HC Deb 29 May 1845 vol 80 cc1011-22
Mr. H. Berkeley

rose, pursuant to notice, to bring before the House the Insolvency Act, or Small Debts Bill of last Session, in order to point out the evils of its operation, whether prospective or retrospective, and to ask the House to grant a Committee to inquire into those evils with a view to their remedy. He believed that an inquiry would convince the most sceptical that the Act in question had a tendency to demoralize the people, while it was fraught with the most ruinous consequences to trade. On this subject the right hon. Baronet the Secretary for the Home Department had been frequently pressed; but as yet he had turned a deaf ear to all solicitations, and still persisted in fondling Lord Brougham's bantling, although its parent had turned his back upon it. No one had more respect than himself for the talents of the noble Lord, or viewed with greater admiration than he did his wonderful Bill-begetting powers: at that moment he had nine young Bills on the Table of the other House—just born, and was probably looking to the right hon. Baronet to suckle them and bring them to perfection. Among those Bills was one intended to replace the right hon. Baronet's present pet; but he trusted that such would not be offered as a reason for refusing a Committee. The country had suffered too much in the same quarter from crude legislation, from want of deliberation, from indecent haste — and the tradesmen of England were now suffering from the loss of nearly three millions of money (this he stated on authority) from the Insovency Act of last Session; and under such circumstances he hoped that the House would consent to inquiry, instituted for the purpose of perfect information, made by a Committee of their own body, to furnish such a report as would lead them to a correct judgment in adopting or rejecting any measure which might be offered for their consideration. When the Bill was brought into the House last Session, at the close of the summer, before half the House knew the measure as a Bill it had passed into a law. The constituency he had the honour to represent pressed for opposition, and he presented their petition; but having reserved the expression of his own opinion until he had heard the Solicitor General, he felt bound to admit that the Solicitor General's statement was of such a nature that he found it impossible to refuse his concurrence in putting a stop to a system disgraceful to a Christian country. Dungeons, it appeared, were set a part for the confinement of poor debtors, rivalling the Black Hole of Calcutta; the innocent and the guilty were thrust in promiscuously; the fraudulent and the unfortunate immured in kennels, to which those occupied by gentlemen's foxhounds and pointers were a palace. Such was the picture the first four prisoners presented when examined by Her Majesty's Government; had the one at Bristol been the fifth inspected, he believed a different result would have been obtained. Not for one moment, however, did he stand there to suggest or urge the re-adoption of the old law; so far from it, that if any hon. Member were to attempt such a proposition he would resolutely oppose it, and be the first to vote against it; but he did ask the House to take into its serious consideration the unfortunate difficulties into which they had plunged the trading classes of this country by hastily passing an Act which, although it might have smothered one crying evil, yet had effected that purpose by inflicting upon those classes another grievous wrong. The change to be wholesome, was too violent; formerly the debtor was too much at the mercy of the creditor. Now the creditor was too much at the mercy of the debtor; the debtor, wholly without any personal responsibility as to all debts under 20l. The alarm and excitement produced among the tradesmen of the country might be gathered from their numerous petitions; and those from London, Bristol, Liverpool, Bath, Birmingham, Southampton, Leeds, Bolton, Manchester, Norwich (some towns presenting two and three petitions, and all most numerously signed), were unanimous in declaring the losses sustained by the retrospective operation of the Act, and giving forcible reasons why the prospective operation would be equally disastrous. Were their opinions unsupported? Far from it; he was prepared to prove the bad retrospective operation of the Act, and high legal authorities who had to carry the Act into operation condemned it. Mr. Commissioner Fane had written ably on the subject; and Mr. Commissioner Evans, in the early career of this young Act, declared that it appeared to him calculated to become a refuge for all the rogues and vagabonds in the kingdom? It had been calculated that insolvents deprived their creditors annually of about 50,000,000l. If the present Act were not altered, what the additional loss would amount to was a matter of frightful conjecture, seeing that three-fourths of the tradesmen's debts in this country were under 20l. and that these debts, from the absence of any visible property in the majority of debtors, could only now be considered as debts of honour. It seemed a strange contradiction in legislating, that whilst every opportunity was sought to render the Unions as repulsive as possible to the pauper, with a view to check imposition, the Go- vernment, by their present system, had rendered the Insolvent Courts as attractive as possible to the debtor who should feel disposed to defraud his creditor, by affording him every facility of doing so. What follows under such a system? Laxity of morals, and, dishonest principles enjoy a licentious reign. An argument in favour of the Act was stated to be, that it would prevent credit from being given. How chimerical and absurd! A strange doctrine to broach in a country which avowedly depends on her mercantile credit for her commercial prosperity; the wealth produced is averaged at 164,000,000l., and the actual cash in circulation at 46,000,000l. What credit was to commerce, so it must be to trade in all its branches; it is essential to the merchant and tradesman, whether wholesale or retail, and ramified from them down to the customer—yet what had the Government done? It had protected the credit of the rich, and denied it to the poor. It had protected the trader above 20l. but turned its back upon the trader below. For instance, "Pay me," says the wholesale man to his retail debtor, "21l. which you owe me, or I'll lock you up." "Don't do so," replies the retail man, "because two customers of mine owe me 19l. each, and not having visible and tangible property, laugh in my face, and I cannot lock them up!" What kind of legislation could that be which defined the difference between rigid responsibility and complete impunity, and assessed its value at 21. It had been urged that an utter absence of credit would be conducive to the welfare of the working classes. He took leave, most emphatically, to deny that. It was another strange doctrine to say, that men were made more moral by being made more miserable! He admitted that great facilities for credit to the poor man would be ruinous; but if when compelled by misfortune to seek, he could not obtain credit, his cup of misery would indeed be full! Let this be exemplified by the case of a working man from either town or country—a mechanic or an agricultural labourer—with a wife and two or three children, and 14s. or 16s. a week wages. If he pay rent and taxes—if he pay for food and clothes—in short pay his way and live respectably, such a man is deserving of all praise, he can lay nothing by: common occurrences pass over him; the sickness of one of his children ending in death. To supply more nourishing food and medical attendance during sickness, and after death to obtain the means of Christian burial, credit must be that man's only resource. Deny him credit, and you assert the monstrous principle, that when the poor man is under the visitation of God, you refuse him relief from man. Now, the relief of credit was entirely shut out by that wretched enactment. He would ask the House which kind of relief was most moral or praiseworthy, the relief of wholesome credit, or that obtained from the Board of Guardians? Shall he follow his child to a pauper's grave? The poor but honest man without a blush might ask for credit and meet its results, but would be broken-hearted to beg for alms. In this country it was a pretty well ascertained fact, that seven-tenths of the people anticipated their incomes. Could it be supposed that such a state of things was to be remedied by Act of Parliament? Amongst those who anticipated their incomes, the clergymen of the Church of England formed a prominent class. The very nature of their property rendered credit to them necessary. Obstacles might be thrown in the way of credit, but its necessity could not be done away with; nor could any Act prevent its being given as it ought to be. But there was another class much less worthy of credit, who anticipated their incomes—the thoughtless and the extravagant—these would laugh at Acts of Parliament, and obtain credit in spite of them. They will mock the Legislature with the words of the old poet— Dost thou think, because thou art virtuous, there shall be no more cakes and ale? Ay, marry shall there; and ginger shall be hot i'the mouth too. Cakes, and ale, and ginger will still be found by tradesmen at their risk, imminent as it has been made; because a refusal to do so would eventuate in their ruin. One thing, however, has been effected. A class of dishonest tradesmen has been encouraged, to the discouragement of honest tradesmen; for a class of spurious tradesmen exist, and begin to flourish, under the operation of this law, who, trading on a fictitious capital, will always give credit, because they do not pay. But it has been stated, that as all remedy for debts under 20l. is denied to the tradesman, he must protect himself by the exercise of discretion and acuteness—in other words, the rogue must be protected from the tradesman, but not the tradesman from the rogue. It was impossible, in the present vitiated state of society, to refuse credit. A writer, speaking of the present prevailing system in England, thus expressed himself— It had made debt a national habit; it had made credit the ruling power, not the exceptional auxiliary, of all transactions; it had introduced a low, indirect, haphazard, and dishonest spirit in the conduct of both public and private life—a spirit dazzling, and yet dastardly—reckless of consequences, and yet shrinking from responsibility; and, in the end, it had so overstimulated the energies of the population to maintain the material engagements of the State, and of society at large, that the moral condition of the people had been entirely lost sight of. He denied that acuteness and discretion could protect the tradesman in giving credit. He (the tradesman) might have all the acuteness of Westminster Hall, and the discretion of the twelve Judges, and have to the bargain the power of referring to a bureau of spies—for the law, as at present constituted, turns every tradesman into a Fouché or a Vidocque, a mean spy, and incites him to look into the affairs of his customers—to pry into their earlier lives, as well as their present circumstances—yet still, with all this, he could not protect himself from fraud. If any hon. Member could define the outward and visible signs of honesty and dishonesty, it would be of infinite service to the tradesman. He (Mr. Berkeley) professed to be utterly unable to ascertain what were the distinguishing marks of either, for honesty was not always to be found in purple and fine linen; honesty sometimes were fustian, whilst dishonesty was covered up in velvet; honesty was not always to be found domiciled in a square, nor dishonesty always in a narrow street; honesty sometimes walked, or drove in an omnibus; whilst dishonesty mounted a horse, or rejoiced in its own peculiar Brougham. Was previous character (the hon. Member proceeded) a security to the tradesman? So far from it, that under the temptation of the Act of last Session, customers who had been regular in their payments for years had now become defaulters; a fact strongly urged, and set forth in a petition he had presented from the tradesmen of the city of London and Westminster. A tradesman now had no redress from persons In furnished lodgings, holding situations with large salaries, perhaps; indeed, under the present state of things—the caption of person being disallowed, and no remedy in lieu existing—the different forms and modes of fraud vied with each other to rob the creditor. Fictitious transfer of property would be much encouraged; and friends, relations, and landlords would emulate each other in securing for debtors their property to the injury of creditors. He had a great number of cases to refer to, bearing upon the operation of this law retrospectively; and others showing that prospectively it exhibited no better promise. Here the hon. Member quoted a number of cases furnished by the tradesmen of London and Bristol; in most of them it appeared that they had tried the recovery of debts under 201., from November 1844 to April 1845, but had failed; and, in consequence of which, they were resolved to give up enforcing their claims—some had discharged workmen, and were contracting their businesses. Two remarkable cases he must be permitted to call particular attention to, as illustrating the argument: one was that of an old woman, near ninety years of age, in Bristol gaol, confined for a debt of 24l.; she had debts due to her amounting to within a fraction of the sum, but being under 20l. severally, not one could she recover; her name was Bull. Such was the dreadful state of things under this Act. The other case was derived from an inspection of the books of Mr. Llewellyn, a most respectable tradesman of the city of Bristol, and which would not only prove the iniquitous operation of the Act, but show its reaction upon the Government itself. It was found that since the passing of the Act of last Session that he had bad debts to the amount of 102l., due from persons who had never failed to pay him previously. He had also 150l. due from persons in good circumstances, which he could recover, and which never would have been disputed under the old system. He had been compelled to circumscribe his business to the annual amount of 200l., making a gross loss of 452l. He had paid Income Tax upon this dead loss, but in future, would make a blank return. He would trouble the House with but one more document. In consequence of the utter incompetency afforded to tradesmen to re- cover debts not amounting to 20l. in local courts, the business of those courts had decreased to such an extent, that the deficiency of fees to the officers of such courts would have to be paid from the Consolidated Fund. But it was not to be supposed for one instant that this denoted the presence of virtue and the absence of debt. The contrary was the fact: the utter failure to obtain justice was the cause that deterred tradesmen from going into court. As a specimen of the Act's influence upon these courts, he would take the Court of Requests for Southwark. The salaries of the chief baliff and the three first clerks under him, amount in the aggregate to 2,241l. 8s., paid by fees; all deficiency was made up from the Consolidated Fund. Now, after the passing of the Debtor and Creditor Act of 1844, the fees were so diminished in the first half year, as to leave a deficiency of 716l. 8s. 4d. and, consequently, at the close of the year the Consolidated Fund would be saddled from this Court alone with 1,432l. 16s. 8d. In conclusion, he would ask the right hon. Baronet to grant his assent to a Committee. Surely, when on all sides it was admitted—partially there, fully in another place—that evils did exist from inconsiderate legislation, the demand for full and unbiassed inquiry would be deemed reasonable. It might be urged, that as he made the complaint, so he should bring in a Bill; this he disputed. He had urged, feebly perhaps, but honestly, the complaint of the tradesmen of England; and he was ready to prove their case, if he might, to the right hon. Baronet. To the right hon. Baronet all looked for some remedial measure; he had inflicted the wrong, let him repair the error, nor turn away from the truth. No Member in that House had the advantages which belonged to the right hon. Baronet; in addition to his great experience and admitted talent, he could command the sound legal knowledge and brilliant abilities of a Follett and a Thesiger; it was from the right hon. Baronet they had a right to expect a remedial measure—from him the tradesmen of England had a right to expect redress. If the right hon. Baronet would not concede a Committee, or grant satisfaction on this subject, he would appeal to the House. Tradesmen looked to that House in this their time of need; and hon. Members who stood by them at such a time, might then look to tradesmen in times when the support now afforded to them would be gratefully returned. The hon. Member concluded by moving— That a Select Committee be appointed to inquire into the effects produced on Debtors and Creditors, by the operation of the Insolvency Act of last Session.

Mr. Kemble

seconded the Motion. His object was to have an inquiry granted, in order to consider of devising securities against fraud more effectual than were provided by the Act of last Session.

Sir. J. Graham

had listened with great attention to the speech of the hon. Gentleman who introduced the Motion, and he was obliged to say that, after all the attention he could bestow on it, he felt at a loss, even at the close of the speech, to ascertain any definite object which the hon. Gentleman had in view. He imagined that that object was to remedy certain defects in the Act of last Session, which gave rise to frauds on the part of debtors, and placed obstacles in the way of honest tradesmen recovering their debts. He was not of opinion that the course which the hon. Gentleman had taken was the one best calculated for the attainment of his object; direct legislation he thought was the preferable course. The hon. Gentleman had referred to the law officers of the Crown; but he forgot to mention the first law officer, namely, the Lord Chancellor of England, and he might state that there was at this moment a Bill pending in the other House of Parliament, to which that noble and learned Lord had given the most anxious and earnest attention, for the purpose of rectifying the defects of the Act of last Session. The hon. Gentleman who had made the present Motion, said, in the most emphatic manner, that it was not his intention to repeal the Act of last Session, and revive imprisonment for debt. He rejoiced to hear that declaration: for, with all their professions of sympathy for the working classes, feeling for their miseries, and desire to promote their welfare, he could not conceive any course more inconsistent with these professions, than the revival of imprisonment for small debts. He was convinced that the apprehensions of evil from the change in the law were almost devoid of foundation; in fact, no complaints had been made on the part of the great body of the community; they arose entirely from the retail dealers—a class well worthy of respectful attention, but comparatively wealthy, and possessed of considerable power. Nothing was withdrawn from the creditor by the law, as recently amended, but command over the person of the debtor. The hon. Member had said there was an invidious distinction drawn between two classes of debtors, those owing large and those owing small sums. It was not correct to say that the creditors had power over the debtor above 20l. so summary as the hon. Member had represented; he must proceed by action, and it was only on proof being given before the Judge that fraud was intended that a summary power was given. The hon. Member had styled the Act of last Session an instance of crude legislation. If any subject had been well considered by a Government, it was the law of debtor and creditor; no act had received a larger share of attention during the last twenty years. Though there were imperfections in the Act of last Session, it had been very fully and completely discussed. Not a single argument had been brought forward by the hon. Member on this occasion which had not been fully considered by the House in the course of last Session. The hon. Member's speech was not one for inquiry; it was one in condemnation of the Act. He was willing to admit that its provisions might not be sufficiently summary, or of sufficiently easy operation against the goods of the debtor, if he were disposed to act fraudulently. That object was carefully considered in the Bill to which he had alluded, brought in under the sanction of the highest legal authority in the other House. That measure, he had reason to believe, would come down to them in a very short time, and, so introduced, it would be his duty to proceed with it on the part of the Government. Instead of instituting a fruitless inquiry, which could lead to no result, he hoped the House would be disposed rather to wait and see the practical measure which would be introduced for the relief of a practical grievance. He hoped the hon. Member would not press the Motion; he admitted most distinctly that some alteration in the Act of last Session was necessary.

Mr. Parker

, as steward of a manor in which one of those courts was located, had seen so much of imprisonment for small debts, that he trusted nothing would induce Ministers to consent to the revival of a system under which the poor had been huddled together in prisons of the vilest kind, without control or superintendence. The measure of last Session might tend in some degree to dislocate the present system of credit; but he believed that that system would be gradually adjusted to the new order of things. It might be proper to resort to imprisonment in cases of fraud, but, even as the Act now stood, he considered that sufficient power was retained to check fraud. One clause with that tendency was of a very stringent nature, and if persons holding the situations of Commissioners in those courts were urged to put that clause into operation, it would be found very effective.

Mr. M. Philips

was anxious that this Committee should be granted, because he thought that last year their legislation had been hurried, and that portion of the Committee which was chiefly interested in the question had not had sufficient time to consider it. He would not trust exclusively to the inquiries of the Upper House, and thought a Committee best calculated to meet the case.

Mr. Hawes

understood that there had been a Committee on this subject in the House of Lords, and that a Bill was now pending in that House to provide a remedy for the evil complained of. He, therefore, was of opinion that the appointment of a Committee by this House on the same subject would retard rather than accelerate the object which the hon. Member for Bristol had in view. Under these circumstances, he hoped his hon. Friend would not press his Motion. The mercantile interests were anxious that the question should be as soon as possible brought under the consideration of the House. The public, perhaps, were not aware that the local courts already possessed very stringent powers, which, in his opinion, it would be neither desirable nor safe to increase. The subject was one which had been often discussed, but he hoped the time was coming when the general opinion would be in favour of establishing a general and an efficient system of local courts for the recovery of small debts.

The Solicitor General

expressed a hope that the hon. Gentleman would withdraw his Motion, in order that the House might have the opportunity of first seeing the Bill which was to come before it shortly. It was, perhaps, important that the House should know the course of legislation on this subject. In consequence of the Report of the Inspectors of Prisons, the attention of the Government was drawn to the number of persons imprisoned under warrants from the courts for the recovery of small debt throughout the country. The attention of the Legislature having been called early to the subject, there Was a general impression that it was necessary, in order to remedy the evil, utterly to abolish imprisonment for debt on final process under 20l. Unquestionably, at the time the subject was under the consideration of Parliament, suggestions were made that regard should be had, not only to debtors, but also to persons compelled from the nature of their business to give credit, and not to take from them the security they had for the satisfaction of their debts. Parliament was anxious to provide them with an adequate security, and consequently a remedy was given which was supposed to be effectual. A general remedy was granted against the goods of the debtor, and also a power was given to the judge or court who tried the case, to imprison for a specified time a party who obtained goods fraudulently, or without a reasonable expectation of being able to pay for them. But now, when the power of imprisonment was taken away, it was undoubtedly right that there should be something substituted for that power, in order to afford adequate security to the creditor. It would, no doubt, be the desire of every one to have the creditor sufficiently protected, if that could be done without placing too much power in his hands. But the danger was this, that if you conferred a power on the creditor which he was to use against persons who had fraudulently incurred debts, you could not limit his exercise of that power so as to prevent him from using it against persons who, having incurred debts with a reasonable expectation of paying them, might, from unforeseen circumstances, be utterly unable to do that. If there were means by which additional security could be given to the creditor, without reviving imprisonment for debt, he should be glad to adopt them.

Mr. Spooner

thought that after what had fallen from the right hon. Baronet the Secretary of State and the Solicitor General, the hon. Member for Bristol should withdraw his Motion. His own wish was to see the fullest security given to the creditor with the least inconvenience to the debtor.

Mr. H. Berkeley

said, that after what had been stated by the right hon. Baronet (Sir J. Graham), he could not do otherwise than withdraw his Motion.

Motion withdrawn.