710

THE NATEKE AND CAUSES OE

vigilance and attention of private adventurers would, in allprobability, soon make them weary of the trade.

An eminent French author, of great knowledge in mattersof political economy, the Abbe Morellet, gives a list of fifty-five joint stock companies for foreign trade, which have beenestablished in different parts of Europe since the year 1G00,and which, according to him, have all failed from misma-nagement, notwithstanding they had exclusive privileges.He has been misinformed with regard to the history of twoor three of them, which were not joint stock companies, andhave not failed. But, in compensation there have been se-veral joint stock companies which have failed, and which hehas omitted.

The only trades which it seems possible for a joint stockcompany to carry on successfully, without an exclusive pri-vilege, are those, of which all the operations are capable ofbeing reduced to what is called a routine, or to such a uni-formity of method as admits of little or no variation. Of thiskind is, first, the banking trade; secondly, the trade of in-surance from fire, and from sea risk and capture in time ofwar; thirdly, the trade of making and maintaining a navi-gable cut or canal; and, fourthly, the similar trade of bring-ing water for the supply of a great city.

Though the principles of the banking trade may appearsomewhat abstruse, the practice is capable of being reducedto strict rules. To depart upon any occasion from those rulesin consequence of some flattering speculation of extraordinarygain, is almost always extremely dangerous, and frequentlyfatal to the banking company which attempts it. But theconstitution of joint stock companies renders them in generalmore tenacious of established rules than any private copart-nery. Such companies, therefore, seem extremely well fittedfor this trade. The principal banking companies in Europe ,accordingly, are joint stock companies, many of whichmanage their trade very successfully without any exclusiveprivilege. The bank of England has no other exclusive pri-vilege, except that no other banking company in Englandshall consist of more than six persons. The two banks ofEdinburgh are joint stock companies without any exclusiveprivilege.

The value of the risk, either from fire, or from loss by sea,or by capture, though it cannot, perhaps, be calculated, veryexactly, admits, however, of such a gross estimation as ren-