters, the latter would be compelled to enforce those regulations by which alone accidents may be averted. And though the measure might, perhaps, make some addition to the cost of mineral produce, it would be far too trifling to have any sensible effect.

For the same reasons we are also disposed to think that the proprietors of mills and factories should be made responsible for the accidents that occur in them.

We have alluded, in a previous part of this work, to the serious injury done to the public health by the bad state of the dwellings of the poor. (Ante, p. 129.) This is especially the case in the great manufacturing towns; and it is not easy to imagine that there can be any subject with stronger claims on the public attention. It is in vain to trust, in a matter of this sort, to the judgment of individuals. If private parties were left to construct houses at discretion, we should no doubt have, in time to come, as we have had hitherto, thousands upon thousands of cottages erected without any provision for their drainage, for furnishing them with adequate supplies of water, or even for their ventilation; and such cottages, being cheap, are always sure to find occupiers. Nothing, however, can be more obvious than that it is the duty of government to take measures for the prevention and repair of an abuse of Edition: current; Page: [230] this sort. Its injurious influence is not confined to the occupiers of the houses referred to, though, if it were, that would be no good reason for declining to introduce a better system. But the diseases engendered in these unhealthy abodes frequently extend their ravages through all classes of the community; so that the best interests of the middle and higher orders, as well as those of the lowest, are involved in this question. And on the same principle that we adopt measures to guard against the plague, we should endeavour to secure ourselves against typhus, and against the brutalising influence, over any considerable portion of the population, of a residence amid filth and disease.

Nothing has ever been found to be half so effective for the securing of good work and honourable conduct, as the making of all persons directly responsible for their proceedings. In furtherance of this object it has been customary for the principal manufacturers and merchants to adopt certain marks, which, being impressed on their goods, might give the public a guarantee for their being genuine, that is, for their being made or supplied by the parties whose names they bear. But instead of being any security against fraud, the facility with which these marks have been counterfeited, and the difficulty of distinguishing those that are authentic from those that are spurious, have proved a copious source of abuse. Fraudulent proceedings of this sort, when they can be brought home to the parties, should be severely dealt with. And we are glad to have to state that by an Act passed in 1862, the 25 & 26 Vict. cap. 88, the forgery of trade marks and their use by parties knowing them to be forged, are visited by very heavy penalties. But the best security that ordinary people can have for getting genuine articles, is to resort to shops of established character, or to those that are above the suspicion of a fraud.

As already stated, we shall briefly touch, in another part of this work, on the interference of government with respect to public education, and the support of the poor. It belongs to Edition: current; Page: [231] the politician and moral philosopher to discuss how far, and in what way, it should interfere to strengthen and promote moral and religious habits.

The previous observations may, perhaps, suffice to give a general idea of the sort of objects with respect to which the interference of government is required, in conducting the ordinary business of society, and the extent to which it should be carried. It cannot, however, be too strongly impressed upon those in authority, that non-interference should be the leading principle of their policy, and interference the exception only; that in all ordinary cases individuals should be left to shape their conduct according to their own judgment and discretion; and that no interference should ever be made on any speculative or doubtful grounds, but only when its necessity is apparent, or when it can be clearly made out that it will be productive of public advantage. The maxim, pas trop gouverner, should never be absent from the recollection of legislators and ministers. Whenever they set about regulating, they are treading a path encompassed with difficulties; and while they advance with caution, they should be ready to stop the moment they do not see the way clearly before them, and are not impelled, by a strong sense of public duty, to go forward. But, so long as this is the case, they should never hesitate in their course. There are many cases in which government must, and many more in which it should, interfere. And it is the duty of the legislature, having once fully satisfied itself, by a careful inquiry, of the expediency, all things considered, of any measure, resolutely to carry it into effect.

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