fall even a good deal short of that rate. 
Without a monopoly, however, a joint-stock 
company, it would appear from experience
cannot long carry on any branch of foreign 
trade. To buy in one market, in order to 
sell with profit in another, when there are 
many competitors in both; to watch over, 
not only the occasional variations in the demand
but the much greater and more frequent 
variations in the competition, or in the 
supply which that demand is likely to get 
from other people; and to suit with dexterity 
and judgment both the quantity and quality 
of each assortment of goods to all these 
circumstances, is a species of warfare, of which 
the operations are continually changing, and 
which can scarce ever be conducted successfully
without such an unremitting exertion 
of vigilance and attention as cannot long be 
expected from the directors of a joint-stock 
company. The East India company, upon 
the redemption of their funds, and the expiration 
of their exclusive privilege, have a 
right, by act of parliament, to continue
corporation with a joint stock, and to trade in 
their corporate capacity to the East Indies
in common with the rest of their fellow subjects
But in this situation, the superior vigilance 
and attention of a private adventurer 
would, in all probability, soon make them 
weary of the trade
An eminent French author, of great knowledge 
in matters of political economy, the 
AbbĂ© Morellet, gives a list of fifty-five joint-stock 
companies for foreign trade, which have 
been established in different parts of Europe 
since the year 1600, and which, according 
to him, have all failed from mismanagement, 
notwithstanding they had exclusive privileges
He has been misinformed with regard to the 
history of two or three of them, which were 
not joint-stock companies and have not failed
But, in compensation, there have been 
several joint-stock companies which have failed
and which he has omitted. 
The only trades which it seems possible for 
a joint-stock company to carry on successfully
without an exclusive privilege, are those, 
of which all the operations are capable of 
bring reduced to what is called a routine, or 
to such a uniformity of method as admits 
of little or no variation. Of this kind is, 
first, the banking trade; secondly, the trade 
of insurance from fire and from sea risk, and 
capture in time of war; thirdly, the trade of 
making and maintaining a navigable cut or 
canal; and, fourthly, the similar trade of 
bringing water for the supply of a great city. 
Though the principles of the banking trade 
may appear somewhat abstruse, the practice 
is capable of being reduced to strict rules
To depart upon any occasion from those 
rules, in consequence of some flattering speculation 
of extraordinary gain, is almost always 
extremely dangerous and frequently 
fatal to the banking company which attempts 
it. But the constitution of joint-stock companies 
renders them in general, more tenacious 
of established rules than any private 
copartnery. Such companies, therefore, seem 
extremely well fitted for this trade. The 
principal banking companies in Europe, accordingly, 
are joint-stock companies, many 
of which manage their trade very successfully 
without any exclusive privilege. The bank 
of England has no other exclusive privilege
except that no other banking company in 
England shall consist of more than six persons. 
The two banks of Edinburgh are 
joint-stock companies, without any exclusive 
The value of the risk, either from fire, or 
from loss by sea, or by capture, though it 
cannot, perhaps, be calculated very exactly, admits
however, of such a gross estimation, as 
renders it, in some degree, reducible to strict 
rule and method. The trade of insurance
therefore, may be carried on successfully by a 
joint-stock company, without any exclusive 
privilege. Neither the London Assurance
nor the Royal Exchange Assurance companies
have any such privilege
When a navigable cut or canal has been 
once made, the management of it becomes 
quite simple and easy, and it is reducible to 
strict rule and method. Even the making of 
it is so, as it may be contracted for with undertakers, 
at so much a mile, and so much a 
lock. The same thing may be said of a canal, 
an aqueduct, or a great pipe for bringing 
water to supply a great city. Such undertakings
therefore, may be, and accordingly 
frequently are, very successfully managed by 
joint-stock companies, without any exclusive 
To establish a joint-stock company, however, 
for any undertaking, merely because 
such a company might be capable of managing 
it successfully; or, to exempt a particular 
set of dealers from some of the general 
laws which take place with regard to all their 
neighbours, merely because they might be 
capable of thriving, if they had such an 
exemption, would certainly not be reasonable
To render such an establishment perfectly 
reasonable, with the circumstance of being 
reducible to strict rule and method, two other 
circumstances ought to concur. First, it 
ought to appear with the clearest evidence
that the undertaking is of greater and more 
general utility than the greater part of common 
trades; and, secondly, that it requires a 
greater capital than can easily be collected 
into a private copartnery. If a moderate 
capital were sufficient, the great utility of the 
undertaking would not be a sufficient reason 
for establishing a joint-stock company; because, 
in this case, the demand for what it 
was to produce, would readily and easily be 
supplied by private adventurers. In the four