“Capital, no,” was the reply; “companies, yes—at least, limited liability companies.”
“And yet the idea of the man who brought in, and the majority which passed, the Limited Liability Act, was, that, so far from killing trade, it would foster and encourage commerce.”
“So we may conclude, or else it would never have become law,” was the reply.
“Trade has always been crippled for want of capital,” remarked Mr. Croft.
“And trade always will be,” answered Mr. Raidsford; “it is in the nature of trade to find whatever capital it may have insufficient. In precise proportion to the extent of his business are a man’s outstanding debts; consequently, the larger his business is, the greater are the number of his debtors. His capital, in fact, goes into his books; and instead of so much in the bank, he has so many hundreds of people owing him money.”
“The idea of limited liability was to enable a man to put a certain sum of money into a business, and have no further responsibility,” said Mr. Stewart.
“Any man could have compassed the same object by lending money into a business,” replied Mr. Raidsford; “since the usury laws were repealed, he might have taken what percentage he pleased, and run no more risk than he does under the Limited Liability Act; but the real mischief of the present system, to my mind, is, not that large capitalists are thereby enabled to advance money to small working men, but that the large capitalists are thereby enabled to combine together, and crush the small working men. Precisely as you are doing at present: you are ruining hundreds of respectable tradesmen, and when your crash comes, as come it will, those men will not be benefited thereby; they have lost their capital, small or great, as the case may be, and must content themselves with situations for the remainder of their lives.”
“You are extremely kind to prophesy such a pleasant future for the Protector,” said Mr. Croft.
“Where there are many masters, there are bad servants,” was the reply; “at least, such is my opinion. My notion is, indeed, that in a company there is no master at all; there is no one person whose business and interest it is to see that things are properly and economically conducted.”
“We have our manager,” suggested Mr. Stewart.