'Different and better?' Scottish joint-stock companies and the law, c. 1720-1845

English Historical Review

Volumn 122, Issue 495, 2007, Pages 61-81

  Freeman, Mark ^a   Pearson, Robin ^a   Taylor, James ^a  

^a UNIVERSITY OF HULL   (United Kingdom)

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[No Author keywords available]

Indexed keywords

EID: 34748879198     PISSN: 00138266     EISSN: 14774534     Source Type: Journal    
DOI: 10.1093/ehr/cel373     Document Type: Review

References (139)

1. C. W. Munn, 'The Emergence of Joint-Stock Banking in the British Isles: A Comparative Approach', Business History, xxx (1988), 69-70.
2. R. Harris, Industrializing English Law: Entrepreneurship and Business Organization 1720-1844 (Cambridge, 2000) gives a detailed account of the evolution of the law in England.
3. J. F. Wilson, British Business History 1720-1994 (Manchester, 1995), 42-50, 50-6 on banks;
4. G. Boyce and S. Ville, The Development of Modern Business (Basingstoke, 2002), 101-2, box entitled 'The development of British corporate law: limited liability and the legal personality of the firm'.
5. R. H. Campbell, 'The Law and the Joint-Stock Company in Scotland', in Peter L. Payne (ed.), Studies in Scottish Business History (London, 1967), 136,
6. quoting H. A. Shannon, 'The Coming of General Limited Liability', Economic History, ii (1931), 267 n. 2
7. (not Economic History Review, ii (1931), 1 n. 2, as cited by Campbell).
8. Campbell, 'Law and the Joint-Stock Company', 148. See J. Roberton Christie, 'Joint Stock Enterprise in Scotland before the Companies Acts', Juridical Review, xxi (1909-10), 128-47. Campbell wrongly gives Christie's name as J. Robertson Christie.
9. Campbell, 'Law and the Joint-Stock Company', 139.
10. Ibid., 140.
11. Francis William Clark, A Treatise on the Law of Partnership and Joint-Stock Companies According to the Law of Scotland (Edinburgh, 1856), 31, 168, 538-9, and passim.
12. Ibid., 6, 537-8.
13. N. R. Lamoreaux, 'Partnerships, Corporations, and the Limits on Contractual Freedom in U.S. History: An Essay in Economics, Law and Culture', in K. Lipartito and D. B. Sicilia (ed.), Constructing Corporate America: History, Politics, Culture (Oxford, 2004), 29-65.
14. For example, on Britain and the US, see Colleen A. Dunlavy, 'From Citizens to Plutocrats: Nineteenth-Century Shareholder Voting Rights and Theories of the Corporation', in K. Lipartito and D. B. Sicilia (ed.), Constructing Corporate America: History, Politics, Culture (Oxford, 2004), 66-93. On France and the US,
15. see N. R. Lamoreaux and J.-L. Rosenthal, 'Legal Regime and Business's Organizational Choice: A Comparison of France and the United States during the Mid-Nineteenth Century' (unpublished paper, January 2004). Our thanks to Naomi Lamoreaux for generously providing us with a copy of the latter.
16. R. C. Michie, Money, Mania and Markets: Investment, Company Formation and the Stock Exchange in Nineteenth-Century Scotland (Edinburgh, 1981), 39, 45, 71.
17. John Reid, Manual of the Scottish Stocks and British Funds, with a List of the Joint Stock Companies in Scotland (Edinburgh, 1841), 166-71.
18. Munn, 'Emergence of Joint Stock Banking', 72, 76;
19. T. L. Alborn, Conceiving Companies: Joint-Stock Politics in Victorian England (London, 1998), 88-92.
20. Campbell, 'Law and the Joint-Stock Company', 141-2.
21. Ibid., 142.
22. Christie, 'Joint Stock Enterprise', 137-8.
23. Shannon, 'Coming of General Limited Liability', 269, uses the phrase dead letter with reference to the Bubble Act in England.
24. Quoted in Clark, Law of Partnership, 5, and Christie, 'Joint Stock Enterprise', 138.
25. C. W. Munn, 'The Emergence of Edinburgh as a Financial Centre', in A. J. G. Cummings and T. M. Devine (ed.), Industry, Business and Society in Scotland since 1700: Essays Presented to Professor John Butt (Edinburgh, 1994), 130.
26. Patrick Shaw and Alexander Dunlop, Cases Decided in the Court of Session (Edinburgh), vi (1827-8), 955.
27. Robert Henderson, Notes on the Law of Scotland, in Regard to Joint Stock Companies, with Illustrations from the Law of England (Edinburgh, 1846), 2.
28. R. Pearson, 'Shareholder Democracies? English Stock Companies and the Politics of Corporate Governance During the Industrial Revolution', ante, cxvii (2002), 844.
29. Ibid.
30. Banks formed by deed of settlement under the terms of the legislation of 1826 were required to sue and be sued in the names of appointed public officers.
31. Pearson, 'Shareholder Democracies?', 845;
32. Harris, Industrializing English Law, 173-82.
33. H. Hansmann and R. Kraakman, 'The Essential Role of Organizational Law', Yale Law Journal, cx (2000), 387-440.
34. The phrase was first used in Davis v. Fish (1823),
35. cited by S. J. Stoljar, Groups and Entities: An Inquiry into Corporate Theory (Canberra, 1973), 95-6. We are most grateful to an anonymous referee for this and the previous reference.
36. Ibid., 90-1.
37. R. Pearson, Insuring the Industrial Revolution: Fire Insurance in Great Britain 1700-1850 (Aldershot, 2004), 238-9;
38. Harris, Industrializing English Law, 236-41.
39. Harris, Industrializing English Law, 245-9.
40. For example, the British Ale Brewery in 1808, the Philanthropic Annuity Society in 1809, the Equitable Loan Bank Company in 1825, the Patent Distillery Company in 1828 and the Anglo-American Gold Mining Association in 1837. Harris, Industrializing English Law, 238, 242-3, 245-7.
41. Harris, Industrializing English Law, 164.
42. Christie, 'Joint Stock Enterprise', 137.
43. Campbell, 'Law and the Joint-Stock Company', 136, 139.
44. See Henderson, Notes on the Law of Scotland, 4, 8-10.
45. B. C. Hunt, The Development of the Business Corporation in England 1800-186/ (Cambridge, 1936), 60.
46. Campbell, 'Law and the Joint-Stock Company', 139.
47. See also D. M. Walker, A Legal History of Scotland: The Nineteenth Century (vol. 6, Edinburgh and London, 2001), 734-5, which briefly explains letters patent under the 1837 statute. For an analysis of the Board of Trade's implementation of the Aas of 1834 and 1837,
48. see J: Taylor, 'Wealth Makes Worship: Attitudes to Joint Stock Enterprise in British Law, Politics and Culture, 1800-1870' (unpublished Ph.D. thesis, University of Kent, 2002).
49. Shannon, 'Coming of General Limited Liability', 279.
50. John George, A View of the Existing Law affecting Unincorporated Joint Stock Companies (London, 1825), 73.
51. Parliamentary Papen (1837) xxxix, 287.
52. Ibid. Cf. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (vol. 2, Oxford, 1976), 756-8.
53. Return of applications for charters and letters patent under the 1837 Act: Parliamentary Papers (1854) lxv, 611.
54. See also Gordon H. Boyce, Information, Mediation and Institutional Development: The Rise of Large-Scale Enterprise in British Shipping 1870-1919 (Manchester, 1995), 66-9.
55. PRO BT1/330, no. 72, Memorial from Chamber of Commerce and Manufacturers of Glasgow, 26 Apr. 1837.
56. Campbell, 'Law and the Joint-Stock Company', 148 (quoted);
57. Clark, Law of Partnership, 6; Christie, 'Joint Stock Enterprise', 142-4.
58. Campbell, 'Law and the Joint-Stock Company', 148; Christie, 'Joint Stock Enterprise', 144.
59. Walker, Legal History of Scotland (vol. 6), 717.
60. Campbell, 'Law and the Joint-Stock Company', 145.
61. Alexander Dunlop, J. M. Bell, John Murray and James Donaldson, Cases Decided in the Court of Session (Edinburgh), iii (1840-1), 1045-6.
62. Christie, 'Joint Stock Enterprise', 141;
63. Campbell, 'Law and the Joint-Stock Company', 145;
64. Walker, Legal History of Scotland (vol. 6), 718.
65. Clark, Law of Partnership, 539.
66. See Harris, Industrializing English Law, ch. 9;
67. D. Hay, 'The State and the Market in 1800: Lord Kenyon and Mr Waddington', Past and Present, clxii (1999), 101-62.
68. 1-2.
69. Maclean v. Rose, 9 Dec. 1836: Shaw and Dunlop, Cases, xv (1836-7), 236-41.
70. Ibid., 43.
71. Shaw and Dunlop, Cases, xiii (1834-5), 46.
72. Campbell, 'Law and the Joint-Stock Company', 150 n. 24.
73. Harris, Industrializing English Law, 142-5.
74. Clark, Law of Partnership, 168.
75. Shaw and Dunlop, Cases, xiii (1834-5), 47.
76. On the Scottish feudal system of land tenure, see Richard Rodger, The Transformation of Edinburgh: Land, Property and Trust in the Nineteenth Century (Cambridge, 2001), ch. 3.
77. Clark, Law of Partnership, 168.
78. Harris, Industrializing English Law, 153-6.
79. See also R. Pearson, review of Harris, Economic History Review, liv (2001), 555-6.
80. National Archives of Scotland (hereafter NAS), GD 1/3/1, Shotts Iron Company, contract of copartnery (1824), article 17.
81. Glasgow City Archives, TD 379/1, Glasgow and Liverpool Royal Steam Packet Company, contract of copartnery, (1844), articles 6, 10-11.
82. See, for example, Dundee City Archives GD/Hu/JS/8/2, Dundee Joint Stock Company, contract of copartnery, article 18.
83. Clark, Law of Partnership, 171-2.
84. See also Walker, Legal History of Scotland (vol. 6), 713.
85. Clark, Law of Partnership, 172. Original emphases.
86. We could add that in Scotland, there was some indication that a company might have a right to leasehold property under its social name, but certainly not under a descriptive name; however, Clark was dismissive of this view as 'without foundation, and subversive of the distinction between mere partnerships and proper corporations' (ibid., 170).
87. Bank of Scotland Archive Ace 2003/091, box 1/13, Caledonian Banking Company, contract of copartnery, article 44.
88. Glasgow University Archives (hereafter GUA), UGD129/2/3/9, National Bank of Scotland, contract of copartnery (1825), article 16; NAS, GD 1/3/1, Shotts Iron Company, contract of copartnery, article 17. The Commercial Bank of Scotland contract of copartnery was one of the few such documents in the Scottish banking sector which did not explicitly authorise application for incorporation. Royal Bank of Scotland archives, Edinburgh, CS/362.
89. Reid, Manual of the Scottish Stocks, 38.
90. 7 Geo. IV, c. 67;
91. C. W. Munn, The Scottish Provincial Banking Companies 1747-1864 (Edinburgh, 1981), 85.
92. See also S. G. Checkland, Scottish Banking: A History 1696-19/3 (Glasgow and London, 1975), 440.
93. Clark, Law of Partnership, 548.
94. Reid, Manual of Scottish Stocks, 39.
95. Munn, Scottish Provincial Banking Companies, 85.
96. Wilson and Shaw, Cases, iii (1828-9), 365-6.
97. The Commercial Bank of Scotland, Our Bank: The Story of the Commercial Bank of Scotland 1810-1841 (London and Edinburgh, 1941), 20.
98. GUA UGD 129/2/3/9, Jeffrey to Melbourne, 7 July 1831, attached to copy of National Bank contract of copartnery.
99. Ibid.
100. Munn, Scottish Provincial Banking Companies, 85.
101. GUA UGD 129/2/3/9, Jeffrey to Melbourne, 7 July 1831.
102. Checkland, Scottish Banking, 362-3, 441-2.
103. PRO BT1/564, Draft warrant for charter.
104. NAS, GD 1/3/1, Shotts Iron Company, contract of copartnery, articles 7, 17. The chairman could be re-elected annually with no maximum period of service.
105. Shotts Iron Company, directors' meeting, 17 Nov. 1826. All references to the directors' meetings (hereafter DM) and annual and extraordinary general meetings (hereafter AGM and EGM, respectively) are in NAS GD 1/3/4-6, Shotts Iron Company, sederunt books. Hopkirk was replaced by George Combe, W. S., among other things a well-known phrenologist and author of The Constitution of Man (1828).
106. See Charles Gibbon, The Life of George Combe (2 vols, London, 1878).
107. DM, 17 Apr. 1827.
108. Shaw and Dunlop, Cases, vi (1827-8), 400.
109. The date is given in Shotts Iron Company, AGM, 12 Sept. 1827.
110. AGM, 12 Sept. 1827;
111. see also Shaw and Dunlop, Cases, vi (1827-8), 401-2.
112. Shaw and Dunlop, Cases, vi (1827-8), 401.
113. Ibid., 401-2.
114. Ibid., 402.
115. DM, 8 Jan. 1834, 5 Feb. 1834.
116. EGM, 4 Feb. 1834; DM, 1 Apr. 1835. The latter's minute refers to a general meeting on 3 February, but it has been assumed that this was an error. No reference to the subscription of the mandate is made in the minute of the general meeting.
117. DM, 1 Apr. 1835.
118. Directors' report to AGM, engrossed at EGM, 4 Nov. 1835.
119. DM, 6 May 1835.
120. DM, 1 July 1835.
121. Directors' report to AGM, engrossed at EGM, 4 Nov. 1835.
122. PRO BT1/564, Extract from letter, George Imlach to Richardson and Connell, 19 Dec. 1837.
123. DM, 6 May 1835
124. DM, 3 June 1835
125. Ibid
126. DM, 1 July 1835
127. DM, 22 June 1835
128. Letter from Alexander Gray, engrossed at DM, 16 Jan. 1838.
129. DM, 5 June 1839.
130. Harris, Industrializing English Law, 254-6.
131. Campbell, 'Law and the Joint-Stock Company', 138.
132. DM, 5 June 1839.
133. DM, 4 Mar. 1840; AGM, 8 Sept. 1841.
134. 34 & 35 Vict., c. 17. Given the disheartening experiences of the Shotts Iron Company, it is unsurprising that only one other company, the ill-fated Western Bank of Scotland, applied for letters patent under the 1837 Act: Campbell, 'Law and the Joint-Stock Company, 139. The Western's application was strenuously opposed by the chartered banks, who argued that the dubious practices of the Western did not entitle it to the official recognition and protection that went with a charter, and that even the lesser privilege of letters patent was a step too far in this case. NAS GD 18/3387, copy of letter from Alexander Blair for Bank of Scotland, Thomas Carrie [?Cassie?] for British Linen Company, Robert Paul for Commercial Bank of Scotland and George Crosbie for National Bank of Scotland to C. P. Thompson [sic], President of the Board of Trade, 10 Aug. 1838.
135. R. H. Campbell, Carron Company (Edinburgh and London, 1961), 24-5.
136. Campbell, 'Law and the Joint-Stock Company', 140.
137. The financial cost of the protracted negotiations about incorporation appears to have been minimal.
138. Clark, Law of Partnership, 97.
139. Walker, Legal History of Scotland (vol. 6), 718.