Conceiving Companies: Joint-Stock Politics in Victorian England (review)

Abstract

Victorian Studies 44.2 (2002) 287-288
Readers interested in the complexities of Victorian culture should read Timothy L. Alborn's Conceiving Companies: Joint-Stock Politics in Victorian England. Unlike many literary critics, who treat the world of finance as just so many ideas, Alborn understands that money, which informed nearly every aspect of Victorian life, could only acquire meaning in relation to the institutions that regulated it. Unlike many business historians, who focus on individual corporations or corporate heroes, Alborn understands that institutional forms are always both cultural and political. Thus a book that could easily have been a mere history of the corporate form brilliantly illuminates the subtle ways that Victorian men and women negotiated various ambitions—most prominently, the ambition to attain representation in a society rapidly transforming inherited institutions.
Alborn examines the mid-nineteenth-century rise of the corporate form alongside another kind of company, only a few of which still existed in 1840. Chartered, or "sovereign," corporations, represented here by the East India Company and the Bank of England, originated in the seventeenth century as monopolies chartered by the Crown. These monopolies were publicly owned companies, whose large-denomination shares were bought and sold on the London Stock Exchange. To different degrees, and in various ways in the course of their histories, each of these companies was torn between responsibility to the public, which was conferred by its special relationship to the British state, and responsibility to its shareholders, which followed from its status as a profit- driven business. In part 1 of Conceiving Companies, Alborn traces the fascinating and intricate story of the two companies' efforts to negotiate the tensions between functions associated with the state (the administration of India, the issuing of notes, and maintenance of the nation's gold reserve) and profitability.
In parts 2 and 3, Alborn engages his real subject—the political significance and activities of the new joint-stock corporations that began to proliferate after 1844. Apart from the chartered monopolies and banks (which were allowed to incorporate after 1826), early-nineteenth-century English law virtually prohibited joint-stock enterprise for ordinary trading. Before the legal changes of 1844 and 1855, most companies were simple partnerships, which were governed by the law of partnership, not the more advantageous law of corporations. Under the former, each partner was regarded as the fully accredited agent of all partners, and, if the company ran into legal or financial difficulties, each partner could be sued or held liable for the company's losses "to his last shilling and acre." Under the law of corporations, by contrast, the business became a distinct legal entity, whose assets were the only security for its debts. In practice, this meant that a corporation could—and typically did—outlive its founders, it could act in law as a single body, and its shareholders were only liable for the sums they had invested. With the Registration Act of 1844 and the even more permissive company legislation of 1855 and 1862, incorporation became increasingly easy. By the end of the nineteenth century, Britain enjoyed the most permissive company law in the world, and one estimate puts the number of new companies forming (in 1886) at 1,500 a year.
Most business historians are content to draw contrasts between private partnerships and the new public corporations. Alborn is less interested in this distinction than in showing what a complicated cultural form the corporation was. Focusing on joint-stock banks and railways, Alborn demonstrates the inadequacy of modern attempts to write business history in terms of a distinction between the public and private dimensions of corporate enterprise. The joint-stock companies formed after 1844 were public in the sense that their (increasingly small-denominational) shares were publicly traded, but they were not public in the way that the chartered monopolies were, with both the protection of the Crown and responsibilities to it. These companies were also private, of course, in that their chief responsibility was to their...