INSOLVENT DEBTORS BILL. (Hansard, 1 February 1819)

§ Mr. Alderman Waithman
said, that the petition they had just heard, was not less important than any petition presented during the present session: not less important than the petition presented the other day for a revision of the criminal law. It was a petition from the city of London praying the house not to renew the Insolvent Debtors bill. He had had many opportunities of witnessing the conduct of the citizens of London, and forming an opinion respecting their character, and this he could safely say, that so far from being deficient in humanity, they would be as ready as the inhabitants of any part of the kingdom to agree to any measure for the relief of insolvent and distressed persons. With respect to this measure, however good might be the intentions of those by whom it was introduced, he would not hesitate to say, that no act ever passed that house, which made so complete an inroad on the property of traders, or which gave a more deadly blow to the morals of the people. It not only-afforded an easy indemnity to the dishonest part of the community, but held out an encouragement to vice and profligacy of every description. In addition to these grievances, the bill, in its present form, had totally superseded that pride and bulwark of our constitution, the trial by jury. It, in fact, invested in the judge of the 181 insolvent court more power than had over been conferred on any individual for centuries past. He possessed a much greater authority with regard to property between debtor and creditor than was in the exercise or the discretion of the lord chancellor, and the twelve judges. Different papers had been presented to the House, showing the number of persons who had taken the benefit of the act, and the amount of their debts; but gentlemen who were not connected with trade, could hardly be supposed willing to take the trouble to look into these papers. It would astonish many members to learn that after the bill had been in operation three years, an account up to March 1815 had been moved for, whereby it appeared that upwards of six millions of property had then been decided on under that act, and that all the dividends on that property amounted only to about one farthing in the pound. At that time they were told that several regulations would be introduced to remedy the evils, and that they proceeded in a great measure from the carelessness of the creditors, in not looking after the property of their debtors. Another account was presented up to the 1st of March 1817. The persons who then had taken the benefit of the act since the former account, amounted to something more than 9,000; and the whole property decided on, amounted to upwards of eight millions. The money recovered amounted to something more than half a farthing in the pound. He had made a great mistake in stating the dividend on the former property at a farthing in the pound—it was only one-fourth of a farthing; so that the improvement had produced an increase of from a quarter of a farthing to half a farthing in the pound. The number of persons who had taken the benefit of the act was nearly fourteen thousand, and the property they owed was nearly fifteen millions. Here, then, a tax to a most enormous amount was levied—a tax exceeding in amount that of the property tax—here was fifteen millions of property, all taken from the profits of the most honest, the most industrious, the most laborious, and the most moral part of his majesty's subjects [Hear, hear!]. He did not, when he said this, mean any thing invidious to any other class of society; but it was not to be denied that their habits were more chaste, their conduct more regular, and their morals more pure, than 182 those of the lower ranks of life, who were too often driven by distress to the commission of improper acts; and than those who, in a state of affluence, had not the checks to control their conduct, that must necessarily regulate the trading part of the community. He said, that it any plan could be devised to meet the benevolent wishes of the framers of the act, and at the same time to give some security for the property of the honest trader, the city of London would willingly concur. The real fact was, that it made individuals rush to take the benefit of the act in the first instance, without making any exertion to retrieve their situation. He could appeal to the hon. commissioner of bankrupts who sat near him, whether he ever knew an instance of an honest debtor being oppressed by his creditors, after he had given a fair statement of his losses and effects. The house surely could not tolerate the principle of a measure which justified a man's wasting his effects until he had not one farthing left, and then cancelling all his engagements by this act. If a man had 10,000l. or 500l. and found his affairs sinking, let him call his creditors together and give among them what remained, but let him not, as this act justified, continue a squandering career until not one farthing remained for any body. Indeed, the consequence of this measure was, that many creditors were actually compelled by the losses they incurred to follow their debtors into gaol, and go on themselves to take the benefit of this act, which shook of debts to the amount of hundreds of thousands, and did not leave assets to the amount of a farthing in the pound for distribution among creditors. He had seen a paper containing a list of persons who had applied to particular sheriffs officers with the writs in their hands under which they were to be taken into custody. The hon. alderman concluded with moving that the petition do lie on the table; and he begged at the same time to give notice, that if it should appear at a future time to be the intention to renew this act, he would move for a previous inquiry into its operation. In the mean time he would move for a continuance of the line of accounts formerly presented to the house on this subject.

§ Mr. E. J. Littleton
said, that he perfectly concurred with the worthy alderman as to the effects of the law. The intentions which had actuated those who originated the law were, he was convinced, most hu- 183 mane. It was a laudable attempt to endeavour to distinguish between the unfortunate and the fraudulent debtor. But the effect had not corresponded. Millions of property had been disposed of, of which the creditors had not received a farthing in the pound; and he was convinced, that for every instance in which justice had been done to a debtor, much more injustice had been done to the creditors. This was not a mere question between the debtor and creditor—it was one which concerned the public morals and public interest; first it clearly, appeared before the last committee appointed by parliament, that respectable traders were obliged to shield themselves from the losses entailed by this act, by putting an additional price on their goods. He believed that for one act of justice towards an honest debtor, occasioned by the operation of this act, fifty frauds were committed upon the creditor.

§ Mr. Brougham
said, he quite agreed with his hon. friend, the worthy alderman, and with the hon. gentleman who spoke last, that this was an important question, which ought to be maturely considered; he quite agreed with them, that it ought to be duly and carefully weighed, from the immense interests which were at stake on the issue. Its operations on the mercantile, the general and trading interests, and on the administration of justice, were of the highest importance, and alike entitled this act to the most serious and cool consideration. He did not mean on the present occasion to anticipate a discussion which would be more regular at a future period, but he could not allow the statements which had just been made to go forth to the world without protesting against them in one point of view. These statements, or at least the great point or principle upon which they were founded, though guarded with some special qualifications, went generally against the whole measure. He objected to this sweeping way of denouncing the act, and particularly to the manner in which the comparisons seemed to be made. The comparison between the state of this particular law now, and the previous state, should not be made upon an ideal standard of law which never did exist, but upon what was the actual fact, and then, indeed, a fair estimate might be made of the practice in one case and in the other. If hon. gentlemen meant to make a fair comparison, they must refer to the former practice, which was, to pass every year or 184 two ex post facto laws to clear the gaols from debtors, and compare that with the principle of the present act, which was prospective in its operation. The act as it was might have many imperfections, which it would be well to remedy. It had not emanated from that House. The bill was lord Redesdale's, with a few and not important alterations. This act might be liable to objections, though many of them, he hoped, would be found capable of being removed; but what he protested against was, its being compared with a state of law which never had existence. As an instance how easily a clamour might be raised on this subject, though he acquitted the worthy alderman of any intention of producing an unfair impression, he should refer to the statement of properly disposed of under this act. Suppose no insolvent act had passed, would the creditors have had the whole of the fifteen millions? Was it not more probable that they would not have had even the fortieth part of the farthing in the pound, which it was said they had actually received?
The petition was ordered to lie on the table. After which, on the motion, of Mr. Alderman Waithman, returns were ordered, "1. Of all persons discharged under the Insolvent acts up to the first of February 1819, the amount of the respective sums to which such discharge extended, and the amount of dividends, that have been received and paid to Creditors. 2. Of all instances in which debtors have been remanded under the operation of the Insolvent debtors acts, with the grounds of such remanding."