or misery of their subjects, the improvement | consequence of those disorders, the company or waste of their dominions, the glory or dis- is now (1784) in greater distress than ever; grace of their administration, as, from irresist- and, in order to prevent immediate bank ible moral causes, the greater part of the pro- ruptcy, is once more reduced to supplicate prietors of such a mercantile company are, and the assistance of government. Different necessarily must be. This indifference, too, plans have been proposed by the different was more likely to be increased than diminish- parties in parliament for the better manage ed by some of the new regulations which were ment of its affairs; and all those plans seem made in consequence of the parliamentary in- to agree in supposing, what was indeed alquiry. By a resolution of the house of com- ways abundantly evident, that it is altogether mons, for example, it was declared, that when unfit to govern its territorial possessions. the L.1,400,000 lent to the company by go. Even the company itself seems to be convernment, should be paid, and their bond-debts vinced of its own incapacity so far, and seems, be reduced to L.1,500,000, they might then, upon that account willing to give them up to and not till then, divide eight per cent. upon government. their capital; and that whatever remained of With the right of possessing forts and gar. their revenues and neat profits at home should risons in distant and barbarous countries, is be divided into four parts; three of them to necessarily connected the right of making be paid into the exchequer for the use of the peace and war in those countries. The public, and the fourth to be reserved as a fund, joint-stock companies, which have had the either for the further reduction of their bond-one right, have constantly exercised the other, debts, or for the discharge of other contingent and have frequently had it expressly confer exigencies which the company might labour red upon them. How unjustly, how capriunder. But if the company were bad stew- ciously, how cruelly, they have commonly ards and bad sovereigns, when the whole of exercised it, is too well known from recent their neat revenue and profits belonged to experience. themselves, and were at their own disposal, they were surely not likely to be better when three-fourths of them were to belong to other people, and the other fourth, though to be laid out for the benefit of the company, yet to be so under the inspection and with the approbation of other people.

When a company of merchants undertake, at their own risk and expense, to establish a new trade with some remote and barbarous nation, it may not be unreasonable to incorporate them into a joint-stock company, and to grant them, in case of their success, a monopoly of the trade for a certain number of It might be more agreeable to the company, years. It is the easiest and most natural ⚫hat their own servants and dependants should way in which the state can recompense ther have either the pleasure of wasting, or the for hazarding a dangerous and expensive exprofit of embezzling, whatever surplus might periment, of which the public is afterwards to remain, after paying the proposed dividend of reap the benefit. A temporary monopoly eight per cent. than that it should come into of this kind may be vindicated, upon the the hands of a set of people with whom those same principles upon which a like monopoly resolutions could scarce fail to set them in of a new machine is granted to its inventor, The interest of and that of a new book to its author. But some measure at variance. those servants and dependants might so far upon the expiration of the term, the monopredominate in the court of proprietors, as poly ought certainly to determine; the forts sometimes to dispose it to support the authors and garrisons, if it was found necessary to of depredations which had been committed establish any, to be taken into the hands of in direct violation of its own authority. government, their value to be paid to the With the majority of proprietors, the support company, and the trade to be laid open to all even of the authority of their own court the subjects of the state. By a perpetual might sometimes be a matter of less conse- monopoly, all the other subjects of the state quence than the support of those who had set are taxed very absurdly in two different ways: that authority at defiance. first, by the high price of goods, which, in The regulations of 1773, accordingly, did the case of a free trade, they could buy much not put an end to the disorder of the com- cheaper; and, secondly, by their total exclupany's government in India. Notwithstand-sion from a branch of business which it might ing that, during a momentary fit of good con- be both convenient and profitable for many duct, they had at one time collected into the of them to carry on. It is for the most treasury of Calcutta more than L.3,000,000 worthless of all purposes, too, that they are sterling; notwithstanding that they had after-taxed in this manner. It is merely to enable wards extended either their dominion or their the company to support the negligence, prodepredations over a vast accession of some of fusion, and malversation of their own ser he richest and most fertile countries in India, vants, whose disorderly conduct seldom allows all was wasted and destroyed. They found the dividend of the company to exceed the themselves altogether unprepared to stop or ordinary rate of profit in trades which are resist the incursion of Hyder Ali; and in altogether free, and very frequently makes it

fall even a good deal short of that rate. fatal to the banking company which attempts Without a monopoly, however, a joint-stock it. But the constitution of joint-stock comcompany, it would appear from experience, panies renders them in general, more tenacannot long carry on any branch of foreign cious of established rules than any private trade. To buy in one market, in order to copartnery. Such companies, therefore, seem

sell with profit in another, when there are extremely well fitted for this trade. The many competitors in both; to watch over, principal banking companies in Europe, ac not only the occasional variations in the de- cordingly, are joint-stock companies, many mand, but the much greater and more fre- of which manage their trade very successfully quent variations in the competition, or in the without any exclusive privilege. The bank supply which that demand is likely to get of England has no other exclusive privilege, from other people; and to suit with dexte- except that no other banking company in rity and judgment both the quantity and qua- England shall consist of more than six perlity of each assortment of goods to all these sons. The two banks of Edinburgh are circumstances, is a species of warfare, of which joint-stock companies, without any exclusive the operations are continually changing, and privilege.

which can scarce ever be conducted success- The value of the risk, either from fire, or fully, without such an unremitting exertion from loss by sea, or by capture, though it of vigilance and attention as cannot long be cannot, perhaps, be calculated very exactly, adexpected from the directors of a joint-stock mits, however, of such a gross estimation, as company. The East India company, upon renders it, in some degree, reducible to strict the redemption of their funds, and the expir- rule and method. The trade of insurance, ation of their exclusive privilege, have a therefore, may be carried on successfully by a right, by act of parliament, to continue a joint-stock company, without any exclusive corporation with a joint stock, and to trade in privilege. Neither the London Assurance,

their corporate capacity to the East Indies, nor the Royal Exchange Assurance comin common with the rest of their fellow sub-panies, have any such privilege. jects. But in this situation, the superior vi- When a navigable cut or canal has been gilance and attention of a private adventurer once made, the management of it becomes would, in all probability, soon make them quite simple and easy, and it is reducible to weary of the trade. strict rule and method. Even the making of

An eminent French author, of great know-it is so, as it may be contracted for with unledge in matters of political economy, the dertakers, at so much a mile, and so much a Abbé Morellet, gives a list of fifty-five joint- lock. The same thing may be said of a castock companies for foreign trade, which have nal, an aqueduct, or a great pipe for bringing been established in different parts of Europe water to supply a great city. Such undersince the year 1600, and which, according takings, therefore, may be, and accordingly to him, have all failed from mismanagement, frequently are, very successfully managed by notwithstanding they had exclusive privileges. joint-stock companies, without any exclusive He has been misinformed with regard to the history of two or three of them, which were To establish a joint-stock company, hownot joint-stock companies and have not fail- ever, for any undertaking, merely because ed. But, in compensation, there have been such a company might be capable of managseveral joint-stock companies which have fail-ing it successfully; or, to exempt a particued, and which he has omitted. lar set of dealers from some of the general

privilege.

The only trades which it seems possible for laws which take place with regard to all their a joint-stock company to carry on successful-neighbours, merely because they might be ly, without an exclusive privilege, are those, capable of thriving, if they had such an of which all the operations are capable of exemption, would certainly not be reasonable. being reduced to what is called a routine, or To render such an establishment perfectly to such a uniformity of method as admits reasonable, with the circumstance of being of little or no variation. Of this kind is, reducible to strict rule and method, two other first, the banking trade; secondly, the trade circumstances ought to concur. First, it of insurance from fire and from sea risk, and ought to appear with the clearest evidence, capture in time of war; thirdly, the trade of that the undertaking is of greater and more making and maintaining a navigable cut or general utility than the greater part of comcanal; and, fourthly, the similar trade of mon trades; and, secondly, that it requires a bringing water for the supply of a great city. greater capital than can easily be collected Though the principles of the banking trade into a private copartnery. If a moderate may appear somewhat abstruse, the practice capital were sufficient, the great utility of the is capable of being reduced to strict rules. undertaking would not be a sufficient reason To depart upon any occasion from those for establishing a joint-stock company; berules, in consequence of some flattering spe- cause, in this case, the demand for what it culation of extraordinary gain, is almost al- was to produce, would readily and easily be ways extremely dangerous and frequently supplied by private adventurers. In the four

trades above mentioned, both those circum- which the undertakers mislead and impose

stances concur.

The great and general utility of the banking trade, when prudently managed, has been fully explained in the second book of this Inquiry. But a public bank, which is to support public credit, and, upon particular emergencies, to advance to government the whole produce of a tax, to the amonnt, perhaps, of several millions, a year or two before it comes in, requires a greater capital than can easily be collected into any private copartnery.

upon them, is a real discouragement to the rest, and necessarily breaks, more or less, that natural proportion which would otherwise establish itself between judicious industry and profit, and which, to the general industry of the country, is of all encouragements the greatest and the most effectual. Note 41

ART. II.-Of the Expense of the Institution for the Education of Youth.

THE institutions for the education of the youth may, in the same manner, furnish a revenue sufficient for defraying their own exThe fee or honorary, which the

The trade of insurance gives great security to the fortunes of private people, and, by dividing among a great many that loss which would ruin an individual, makes it fall light pense. and easy upon the whole society. In order scholar pays to the master, naturally constito give this security, however, it is necessary tutes a revenue of this kind. that the insurers should have a very large Even where the reward of the master does capital. Before the establishment of the two not arise altogether from this natural revenue, joint-stock companies for insurance in Lon- it still is not necessary that it should be dedon, a list, it is said, was laid before the at-rived from that general revenue of the sotorney-general, of one hundred and fifty private iusurers, who had failed in the course of a few years.

That navigable cuts and canals, and the works which are sometimes necessary for supplying a great city with water, are of great and general utility, while, at the same time, they frequently require a greater expense than suits the fortunes of private people, is sufficiently obvious.

ciety, of which the collection and application are, in most countries, assigned to the executive power. Through the greater part of Europe, accordingly, the endowment of schools and colleges makes either no charge upon that general revenue, or but a very small one. It everywhere arises chiefly from some local or provincial revenue, from the rent of some landed estate, or from the interest of some sum of money, allotted and put under the management of trustees for this particular purpose, sometimes by the sovereign himself, and sometimes by some pri vate donor.

Except the four trades above mentioned, I have not been able to recollect any other, in which all the three circumstances requisite for rendering reasonable the establishment of a joint-stock company_concur. The English Have those public endowments contributed copper company of London, the lead-smelt-in general, to promote the end of their instiing company, the glass-grinding company, tution? Have they contributed to encourage have not even the pretext of any great or the diligence, and to improve the abilities, of singular utility in the object which they pur- the teachers? Have they directed the course sue; nor does the pursuit of that object seem of education towards objects more useful, to require any expense unsuitable to the for- both to the individual and to the public, than tunes of many private men. Whether the those to which it would naturally have gone trade which those companies carry on, is re- of its own accord? It should not seem very ducible to such strict rule and method as to difficult to give at least a probable answer to render it fit for the management of a joint- each of those questions. stock company, or whether they have any In every profession, the exertion of the reason to boast of their extraordinary profits, greater part of those who exercise it, is alI do not pretend to know. The mine-adven-ways in proportion to the necessity they are turers company has been long ago bankrupt. under of making that exertion. This neces A share in the stock of the British Linensity is greatest with those to whom the emocompany of Edinburgh sells, at present, very luments of their profession are the only much below par, though less so than it did source from which they expect their fortune, some years ago. The joint-stock companies, or even their ordinary revenue and subsist which are established for the public-spiritedence. In order to acquire this fortune, or purpose of promoting some particular manu- even to get this subsistence, they must, in the facture, over and above managing their own course of a year, execute a certain quantity affairs ill, to the diminution of the general stock of work of a known value; and, where the of the society, can, in other respects, scarce competition is free, the rivalship of competitors, ever fail to do more harm than good. Not-who are all endeavouring to justle one another withstanding the most upright intentions, the out of employment, obliges every man to enunavoidable partiality of their directors to deavour to execute his work with a certain particular branches of the manufacture, of degree of exactness.

The greatness of the ob

jects which are to be acquired by success in university, of which he himself is a member, some particular professions may, no doubt, and in which the greater part of the other sometimes animate the exertions of a few men members are, like himself, persons who either of extraordinary spirit and ambition. Great are, or ought to be teachers, they are likely objects, however, are evidently not necessary, to make a common cause, to be all very inin order to occasion the greatest exertions. dulgent to one another, and every man to Rivalship and emulation render excellency, consent that his neighbour may neglect his even in mean professions, an object of ambi- duty, provided he himself is allowed to netion, and frequently occasion the very great-glect his own. In the university of Oxford, est exertions. Great objects, on the con- the greater part of the public professors have, trary, alone and unsupported by the necessity for these many years, given up altogether of application, have seldom been sufficient to even the pretence of teaching. occasion any considerable exertion.

In England, success in the profession of the law leads to some very great objects of ambition; and yet how few men, born to easy fortunes, have ever in this country been eminent in that profession?

If the authority to which he is subject resides, not so much in the body corporate, of which he is a member, as in some other extraneous persons, in the bishop of the diocese, for example, in the governor of the province, or, perhaps, in some minister of state, The endowments of schools and colleges it is not, indeed, in this case, very likely that have necessarily diminished, more or less, the he will be suffered to neglect his duty altonecessity of application in the teachers. Their gether. All that such superiors, however, subsistence, so far as it arises from their sa- can force him to do, is to attend upon his laries, is evidently derived from a fund, alto-pupils a certain number of hours, that is, to gether independent of their success and re-give a certain number of lectures in the week, putation in their particular professions. or in the year. What those lectures shall

In some universities, the salary makes but be, must still depend upon the diligence of a part, and frequently but a small part, of the teacher; and that diligence is likely to be the emoluments of the teacher, of which the proportioned to the motives which he has for greater part arises from the honoraries or fees exerting it. An extraneous jurisdiction of of his pupils. The necessity of application, this kind, besides, is liable to be exercised though always more or less diminished, is both ignorantly and capriciously. In its nanot, in this case, entirely taken away. Re-ture, it is arbitrary and discretionary; and putation in his profession is still of some im- the persons who exercise it, neither attending portance to him, and he still has some de- upon the lectures of the teacher themselves, pendency upon the affection, gratitude, and nor perhaps understanding the sciences which favourable report of those who have attended it is his business to teach, are seldom capable upon his instructions; and these favourable of exercising it with judgment. From the sentiments he is likely to gain in no way so well as by deserving them, that is, by the abilities and diligence with which he discharges every part of his duty.

The

insolence of office, too, they are frequently indifferent how they exercise it, and are very apt to censure or deprive him of his office wantonly and without any just cause. In other universities, the teacher is prohi person subject to such jurisdiction is necesbited from receiving any honorary or fee sarily degraded by it, and, instead of being from his pupils, and his salary constitutes the one of the most respectable, is rendered one whole of the revenue which he derives from of the meanest and most contemptible perhis office. His interest is, in this case, set sons in the society. It is by powerful pro as directly in opposition to his duty as it is tection only, that he can effectually guard possible to set it. It is the interest of every himself against the bad usage to which he is man to live as much at his ease as he can; at all times exposed; and this protection he and if his emoluments are to be precisely the is most likely to gain, not by ability or dil.same, whether he does or does not perform gence in his profession, but by obsequioussome very laborious duty, it is certainly his ness to the will of his superiors, and by being interest, at least as interest is vulgarly un- ready. at all times, to sacrifice to that will derstood, either to neglect it altogether, or, the rights, the interest, and the honour of if he is subject to some authority which will the body corporate, of which he is a member. not suffer him to do this, to perform it in as Whoever has attended for any considerable careless and slovenly a manner as that authority will permit. If he is naturally active and a lover of labour, it is his interest to employ that activity in any way from which he can derive some advantage, rather than in the Whatever forces a certain number of stuperformance of his duty, from which he can dents to any college or university, independerive none. dent of the merit or reputation of the teach If the authority to which he is subject reers, tends more or less to diminish the neces sides in the body corporate, the college, or sity of that merit or reputation.

time to the administration of a French university, must have had occasion to remark the effects which naturally result from an arbitrary and extraneous jurisdiction of this kind.

The privileges of graduates in arts, in law, it; and if this book is written in a foreign physic, and divinity, when they can be obtain- and dead language, by interpreting it ed only by residing a certain number of years them into their own, or, what would give in certain universities, necessarily force a cer- him still less trouble, by making them inter. tain number of students to such universities, pret it to him, and by now and then making independent of the merit or reputation of the an occasional remark upon it, he may flatter teachers. The privileges of graduates are a himself that he is giving a lecture. The sort of statutes of apprenticeship, which have slightest degree of knowledge and application contributed to the improvement of education, will enable him to do this, without exposing just as the other statutes of apprenticeship himself to contempt or derision, by saying have to that of arts and manufactures. any thing that is really foolish, absurd, or ridiculous. The discipline of the college, at the same time, may enable him to force all his pupils to the most regular attendance up. on his sham lecture, and to maintain the most decent and respectful behaviour during the whole time of the performance.

The charitable foundations of scholarships, exhibitions, bursaries, &c. necessarily attach a certain number of students to certain colleges, independent altogether of the merit of those particular colleges. Were the students upon such charitable foundations left free to choose what college they liked best, such liberty might perhaps contribute to excite some emulation among different colleges. A re gulation, on the contrary, which prohibited even the independent members of every particular college from leaving it, and going to any other, without leave first asked and obtained of that which they meant to abandon, would tend very much to extinguish that mulation.

The discipline of colleges and universities is in general contrived, not for the benefit of the students, but for the interest, or, more properly speaking, for the ease of the masters. Its object is, in all cases, to maintain the authority of the master, and, whether he neglects or performs his duty, to oblige the stu dents in all cases to behave to him as if he performed it with the greatest diligence and ability. It seems to presume perfect wisdom and virtue in the one order, and the greatest weakness and folly in the other. Where the masters, however, really perform their duty, there are no examples, I believe, that the

If in each college, the tutor or teacher, who was to instruct each student in all arts and sciences, should not be voluntarily chosen by the student, but appointed by the head of the college; and if, in case of neglect, inabi- greater part of the students ever neglect lity, or bad usage, the student should not be theirs. No discipline is ever requisite to allowed to change him for another, without force attendance upon lectures which are leave first asked and obtained; such a regu- really worth the attending, as is well known lation would not only tend very much to ex- wherever any such lectures are given. Force tinguish all emulation among the different and restraint may, no doubt, be in some detutors of the same college, but to diminish gree requisite, in order to oblige children, of very much, in all of them, the necessity of very young boys, to attend to those parts diligence and of attention to their respective education, which it is thought necessary for pupils. Such teachers, though very well them to acquire during that early period of paid by their students, might be as much dis- life; but after twelve or thirteen years of age, posed to neglect them, as those who are not provided the master does his duty, force or paid by them at all or who have no other re-restraint can scarce ever be necessary to carry compense but their salary.

nonsense.

on any part of education. Such is the generosity of the greater part of young men, that so far from being disposed to neglect or despise the instructions of their master, provided he shews some serious intention of be ing of use to them, they are generally inclined to pardon a great deal of incorrectness in the performance of his duty, and sometimes even to conceal from the public a good deal of gross negligence.

If the teacher happens to be a man of sense, it must be an unpleasant thing to him to be conscious, while he is lecturing to his students, that he is either speaking or reading nonsense, or what is very little better than It must, too, be unpleasant to him to observe, that the greater part of his students desert his lectures; or perhaps, attend upon them with plain enough marks of neglect, contempt, and derision. If he is Those parts of education, it is to be observ obliged, therefore, to give a certain numbered, for the teaching of which there are no of lectures, these motives alone, without any public institutions, are generally the best other interest, might dispose him to take taught. When a young man goes to a fenc some pains to give tolerably good ones. Several different expedients, however, may be fallen upon, which will effectually blunt the edge of all those incitements to diligence. The teacher, instead of explaining to his pupils himself the science in which he proposes to instruct them, may read some book upon

ing or a dancing school, he does not, indeed, always learn to fence or to dance very well; but he seldom fails of learning to fence or to dance. The good effects of the riding school are not commonly so evident. The expense of a riding school is so great, that in most places it is a public institution. The three