of chartered companies in America, which have caused so much loss and so much scandal in Europe, did not occur in the part of the Union to which this extract refers, but in other States, in which the right of associating is much more fettered by legal restrictions, and in which, accordingly, joint-stock associations are not comparable in number or variety to those in New England. Mr. Carey adds, "A careful examination of the systems of the several states can scarcely, we think, fail to convince the reader of the advantage resulting from permitting men to determine among themselves the terms upon which they will associate, and allowing the associations that may be formed to contract with the public as to the terms upon which they will trade together, whether of the limited or unlimited liability of the partners;" and I concur in thinking that to this conclusion, science and legislation must ultimately come. § 8. I proceed to the subject of Insolvency Laws. Good laws on this subject are important, first and principally, on the score of public morals; which are on no point more under the influence of the law, for good and evil, than in a matter belonging so preeminently to the province of law as the preservation of pecuniary integrity. But the subject is also, in a merely economical point of view, of great importance. First, because the economical well-being of a people, and of mankind, depends in an especial manner upon their being able to trust each other's engagements. Secondly, because one of the risks, or expenses, of industrial operations is the risk or expense of what are commonly called bad debts, and every saving which can be effected in this liability is a diminution of cost of production; by dispensing with an item of outlay which in no way conduces to the desired end, and which must be paid for either by the consumer of the commodity, or from the general profits of capital, according as the burden is peculiar or general. The laws and practice of nations on this subject have almost always been in extremes. The ancient laws of most countries have been all severity to the debtor. They have invested the creditor with a power of coercion, more or less tyrannical, which he might use against his insolvent debtor, either to extort the surrender of hidden property, or to obtain satisfaction of a vindictive character, which might console him for the non-payment of the debt. This arbitrary power has extended, in some countries, to making the insolvent debtor serve the creditor as his slave; in which plan there were some grains of common sense, since it might possibly be regarded as a scheme for making him work out the debt by his labor. In England, the coercion assumed the milder form of ordinary imprisonment. The one and the other were the barbarous expedients of a rude age, repugnant to justice as well as to humanity. Unfortunately the reform of them, like that of the criminal law generally, has been taken in hand as an affair of humanity only, not of justice; and the modish humanity of the present time, which is essentially a thing of one idea, (and is indeed little better than a timid shrinking from the infliction of anything like pain, next neighbor to the cowardice which shrinks from necessary endurance of it,) has in this as in other cases, gone into a violent reaction against the ancient severity, and sees in the fact of having lost or squandered other people's property, a peculiar title to indulgence. Everything in the law which attached disagreeable consequences to that fact, has been gradually relaxed, and much of it entirely got rid of. Because insolvency was formerly treated as if it were necessarily a crime, everything is now done to make it, if possible, not even a misfortune. The indulgence of the present laws to those who have made themselves unable to pay their just debts, is usually defended, on the plea that the sole object of the law should be, in case of insolvency, not to coerce the person of the debtor, but to get at his property, and distribute it fairly among the creditors. Assuming that this is and ought to be, the sole object, that object, in the present state of the law, is not attained. Imprisonment at the discretion of a creditor was really a powerful engine for extracting from the debtor any property which he had concealed or otherwise made away with. In depriving creditors of this instrument, the law has not furnished them with any sufficient equivalent. And it is seldom difficult for a dishonest debtor, by an understanding with one or more of his creditors, or by means of pretended creditors set up for the purpose, to abstract a part, perhaps the greatest part, of his assets, from the general fund, through the forms of the law itself. The facility and frequency of such frauds is a subject of much complaint, and their prevention demands a vigorous effort of the legislature, under the guidance of judicious persons practically conversant with the subject. But the doctrine, that the law has done all that ought to be expected from it, when it has put the creditors in the possession of the property of an insolvent, is in itself a totally inadmissible piece of spurious humanity. It is the business of law to prevent wrong-doing, and not simply to patch up the consequences of it when it has been committed. The law is bound to take care that insolvency shall not be a good pecuniary speculation; that men shall not have the privilege of hazarding other people's property without their knowledge or consent, taking the profits of the enterprise if it is successful, and if it fails, throwing the loss upon the lawful owners; that they shall not find it answer to make themselves unable to pay their just debts, by spending the money of their creditors in personal indulgence. The humanitarians do not deny that what is tech nically called fraudulent bankruptcy, the false pretence of inability to pay, may reasonably, when detected, be subject to punishment. But does it follow that insolvency is not the consequence of misconduct because the inability to pay may be real? If a man has been a spendthrift, or a gambler, with property on which his creditors had a prior claim, shall he pass scot-free because the mischief is consum mated and the money gone? Is there any very material difference between this conduct, and those other kinds of dishonesty which go by the names of fraud and embezzlement? Such cases are not a minority, but a large majority among insolvencies. The statistics of bankruptcy prove the fact. "By far the greater part of all insolvencies arise from notorious misconduct; the proceedings of the Insolvent Debtors' Court and the Bankruptcy Court will prove it. Excessive and unjustifiable overtrading, or most absurd speculation in commodities, merely because the poor speculator 'thought they would get up,' but why he thought so he cannot tell; speculations in hops, in tea, in silk, in corn -things with which he is altogether unacquainted; wild and absurd investments in foreign funds, or in joint-stocks; these are among the most innocent causes of bankruptcy."* The experienced and intelligent writer from whom I quote, corroborates his assertion by the testimony of several of the official assignees of the Bankruptcy Court. One of them says, "As far as I can collect from the books and documents furnished by the bankrupts, it seems to me that" in the whole number of cases which occurred during a given time to which he was attached, "fourteen have been ruined by speculations in things with which they were unacquainted; three by neglected book-keeping; ten by trading beyond * From a volume published in 1845, entitled, "Credit, the Life of Commerce," by Mr. J. H. Elliott, their capital and means, and the consequent loss and expense of accommodation-bills; forty-nine by expending more than they could reasonably hope their profits would be, though their business yielded a fair return; none by any general distress, or the falling off of any particular branch of trade." Another of these officers says, "The new Court has been open upwards of eighteen months, during which period fifty-two cases of bankruptcy have come under my care. It is my opinion that thirty-two of these have arisen from an imprudent expenditure, and five partly from that cause, and partly from a pressure on the business in which the bankrupts were employed. Fifteen I attribute to improvident speculations, combined in many instances with an extravagant mode of life." To these citations the author adds the following statements from his personal means of knowledge, which are considerable. "Many insolvencies are produced by tradesmen's indolence; they keep no books, or at least imperfect ones, which they never balance; they never take stock; they employ servants, if their trade be extensive, whom they are too indolent even to supervise, and then become insolvent. It is not too much to say, that one half of all the persons engaged in trade, even in London, never take stock at all; they go on year after year without knowing how their affairs stand, and at last, like the child at school, they find to their surprise, but one halfpenny left in their pocket. I will venture to say that not one fourth of all the persons in the provinces, either manufacturers, tradesmen, or farmers, ever take stock; nor in fact does one half of them ever keep account-books, deserving any other name than memorandum books. I know sufficient of the concerns of five hundred small tradesmen in the provinces, to be enabled to say, that not one fifth of them ever take stock, or keep even the most ordinary accounts. I am prepared to say of such tradesmen, from carefully-prepared tables, giv |