That said partners shall, once every three months, upon the request of any one of them, make and render to each other, or his legal representatives, a true and perfect ac count of all profits and gains by them made, and of all losses sustained; and also of all receipts, disbursements, and other things whatsoever concerning said partnership, and there upon shall cancel, adjust, pay, and deliver unto each other their equal shares of the profit so made, if any.
That at the end of said term of ten years (if said partner ship be not sooner determined, in which case) the said part ners, or their survivors, shall make a final and true account of all things as aforesaid, and in all things well and truly adjust the same.
That upon making account of stock, goods, wares, and merchandise, and the profit, gain and increase thereof which remain, the same shall be equally divided between them, or their survivors, share and share alike.
6. Dissolution of partnership.—As will be inferred, a partnership will cease by any act that would tend to convey any partner's rights to another. The insol vency, death or insanity of any partner therefore terminates the relation. There are other causes for termination, including agreement of the parties, ex piration of the time agreed upon for continuance, insolvency of the concern and, if different national ities are represented, war between the nations repre sented by two or more partners.
7. Example of partnership agreement.—No one has a keen enough mind, or is rich enough in expe rience, to foresee all the contingencies that may arise in the course of the conduct of a successful business. Hence the agreement between partners cannot pro vide for every possible difficulty. But even simple partnership articles will be found useful. Forms can be found in any legal book; they usually include pro visions for the name of the firm, the amounts to be contributed by the partners, their duties, the method of calculating profits and of dividing them, the gen eral scope of the business and the period of duration.
8. Advantages of the partnership.—So much was said in connection with the individual proprietorship that is applicable here, that it is hardly necessary to state in detail the advantages of the partnership. The partnership is not so autocratic as the individual pro prietorship. It is simple and easy to form, and the partners have the same right as in the individual pro prietorship to change their business plans without get ting legislative consent. There is here also the strong, direct incentive to attend to business and see the bank balance grow. But the partnership is capable of controlling more capital than the individual. In deed, there may be a division of functions amongst the partners that will give all the advantages in this respect that could be expected from the more solidly formed corporations.
9. Mr. Carnegie's praise for the partnership.—An drew Carnegie was a great believer in the partnership ; he continued this form of control long after other steel magnates had incorporated their concerns. In 1912, when testifying before the Congressional Com mittee on Investigation of the United States Steel Corporation, he made the following statement : I do not believe that corporations can manage a business like partners. When we were partners I felt we could run around corporations. Take thirty-five men, young men, each one will be interested in a department and will watch the spigots from which there might be leaks.
. . . The best corporations that ever were formed will be beaten by such an organization as we had in the Carnegie Steel Company. I would not say that the greater corpora tion would not equal the smaller corporation. What I wish to say is, that the corporation is not in it with the partners managing their own business. For instance, I want a great contract for rails. I remove to New York. Sidney Dillon, of the Union Pacific, was a personal friend of mine. Hunt ington was a friend. Dear Butler Duncan, who called on me the other day, was a friend. Those and other men were presidents of railroads. The Union Pacific had advertised for 70,000 tons of rails, the biggest order that they had ever given. It was to be decided at Omaha, and all my com petitors, all the agents of those corporations were out at Omaha, and those bids were to be opened. I walked over to Sidney Dillon. I was able to do the Union Pacific a favor once, and I did it, and I was elected a director of the Union Pacific, and I got them a loan on securities in Philadelphia, I think, for $600,000 and they elected Air. George M. Pull man and myself directors: I had done him a favor, and I said, "Mr. Dillon, you have had some Carnegie rails. "What is the report?" "Oh, first class ; splendid rails, Mr. Car negie." "I want you to do this for me: Your people are out there bidding on 70,000 tons of rails. I ask you to give me those rails, and I will promise you to take the lowest price that is bid." "All right, Carnegie." What is the use of a corporation with hired people fighting against that? 10. Am example of partnership organization.—The 13aldwin Locomotive Works was, until its recent in corporation, the largest partnership in the world. Its methods of doing business as a partnership were de scribed by the head of the concern, Mr. Alba B. John son, in a lecture in the University of Pennsylvania. This lecture has been quoted in part by Mr. J. Rus sell Smith in his "The Elements of Industrial Man agement," from which the following extract is taken: I do not know of any other business, either in the United States or any other part of the world, where so large a busi ness is conducted under the form of the old-fashioned co partnership.