HC Deb 18 March 1835 vol 26 cc1144-81
Sir John Campbell

moved the Second Reading of this Bill.

Mr. Richards

had received numerous communications from persons who entertained the utmost fears in consequence of the introduction of this Bill. They did not object to the details, for they had no opportunity of seeing them, but to the principle of the measure. It appeared altogether to have been forgotten by the hon. and learned Gentleman who originated this Bill, that they were not living in a state of society like that of ancient times, nor in such a state as it was the object of the Christian religion to institute. It seemed to be the object of this Bill, to assure the public that on all occasions creditors were wealthy and debtors were poor, and that creditors ought on all occasions to be merciful to debtors. By giving summary remedy, too, it appeared that it had been forgotten, that while a man owed money on the one hand, he might have money owing to him on the other, and by this Bill he might be precluded obtaining the amount of debts due to him in sufficient time to meet an opposing claim. There was one remarkable thing, too, with regard to this measure, and to which he begged to draw the attention of the House, viz., that, except from one jail in the metropolis, there was no petition in its favour. He could not, therefore, but look upon it—seeing that there were no signs of support being general—as a piece of gratuitous legislation on the part of the hon. Member for Edinburgh, who, be it understood, had not even condescended to communicate with any persons who might be supposed to represent the commercial interests. He might have ascertained from one of equal authority on such a subject at least as himself, how such alterations would affect the commercial classes. He could then have given his reasons in detail, and, when those reasons had been stated, hon. Gentlemen might have been able to come to some conclusion on a subject that so much demanded their serious attention. He (Mr. Richards) had been, for thirty years, engaged in commercial transactions, and he could not look upon the introduction of this measure as anything but a serious infliction on the interests of trade; and that, if carried into execution, it would create a mortal disease in the body politic. He could not, therefore, entertaining such opinions, do less than come forward and protest against this Bill. The motives, that actuated men, were the hope of reward and the fear of punishment. Human legislation invariably proceeded upon those acknowledged principles; but, as hope could rarely be brought to bear, resort was commonly and necessarily had to fear. But, in this measure there was nothing to fear and everything to hope for the dishonest, for it gave all imaginable inducements to knaves and thieves to cheat the community. The preamble professed to facilitate the recovery of two things for the advantage of the creditor, which were bills of exchange and bonds, but why were book-debts omitted? They were often much larger than the two former mentioned securities. But what he complained of was, that the great body of the public most interested were entirely unacquainted with the pur- posed details; and before attacking the interests of such numerous and great bodies they should have been consulted. He should like to know if arrest of the person was abolished, what protection tradesmen could have against that large mass of the community who lived in lodgings? Generally speaking, they had no chattels to seize, and obtained credit from day to day and from month to month without any visible means of subsistence, and yet this Bill would take away the power of arrest and imprisonment, which was the only security the housekeeper had against the fraudulent impositions of this class of persons. Hon. Gentlemen who previously supported this measure had said, that if bills of exchange were decreased by this Bill, as had been maintained, that those that were in circulation would be all good ones. Now, he never arrested five men in his life, and would engage to say, that nineteen bills out of twenty were paid. But the fact was, that some hon. Gentlemen set themselves up as Doctrinaires and Utilitarians, and never troubled themselves about things as they were. He could easily suppose the case of a poor man calling upon a Member of Parliament in the country, and requesting payment of a sum of money. The money might not be at hand, but yet the poor fellow would not be sent away. A bill might be given him, which might never again be thought of by the Member, unaccustomed to the routine of business, and then for its non-payment the poor man who had failed with it might, on ten days notice given, have execution levied on his goods. This would be a state of things most monstrous and cruel, and he trusted this measure which he looked upon as a supplement to that Bill which on the same subject fifteen years ago was rejected and the laughter and sneers of that House, would not pass into a law. It would lessen the number of bills—no man would care to draw a bill. [Cheers.] The hon. Member for Bridport cheered;—had he then lived in some fancy region, or was he so blinded by benevolent theories that he forgot the state of society in which he existed? Why, 19–20ths, he might with as much safety say 99–100ths, of the trade of this empire was carried on by credit, and that credit by bills. Would they then, in this state of things, with eight hundred millions of debt, and twenty millions of taxes, be guilty of anything so monstrous and cruel as passing this measure? The Doctrinaires who had brought it forward, were a set of people fond of applying general principles without entering into particular circumstances. They were merely syllogism men, and cared not to look to consequences. [Laughter.] He really did not see the applicability of the hon. Member for Liverpool's interruption, perhaps it was owing to his (Mr. Richard's) obliquity of vision; but he was afraid the hon. Member, who ranked among the Utilitarians, as he believed, felt a little sore under his remarks, and thence proceeded the interruption. As a new Member of Parliament, for he had only been in Parliament two years, he had made these observations, hoping it would lead to a discussion on the principles of the Bill, but it certainly did appear to him a matter of the gravest importance, and deserving the most serious consideration of the House, whether they would repeal the law at present existing, and give no adequate protection to book debts, which constituted by far the largest class of debts. If they did repeal it, and if creditors should find it impossible to go on giving credit as they did, and debtors should find it not quite so easy to borrow as formerly, they would then, perhaps, find it necessary to recur to the old law of debtor and creditor. The hon. Member, after apologizing for the imperfect manner in which he had handled the subject, concluded by saying, that his principal object was attained if he had roused the attention of those better qualified than he was to discuss the details of this measure.

Mr. Baring

observed, that as the hon. and learned Member for Edinburgh had stated his wish that the Bill should be referred to a Committee up stairs, and he did not wish to multiply discussions, he would reserve the statement of his opinions on the principle of the Bill till the time of the Speaker's leaving the Chair for the House to go into Committee, supposing the Bill to be now read a second time without discussion. If the hon. and learned Member had no objection to his taking that course, he would then say nothing further than that when this Bill was brought before the House on another occasion, he was apprehensive that the result would be great danger to the trade of the country, and as his opinions were not altered, he felt a difficulty added to the subject by the situation which he had the honour to hold. He would also point out to the hon. and learned Member, that many lawyers, who were Members of that House, were now necessarily absent on their professional business, and he therefore suggested, that it would be better to postpone the discussion on the principle of the Bill till the House went into Committee.

Sir John Campbell

said, that he was entirely in the hands of the House; but, as far as his own opinion went, he must say, that it would be most cruel and unjust towards those who now languished in the sickness of hope long deferred, not to allow the House now to decide on the principle of the measure to which persons subject to the operation of the present law had so long looked forward. As to the observation of the hon. Member for Knaresborough, that he had entered on a gratuitous piece of legislation, he could only say, that he had received at least 500 letters, not only from debtors, but from creditors, urging him to press the Bill forward. He did think, therefore, that these individuals ought to have the benefit of the decision of the House of Commons on the principle of the Bill.

Mr. Baring

observed, that whatever serious doubts he might have on the details of the measure before the House, he could not but do justice to the benevolent intentions of the hon. and learned Gentleman who had originated it. No one who knew the hon. and learned Gentleman, but must feel convinced when he gave up professional time of so much value, that the hon. and learned Gentleman was himself persuaded of the importance of the measure. He would shortly state what were his apprehensions in the event of this measure becoming the law, at the same time reserving to himself the right of offering further objections at a future stage of the proceedings. They had not at present sufficiently gathered the opinion of practical men on the subject. The people generally, and the inhabitants of large manufacturing towns in particular, had experienced men on the subject; and he did not believe, that they were favourable to the measure. Although he did not participate in the feelings of the hon. Member for Knaresborough on the subject of Doctrinaires and theorists; yet he did think the opinion of merchants and tradesmen were worth all opinions com- ing from people of less experience. That the theory of this Bill was correct, he was ready to acknowledge—that misfortune was no crime, and should not, if it could be avoided, meet with punishment, and, least of all, the punishment of imprisonment. Yet the universal experience of mankind, and the law of all nations, rendered it fair to conclude, that the possession of the person of the debtor was the only effectual method of recovering the debt. That it was repugnant to feeling he admitted; but with that fact before him he was inclined to think it was the only means of remedy. He had every desire to carry out the principle of the measure, but he could not see what method could be pursued for getting at the property of a debtor if they could not get at his person. He could not see what means could be given of securing the property of the debtor without having the right of arresting his person. A creditor might, under the hon. and learned Member's Bill, get into the house of his debtor, and there he would find chairs and tables, but would be told, that they were the property of a brother, or a sister, or a mere man of straw, and he would see his debtor continue to live in ease and affluence; but if he could take the person of his debtor, it would compel him at once to surrender his property. The hon. and learned Member might say—"You may summon and examine him, and send him to prison if he does not disclose where his property is;" but he was asked—"Sir, where is your property?" "I have got none," would be the answer, and the only means of arriving at the property would be by seizing the person. The tradesmen of the country would be the fitting judges on this question, and not the great merchants. During the many years in which he (Mr. Baring) had been in business he had never arrested a single individual. The persons with whom the large merchants did business had an interest in maintaining their credit, which the persons who dealt with tradesmen had not; and how would it be possible to meet the thousands of swindlers who would overrun the country if this Bill passed, when they took away the means of forcing them to surrender their property? It was urged, that poverty was punished as a crime, but with reference to this subject, that the nonpayment of a debt was prima facie an offence, and if a person incurred a debt without any means of defraying it, he was as guilty as a man convicted of petty larceny. It certainly was an offence, and what in the present state of the law was the punishment? A man might be confined for about five weeks under the present Insolvent Act, and then get whitewashed; and he held, notwithstanding the pathetic appeal of the hon. and learned Gentleman, that that was not a grievance to be compared to the danger which could arise from the adoption of a contrary practice. It was only a wholesome punishment due to the man who idly and mischievously took, on false pretences, the property of honest tradesmen. Besides, under the present law, if a man could prove, that, in all his proceedings, there was no fraud, if he could make all those proofs which the Commissioners required, he was discharged at the end of a few weeks. The hon. Member for Knaresborough had talked of persons of rank and affluence not paying the bills of their tradesmen. Now, the present law of arrest was a remedy to the tradesmen; for imprisonment would be felt to be a personal degradation by many who would not be influenced by more honourable motives. The hon. Member for Middlesex had said, that trade should be carried on without credit. Now, that was precisely the point on which the question turned. He would tell them plainly, that trade, whether on a large or small scale, could not be carried on without credit. It was impossible to apportion receipts and payments, unless they could be placed at a certain distance from each other. He ventured to say, that let them do what they would, the tradesmen of London, and all large commercial towns, must give credit. They could not bring the country to none but ready-money dealings. For his part he would feel much pleasure if he could come to the same conclusions upon the subject as the hon. and learned Member for Edinburgh; but he was bound to confess that his apprehensions of the effects of the Bill were by no means few or slight. He would confess, however, that there was a great deal of the Bill which was extremely useful, and he believed, that the commerce of the country would on this score find itself much indebted to the hon. and learned Gentleman. It had been argued, that if the House, in passing this Bill, should find that it had made a mistake, it could retrace its steps, but, he thought it would be by far better to avoid the error in the first instance. Let any hon. Gentleman only point out to him any country in which a similar experiment had been made. For his part he had been a traveller to a considerable extent, and he knew of no country that possessed upon the subject a state of law similar to that which the present Bill proposed to introduce into England. America was very anxious for the personal liberty of her citizens, and her laws affecting that personal liberty were sufficiently relaxed; and yet she had no such law as that contemplated by the present measure. France and Holland had not such a law; and, in fact, in no part of the world did such a law exist. Was it prudent, then, to make such an experiment in the most artificial country upon earth? a country more filled with the chevaliers d' industrie than any other, and more full of that description of swindlers which preyed upon credit. He had but one more observation to make, and that was upon the facility which the Bill gavel for the recovery of the amount of bond debts. There was a class of persons in this country who should be informed of the manner in which this Bill was likely to affect them. The Bill gave a summary remedy against all persons who had signed a bond. Now, there were, at least, one hundred thousand of these bonds afloat between families for the purposes of loans being taken up, and other persons who gave bonds on mortgages creating a lien on their estates, had, by the practice of the country, six months' notice given to them before the money was sued for. [Sir John Campbell: Such bonds might be sued upon immediately.] All persons of landed property knew, however, that, by the practice of the country, they could get, or did get, a very considerable allowance of time. When a mortgage was to be called in by the present Bill judgment could be obtained upon the bond in ten days, and in ten days more the property of the person who had signed the bond could be seized, or put into the hands of trustees, if the demand were not otherwise satisfied. Then he had to complain that the most arbitrary powers were given to these trustees. They could select what property they pleased out of a man's estate in order to sell it, to satisfy the bondholder, and could do just as they might think fit, without responsibility or control. All he could say was, that the proprietors of land throughout the kingdom ought to know that this was the proposed alteration to be made in the laws of the country. He had to remind the House, that Bills of this sort, if they were called Bills of improvement, cantered through the House so fast that it was perfectly impossible that persons to be affected by them could know anything of them. He protested against the Bill with respect to its provisions upon arrests for debts, and he had doubts whether the remedy with respect to bonds would not expose persons to inconveniences which had been never even contemplated between them and their creditors. He had thrown out these general observations upon the principle of the Bill; and, though he should not now oppose the Bill passing through another stage, he should reserve to himself the privilege of giving it his opposition in detail.

Sir John Campbell

hoped the House would allow him to make a few observations in reply to the remarks of the right hon. Gentleman, the President of the Board of Trade. He considered it of great importance to decide without delay on the principle of this Bill. He thought this a much better course than for them to run the chance of the principle being rejected, after having devoted day after day, and great labour, to an examination of the details of the measure in a Select Committee. He was surprised to hear the right hon. the President of the Board of Trade, lament that Bills of this sort cantered through the House; for all who knew anything of the progress of Reform in Parliament, very well know, that such Bills did the very reverse of cantering, or galloping through their stages; notwithstanding which, however, he entertained sanguine hopes that the present measure would pass, without any very serious delay. The Bill had been framed upon the evidence of practical men. Merchants, who dealt with millions, as well as petty shopkeepers, had been equally examined by the Committee; and that Committee, after the most minute examination of every class and condition of traders, came to a determination, that a measure of the present description would prove of the most essential benefit to the whole community. Upon the Report of that Committee, a Bill was prepared and brought into Parliament, in the last Session, and was most widely circulated throughout the country. He denied, that any man could plead ignorance of the Bill, and he equally denied the assertion of the right hon. President of the Board of Trade, that the Bill was peculiarly calculated for the benefit of debtors. It was a Bill of general provisions, equally calculated for the benefit of debtor and creditor, and for the advantage of the general credit and character of the country. The first provision of the Bill was a summary execution on bonds and bills of exchange. The clause gave a power of summoning a debtor, of compelling him, on oath, to disclose the state of his real and personal property, and of sending him to gaol if he refused to give a satisfactory statement. The third provision subjected to the process of execution the property of every debtor, let it be of what description it might. By the present law, money could not be taken, bills of exchange could not be taken, money in the Bank could not be taken, copyhold lands, and many other species of landed property, could not be taken; and, in fact, the most fraudulentand profligate or debtors might live in luxury upon the property of their creditors, and run those creditors to ruinous expense, and set them at defiance. Such was the present state of the law of this country, and he was glad that so few were to be found who did not wish the law to be altered. The next head of the Bill embraced the principle of the cessio bonorum; and then came a provision eminently calculated to punish the frauds of those chevaliers d'industrie, of whom the right hon. the President of the Board of Trade complained. Last of all came that great enactment, which does not absolutely abolish imprisonment for debt as the right hon. gentleman supposed, but abolished it, except in cases of fraud, making a distinction which the present law did not make, between the honest and the fraudulent debtor. These were the heads of the Bill, and having stated them, he should advert to the objections made against them. The right hon. President of the Board of Trade had sounded the tocsin of alarm to all persons who had mortgages on their estates, lest payment should be enforced on their bonds in the space of twenty days. In fact, however, the Bill gave no facility to sue upon mortgage bonds, and only met those cases where false and fraudulent pretences were urged for not paying the amount of bonds. What were the pleas by which the indulgence of time, of which the right hon. Gentleman spoke, was now obtained? The party had to plead that he never signed or sealed the bond which he had signed or sealed, and which stood in flagrant evidence against him; or he had to plead that he had given a horse or some other fictitious thing in satisfaction, or he had to put in some other sham plea, by which he compelled his creditor to go to trial, and to throw away his money; in some cases, to throw away good money after bad, and thus he aggravated the injury the creditor had originally sustained. But the right hon. Gentleman said, there was no country in which an experiment similar to the present had been tried. Did not the right hon. Gentleman know, that such a law existed in Germany, in Italy, and in Scotland; and, in which latter country it was well known that it operated most beneficially? But at present, by the law which the right hon. President of the Board of Trade did not wish to see altered, a mortgagee might sue on his bond, and the other party, if he did not pay, must plead a lie, and by fraud and chicanery, might put off the evil day for only three or four weeks; for the right hon. Gentleman was not aware that, by certain rules which the Judges have most properly made, the extent of frauds had been limited. This rule had been found to act beneficially in many instances, and prejudicially in none. The present Bill would prevent the debtors money from being spent among lawyers when it ought to go to the creditors. The next enactment was, that debtors were to be summoned before Judges, after judgment had been passed. The effect of this clause, would be to assimilate the law between persons in trade, and those not in trade. At present, a man in trade might fail for 1,000,000l., and he was protected, if he made a full disclosure of his assets. If he absconded, or concealed his property, then he might be sent to gaol. Would the right hon. President of the Board of Trade, tell him why a man not in trade, who owed 500l. should, as a matter of course, be sent to gaol, whilst he in trade who owed 1,000,000l., should be free? It was a most disgraceful thing, that in England all property of every sort, was not liable to the payment of just debts. The present law of England, in that respect was not creditable to the country, and it was such that, in his opinion, few honourable men wished for its continuance. The present distinctions between the liabilities of personal and real property, occasioned the greatest frauds. It was Sir Samuel Romilly who first endeavoured to effect an alteration in the law. In his day, a man might have borrowed 50,000l., have bought land with it, have died the next day, have left the land to his son or heir, and the creditor or creditors who had advanced the 50,000l., could not have recovered one single shilling, as real property was not liable to the obligations of simple contract debts. The right hon. the President of the Board of Trade, would see therefore that improvements did not canter or gallop through the Houses of Parliament. It was not until the last Session, that a Bill was brought into Parliament by the son of Sir Samuel Romilly, by which simple contract creditors had a general remedy against the real estate of the debtor. Sir Samuel Romilly's Bill carried the principle no further than that, it a man were in trade, his landed estates should be liable to simple contract debts. The creditor had a lien on his estates. It was to the honour of the Reformed Parliament that this distinction between real and personal property had been done away. The next enactment of the Bill related to the principle of the cessio bonorum without imprisonment. By the present law the most lamentable consequences ensued. A man who went within the walls of a prison seldom left them so good a man as when he entered. He lost his own respect, and the respect of his friends and the community. He was contaminated by bad example, he spent his time in vice, and the money belonging to creditors amongst lawyers. The expense of going through the Insolvent Court, on an average was, at least, 10l. each person, which was so much thrown away amongst the lowest practitioners of the law. The greatest dissatisfaction had arisen from that tribunal, and the dividends on the estates of debtors had not amounted on an average to one farthing in a pound. When he said this, he meant not to cast the slightest reflection on the learned persons who presided in that Court, than whom no public men discharged their duties more diligently and honourably. He spoke only of the system. A man who failed in business for 1,000,000l. was discharged without going to gaol; and why not make the same law for a man not in trade who owed a small sum, and honestly gave up his whole property to his creditors? Such was the law in Scotland. He allowed that trade could not be carried on without credit; but there was a vast difference between prudent and wholesome credit, and fictitious and mischievous credit. The first effect of the Bill would be to make the creditor inquire into the character and condition of the person who wanted credit, for trusting to the power of imprisonment, persons give credit with too much facility. The most important clause of the Bill, however, was that which abolished all imprisonment for debt except in cases of fraud. At present imprisonment, as far as the ends of justice were concerned, was a mere farce. A man receiving his capias ad satisfaciendum, went into the King's Bench, where by paying the marshal the purchase of the rules, he enjoyed all the pleasures of life, and set his creditors at defiance. The rules extended some miles, and a man might take an elegant house, and his lady give routs without the visitors having any suspicion that the parties whose guest he was, were prisoners for debt within the rules of a gaol. He maintained that such a system ought to be abolished. The gaols of the kingdom would not be sufficient to contain the crowds of debtors that might be thrust into them by the present law, and therefore he was surprised that the President of the Board of Trade should have vindicated it. It is thus, that what was wrong led to what was worse; and the only remedy was to cut up the evil by the roots. The right hon. Gentleman made no distinction between imprisonment on mesne process, and imprisonment after judgment on execution; but surely he could not mean to say, that the first should continue? Such a practice was without parallel, except in England and the countries which had adopted its laws; and it would be looked upon with horror all over the Continent of Europe. But, independently of the abuses to which it gave rise, the expense of the system was great; for, the mere giving of bail alone, cost 300,000l. annually. He perceived that the right hon. Gentleman was ready to abandon arrest on mesne process; but that was precisely what the tradesman most liked; for he hoped to succeed in obtaining his money from some source or other by depriving his customer of liberty. This was no part of the ancient law of England; but although of comparatively modern introduction it had subsisted too long. With respect to imprisonment after judgment, such a power had no doubt, existed in most countries of Europe; but as the influence of the Doctrinaires—for whom he had a great respect, notwithstanding the sneer of the hon. Member for Knarcsborough—became greater, that power would be everywhere abolished except in cases of fraud. It would be a proud thing for England to set the example of doing so to the whole of the civilized world. Let him repeat to the right hon. the President of the Board of Trade, that this had not always been the law of England; for, by the old common law, a man could only be deprived of his liberty for a breach of the peace. The right hon. Gentleman asked, how was a man's property to be got at, if not by taking his person? Taking a man's person, therefore, could only be justified by its enabling the creditor to get at his debtor's property; for it was not meant as a punishment, as seems to be imagined by the hon. Member for Knaresborough. Misfortune was not, thank God! an offence by the law of England, and the body was only taken to obtain payment of a debt. It was the immediate mode of getting at property; but what he proposed to do was, to get at it by an immediate mode, and, under this Bill, a debtor could be carried before a Judge, and be subjected to all manner of questions to obtain the discovery of his property; and parties will still be able, as heretofore, to proceed by fi fa. He would not trespass, however, further on the House. He hoped he had, to the satisfaction of the House, answered the arguments which had been urged against his Motion. He took the deepest interest in this Bill. The more he considered it, the more convinced he was that. the most beneficial consequences would result from it, and the highest object of his ambition was to be successful in his exertions to get it passed into a law.

Mr. Carruthers

said, the difficulty he felt in dealing with the principle of the Bill arose from the objectionable nature of many of its various details, details which so far affected the dealings of the commercial and trading com- munity of the country that he felt it his duty to offer a few observations on them to the House. If the Bill in the shape in which it had been introduced were suffered to pass, all parties concerned in manufactures and commerce would be seriously damaged by one portion of it—the pre-emption given to bills of exchange over book-debts. By the laws, as they stood, all the creditors of a bankrupt were entitled to an equal share in the assets of his property, but by this Bill a preference was given to one class of creditors, the holders of bills of exchange. That was one of the objections he had to it. Another objection was, that a new Court was to be created by it, into which all persons having overdue bills of exchange out against them could be driven. If the Bankrupt-laws were sufficient for all purposes connected with credit, he should have no objection to this Court; but that they were not so was perfectly well known to all who were engaged in trade or commerce. There were cases of daily occurrence which the Bankrupt-laws could not reach: and it would be found that no assets would exist in many of these, on account of the pre-emption given to bills of exchange when bankruptcy ensued. One of the great evils likely to arise from granting a pre-emption to a particular class of credit might be briefly alluded to. In the time of the late war, the merchants of this country had not alone to wait for convoys, and to take the chances of the weather, but also to send the goods they sold, through the most circuitous routes to the continental market. For instance, there were many cases, and those of common occurrence, where goods made up in this country were sent to Macedonia for the purpose of being transported over land to Frankfort on the Maine, in consequence of the ports of Germany being closed against England. Bills of exchange of course passed between the parties shipping and the parties manufacturing. In many of these cases, in consequence of the great delay arising from the causes stated, the merchants were obliged to keep their bills back until they should have advices of the arrival of their respective shipments at their destination. If such cases were to occur again, and the Bill of the hon. and learned Member for Edinburgh to be in operation, the right of pre-emption given to bills of exchange would be the cause of ruin to numbers; for it would give the holders a power to pounce upon the property of the merchant the moment his bills became due, and it would give him no power to avert his destruction. He would cite a case of recent occurrence, as quite in point with the matter at issue. In the recent extensive failures in India it was well known that several great commercial houses in town were affected, in one of which were deposits to the amount of 500,000l., the property of various individuals. If the Bill of the hon. and learned Member was then in operation, the holders of any overdue bills of exchange could come in and seize possession of the sum, and leave the depositors to their secondary share of the assets. Again, he would suppose another case. A house in India sends advices to its correspondents in London that it will despatch a cargo of indigo by the next vessel; in the meanwhile it draws bills, which are accepted. Every one knew that bills of exchange travel with the wings of the wind, while cargoes, on the contrary, are ordinarily slow in coming to their destination, independent of the thousand casualties which might occur to them on their transit. The bills become due, the cargoe has not arrived. By the pre-emption given to bills in the measure before the House the holders could enter on the assets, and ruin the acceptors before they had obtained the value of their acceptance. Since the passing of the Bankrupt Laws, such was the severity of their operation in the matter of expenses, that there was scarce a great failure in London in which the solicitor and the creditor did not endeavour to compromise rather than incur the enormous costs of a Commission. In a recent case, a house in the City failed for 200,000l., and it was compromised, because it was ascertained that the expenses of a Commission of Bankruptcy would amount to 10,000l. This was bad enough in all conscience; but if the Bill before the House passed in the shape in which it then stood it would be worse. No merchant would be able to keep out of the Bankrupt Court if pre-emption was given to bills of exchange over other kinds of credit. It would be a very grievous thing for the merchant, but a very good harvest for the lawyers. He fully agreed with the hon. and learned Member on the injurious tendency of unlimited credit; but be was free to say, that the Bill would not prevent it. With respect to the main question, imprisonment for debt, he could safely say, that he was not partial to it. He had lived up to the present day without ever having arrested any man for debt, and he hoped he should terminate his life without being compelled to have recourse to it as a remedy. But he thought the Bill of the hon. Member for Edinburgh went too far on the subject. Its effect would certainly be to drive every man owing anything into the Bankruptcy Court. As to preventing the circulation of bad bills, which the hon. Member for Bridport asserted in a former debate it would do, it would have no such effect. Accommodation bills could be concocted, even though it were in operation, with as much ease as ever, and as little chance of want of success; and the unprincipled creditor, in consequence of the pre-emption given to bills of exchange, by accepting a bill drawn by a friend, could empower that friend to come in and seize his property, by fraudulent collusion, to the prejudice of the butcher, baker, grocer, and other retail creditors, whose claims against him were merely book debts. All these things he trusted the hon. and learned Member for Edinburgh would consider; and, also, he begged of him to bear in mind, that credit was the source of all the industry of the country. If credit were injured, as the Bill in its present form had a tendency to do, the industry of the country would be seriously detrimented. It was not possible for manufacturers doing extensive business to search into all connected with their customers' credit, or to ascertain what bills of exchange of theirs were out in circulation; consequently, they should, in self-defence, be compelled to curtail their credit, and then all the evils of slackened industry would fall upon the country. If the Bill were to be passed, as it then stood, it would cramp the credit of the nation; and if a war were to ensue, and all the delays in the transmission of produce consequent on it, most of the merchants in the country, however solvent in reality, would be driven into the Gazette by the pre-emption given to bills of exchange.

Mr. Bernal

said, that he was more than ever convinced by the observations of the hon. Member for Hull of the necessity of debating the Bill no farther, as all appeared to be agreed on its principle, but to refer its details to a Committee. Even the hon. Member for Knaresborough did not condemn it, and all were agreed on its humanity and moral effects. The hon. Member for Hull, and the right hon. President of the Board of Trade, held opposite opinions on the tendency of the measure. One said, it would have the effect of injuring book-debts, while the other said, that it would only endanger long credits. He confessed that he was at a loss to reconcile these opposite opinions, coming from quarters entitled to such deference. However, he was sure his hon. and learned Friend the Member for Edinburgh would listen to all suggestions on the subject, and improve his Bill by all the feasible means in his power. With respect to the presumed danger to mercantile houses, from the pre-emption given to bills of exchange, urged by his hon. Friend the Member for Hull, he would beg to inquire of that hon. Gentleman whether that presumption was not founded on assuming malice in the Bill-holders of such houses? That being the case he would beg to ask his hon. Friend, whether by the law as it now stood an equal degree of injury to an establishment could not be caused by any individual entertaining such a feeling and having the power of a large creditor over it? With respect to the assertion of his hon. Friend that the bankrupt laws caused an enormous expense he could only say that those expenses existed before the Bankrupt-laws came into operation, and therefore, that could be no argument against the foundation of the new Court proposed by the Bill, on the model of the Court of Bankruptcy. Hon. Members had talked of the curtailment of credit. Now he (Mr. Bernal) thought that those who did so were seeking out objections against the Bill which had in reality no existence. Credit was one thing and unlimited confidence was another. The latter which existed to such a ruinous extent in this overgrown metropolis, was what the Bill of his hon. and learned Friend sought to suppress, and not that healthful credit without which all trade must be at an end. As to imprisonment for debt, in itself regarded as a punishment, it was plainly in many cases quite the contrary. It had been properly said that many debtors lived within an ideal range, a fancy prison—the rules of the King's Bench or Fleet. To these im- prisonment was clearly no punishment, and the law of arrest quite inefficacious. Every one knew that many of them were living in every kind of luxury, while their creditors were, perhaps, on the verge of utter ruin, or partaking of the bitterness of misfortune, arising from the transactions with them. The same could be said in an almost equal degree of the interior of those two prisons. It had been urged against the Bill that it gave protection to fraudulent. debtors; but the contrary was the case. It protected creditors by giving them power over all species of property, and it protected unfortunate debtors only. When, therefore, his hon. and learned Friend was called the advocate of a spurious humanity he was called that which he was not; for he was in reality the guardian and assertor of the rights of a very large proportion of the community—rich and poor, debtor and creditor.

Mr. Williams Wynn

fully agreed in the principle of the Bill, and regretted that he should be obliged to differ in some of its details. However, he thought the hon. and learned Member for Edinburgh had begun at the right end of the subject. He (Mr. W. Wynn) had been for many years most anxious for the success of that or a similar measure. Twenty-eight years since, he had been one of the very few who supported the late Sir Samuel Romilly in his first attempt to make real property liable to the claims of creditors, he was, therefore, glad to perceive that the object of his endeavours was now nearly accomplished. With respect to the imprisonment for debts, no one could doubt its inefficiency for all useful purposes in connexion with credit. In the earlier periods of the history of the country it was an extremely difficult and tedious operation to convert real property into money, consequently, a greater length of credit was necessary in transactions of a commercial nature, Since then, however, matters had completely changed, and no such time was required. This obviated the necessity of delay in recovery upon dealings. The altered state of the country, as well as the social improvements which had taken place in every institution, naturally forced the subject of imprisonment for debt on the Legislature. Half a century ago, taking the state of the prisons into consideration at that period, imprisonment for debt was a real and severe punishment. The condition of these receptacles of mis- fortune and crime had undergone such a change for the better since then, that imprisonment for debt particularly was rather a change of place than a punishment. The consequence was, that prisoners—many, if not most of them, fraudulent debtors—increased to such a degree that the Insolvent Court was created for the purpose of delivering the several gaols in the kingdom. How that worked he need not say. The right hon. Gentleman concluded by expressing a hope, that the portion of the Bill which related to the granting of certificates to debtors would be considered well in the Committee, and by declaring that he would give the principle of the measure his fullest approbation.

Mr. Clay

said, that he did not believe that the power of imprisonment ever entered into the mind as a matter of the slightest advantage to any mercantile man of extensive dealing. The Bankrupt-laws gave to creditors of that class all the relief and advantage they sought for as against those upon whom they had claims, and the power of imprisonment therefore could extend to them no benefit. In large mercantile transactions the credit of a man must be judged of by his numerous dealings, his extensive connexions, his general intercourse with the commercial world, and these must always be the best guides to a test of his solvency. He could take upon him to assert, with the utmost confidence, that nothing was more rare than the circumstance of one merchant arresting another for debt, and he was sure that if the whole of the merchants of England were polled upon the question, but few would be found to set any value upon the power of arrest which the existing law gave them over their creditors. If the power of arrest was of any value to mercantile interests of any class it could only be so to small dealers; yet he had reason to believe, that even with this class but little value was set upon it. He had the honour of representing, perhaps, the largest mercantile constituency of all classes in the country, and not one single petition had been intrusted, or a single representation made to him from any portion of them against this Bill. On the contrary, he had every reason to believe, that it met with universal approbation amongst his constituents. As to the supposed effect that the Bill might have, to limit the credit of persons with their butchers and bakers, he had not the slightest fear that this class of tradesmen would not continue to give as much credit as they ought to give, notwithstanding the passing of this Bill. He should be glad if the measure had the effect of putting an end to the system of spurious credit that had so long prevailed, and which enabled the extortionate tradesman to exact from his customer an enormous price for the worst description of commodity. It had been said as an objection, that no other country had as yet made this experiment. If this reason were to prevail it would be equally valid against the removal of any abuse whatever. But, supposing this improvement never to have been attempted in any age or country before, he would say, let this country be the first to show the example. He, for one, as a party to such a legislative measure, was prepared to take his full share of the responsibility of having made the experiment. It would, of course, be the duty and the object of the House to render the measure as satisfactory as possible by attending closely to its details in Committee, so as to make it such as the whole mercantile interest would approve of.

Mr. Ewart

said that, like his hon. Friend who had last spoken, he too represented a large mercantile constituency, from no portion of which had he received any instruction to offer opposition to this Bill. Convinced as he was that the measure was calculated to add to rather than diminish the security of property, he should give it his most warm support. The titles of Doctrinaires and Utilitarians had been applied, as if they were synonymous, to the promoters of such measures as the Bill now under consideration. But those who made use of those terms did not seem to understand their meaning. There was a wide distinction between the two. A Doctrinaire was a much more aristocratic character than an Utilitarian. But he would refer to the opinion of a man who was neither one nor the other—he meant Lord Eldon. That noble and learned Lord had denounced the law of arrest for debt as the worst species of slavery. In the year 1827, there were no less than 523 persons confined in one prison alone for debts, each not exceeding 30l. This system was unusual in any other country, and it was the astonishment of foreigners the facility with which credit was given and obtained in this country. This Bill would be a wholesome warning. It was saying "Caveat, creditor." If no other country had ever tried this experiment he should be proud that England, the greatest mercantile country in the world, was the first to set so beneficial an example.

Mr. Grote

said, that the principle of this Bill seemed to him to be recommended both by policy and humanity, and he was more convinced of this by the speech of the President of the Board of Trade than by any other reasoning upon the subject. He always preferred having his own views sustained by the failure of his opponent's arguments than by the success of his own. This was the case as regarded the speech of the President of the Board of Trade. He did not think that small tradesmen would have any reason to complain when they found that they were only placed on a footing with all the other classes of the community. He should be glad if some facility were superadded for the recovery of book-debts, and he would not give any advantage to the holders of bills of exchange that he would not give to the creditors on book-debts. He felt deeply grateful, as he was sure would the country at large, to the hon. and learned Gentleman (the late Attorney-General) who had made so valuable a use of his profound and extensive learning as to apply it to the correction of an abuse so afflicting to humanity and so injurious to the general interests of the country as the law of arrest.

Mr. Mark Phillips

said, that it was impossible for any mercantile man not to see that the existing law was totally inconsistent with the interests even of those whom it affected to protect. He could say for himself, as a mercantile man, and he believed the mercantile body generally was slow to have recourse to imprisonment, that he had never deprived a man of his liberty on account of debt. There were, however, some provisions in the Bill of last year, that he thought were not approved of, although the principle was; but there would be ample opportunity of investigating those provisions in the Committee.

Mr. O'Connell

regretted that the Bill was not to extend to Ireland. He did not know if it might be so altered in Committee as to let Ireland have the benefit of it; but he doubted much that it could be so altered. If not, he would pledge himself to bring in a similar measure for Ireland. He regretted, for the sake of humanity, that this Bill had not passed sooner, and it would have passed had the late Government remained in office. The hon. and learned Gentleman who brought forward the Bill was the first practical Attorney-General who had ever attempted to carry out so humane and just a principle. He looked upon imprisonment for debt to be a species of torture. What security for debt was the human carcase? Speculating tradesmen charged twenty-five per cent more than the honest value of their goods to men not much greater knaves than themselves, on the calculation, that when they arrested their debtor, some friend would come forward to pay the demand. He was not disposed, however, to let the debtor escape the payment of his just debts, so long as he had one available shilling, and therefore he objected to that part of the Bill that went to grant a certificate; but this would be best disposed of in the Committee. He thanked the hon. and learned Gentleman most heartily for introducing the Bill, and he should give to it his best consideration and warmest support.

Mr. Rolfe

supported the Bill. It was calculated to confer upon the debtor the most essential benefit, without any injury to the creditor. All experience proved that the hope of deriving any benefit in the way of payment from a person who had been once imprisoned for debt was quite hopeless. What, then, was the use of imprisoning a man for debt? It was of no use to the creditor, while it ruined the character of the debtor, and paralysed all his future efforts. The hon. Members for Hull and Manchester were mistaken as to the tendency of the Bill in one respect. The fact was, that it gave no priority of claim, no peculiar advantage, to bills of exchange over other claims. The only difference was this, that bills were a more satisfactory species of evidence. It was no more than justice that persons having this species of evidence should not be left at sea, like those creditors who were more negligent as to the evidence of debt. The right hon. Gentleman (Mr. Baring) said, they ought to look more to the evidence of tradesmen and commercial men upon a subject of this kind than of lawyers. So far as facts or habits of dealing were concerned, he admitted the justice of the observation, but no further. Not less than 300 or 400 tradesmen were examined, and their evidence proved that they were the last men in the world who ought to be consulted in legislation upon a matter of this kind. The traders upon a large scale who were consulted, said no injury could arise from taking away the power of arrest. The small dealers were of a contrary opinion; and their reason was, that when a debt was small, friends or relations might be induced to come forward to release the debtor from prison. This was a state of things that should not be allowed to exist. There was an idea prevalent out of doors, that Members of Parliament enjoyed an unfair exemption from arrest for debt. This Bill applied a remedy, and went far to set the Representatives of the people right with the public upon that point.

Mr. Warburton

approved of the measure as founded on the great principles of justice. The principle of justice was, that the creditor had a claim upon every species of property in the possession of the debtor.

Captain Pechell

said, the retail traders of Brighton thought their interests would not be protected by this Bill. He had a petition from them to that effect.

The Bill was read a second time, and referred to a Select Committee.

  2. cc1169-70
  4. cc1170-8
  6. cc1178-81
  7. LIBEL. 1,111 words