sudden development of a profession is, I think, unprecedented. It was no particular invention or discovery which made accountants a necessity, but simply the great general commercial development of the last fifty years; and also with this the march of intellect, and that in the right direction. When men owned small businesses or manufactories, they attended personally to every detail, and were perfectly familiar with every department. A man would with his own hand show his men how to do each part of the work. But now not only the owners of large businesses, but also the smaller manufacturers, find it more economical to pay others to do detailed work, while they themselves do hardly more than give general directions. One of our most successful manufacturers was some years ago lamenting to me that his sons, to whom he had given up his business (retaining however one-half the profits), came to work at half-past nine or ten in the morning, which he thought was not the way to make money. His habit, on the contrary, had been to open the works in person at six o'clock each morning. and to remain to write up the books until eight at night, Some time afterwards I told the son his father's opinion. "Very true," he said; "but the governor gets now more than double the profit he ever had when he worked the concern himself." The old man had forgotten how times had changed, though he extremely relished the double profits for himself. I mention this as a type of the change that has been coming over the commercial world in the last half century. Formerly each man bought and worked up his own raw material, and generally disposed of the same himself; but to carry on business now successfully subdivision is a necessity, and all manufacturers and commercial men, whether in a large or a small way, have come to know that large profits are chiefly made by a principal finding the capital, and the brain-power to work it. Of course, the sons in the case I referred to indulged in the luxury of an accountant; while the father always made up his own accounts, and not by double entry.

The Bankruptcy Act of 1849 in some measure led to an increase in accountancy; the preparation of bankrupts' balancesheets, deficiency and other elaborate accounts, which had to some extent been formerly prepared in solicitors' offices, fell generally into the hands of accountants; also the hostile examination of the filed accounts for the purpose of opposing the bankrupt, became exclusively the work of accountants; and very exciting and interesting work it was, bringing out skill and ability to a great extent. About this time also the proprietors of large works or extensive businesses, having neither time nor inclination to do the work themselves, and in some cases lacking the ability, began more generally to employ accountants to make up their annual trade account.

From 1856 to 1862 various Acts of Parliament were passed enabling limited companies to trade and manufacture. These were not at first made use of to any great extent; but gradually they began to be understood, and after 1862 many large trading concerns were transformed into companies. This change again led to more work for accountants, although at first many of the auditors were not accountants, but only shareholders.

The passing of the Bankruptcy Act of 1869 also did more to increase the number of persons calling themselves accountants than any of the other causes I have previously mentioned.

A few years later the different associations of accountants which had been formed (two in London, one each in Liverpool, Manchester, and Sheffield), came to the conclusion that some step should be taken in order that accountancy might be recognised as a special profession, and be practised in the future only by those who had been specially trained for the purpose. Many accountants had joined one or other of the associations, which however had been worked on separate lines, and it took a few years to discover that it was only by union, and by sinking their individuality, that the object they each had in view could be accomplished. The result of their joint efforts was, that on the 11th May, 1880, there came into existence" The Institute of Chartered Accountants in England and Wales,” then the bye-laws were framed and passed by the

members of the Institute, and were confirmed at a meeting held on the 15th March in this year. The proposed bye-laws, however, had for months previously been in circulation amongst the members, and consequently clerks had already discovered that they could not slip into the profession of accountants as heretofore, Any one could indeed call himself accountant, but the word "Chartered" had already begun to have some hold on the public mind.

The clerks found themselves of so much importance in the eyes of the Chartered Institute that out of 117 bye-laws exactly one-third referred to clerks and to their examinations. Of course it set them thinking what steps they as a class should take, to obtain all the benefits which the Charter could give them. Now there were many clerks in this town who had chosen the profession of accountancy, little dreaming they would have to encounter the ordeal of an examination that required some skill in accounts. However, they manfully rose to the occasion, and on the day before the bye-laws of the Institute were confirmed, they held a meeting and founded "The Birmingham Accountants' Students' Society." They welcomed the opportunity of showing themselves able to be and to do all that the Charter of the Institute and its bye-laws required of them, and to prove themselves worthy of the trust and confidence reposed in skilled accountants.

The first circular issued in connection with the "Birmingham Accountants' Students' Society" was dated the 16th February in this year; the first meeting, as I before stated, was held on the 14th March, and the rules were passed at a meeting held on the 4th May last. Up to the present time there have been held four general meetings of members, and ten meetings of the committee. The minutes of these meetings are all entered in the minute book in due form. In a few weeks after it had been determined to form the society, everything was in working order. I think, gentlemen, that the professional ability and the business-like despatch of the members of the society, in this their commencement, cannot be too highly commended; and if, when they become Chartered Accountants, they give their clients the benefit of the same promptitude and earnestness, they will deserve and ensure

success.

The Birmingham Accountants' Students' Society numbers already 64 ordinary members, all of whom within the next five years should become Chartered Accountants; and very much will be expected of the pioneers of this new movement. There are also 23 honorary members, but the list of these is not yet by any means in a complete state. The officers of the society are set out in the very tasteful circular convening this meeting; and as some gentlemen present may not have seen it, I will just read over the names; but I must first call attention to one very serious omission in the list of officers. This society of embryo auditors has no auditor, nor is any provision made for

one.

The names are:-President, Edward Carter, F.C.A.; Vice-President, Charles A. Harrison, F.C.A.; Hon. Treasurer, A. R. Johnson, Articled to Carter and Carter, 33 Waterloo Street, Birmingham; Hon. Secretary, J. R. Ellerman, Articled to Smedley and Corder, 57 Colmore Row, Birmingham; Hon. Librarian, G. H. Sargant, 22 Waterloo Street, Birmingham. Committee, O. H. Caldicott, F.C.A.; W. A. Addinsell (Chairman), Articled to W. N. Fisher; R. L. Impey, F.C.A.; W. D. Callaway, Articled to Hill and Parsons; Howard S. Smith, F.C.A.; W. E. Fletcher, Articled to Mayo and Thornbury; G. H. Sargant, Clerk to Laundy and Co.; John Wilkinson, Clerk to W. N. Fisher; H. F. Woodward, Clerk to Carter & Carter. The following gentlemen have already promised to become honorary members:-Messrs. O. H. Caldicott, Edward Carter, E. Harold Carter, Eric Mackay Carter, W. N. Fisher, C. A. Harrison, R. L. Impey, R. Mayo, Howard S. Smith, Joseph Slocombe.

The gentlemen on the committee are not, I am sure, likely to forget the Birmingham motto, and you may rely upon good progress being made by the Society under their management,

and they are now ready efficiently to deal with every matter that may arise. I would urge all clerks, who intend becoming Chartered Accountants, to join this Society. The larger the number of members, the greater will be the benefit to each individual. With a full society, the debates and the meetings will be more interesting and more useful. Knowing one another will of itself do good. I have seen with astonishment, how little the members of the profession in this town know each other. I have heard that a gentleman in practice here for twenty years, had never spoken to another who had been in practice for the same time. I hope such a state of things is now passed.

Before this time next year, I trust the number of ordinary members will have very largely increased, and that there will be a goodly increase also in the honorary members. I do not propose going through the very good Rules of the Society, or attempting to discuss them. In five years there will be an entirely new body of ordinary members, and that time will show if any, and what, alterations will be beneficial. The Rules at present are amply sufficient for their purpose, and reflect great credit on the gentlemen by whom they were drawn

up.

The first rule is the rule of the Society, and I will read it : "That the society be called The Birmingham Account"ants' Students' Society, and shall consist of honorary and "ordinary members. Its objects shall be, the advancement "of its members in the knowledge and study of Account"ancy."

Accountancy, as is well known, is the profession of a man skilled in accounts; in the same way as a lawyer is skilled in law, a physician in medicine, or a statesman in the art of governing; and the more skilful each member of a profession is, the higher is the position of that profession, both as to its usefulness, and the regard and respect in which it is held by the whole community. I venture to predict that in the future no profession will deserve to stand higher in public estimation than that of a Chartered Accountant.

I should like, gentlemen, very briefly to consider what are the various departments or branches of accountancy. The oldest, I believe, is:-The making out of accounts for the Court of Chancery and other law courts; the making out of executorship accounts, and of the accounts of estates; the making up of balance-sheets, of trade accounts, of profit and loss accounts for commercial and professional firms and individuals; the auditing of the accounts of public bodies and societies, of 11mited and other public companies; the investigation of any accounts referred either for decision or for an opinion. These, I consider, are the branches of the profession which will require skill in accounts, but there are other branches which may be considered as belonging to the profession, though requiring rather general knowledge of, than skill in, accounts:secretarial work; bankruptcy and liquidations, such as being receiver and trustee in bankruptcy or liquidation; the liquidation of public companies; the promotion of public companies; insurance agency.

Now, gentlemen, how are the ordinary members of this Society to advance in the knowledge of all these things? A man may study for years and pass his examinations, but when he begins to practise in a profession he may find himself utterly bewildered. With an articled clerk in an accountant's office, in the same way as with an articled clerk in a solicitor's office, study and practice go on together, and cannot be separated. Theory alone will fail when it is attempted to be put in practice, and book knowledge cannot provide for all and every contingency. Occasionally we meet with bookkeepers who, after having been shown how accounts should be kept, have gone on different and mistaken systems, which they have ignorantly contended are laid down in a certain book on accounts which has been carefully followed by them, and with which they intend putting the accountant straight. The books of accounts which are published cannot give a reference to the different classes of trading and manufacturing, nor to the variety of cases where modifications are advisable and neces

sary. Lawyers have law books, which give references to so many cases that have been tried and decided, that they can see how almost every variety of case should be treated, and advise accordingly. Bnt in accounts this cannot be done, and the more you practise, the more you will see how seldom two similar concerns in the same trade, with their books correctly kept, are the same in the detail of their accounts. On the whole, I think this is rather an advantage than otherwise to the accountant.

I presume each member of the society has seen the questions set for the examinations in July last. Those for the preliminary examination, I am told, are such as could be answered by most of the boys leaving our Birmingham Grammar School. I do not propose dealing with this preliminary examination, as unless a young man passes it he cannot become a member of this society. There are questions set which no amount of cramming would enable me to answer; and I and many others, I am sure, most grateful to Her Majesty, for dispensing with an examination for those accountants already in practice. The rising generation have many privileges and advantages, and amongst them is that of frequent examinations. There has been discussion as to the desirability of such a preliminary examination for an accountant's clerk; but high education being now accessible to all, I think a high standard of examination is a good test of the proficiency and ability of those lads who wish to become members of our profession.

are,

No intermediate examination has yet been held, it being applicable in due time to those only who have passed the preliminary examination.

The final examination deals entirely with practical subjects. The questions on bookkeeping, and indeed throughout, so far as they relate to commercial matters, are chiefly in connection with the business of a merchant. Technically, a merchant is one who ships goods abroad on his own account and in the same way receives goods from abroad: and in London such a merchant has certain privileges, such as not being liable to serve on the inferior juries; and this is so well-known to Londoners, that by the term "merchant" they generally understand a foreign merchant only; so that the questions to a London student would convey a different meaning to that which perhaps a Birmingham student might attach to them, and there would be some slight variations in the answers; but, on the whole, the questions do not appear very difficult.

Most of the questions on auditing should readily be answered by a student of five years' standing.

Those on the adjustment of partnership and executorship accounts are not difficult to answer. I consider, however, that the adjusting of partnership accounts belongs more properly to ordinary bookkeeping and to the auditing of the accounts of private firms as they occur year by year.

The questions asked as to the rights and duties of liquidators, trustees, and receivers, and also as to bankruptcy and common law, do not touch much upon accounts, and require law reading, rather than practice in accounts, to enable the student to answer them. They rather support my opinion that skill in accounts is not an absolute necessity for many of those duties. I do not deny that some knowledge of accounts is necessary, but skill is

not.

The questions on mercantile law and the law of arbitration have not much reference to accounts; but the former should be familiar to every accountant who has to do with the annual accounts of trading firms. Some knowledge of both these subjects is necessary to a skilled accountant.

Now we come to the question of passing examinations.

How can students be enabled to pass these examinations, as they must do, to become Chartered Accountants? Only in the manner so truly stated in your first rule, namely, by "knowledge and study." Study is absolutely necessary to obtain the sufficient knowledge, and the fortnightly meetings to be held will greatly facilitate such studies. Although I have never examined, or lectured, or taught, yet you will, perhaps, pardon me if I venture to sketch out the course which I should wish to be pursued if I were now a student.

At one meeting I would have a preliminary discussion of the questions set at the last examination on the subject of bookkeeping, to decide the meaning of different words or sentences in the questions, if there should be two opinions about them. Before the next meeting each student should write out his answers to the questions discussed, and at the meeting give in his answers, and submit them either to three of the members who were present at the previous discussion, or to your three honorary members, who would decide which are the best answers to each separate question.

At the third meeting these prize answers can be discussed, and the questions on the next subject will undergo a preliminary dis cussion as in the former case. I think the adoption of such a course would not only be interesting, but would, by familiarising you with examinations, assist you in passing them. Then when the list of those books which are recommended for study for the next examination is out, I would suggest the engagement of a special lecturer, who would at your meeting keep as much as possible to the points which, in his opinion, will be the subjects of the next examination. At some following meeting, each student should submit his idea of the questions likely to be set by the examiners. Your lecturer should then settle upon a list of questions, to which your replies should be ready for discussion at another meeting, and so on. This would, I imagine, prevent time being unnecessarily occupied in reading up the subjects; and it would enable students, by a constant interchange of thought and of ideas, to see a subject in all its various bearings.

The results of the Chartered Institute examinations in July last have been as follows:-Preliminary: maximum number of marks, 800; examined 13, passed 5: the numbers obtained by the successful candidates ranged from 335 to 493 marks. Final: maximum number of marks, 600; examined 25, passed 16: the numbers obtained by the successful candidates ranged from 322 to 457, so that judging simply by the number of marks success has hardly yet been obtained. Considering that there were no precedents for this examination, I think you will agree with me that some of the candidates for the final examination have done exceedingly well.

You must however remember that you may have advanced sufficiently in the knowledge and study of accountancy to pass all these examinations, and yet not be a skilled Accountant you may be able to put all your knowledge into practice, but even that is not sufficient. An accountant is expected to know much more than all this, and whilst you are a student it should be your endeavour to acquire knowledge not only by study, but still more by practice; and you should let no opportunity pass of acquiring a practical knowledge of details. When a manufacturer's accounts are made up at the end of the year, and there has been a loss, perhaps a heavy loss, he then will ask his accountant for suggestions: then come investigations as to percentages of prime cost, dead charges, depreciation, powers of increasing production, cheaper labour in production, reduction of staff, change of the old manager or foreman, and other things which, so long as the profit has been satisfactory, have been disregarded by the manufacturer. Now an accountant, in thus advising his client, has to abandon theory and to be intensely practical, he must be almost confident as to what he recommends; if possible, he should speak from some experience, and he must be content simply to make suggestions, rather than urge his opinions strongly.

Gentlemen, accountants are sometimes told that their vocation is simply to make out accounts for their clients, and that they are stepping out of their proper sphere when they advise how the business can be better carried on. I do not agree with this view, but I allow that such advice has to be given very carefully and judiciously, and hardly at all by young beginners. How many cases do we all know, of men brought up to no business in particular, and knowing little or nothing of commerce, putting their £1,000 or £2,000 or £5,000 or more into a business quite strange to them? In such cases would not the accountant be doing a positive wrong, should he omit to point out matters to his client if the necessity arose ? Again, it should never be said by a bankrupt that he would have

pulled up sooner, but his accountant would not let him. In truth the advice is generally given the other way. Another thing is sometimes expected of an accountant, which no examination is likely to touch. Limited companies spring daily into existence, the accountant is instructed to originate the whole of the bookkeeping, from the very smallest paper upwards. If, for instance, it be a Colliery Company, he must prepare wages' tickets and books, store tickets and books, sale tickets, weighingmachine books, and every book on the place; and then the habits and prejudices of the people who will have to keep the books must be studied, or the system will be found not to work, and then to his disgust the accountant has somewhat to modify his system to suit the ignorance of these persons. Again, how often do directors of public companies ask questions of auditors, the answers to which are not to be found in any books on

accounts.

From what I have said, you will gather that I consider an accountant should not only have skilled and technical knowledge of accountancy, but he should also be possessed of good sound practical common sense. When he is with his ironmaster client, rolling-mills and puddling furnaces should interest him; with his brewer client, he should show some interest in hops and malt; at a colliery, he should burrow underground (this I have always taken care to avoid); with a miller, he should wear a white hat, and so on. Then whenever or wherever you may meet your client, the contents of his last balance-sheet should instantly flash on your memory; nothing gives a client more satisfaction, than to believe his affairs are of so much importance, that you cannot forget them.

You will do well also to study, or at any rate to notice, various forms, circulars, and other things in use in commercial circles, that you may have an insight into the way business is transacted. I have heard of accountants who could not decently draw an ordinary commercial bill of exchange, many have not seen bills of exchange in sets, or bills of lading, or bought notes, or sale notes, or a policy underwritten at Lloyd's; now sometimes these things are put before you as one able to give an opinion, and it is well not to be quite ignorant of them, but quietly and unostentatiously to gain some knowledge of them (carefully avoiding anything that might look like prying into matters that do not concern you), so that you may be familiar with every sort of detail which may crop up in any account that may come before you. Gentlemen, each one of us has, and always will have, much to learn in the practice of accountancy, and we see the same in every other profession.

In

Now I would call your attention to specialties amongst accountants. In London these are more developed than in the provinces. There, I believe, you will find a class of accountants, whose clients are nearly all brewers, or engaged in trades connected with brewing; another class favour wine merchants; another millers; another builders; another drapers; another grocers; another the leather trade, and so on. Birmingham this has not hitherto been the case, we have been satisfied with being considered good all-round men. My advice to students is to do all their work well, but at the same time to try and excel in some one branch, and to obtain a name for so doing. The Council of the Chartered Institute has power to allow an articled clerk to pass part of his time in some other pursuit, and this has already been exercised in favour of a clerk who intended to take up a special branch.

Now, as to the best time of life for commencing practice. I think, unless it is as partner in an already established firm, the age of twenty-five is quite young enough. It is not until a clerk is almost out of his articles that his principals can, even in ordinary cases, commit audit or other work to his sole charge, and in the following two or three years he obtains more practical knowledge than in the previous five or six. By the age of twenty-five he should have attained to that tact, method, accuracy, punctuality, patience, and courtesy which, together with steadiness and hard work, are necessary for great success in the profession; and he will be ready to practise all the virtues of the profession, even; if he cannot obtain all its rewards.

Many years since, when I lived in Germany, I read of some town officials who, on being inducted into office, were exhorted to do their work as if the eyes of their fellow-citizens were always upon them. Gentlemen, if accountants will act in this manner they will do well; but I will go further and say without any hesitation, that those who do their work as if the eye of their God was upon them do best of all.

Some people say that the profession of accountants is overcrowded; but, gentlemen, look at the benighted multitudes who do not employ us. My complaint, however, is that there are not a sufficient number of skilled accountants, and I say skilled specially. Up to 1869 almost every accountant in practice was obliged to show some skill in accounts, or he had but little to do; he might pick up other work,-secretarial, insurance, or what not, but not work requiring skill. Before 1869 Birmingham was the bankruptcy centre for a very large district, and all bankruptcy proceedings arising in that district were carried on here. Then came the 1869 Act, which made a sweeping change. Wherever a County Court judge sat, there was a bankruptcy court with all its machinery, excepting that of the official assignee, whose office was then done away with, and in his stead receivers were appointed by the court, and trustees by the creditors, to wind-up estates in bankruptcy. Within a few years accountants doubled in number, and we find that accountants, whilst practising in their profession, were also agents of various sorts-auctioneers, bailiffs and brokers, debt collectors, clerks to solicitors, law stationers, hatters, tailors, publicans, keepers of refreshment rooms, wine merchants, and so on. Can you wonder that the skilled accountants applied for the Charter, so that some distinction might be made between skilled accountants and others?-the others being chiefly those whose practice for the most part consists in receiverships and trusteeships, which do not require skilled accountancy.

Have you, gentlemen, ever thought of comparing the cost to the nation of receivers and trustees doing the work of the official assignees? In the Birmingham district (which I believe was the largest in the provinces), there was at last but one official assignee, with his staff of clerks and his offices. I do not see how the whole of the salaries and expenses could have been £4,000 a year, notwithstanding the size of the district. There are gentlemen present who know more of these things than I do, and can say if I have placed the amount at too low a figure. But all the gentlemen present cannot together say what is now the annual charge for similar work over the same district. Will it amount to the £4,000, or will not £40,000 a year be nearer to the amount? How else could all the so-called accountants in little towns and large towns engaged mainly in such work gain a living as they do? Were official assignees again to be appointed, the loss to accountants would be enormous, and the gain to the public would be proportionately great. Unskilled accountants might succumb, but skilled accountants, although they might lose some work, would gain in the respect of the public, and I believe ultimately in pocket.

I have already remarked upon the work which I consider may be said to require skill, and I would just say that such work, even if not the most profitable in itself, is yet the most desirable, for it means permanency. Some accountants in this town have retained clients and work for thirty, forty, or even more years; these introduce new clients, and there is an evenness of work throughout the year which is not seen in offices where the work is chiefly that which I class as unskilled.

Has it ever struck you, gentlemen, to inquire how it is that only in this kingdom does accountancy flourish; and why there is no corresponding profession on the Continent, or even in America? In Germany, France, Belgium, Switzerland, and elsewhere there are some gigantic business concerns (though but few as compared with England) in the hands either of private firms or of public companies. The former class do not appear to call in outside professional assistance; and the latter somehow get on without it, or else a government official goes through a portion of the accounts. When abroad, having occasionally to state my profession or occupation, either to

officials or to private friends, I have with the latter invariably had to state what it meant, as it was a profession unknown in their country, and the idea was quite new to them. I have explained fully, but have been answered that their men of business were clever enough themselves to ascertain their profits, and the state of their liabilities and assets; and in respect of trading companies, they could not be made to understand why shareholders of a company, who elected the directors, should elect another official to see that the elected directors do not render false accounts; and the polite bow or the contemptuous shrug showed me their opinion of our men of business, and particularly of those who employed accountants. Verily, gentlemen, accountancy abroad is at a very low ebb, and can hardly be said to exist. In America there are some clever experts, who practise I believe chiefly in connection with the law courts and arbitrations. One such heavy arbitration account came through my hands, and it was most artistically put together, and cleverly carried on throughout. Once one of my clerks went to America to get a living as accountant or as accountant's clerk, but he soon returned, unable to find work. I may say, however, that he had previously visited Jerusalem with the same object in view. Gentlemen, I place the profession of accountancy in the very highest rank in respect to its usefulness to those in commercial life who avail themselves of its services. It has been said that no man is a hero to his valet; so I consider no man whose books are gone through yearly can deceive his accountant as to his real business position, however he may impose on his co-traders, his family, or even on himself. His solicitor knows generally only those isolated matters on which he may be consulted; his surgeon only knows his diseases, aggravated, he suspects, by business or other anxieties; but no one is so fully trusted, or has so much of his confidence, as his accountant. Gentlemen, this is a most important trust, and it behoves every member of the profession, and every individual in his employ, to take the utmost care that this confidence is in no way abused. This applics equally to trading companies and to individuals. Neither by word, look, or hint should any person be able to guess that your opinion of your client's position is anything but the very highest. My experience is that information is more carefully kept close in the accountant's profession than in any other, and considering the large number of persons engaged in it, the fact is most creditable to all, but particularly so to the subordinates in the offices.

Gentlemen, an accountant should possess a sound constitution, be temperate in his habits, and regular in his life; and I should say to any young man who does not combine good health with his other qualifications, that he had better find some other vocation; for it is essential to his continued success; whether the accountant be well or ill, balance sheets must be audited and signed by a certain day, fixed appointments must be kept as they come round, and at certain times of the year rest is almost an impossibility. Gentlemen, every other profession has its very old practitioners. Lawyers, surgeons, physicians, clergy, and others; but where are the very old accountants? I know but of one in this town and district, and I do not know of another over sixty-five years of age.

Gentlemen, I have already congratulated you on the estab lishment of this flourishing society, and it only remains to express my wish that its prosperity may be complete and permanent, and my hope that every ordinary member of the Birmingham Accountants' Students' Society may in due time become a successful and distinguished member of the Institute of Chartered Accountants.

Mr. C. A. Harrison (the Vice-President of the Society) then addressed the meeting, and congratulated the members upon the inauguration of the institution. If he might say a word to the students, in addition to what had fallen from the President in raference to the high character which accountants should seek to attain, he would say that a result of his experience was that next to his religion a man should put his business, and then his relaxation. One great reason why the profession was appreciated was that men of sterling worth, great ability, force

of character, and determination to do what was right, had adorned it throughout the country. He hoped that the status of the profession would be improved, and become all that had been predicted.

Mr. A. H. Gibson and Mr. Robert L. Impey also spoke.

Mr. W. Arthur Addinsell (Chairman of Committee) proposed, and Mr. Clarke seconded, a vote of thanks to the President, which brought the meeting to a close.

THE COMPANIES' ACTS.

The following is a full report of the lecture on the Companies' Acts, by Mr. A. H. Gibson, delivered before the Birmingham Students at their second ordinary meeting, held on the 31st of October, 1882, Mr. C. A. Harrison in the chair.

The lecturer said:-Company Law is a modern statutory offshoot from the Law of Partnership. It will be well first to get the clearest view we can of what companies legally are; to enable us to do this I must say a few words on their legal history. The common law of the country recognised only two ways in which persons could be associated together for the purpose of making profits by trading, viz. Partnerships and Corporations. In partnerships the law looked behind, so to speak, the trading firm to the persons composing it, making each individual responsible for the liabilities and enabling each to enforce the rights of the associated firm, In corporations, on the other hand (which were usually created by Royal Charter), the individuals composing them were for the purposes of the corporations legally non-existent. The corporation became an individual, with capacity as an individual to acquire rights and incur obligations; the individuals composing it could not as individuals enforce its rights, nor were they privately liable for its obligations. During the last century so-called Joint Stock Companies, or Partnerships with transferable shares, struggled into existence, but were not regarded favourably by the legislature; they were subjected to various legal obstacles, and, indeed, Acts were passed which were intended to suppress them. Since 1825, however, they have gradually made legislative progress, and by various Acts, culminating in the Companies' Act, 1862, their establishment has been encouraged. Bearing in mind what I have just said respecting Partnerships and Corporations, we find companies, while resembling both, differ from each. They are not partnerships, for the law recognises them as aggregate bodies, as distinct from the individuals composing them; a creditor of an unlimited company, for example, must first proceed against and exhaust the assets of the company before he can sue an individual shareholder, whereas in a partnership he can sue any partner at once for a partnership debt. On the other hand, companies are quite distinct from the old corporations, for the individuals composing them are, in the event of winding-up, for example, called into legal existence, and are more or less liable as individuals for the debts of the collective whole.

There are two general heads under which Joint Stock Companies are divisible, viz. Unincorporated and Incorporated. The Unincorporated Companies are for the most part survivals of the time when the legislature waged war against companies. They differ from partnerships in but two important respects,

viz. :

1st. Shares therein can be transferred by private arrangement between vendor and purchaser, and with the knowledge or consent of all the members.

2nd. Some of them are empowered to sue and be sued in the name of an appointed public officer.

As, except in these respects, Unincorporated Companies are controlled by the ordinary Law of Partnership, which is foreign to the subject of my lecture, I shall not, except incidentally, refer to them further.

Incorporated Companies are divisable under three heads, according to the method of their incorporation, viz. those incorporated by

In order to preserve logical arrangement and sequence as far as possible in this somewhat interlaced subject, I shall arrange what I have to say under four heads, viz. :

1st. The law affecting the formation of companies and membership therein.

2nd. The law affecting the constitution of companies, and the rights of the members among themselves.

3rd. The law affecting the external relations of companies, i.e. their relations with non-members.

4th. The dissolution and winding-up of companies. Firstly, then, let me ask you to consider the law as relating to the formation of Incorporated Companies, and what constitutes membership therein.

The third method of Incorporation just mentioned, viz. Registration, is so much the readiest and cheapest, that nearly all companies are now formed in that manner; indeed, it is only when exceptional powers are required that the other methods are employed. We will therefore consider firstly the incorporation of companies by registration. Some companies exist which were incorporated under the earlier Joint Stock Companies Acts, 1844, 55, 56 and '57; the principal statute now, however, in operation is the Companies Act, 1862, which repealed the former statutes and consolidated the law on the subject. Various amending Acts have since been passed, but the law has not been materially altered since the 1862 Act was passed.

This Act enables any seven or more persons associated for any lawful purpose to form by registration under the Act an Incorporated Company, with or without limited liability. The provision that seven persons at least shall be required to form a company is one which, like many other statutory provisions, is often obeyed in the letter and evaded in the spirit. Concerns which are and are intended to remain the private property of one man are frequently, to secure the benefits of limited liability and perpetual succession, registered as Joint Stock Companies. The requisite number of nominees subscribe their names for one share each, while the virtual proprietor subscribes, say for 10,000. When application is made to register a company there is presented to the Registrar what is called the Memorandum of Association, subscribed by the persons desirous of incorporating the company. This Memorandum of Association is required to set out the name, situation of the registered office, and objects of the proposed company.

It is doubtful whether, as regards the objects of the company, the memorandum can ever be altered; while if any act be done by the company which is not within the terms of the Memorandum of Association, such act is illegal, and involves the usual penalties of ultra vires Acts. For this reason the terms of a Memorandum of Association are generally as wide, vague and inclusive as possible, so as to authorise any acts only remotely connected with the ostensible objects of the company. If limited liability is desired, some further particulars, with which I need not trouble you, have to be stated on the Memorandum of Association; the particular point I wish you to bear in mind is, that the Memorandum of Association is, so to speak, the source and constitution of the company, and that the company must never travel outside its terms. If the company be formed with unlimited liability, or with liability limited by guarantee (which means that, in the event of winding-up, certain persons guarantee fixed amounts towards any possible deficiency), there must also be registered with the Memorandum what are called Articles of Association. These correspond to the Articles of Partnership in an ordinary partnership, and regulate the respective rights and duties of the shareholders, directors, and other officers as among themselves. With reference to companies limited by shares, there is attached to the Act a schedule called Table A. This consists of a sort of pattern Articles of Association, but it is optional with companies to adopt them or any of them, or to draw up entirely fresh Articles, which must be registered at the same time as