[149-150] Economic modernization during the mid-19th century greatly intensified an need to mobilize capital for use in commerce and industry. This was particularly so in France. A shortage of capital there significantly limited the pace and development of an economic transformation that she was ready for in most other economic respects. [.......] With the optimum scale of enterprise growing and the advantages of rationalizing management by freeing firms from control by a small familial group increasing, new legal forms were needed. The creation of joint-stock business organizations was one of the most effective ways to overcome these problems and clear the way for the modernization of France's economy. The extent to which French entrepreneurs and capitalists were able to use these business forms was largely dependent upon two factors: first, how easy it was legally to form them, and second, how supportive governental officials were toward their formation and activities. The first was not a major problem in France. Her legal codes allowed for a variety of joint-stock business forms. Indeed during the first half of the 19th century the French Commercial Code of 1807 was the most liberal in Europe and formed the model for corporation laws on the Continent ..... The second factor, however, was crucial and constitutes the main focus of our analysis. France's governmental policy often contradicted the apparent liberalism of her codes in this area. This created a tension between the theoretical acceptance of joint-stock business organizations and the practice of actually discouraging their use. It was not until the last third of the century that the government allowed Frenchmen easily to create limited liability joint-stock business organizations. Governmental reluctance to facilitate the formation of these institutions was rarely because officials failed to perceive their potential economic importance.