For the early years the aggregate of the value of imports does not appear on the official statement, and has been estimated at different amounts by different persons, and thus that column will not always correspond with former reports. But the difference will not be found so great as to affect materially any general result. [In former reports it is stated, that prior to the 1st of October 1820, the official returns do not show the value of imports. Previous to 1796, the returns of exports did not discriminate between domestic and foreign productions.-Author.]

* The imports and exports, for 1839, are estimated thus by the secretary, the exact returns not having been received by him.-Author.

G.

ON UNLIMITED LIABILITY.

By James Cox Esq. of Philadelphia.

THE question of the extent of the liability of individuals, and of their natural right to limit that liability, is one which, in its moral as well as in its economical aspects and relations, is of the highest interest and importance, and the satisfactory solution of which is intimately connected with the investigation of those general and fundamental principles of justice and of expediency, which should form the basis of all positive enactments.

Prominent among the many plausible yet shallow fallacies which have, with a zeal and a perseverance worthy of a better cause, been urged in favor of the device of a limitation of individual liability-of a restriction upon personal responsibility—is the vain and contradictory assumption that the adoption and extension of this system of restraints is required by an enlightened adherence to the doctrines of the free trade theory-a theory in the general truth of the conclusions of which there is, as we think, no sufficient reason to doubt.

What would be the condition of individuals living in a state of the largest liberty consistent with the protection of each in the enjoyment of his natural rights, and under the control of no laws except such as might be necessary to enforce that performance of engagements which is required by a regard to the paramount obligations of morality, and to the demands of justice? A. B. and C. would, as it is perfectly manifest, trade with each other upon the condition of the natural and unlimited liability of each. And

should A. B. and C. associate together in order to trade with D. E. and F., it would still, in strict conformity with the moral law, be upon the basis of the natural and unrestrained responsibility of each, not merely for the consequences of his own individual actions, but for those of the association of which he was a member. And from this condition of natural and inherent obligation, from this state of subjection to the moral law, neither A. B. nor C. could, by his own unaided act or by his individual effort, liberate himself. To effect this, the efficacy of positive enactments must be called to his assistance. Recourse must be had to far fetched and fanciful analogies, to subtile refinements and to legal figments. Privilege usurps the place of right. Rights cease to be enjoyed upon the only proper condition of the full performance of duties. Perfect freedom is no longer demanded upon the sole ground of perfect responsibility. Liberty and liability are rent asunder; an appeal must be made to the legislative power to put a limitation upon that which was before unlimited-to restrict that which, in a state of freedom, was unrestrained. The very

expression of "limited liability" betrays the weakness of the argument; whilst it suggests, and of necessity implies, from the force of the terms, the idea, not of freedom, but of restraint and of restriction.

We are thus irresistibly led to the conclusion that the fancied advocacy of the right freely to trade in commodities, resolves itself into an argument for the limitation of that which, but for the intervention of the law, and the interference of the law-makers, would be unlimited-for the restriction of that which, in the absence of positive and special enactments, would be unrestricted. The argument for restraints is not the less remarkable as occasionally proceeding from those who thrust themselves forward as the select and chosen champions of the beneficent doctrines of commercial freedom; and who complacently as

sume to themselves the character of the freest of the free.

"There seems to prevail," says Mr. Tooke, "among those who incline to the introduction of the commandites" (or limited liability)" system, a vague notice that something like a right exists, on the part of individuals, to circumscribe their liability” ›› *** “ and that it is only by the special interference of the law of partnership that they are prevented from exercising that right, that the law is an interference with what would otherwise be the free, and probably, therefore, the best direction of capital in trade.” * * * “On the slightest reflection, however, it must be obvious that the commandite is a privilege, and has not the shadow of foundation as a natural right. The general, if not universal, rule of commercial transactions is, that the individual is liable to the full extent of his means, for the engagements entered into by himself, or on his behalf, or jointly with others, and it is only by the intervention of a special law that he can be shielded from the more general one." And whilst this interposition must be considered as granting "a privilege, it operates as a distinct inducement-a premium-to individuals to employ the inferior, instead of the better instrument for carrying on the trade of the country."

But, possibly, it may be objected that individuals are at liberty, by mutual agreement, to limit their responsibility. This, however, in the sense intended, is a mere groundless assertion, without force or foundation. For, although it should be admitted that an individual may, in the performance of a specific contract, limit his liability to the extent of the pledged security, it would by no means necessarily follow that he can thus restrict and restrain his general liability. This liability, as we have seen, is the result of natural obligation. It arises from the operation of the moral law. It is binding upon the one party, from the mere force of moral considerations; and it is entirely

independent of the claim of the other party. It results from the very nature of man as a moral agent. To be relieved from its practical operation, recourse must be had to artificial distinctions, and to legal fictions. The proposition attempted to be sustained is neither more nor less than that men are born under a liability even less than that of corporations. For the latter being, by a legal refinement, considered as artificial persons, are responsible to the whole extent of their corporate property. It is true that the most ready resources of these artificial persons are frequently found to consist in an available fund of public credulity.

"If it should be urged that when a person intrusts property to another, he knowingly undertakes the risk of that other's insolvency, and that if the contingent loss happens, he has no claims to justice on the other, the answer is this: that whatever may be thought of these claims, they are not the grounds upon which the debtor is obliged to pay. The debtor always engages to pay, and the engagement is enforced by morality: the engagement, therefore, is binding, whatever risk another man may incur by relying upon it. The causes which have occasioned a person's insolvency, although they greatly affect his character, do not affect his obligations; the duty to repay when he has the power is the same; whether the insolvency was occasioned by his fault or his misfortune.". Being then able to pay, "does the legal discharge exempt him from the obligation to pay? No: and for this reason, that the legal discharge is not a moral discharge; that as the duty to pay at all was not founded primarily on the law," the law cannot cancel the obligation.

If then individuals can, under no circumstances, except those of a distinct and special contract, be justified in limiting their responsibility to each other, much less can they limit it in reference to third parties, and least of all, can the banker and the bank debtor have, as has been most absurdly assumed, a natural and