SHOOTING NIAGARA 215

In the late 'fifties and early 'sixties Liberal governments to suit
the convenience of the commercial community passed legislation
conferring on joint-stock companies the privilege of limited
liability. Henceforward fictitious bodies, enjoying the legal
rights of individuals, could incur unlimited financial obligations
without their individual shareholders becoming fully responsible
for them.

Up to this time a man's power to make money by transferring
his credit and freedom of commercial action to others was"
restrained by his liability for the obligations they might
incur. This check on irresponsible delegation was. now removed.
A man could grow rich in security and even innocence from
business practices which would have outraged his conscience as
an individual. He could avoid both the risks and stigma of
transactions done by others in pursuit of profits in which he
shared.

At first the investing public was slow to avail itself of the
opportunities afforded by the Companies Act of 1862.l For a
generation the use of limited liability was chiefly confined to
the professional commercial community. But after the failure of
the City of Glasgow Bank in 1879, when many private share-
holders were called upon to meet obligations hundreds of times
greater than the-value of their shares, private investors increas-
ingly entrusted their money to concerns carrying only limited
liability. During the last eight years of the century more than
thirty thousand limited companies were floated and ten thousand
wound up. In 1899 there were 27,969 registered companies in
the United Kingdom with a paid-up capital of £1,512,098,098:
by 1914, 64,692 with £2,531,947,661. Ownership of the nation's
wealth was thus increasingly separated from its control. And
the conscience of the individual ceased to regulate its use.

The consequences of the Companies Act of 1862 were perhaps
greater than that of any single measure in English parliamentary
history. They completed the divorce between the Christian
conscience and the economic practice of everyday life. They
paganised the commercial community. Henceforward an astute
man by adherence to legal rules which had nothing to do with
morality could grow immensely rich by virtue of shuffling off

1 By the Companies' Act of 1862, it became possible for any one to found a limited
liability company by obtaining signatures to a memorandum of registration and
adding the word "Limited" to its nomenclature.