20 SEPTEMBER 1845, Page 15

LIABILITIES OF JOINT STOCK COMPANIES.

ASSOCIA.TIONS of capitalists with limited responsibility encour- age enterprise and experiment. When the possible loss is to be divided among a number, new channels of trade and new inven- tions of machinery have a better chance of obtaining a fair triaL On the other hand, associations of capitalists with limited respon- sibility are apt to be rash in their undertakings, negligent and slovenly in prosecuting them. The loss to each is not great, and risks are run which no man would venture upon were a consider- able sum at hazard. The fractional share of the possible gain is too inconsiderable to stimulate to persevering attention. There is an association in Scotland, instituted more for beneficent than for moneymaking purposes, but which we notice at present because it has been led, apparently by the pressure of external circum- stances, to adopt a mode of action combining to a considerable extent the advantages of limited with those hitherto derived from unlimited responsibility only. The West of Scotland Guarantee Association was instituted principally, we believe, with a view to assist deserving young men by providing bonds of security, at inconsiderable risk to its wealthy members, for the " actings and intromissions " of persons in situations of trust. There is a similar association in London; but in the case of savings banks Govern- ment declined to accept the bonds of any society as security. The West of Scotland Association obviates this difficulty, by some of the Directors, according to an arrangement at a meeting of the board, giving their names as private individuals. A special minute is made of the transaction, and, under a clause in the Company's deed of constitution, the entire body of shareholders are bound to relieve the Directors. The individual has thus a sufficient motive to act warily., and becomes a guarantee to the public for the com- pany of which he is a member. His responsibility is unlimited as to the special business devolved upon him ; limited as to the general operations of the association.