HC Deb 11 February 1861 vol 161 cc285-315

Sir, I hope the Bill which I am about to move for leave to introduce will be brought before you under happier auspices than its predecessor of last year. At the same time I must say that, while I regret the necessity of abandoning the unfortunate Bill of last Session, I have been very much consoled by the reflection that in preparing the present measure I have had to direct my attention to a number of topics to which I felt it necessary that greater consideration should be given; and I hope that I have succeeded in framing a measure which you will receive with greater favour than you were disposed to show to that which pro-ceded it. You will recollect that the two chief objections urged against that Bill were its late appearance and its ponderous dimensions. The first I have obviated by introducing the Bill at the present moment. With respect to the second I have deferred to the opinion then expressed, and surrendered my own judgment to the feeling that prevailed; and I am happy to say that the Bill which I now propose to introduce is less by one half than the Bill of last Session. But you will do me the favour to recollect that the Bill which I then introduced was a consolidating, as well as an amending measure. The law of bankruptcy is entirely lex scripta. It is wholly composed of statutory provisions, and those provisions are to be found scattered over a great number of Acts of Parliament, all of which must be consulted in order to obtain a just idea of the law. As there exists a general opinion that Acts of Parliament ought to he consolidated, I felt last year that it was my duty to attempt to consolidate into one Act the whole of the written law on the subject of bankruptcy. The present, however, is only an amending Bill, and is therefore of a fragmentary and disconnected character, the provisions of which cannot be at once perfectly understood, from the want of those lights that might be cast on them from other statutes which are left untouched. In framing the present Bill I have entirely abandoned consolidation, though I must frankly confess that my own feelings and sentiments are all in favour of a consolidating measure; but it is at all times desirable to propose that which is likely to pass, and if I can succeed in inducing you to pass this measure during the present Session—a measure more than ever demanded by the great body of the mercantile community—it will in some future Session probably enable us to consolidate the whole law of bankruptcy, of which this Bill, if it receives your approbation, will form an important element.

I will very shortly remind you of the important principles which it was desired to establish and carry into execution by the measure of last year. You will remember, probably, that one of the great evils which I thought called for a remedy was the confusion that now exists in bankruptcy between the judicial and administrative functions of the Court. These are, in point of fact, so mixed up and blended I together that the one has no order, or economy, or regularity, and the other has neither dignity nor efficiency. One object of the last Bill, therefore, was to separate the judicial from the administrative functions; to bring home to the abode of the creditors all those duties touching the administrative part of the law which it is necessary should be discharged in the first instance; and, at the same time, to give to the judicial functions of the Court that uniformity and certainty of decision, and that elevation of judgment, which would wipe away the reproach that now attaches to the law as it stands, and render it more satisfactory and respected. One of the other features of the late measure was to restore to the creditors of the bankrupt the power of settling their own affairs. The principle on which the law of insolvency rests is, that the moment a man becomes clearly insolvent his estate belongs to his creditors, and the creditors are the parties who should be consulted as to the mode of administering and disposing of the estate. Unfortunately, the history of the law shows that, partly from the apathy of creditors, and party from other causes, great evils existed in the modes of administration formerly followed. Great changes were made in the hope of remedying these evils; but, nevertheless, it was found that creditors refused to avail them- selves of proceedings which they fancied to be injurious to their interests. There was an enormous amount of formality and technicality, and whole legions of officials were brought into existence, who destroyed that property which it was their avowed province and duty to protect. To remedy these evils was one of the objects of the Bill of last year, and all that it was hoped to accomplish bythatBill in this respect will be embodied in the present measure. Another object of that Bill was to effect a reduction of the great expense incurred by the law charges of the Court of Bankruptcy. It is quite unnecessary that I should justify the introduction of a measure on this point, because the evil is universally admitted; but I shall shortly enumerate to the House some of the different sources of that expenditure, which exists in consequence of those changes that have at different times been made since 1831. On every estate brought into bankruptcy there is a considerable sum to be paid on its first introduction; then there are charges for the messengers, gentlemen who are receiving very considerable incomes for the performance of very slight duties; then there are fees paid to the auctioneer, the broker, and the accountant, fees on public sittings, registrar of meetings, and fees for sittings; the building fund, ad valorem per centage fees on the assets to the official assignee; the effect of the whole being to drive away from the Court of Bankruptcy the administration of large estates wherever possible. Besides these there are allowances to the bankrupt for maintenance, allowances on a dividend and excepted articles, and solicitors' charges. Probably it will be remembered that last year I showed, from returns before the House, that the collective charges on the administration of estates in bankruptcy amounted to not less than 33 per cent. Another object of the Bill of last year was to establish an effective system of audit and the control and superintendence of creditors through the medium of official assignees; and also to inform creditors, by the transmission of proper accounts, of the amount of the estate and the manner of collection, while at the same time it abolished many of the formalities by which an oftentimes unnecessary publicity was provided. Another object of the Bill of last year was the subjecting the insolvent or bankrupt, when applying for his discharge, to a proper tribunal, with the power of punishment in cases of fraudulency, and I am quite sure that all those who through the usual channels of information have had their attention called to the vast commercial frauds of the last year or two, will be ready to admit that this power ought to be most ample. All these different objects it has been my endeavour to provide for by this Bill. But, before entering more particularly into that point, I may be permitted to say that, in presenting this measure to the House, I present it as in my judgment the best that is attainable under the circumstances of having to abandon all attempts at consolidation. Any one who approaches this subject with the intention of reforming the law, finds the ground covered by establishments which have been again and again modified, until the Legislature has become, in regard to bankruptcy, jealous and suspicious of all further attempts at reform, and is adverse to permitting any expenditure of public money in this direction. Under these circumstances little can be done except to modify that which now exists. Undoubtedly, by giving away money under that odious name "compensation," it would be possible to build up a much simpler form of administration of this important part of the law. Whatever, too, may be done by way of enactment, a great deal is requisite for the reform of the administration of bankruptcy, which must be left to the prudence, care, and superintendence of the creditors themselves. No Act of Parliament can supply that want of care, attention, and supervision, and whatever safeguards Parliament may devise, if the creditors are apathetic or indifferent to their interests, if they show a perfect disregard whether they will or will not call for accounts, and examine the conduct of their debtors, we may expect to see the frequent exhibition of things that shock the feelings of morality and integrity that ought to prevail, we may expect to see enormous defalcations, or some great and outrageous instances of commercial delinquency, such as have lately been made manifest, and which have, unfortunately, remained unpunished. While, therefore, much may be done by the Legislature, much will still remain to be done by those who ought to watch over their own interests.

I will, first, direct the attention of the House to the alterations proposed to be made in the formation of the Court and the manner of administering the law; and I will then give a sketch of the procedure in bankruptcy as it will exist under this Bill, if it should be passed. I will then pass on to another and separate branch of the subject, and consider the propriety of abolishing the present jurisdiction for the examination and discharge of insolvent debtors. I. thought last year that it was desirable to have one law of insolvency, and to subject the trader and the non-trader to one uniform system of administering the law if they became insolvent.

The House will recollect that it received last Session with approbation the proposal to give a Chief Judge to the Court of Bankruptcy. At present the law is administered by numerous Commissioners, and, as to a portion of the cases, by the County Court Judges. It was thought that there was great difficulty in obtaining uniformity of decisions unless there were some ready means of approaching a court of appeal. The House was unanimous in thinking that it would be proper to have a Chief Judge at the head of the administration of bankruptcy to secure uniformity, certainty, and dignity. I have, therefore, retained that portion of the plan of last year. One of the proposals of the Bill of last year was, however, to abolish at once the five London Commissioners and to place two other Commissioners in their room. That proposal involved, of course, the necessity of giving to those gentlemen for the rest of their lives retiring annuities to the full amount of their present salaries. That proposal did not appear acceptable, and I have thought it right to continue these Commissioners in precisely the same situation as at present. Their duties under the present Bill will not probably be greatly augmented, considering the appointment of a Chief Judge and the proportion of labour that will fall on his shoulders. That will be, at all events, for the House to determine, but I propose, in the present Bill, to retain that part of the existing system without any alteration. The Bill of last year proposed the abolition of the Insolvent Debtors' Court, and with it the removal and discharge of the Commissioners of that Court. One of the Commissioners, Mr. Serjeant Murphy, has since died. Another Commissioner was appointed in his place, but on the understanding that if it pleased Parliament to put an end to the Court he was not to be entitled to any compensation. At present, therefore, so far as compensation is concerned, there is but one Commissioner of the Insolvent Court, and if the present scheme is carried into effect, it will leave the administration of justice, both in bankruptcy and insolvency in the London district, in one and the same Court. That district is exceedingly extensive, stretching from the extremity of Norfolk on one side to the borders of Hampshire on the other. There will, therefore, be in the London district a Chief Judge, and five London Commissioners to discharge the duties of the law of bankruptcy and insolvency. Another part of the Bill proposes to augment the jurisdiction of the County Courts. By the former Bill power was given to the creditors to take the administration of bankruptcy from the District Courts to the County Courts, It provided, however, that those estates only should be transferred by consent of the creditors from the Bankruptcy Courts to the County Courts where the assets do not exceed £1,000. I have since thought that no reason exists for that limit, that the creditors were able to judge for themselves on this point, and had the right to do so. I, therefore, propose to continue to the majority of the creditors the power of removing an estate from the Court of Bankruptcy to the County Court without any limit in point of amount. Under the former Bill it was proposed that the County Courts should have the right to take administrations in Bankruptcy where the assets did not exceed £300. It has, however, been represented to me that it is difficult to say whether the assets do or do not exceed £300, and I propose that all petitions for removing bankruptcy shall be presented in the first instance to the Court of Bankruptcy, except in those limited cases where the debts of the trader do not exceed £300. The facility of applying to the County Courts has led to many endeavours on the part of fraudulent traders to escape from justice, and I have therefore thought it right that all petitions for adjudications of bankruptcy, except in those smaller cases where the debts do not exceed £300, shall be presented in the first instance to the Court of Bankruptcy or the District Court. These are the material changes in the structure of the Bill, and these are all the differences that exist on this part of the subject between the Bill of last Session and the present.

I now come to the procedure in cases of bankruptcy. I have thought it most desirable to secure to the creditors of an insolvent the opportunity of determining whether they will enter the Court of Bankruptcy or not. The great fault of the present system is, that the creditor cannot get the benefit of the provisions of the Court of Bankruptcy without entering the walls of the court. There is, also, the further evil that once within the walls he cannot escape until he has paid the uttermost farthing. He must remain there until the whole of the estate has been ground down, collected, and administered. But I think it right that, with the consent of a certain portion of the creditors, a man who is an honest trader, or who, not being a trader, is an honest debtor, shall have the opportunity of surrendering his property and having it duly administered without incurring the opprobrium and stigma of having gone through the Bankruptcy Court. It is necessary to approach this part of the case with very great caution, because, if you give to the trader any protection during a certain period of time while he has solicited, or has represented that he has solicited, the consent of his creditors, you have suspended during that period the right of the creditors, and, unless care be taken, the opportunity may be converted into the means of defrauding the creditor by the debtor, and a great deal of injury may be done. I have endeavoured, as well as I could, to provide a remedy for this, and, while the creditors' rights are suspended, there will nevertheless be a provision in the Bill enabling the debtor's estate to be administered under a private deed without the necessity of an adjudication of bankruptcy. I attribute great importance to this scheme, and consider that a great part of the utility of the measure will depend on the possibility of working this portion with convenience and success; and, though, no doubt, it may on many occasions be desirable that, while the rights of the creditors are protected, the estate should be wound up without the debtor being subject to the opprobrium of passing through the Bankruptcy Court, yet I provide in the Bill that the creditor or debtor may at any time pass over the boundary and go into the Court of Bankruptcy, in order to meet any emergency or necessity, or to have a determination on any question which may arise in the administration of the estate under the trust. In effect, therefore, all the remedies in Bankruptcy will be applied to that state of things without the necessity of proceeding to an adjudication. But, supposing a petition presented for adjudication, and that the debtor is adjudicated a bankrupt, the next form of procedure by the Bill is that there should be an immediate meeting of the creditors, at which meeting it should be decided whether the administration of the estate should continue in the Court by which the adjudication had been pronounced, or be transferred to any other Court, as, for example, the County Court. As the same time, the creditors would have the opportunity of receiving any proposal of the debtor, and of determining whether the estate should go on in bankruptcy, or be wound up by a private deed of arrangement. Therefore, at the very first meeting—and there would be power to call any future meeting for the same purpose—an opportunity would be afforded to the creditors of deciding which was the best mode of administering the estate. Then, with regard to the proofs of debts—a proceeding at present attended with much unnecessary expense and great vexation—I have introduced, in conformity with general recommendation, a most simple mode of procedure. A written declaration, containing a statement of account, vouched and signed by the party, is, when unopposed, to be taken as equivalent to proof, and to have attached to it the same force as a formal affidavit, a penalty being attached for any false statement. With respect to the meeting of creditors I have also given most ample power that registrars should be authorised to attend at any convenient place, in order that the administrative business may be proceeded with. On this part of the subject I entertain very sanguine hopes of amendment, founded in a great degree on the experience derived from the Court of Chancery by the adoption of a more simple mode of proceeding. The facility and economy that now attend the administration of estates in Chancery, are matters of the utmost surprise to those who are familiar with the former mode of proceeding in that department of justice. I believe that at present the administration of an estate belonging to a deceased party in the Court of Chancery is effected more quickly and more economically than it could be effected even by private hands. I will refer the House to the evidence given before a Commission which sat a short time since, by the hon. and learned Member for Newcastle upon-Tyne (Mr. Headlam) in proof of the excellent and economical administration of the Court of Chancery as compared with that of the Court of Bankruptcy. Another point to which I wish to call attention is the position in which the creditors' assignees and the official assignees will be placed by the Bill. All acquainted with this subject know that official assignees were introduced in 1831, in consequence of the great evils which were felt, chiefly from what I have denominated the indifference and carelessness of the creditors, under the previous system. The official assignee was invested with the right to receive the whole estate, and the consequence was that creditors found themselves, in their own opinion, entirely excluded from their proper position with respect to control over the administration. There has, therefore, been a general cry to be emancipated from the control of the official assignees, as great as there had been previously for relief from the maladministration and neglect incidental to the former system. I have endeavoured to provide a mode of proceeding which should be something between the two propositions. I hope the House will agree with me in thinking that it is proper to leave to the creditors' assignees the right of receiving, applying, and administering the estate; but that it is most essential that there should be an efficient auditor, active inspector, and vigilant superintendent over the creditors' assignees—able to ascertain, and who would have an interest in ascertaining, that the property was received by them and taken into hand for the benefit of the creditors. I propose, therefore, by the Bill, that as soon as the creditors' assignees should be chosen and appointed, the functions and duties of the official assignees should cease with respect, to the collection and distribution of the'? property, save in one particular. I have found by an examination of the returns that small debts — debts not exceeding £10—due to bankrupts' estates are collected by the machinery in the power of the Court with infinite economy, and therefore I propose to continue to the official assignees the power of collecting debts not exceeding £10. With regard to the rest of their duties, I wish to make it incumbent on them to require periodical accounts from the creditors' assignees, to audit them, and send copies to every creditor who has proved a debt of £10 or upwards. The creditors' assignee will also have to return quarterly accounts of the estate, and those quarterly balance-sheets will be audited with the aid of the official assignee. The next point of the procedure after the ordinary meetings of the creditors, is that of the discharge to be granted to the bankrupt, and here the Bill which I am now seeking to introduce will be found to differ materially from the measure of last Session. It has appeared to me, upon much consideration of the subject, that an obligation should be thrown upon the Commissioners and upon the Chief Judge, whether there be any accusation by the creditors or not, of examining with care and attention the conduct of the bankrupt. Supposing, therefore, that there is an accusation by the creditors, or supposing the Commissioner to whom the matter may be committed thinks it right that the conduct of the bankrupt should be brought before the Chief Judge, the question of the discharge will, in the London district, be brought, in the first instance, before the Chief Judge for decision; I propose to arm the Chief Judge with two kinds of authority. In the first place, I give him authority to examine the conduct of the bankrupt in all cases of misconduct not included in the list of offences which the law treats as misdemeanours. The House is probably aware that, according to the existing law, the conduct of the bankrupt may be the subject of examination by the Commissioners, and that the certificate to be given to the bankrupt varies according to the opinion so formed of his conduct. There are three kinds of certificate—those of the first, those of the second, and those of the third class. The first class is a declaration that the insolvency of the bankrupt is attributable entirely to unavoidable misfortune; the second class states that it is attributable not entirely to unavoidable misfortune; while a certificate of the third class sets forth that it is attributable wholly to causes other than misfortune or accident. I am told, however, that practically the distinction between the different classes of certificates is almost wholly disregarded; that it is of little more use than if the certificates were written on so many pieces of white, or red, or pink paper. The bankrupts receive their certificates and go back to the commercial world apparently as much entitled in the one case as in the other to obtain credit. Hence, I have thought it better to persevere in the proposition which I made last year that these certificates should be wholly abolished. I do so with the more confidence now, because I believe it is necessary that something more stringent, something more definite, something the effect of which may be more severely felt, should be placed in the hands of the Judge than the mere power of giving a certain description of certificate. I have therefore described a number of instances of misconduct which are not characterized as misdemeanours, but which are treated as grave offences, warranting the judge in refusing or suspending the order of discharge, or in committing the bankrupt to prison for any period of time not exceeding one year. Among the offences so enumerated is one which I should have been very glad to make a criminal offence if I could have found the means of defining it with that amount of accuracy with which every criminal offence ought to be defined. I mean the creation of fictitious capital, the trading with false capital, principally produced by the excessive use and unjust application of accommodation bills. That, in point of fact, is nothing more than a mode of obtaining the means of trading by fraudulent pretences, and ought in the excess to be punished as fraud. But the difficulty is in making criminal that which is so only in the excess, because the excess is incapable of being defined in words, although no man can hesitate about recognizing it when it comes before him in actual business. It is impossible to assert that being a party to an accommodation bill shall, of itself, be an offence; yet no man of any information on the subject can hesitate to say that such a system of trading by accommodation bills as that which has been exhibited in the public journals, in connection with a recent case of bankruptcy, amounts to one of the worst description of offences. I have not hesitated, therefore, to give the Chief Judge, who will be a Judge of the highest rank, the power of inflicting a sentence of imprisonment for twelve months in those cases of delinquency which are not included in the list of offences amenable to the criminal law. I do so with less hesitation, because the existing law gives the power to a creditor, if he pleases, of inflicting a greater amount of imprisonment. The law as it at present stands is characterized probably by as much inhumanity and, at the same time inefficiency and impolicy as any law that could be devised. If the Commissioner suspends a certificate, or refuses it for any limited time, during that period any creditor may apply to the Commissioner for a certificate of his debt, and upon that certificate he has a right to commit the bankrupt to prison. Then, at the end of the imprisonment, which is an imprisonment for a limited period, any other creditor may proceed against the bankrupt in the same way, and subject him to a similar incarceration. I think that, if the delinquency of the bankrupt is such that it is just to expose him to the penalty of imprisonment, that penalty ought not to be left at the caprice of any creditor who might be prompted by malice or a vindictive feeling; while, on the other hand, I am equally of opinion that it is not fair that the creditors should be made the agents and instruments of inflicting a criminal sentence. Such a sentence, to have any effect in the way of deterring from similar crimes, ought to come from a Judge of the highest dignity. I therefore propose to take away the power of imprisonment now given to the creditors, and, in cases where the Judge shall be of opinion that the order of discharge ought to be refused or suspended, to give him the power of inflicting the amount of imprisonment I have mentioned. I have also thought it right that the same Judge— namely, the Chief Judge—should be armed with authorty to try the bankrupt for any offence of which he may be accused, because in handing the bankrupt over from the Court of Bankruptcy to a criminal tribunal there is not only very considerable difficulty in causing proofs of the offence to accompany the accusation, so as to enable them to be brought forward in the manner required by any ordinary criminal court, but there is great injustice in subjecting the estate to all the expense and delay incident to that description of prosecution. I have thought it right, therefore, as we propose to place at the head of the Court of Bankruptcy a Judge of the highest rank and character, the equal of any of the Judges of Westminster Hall, that such Judge should have the power of administering this part of the criminal jurisdiction. The Bill provides that, if the bankrupt desires to be tried by a jury, he shall be tried by a jury in the ordinary manner; but that if he does not desire to be so tried, then the Judge is to examine his conduct, the Commissioner who has had the immediate prosecution of the matter sitting as the assessor of the Chief Judge. The final sentence is to proceed from the Court so constituted, no appeal being allowed to any other tribunal. From the decisions of the Commissioners in the country and County Court Judges an appeal to the Chief Judge appears to be desirable, but from the sentence of the Chief judge in this matter I think it right that there should be no appeal. I think these provisions are not more stringent than the absolute necessity of the case requires. I hold that justice should be certainly adminstered in a manner in which humanity and consideration may be united with necessary severity, and so as to operate more efficiently than the present system. I have mentioned to the House the procedure applicable entirely to the case of traders.

It was part of the proposition of last year that the non-trader also should be brought within the area of the same tribunal. That was a proposition which, I believe, as far as general discussion has gone, has received the approval of, I may say, nearly all who have attended to the subject. The true policy of the bankrupt law is, I believe, that every species of encouragement should be given to a debtor the moment he finds himself in a state of insolvency to do that which justice requires, namely, to divide his estate equally among his creditors; but I must beg you also to observe that, with the exception of the trader, in the case of the non-trader the whole tendency of your law as at present established is to produce the very opposite result. You admit of execution against the person of the debtor: you admit the debtor being consigned to prison on that execution, but for what purpose? You cannot for one moment say that he is sent to prison for punishment. You have not been administering the criminal law at all. He is sent to prison at the pleasure of a creditor. Well, the creditor has become his creditor by his own voluntary act. To every debt, in that sense of the word, there are two parties—the man who contracts it, and the man who permits it to be contracted. The creditor, of his own accord, willingly gives credit—to what had he the right of trusting at the time he gave it? He trusted, of course, to the solvency and means of the individual. In the very nature of the contract, it is impossible to suppose that the power of consigning the debtor to prison ought to be regarded as one of the natural rights of the creditor. Consigning the debtor to prison cannot be justified on any other consideration than this, that it is a means of compelling the debtor to give up his property for payment of his debts. But if you can accomplish the same thing without imprisonment, the imprisonment would remain without reason to justify it. The imprisonment of the debtor is undoubtedly the means of rendering the debtor useless to himself and a burden to the community. To the creditor it produces no good; to the State at large it is an unmitigated evil. The debtor is de- moralized; he is in a state of idleness and depravity frequently while in gaol; he comes out of gaol a worse man than he entered it. The whole process, therefore, is neither more nor less than a process of unmitigated evil, unless you say it is effectual as a preventive to men getting into debt. But I say you are not justified in imposing any such law with a view to prevent that consequence when men only get into debt with the consent of their creditors; and if the creditor consent, the act of the creditor entitles him to nothing more than the aid of the law, in the most expeditious manner, to get at the property of the debtor and divide that property equally among his creditors. But here, again, you give every temptation to fraudulent preferences, you stimulate the debtor to do that which in bankruptcy the Judge would stigmatize with the imputation of fraud. I cannot illustrate more forcibly the opinions that have prevailed on this subject, and dictated by good policy as well as humanity and justice, than by taking the liberty of reading one or two passages from the reports of various Commissioners who have considered the subject. In the Report of the Common Law Commissioners in 1832, the result of the law is thus accurately described: — The practical effect of the law of arrest on final process, combined with the insolvent law, is the imprisonment of numbers merely to be discharged without opposition at the end of a few weeks. The consequence is misery, waste of funds, and multiplied frauds and perjuries. While no benefit arises to the creditor, the arrest, imprisonment, and expense are ruinous to the debtor. In short, the ordinary consequence is disappointment and loss to the creditor, destruction to the debtor. I say this is a correct view of the case; statistical returns prove it in the strongest way by the number who are committed to prison, the short time they remain there and then are discharged; not one estate in 250 profiting thereby. You are bound by the principle of your law of debtor and creditor to give the creditor the most available remedy, but it so happens that the most available remedies to the creditor are those which are most consistent with humanity and justice to the debtor and the general benefit to the State at large. You tell the insolvent debtor that he shall be released and discharged on surrendering his property—why, then, do you make it a necessary condition that be shall go to prison before he surrenders his property? You have felt the injustice and have modi- fied the operation of these laws by various Acts, which have had in them, perhaps, more humanity than consistency, and which were not quite impartial. You will recollect the Act of Parliament that was passed for an object I will not stop to explain, and which is commonly denominated the "Gentleman's Act." That is an Act by which in reality the insolvent may get the benefit of bankruptcy without going to prison. It was an Act, however, available to very few, but it is sufficient to establish that the Legislature, in passing it, at the same time condemned the general system, because it has by that and other protection Acts in effect declared that if a man will communicate with his creditors, and get the assent of a certain number and surrender his property, his person shall be free from arrest. Now, all I desire for the benefit of non-traders is this, that the law should give them an opportunity of at once surrendering their property; and upon that surrender and free discovery, that they shall be protected from arrest. This is the first thing, therefore, that is proposed, and for the benefit, I trust, of the non-traders. I will venture to add one or two more extracts from the Report of the same learned Gentleman to which I before referred, in order to vindicate the proposition I have laid down. In another part of the same Report I find this statement:— Thousands are every year imprisoned and discharged, not only at great pecuniary cost, but at a moral expense infinitely more detrimental to the interests of society. Another Report was made in the year 1840 by the Commissioners appointed to consider the Bankruptcy and Insolvency Laws. The Report is signed by Mr. Justice Erskine, previously Chief Judge of the Court of Review, Mr. Evans, Mr. Fonblanque, and Mr. Holroyd, Commissioners of the Court of Insolvency, and Mr. William Crawford, Mr. Wynn Ellis, Mr. Benjamin Hawes, junior, Mr. G. C. Glyn, and Mr. John Horsley Palmer—a combination of authorities of the highest character. There are two passages I would read:— It appears to us," the Commissioners say, "that to unite the jurisdiction in matters of bankruptcy and insolvency would, upon principle, tend much to benefit the public, but this benefit cannot, we think, be obtained without placing all insolvent estates under the administration of one uniform system of law. We can perceive no good reason why the estate of one debtor (a trader) who is unable to pay his debts in full should be administered in a different manner from that of another debtor not a trader under the same disability. In whatever aspect, therefore, the law is regarded, I cannot but think that you must arrive at the conclusion that the greatest injustice is under the present system done to the non-trader, and, in reality, the greatest injury inflicted upon the creditor; because, as matters now stand, the former is led to submit to considerable sacrifices from time to time, frequently even to commit fraudulent acts, in order to evade the penalty of imprisonment; so that, instead of deeming it to be his interest to make an honest surrender of his property to his creditors, every species of inducement is held out to him to do that which under a just and politic administration of the law of debtor and creditor might not occur. That hundreds and thousands of debtors should be imprisoned only, as it would seem, to keep up a costly tribunal for the purpose of their discharge from confinement would appear to be the very extreme of folly. If, then, the case be as I state, it becomes the interest of all parties to place the law of insolvency upon the same footing as that of bankruptcy. It has, however, been made manifest to me since last year that some degree of odium attaches to the word "bankruptcy," in general acceptation, and that that circumstance was likely to become such a bugbear as to frighten hon. Gentlemen from a calm consideration of the question and a recognition of the beneficial results which I anticipated from the changes in the law which I then proposed. I have, therefore, been desirous of embodying in the present Bill words which should be certain and unmistakeable, as defining the test of insolvency as applied to non-traders; so that the law of bankruptcy might be brought into operation in such cases only upon the most distinct evidence of general inability to meet one's just claims. Now, I think the House will agree with me in the opinion that one of the greatest subjects of reproach in connection with cases of this description with which we have to deal is that which results from the habit which exists among men who happen to be involved in debt of withdrawing their property from this country and seeking a residence in some part of the Continent, where they may enjoy it, thus defrauding their creditors of that which ought to be distributed among them. We are all perfectly well aware that there are abroad certain localities which are well known as being the places of refuge of English debtors, and that being so, I have made the first test of insolvency in the present Bill the absconding from the country with the deliberate intent of defeating or delaying one's creditors in the prosecution of their just claims, and the remaining abroad with the same object. But now comes the question, what shall be the overt act which shall meet with general acceptance as evidence of the malus animus—of the intent to defraud? In dealing with that question, in which you have to collect from the acts of the debtor the proofs of the animus by which his absence from the country is influenced, I have been desirous to render it necessary that a certain process should be gone through. It now frequently happens that the declaration of bankruptcy constantly takes place behind the back of the debtor; but I shall require by the Bill that the petition be served at the last abode of the debtor. If there are any means of ascertaining the place of residence of a debtor abroad, I also give to the Court of Bankruptcy the power which is now possessed by the Court of Chancery and the courts of common law, to authorise the service of process abroad. I think, then, that the House, on an examination of the provisions of the Bill, will ultimately be of opinion that it will be impossible for any man to be declared an insolvent upon the ground of fraudulent absence from the kingdom without having a fair opportunity of knowing what is about to be done with respect to him, of entering an appearance against the petition, and of proving that he in reality was animated by no fraudulent intention in taking up his residence abroad. The next test of bankruptcy which I would make applicable to the non-trader is the fact of a creditor having obtained a judgment against him in accordance with the ordinary process of law or equity, and being unable to find him to enforce that judgment, and I propose that under those circumstances an opportunity should be afforded him of appearing to answer the demand, and of giving either satisfactory security to the creditor or proving that he was not liable to be called upon to liquidate the claim made upon him. If that be not done you will I think agree with me that a criterion of general insolvency is furnished which makes it the duty of the debtor to deliver up his property for the payment of his liabilities, and which renders it incumbent upon the framers of the law to enforce that surrender. Another test of insolvency is the fact that the debtor being a non-trader has been arrested on final process, and is placed in prison, where he lies for a certain time. Every hon. Member at all acquainted with this subject must be aware that it has not been unusual for persons so situated to prefer to remain in gaol and enjoy their property there, to giving up that property to be distributed among their creditors. The most absurd part of the English law with respect to this particular point is this—that it seems to assume that when you have got the body of your debtor you have obtained satisfaction of your debt, and if by any accident you lose the body the debt is satisfied, thus reminding one of the doctrine attributed to the Roman law of sanctioning the division piecemeal of a debtor among his creditors. The test of insolvency which I have last mentioned may be made the occasion of a petition for adjudication of bankruptcy being presented against a non-trader, and the result would be that his estate would be administered on the same principle as that of a trader. Touching upon this part of the question, we are naturally led to ask the very important question, whether in altering the law of bankruptcy we ought to import into the amended system that principle of the law of insolvency which makes the future estate of the debtor liable for his debts, or whether it would not be more advisable to extend to the non trader the benefits of that humane principle of the bankruptcy law which gives the debtor an unqualified and general discharge for the future upon his giving up the entire property in his possession to satisfy the claims which exist against him. For my own part, I confess that I do not think a man, if he chooses to give credit, is entitled, morally or upon grounds of good policy, to anything more than an equitable distribution of all the means in the possession of his debtor at the time when he gives him credit. It is not, it seems to me, a just or a politic course so to legislate as to induce a creditor to speculate on the future prospects of the person whom he trusts. All just systems of law have annulled the credit so given. We know that in equity all bargains with expectant heirs upon the security of their expectations, and all contracts relating to future acquisitions of property, are regarded as unjust; and I feel therefore confident that the House will be of opinion that a debtor, having once honestly delivered up to his creditors all the property which he possesses, ought not to be liable to be pursued by them through life, and to be called upon to surrender that which he may afterwards secure to satisfy their claims. That is a principle on which the House will have to decide. I have the greatest possible confidence in a general Committee of this House. I know of no more searching tribunal for the examination of such a question; and this, as well as all the main provisions of this Bill, I shall submit unreservedly to discussion in Committee, accepting altogether that which its wisdom and sense of justice may approve. I must, however, tell you that in that part of the measure which deals with the orders of discharge of bankrupts, whether traders or non-traders, I have given to the Chief Judge in case of any delinquency, the power of annexing to such orders of discharge conditions affecting future acquired property. It will be for you to determine the prudence and propriety of that course: but the Bill proposes, as a penalty upon the bankrupt trader or non-trader, that in cases coming within just censure, such censure shall involve the liability of future acquired property.

Now, it may be asked whether this Bill goes the length of totally abolishing imprisonment for debt. My answer to that is that I regret it does not, I have hesitated on this point from a fear that if I had pledged myself to such a proposition I might not have found it accepted as satisfactory by this House. But I will tell you what I have done, and which in reality will, I trust, arrive at the same result, although it is not the same thing in name; neither is that boldly avowed which reason, justice, and policy appear to me to demand. The course adopted by the Bill is this:—In the first place, every pauper debtor, who, on account of his poverty, cannot petition for an adjudication of bankruptcy against himself, has the power of presenting a petition to a County Court, and of presenting it at the expense of a fund provided so long ago as the 33rd of George III, for promoting the discharge of pauper debtors. That is one of the modes by which I hope to relieve the gaols of some of their present occupants. But another mode is this:—The gaoler, by a provision of the Bill, is required to make out on the first day of every month a return of all prisoners in his custody for pure debt, or rather simply on account of debt, and to forward this return to the Chief Judge in the London district, or to the Commissioner in any country district of bankruptcy. On the receipt of that return notice is to he sent by the clerk to the execution creditor and the detaining creditor of every such person; and on the expiration of ten, or not more than twenty days from the date of the return, a registrar will examine every prisoner, whether there be a petition or not. The registrar will have power to make an adjudication—in other words to make an order vesting the estate of the prisoner in the official assignee—and, if he thinks fit, to grant the prisoner an order of protection—that is, a qualified discharge. When that machinery is in operation, I believe it will be impossible for any man to remain in prison simply on the ground of debt for a longer period than from fourteen to twenty days. And, if that be so, I think it will follow that no creditor would; be willing to commit his debtor to prison; for he pays a considerable sum for that privilege or source of enjoyment, if it be such, and he would hardly avail himself of it when his debtor would be released from prison in the manner I have described. The House will recollect that prisoners for debt in this country are now divided into two classes. One of these classes, and by far the most numerous, are those who are imprisoned by the orders of the County Court Judges, for there is a species of imprisonment which must be called penal, not being for pure debt, inflicted by the sentence of a County Court Judge, or of a Commissioner of Bankruptcy, in cases of small debts which are found to have been contracted either under circumstances of fraud, when the debtor had no probable means or expectation of being able to pay, or under some other species of falsehood or delinquency. Now, of course, it would be very wrong to interfere with that description of criminal imprisonment; and, therefore, I do not propose that the registrar who attends for this gaol delivery of debtors should have any power to release persons so committed to custody. But for pure debt, for debt unaccompanied by these circumstances of fraud or reproach, no man will be permitted to remain in prison; but, whether he will or no, will be discharged, and his property, if he has any, taken from him and made available for the benefit of his creditors at large. These, then, are the principal provisions, some of which were included in the former Bill. I have only to add that connected with the additions made to the former measure there is this important circumstance:—I have mentioned my great desire to facilitate the pro- cess by which debtors, without incurring the reproach of bankruptcy, should be enabled to surrender their property for division among their creditors. But it repeatedly happens, and it cannot be otherwise, that the debtor cannot accomplish this, because he is unable to ascertain who are his creditors at the time, so as to obtain the assent of the required majority for a composition or arrangement. Every trader, for instance, is probably liable upon promissory notes or bills of exchange which are circulating about, it may be in foreign parts, and the holders of which cannot be discovered and communicated with in a short period of time. I have, therefore, introduced this provision, that, if the debtor obtains the required majority of those creditors who can be ascertained, and is willing to make the trust deed or deed of assignment, run in a very simple form, it shall be as effectual and complete a discharge and protection to him as if he had gained the assent of all his creditors. The simple form in which the deed shall run is to this effect, that he conveys all his estate and effects to certain trustees, to be by them collected, applied, and administered exactly as if, at the date of the deed, he had been regularly adjudged a bankrupt. It is impossible to quarrel with such a deed on the ground of length, and yet it is a complete assignment on trust. With regard also to deeds of arrangement after bankruptcy, I have incorporated some provisions from the Scotch system, in order to facilitate a change from the process in bankruptcy to proceedings by private arrangement. Such is the measure which I submit to this House for its approval. It must be recollected that we have at present a most artificial system. It is impossible, as I have already said, to sweep that system entirely away, and substitute for it a perfectly new one. All we pretend to do is to remedy its worst defects, to remove its undoubted grievances, and provide the means whereby, without incurring the expense of all its present formal modes of proceeding, the creditors may easiest obtain the property of the debtor for the satisfaction of their just claims. If these provisions work well and satisfactorily, I venture to anticipate that the charges of bankruptcy, where bankruptcy exists, will be diminished by one-half; but I hope that bankruptcy will seldom be resorted to, and that only in case of absolute fraud and delinquency. I hope that the mode of administering debtors' estates by private arrangement, incorporating, as it does, all the principles and appliances of the law of bankruptcy, will be the general rule, and the formal process of bankruptcy the exception. You cannot have a better illustration of the present unfortunate state of the law than is presented by the contrast between the number of cases of bankruptcy and the cases of composition. It proves to you this great truth, that whenever your law is not in harmony with the exigencies of society—it has the effect of driving the people out of the courts of justice into the by-ways which are still open to them, in order to secure those advantages which they ought to be able to obtain in a more legitimate manner. The cases of composition are estimated to amount to between 8,000 and 10,000 a year; while the bankruptcies and arrangement under the control of the Courts seldom exceed 1,000 or 1,100 in the same period. This only shows the great preference among creditors for private arrangements, even although under the present state of the law the trustee in such a case cannot have the expeditious remedy which this Bill will afford, and, although the only mode of securing the due performance of the trust is by a resort on the part of the creditors to the Court of Chancery against the trustee. In spite of these disadvantages, creditors have preferred to incur all the inconveniences of deeds of private arrangement. Not that the law of bankruptcy itself is wrong, but that there are impediments to its proper administration. I have thought it right to address myself to aid that which appears to be the general impression among the commercial community, and which in the abstract nature of things must be most desirable; for if a debtor comes and surrenders his property, and is willing to account, what do you want with a Bankruptcy Court? It is quite sufficient that there should be a facile remedy to compel the administration and performance of a trust when it is once created. Upon that ground, therefore, I trust that that portion of the Bill which applies the law of bankruptcy to deeds of trust and composition, and admits of the parties to them being placed in the same relative position, and subject to the same jurisdiction as if there had been actual bankruptcy; as if the trustees were assignees, and as if the creditors claiming under the deed had proved in bankruptcy, I say, I trust and believe that portion of the Bill would be found most useful and efficient. It is upon that portion of the Bill that, as a question of finance, I hope to meet with the approval of the House. At present the House is aware that the Court of Bankruptcy is in constitution self-supporting. I do not propose to interfere with that principle, except in two particulars—one with respect to the salary of the Chief Judge, which I propose shall, like the salaries of other Judges employed in the administration of public justice, be paid out of the general revenue of the country; and the other is the unfortunate portion upon which the former Bill in a great measure suffered shipwreck. In the former Bill I proposed, in conformity with the recommendation of the Commissioners, and in conformity with repeated suggestions of former Commissions—that the compensations granted in 1831 to officers who were then discharged from their duties, and which compensations were charged upon the bankruptcy fund—most unjustly, as I think, because it made future generations of creditors pay for the faults of the law, and the improper mode of its administration previously existing—I proposed that those compensations should be thrown upon the Consolidated Fund. The House did not agree to that proposition, but did, I think, agree that the compensation should be defrayed by annual votes of Parliament. I hope hon. Gentlemen who listen to me will understand that my Bill creates no compensations at all, I am only dealing with compensations given nearly thirty years since, and I am only acting in accordance with common justice, in order that we may accomplish that result, without which all reforms are idle—namely, the introduction into the administration of the law of bankruptcy, the principles of economy and cheapness which are absolutely necessary, for if you tax creditors to the extent of 33 per cent, as at present, you compel them to resort to other remedies rather than seek one of Her Majesty's courts of justice for relief. The Bill will, I trust, be in the hands of hon. Gentlemen by Wednesday morning, and I trust that if they give me leave to introduce it now, they will accompany that favour with another, by permitting the Bill to proceed with all possible expedition, and I hope that, with the assistance of the House, the Bill will before we part for the Easter holidays have gone through Committee, and may be transmitted to the other House before the end of the next ensuing month. I have now only to thank the House for its kindness in listening to me, and trust that it will not consider me to have unnecessarily trespassed upon their patience. The hon. and learned Gentleman concluded by formally moving for leave to introduce a Bill to Amend the Law relating to Bankruptcy and Insolvency in England.


said, he felt authorized in the name of commercial communities of this country, to tender their thanks to the hon. and learned Gentleman for bestowing so much care and attention upon this important subject. He was glad to find that the hon. and learned Gentleman intended to proceed with the Bill expeditiously, and hoped, as this was no party measure, that hon. Members on both sides would assist in that desirable object, even if one or two morning sittings should be necessary for the purpose. He was glad to find that the old objection against submitting non-traders to the same law as traders had not weighed with the Attorney General, and, for his own part, he believed non-traders would benefit by the change. Let non traders keep accounts and exercise caution in making contracts as commercial men were obliged to do, and there was no reason why an exclusive law should be created for them. He rejoiced, too, to hear the learned Attorney General's opinion on imprisonment for debt, as, from his experience, he had arrived at the conclusion that the system should be got rid of as soon as possible. It was gratifying to find that there was a prospect of diminishing the expense of winding-up bankrupts' estates, which was now more than 50 per cent of the assets distributed. In fact, at present the remedy was worse than the disease, and it would be better to let the creditors scramble for the bankrupt's property than subject it to such a monstrous tax. The Bill might require amendments in Committee, but he was sure they would not be of a formidable nature, and he would afford every assistance in his power to enable the measure to pass the House.


observed, that although that was a stage of the Bill upon which there could be no difference of opinion, yet he could not refrain from expressing his satisfaction in listening to the statement of his hon. and learned Friend, and his concurrence in the principles which were involved in this Bill. He had, however, heard one thing in which he did not concur. Many of the provisions of the Bill had already received the sanction of the House; for instance, the House was unanimous last year in approving of the principle of a Chief Judge, and in that of abolishing the distinction between certificates; whilst the part of the Bill upon which the great difference of opinion prevailed was that which he regarded as one of the most important provisions of the measure, namely, that with reference to non-traders. He recollected that the Bill was now so guarded and protected in that respect, that non-traders would be subject to no injustice, for they could not be made bankrupt on any debt but a judgment debt, while there was complete security for their having notice before proceedings could be taken. He interpreted the empty state of the benches usually occupied by country Gentlemen as an indication that their alarm had been removed, and that they would not offer any very formidable opposition. He thought that there could be no difference of opinion, when the matter was seriously considered, on the question whether the law of debtor and creditor, both as regarded traders and non-traders, should be uniform. The true principle was, that all persons should be bound to surrender their property to creditors if they became insolvent; and that, having done so, they should he completely absolved from all liability, and should be restored to a capacity to trade as soon as possible. He regarded with great satisfaction that portion of the Bill in which it was proposed to give to the Judge the power of making future property liable to debts which had been incurred. A nobleman, for instance, might get into debt recklessly, leading people to believe that he had large property, when, in truth, the property which he already possessed was small; and he (Mr. Malins) most cordially agreed that in such a case future acquired property should be made liable. The only part of the statement of his hon. and learned Friend on which he looked at present with distrust was that which proposed to abolish the office of official assignee, or at all events greatly to diminish their powers; because he understood that hereafter official assignees would he rather in the position of auditors, with a power of collecting small debts, than persons having that control over creditors' assignees which was at present possessed. He thought the House would do well to bear in mind the advantages which had followed the appointment of an Accountant General in Chancery; and it appeared to him that it would be equally valuable to have the assets of bankrupts placed in official hands rather than in the hands of trade assignees. These, however, were matters of detail which could be considered in Committee. He quite concurred in the necessity of going on with the measure as speedily as possible; but, at the same time, he would suggest that his hon. and learned Friend should fix a moderately distant day for the second reading, so that the country might have, first, an opportunity of considering the detail's of the measure. In the meantime he must congratulate the country on the course of practical legislation on which it seemed to be this year embarking, in lieu of discussing mere theoretical questions which everybody detested, and knew would have no valuable result.


said, it would ill-become one who was unacquainted with the principles of law to offer any criticism on the luminous speech of the hon. and learned Attorney General; but, as he represented the largest commercial city in the world, he should fail to do justice to their feelings if he did not take the earliest opportunity of tendering to the hon. and learned Gentleman their thanks for the manner in which he had dealt with the question. He agreed with the hon. Member for Sheffield (Mr. Hadfield) that it was not a question of party politics. The notice was now in the hands of the House, and he hoped Parliament would, as soon as possible, pass the Bill into law.


—Sir, I very much concur in the observations which have fallen from the hon. Gentleman who has just sat down. This Bill is one upon which no party question arises. It is a Bill of the utmost moment to the commercial classes, and it should be proceeded with in a temper and with an expedition to enable it to pass into law. With that object in view, I do not quite subscribe to the observations of my hon. and learned Friend (Mr. Malins), inasmuch as I think it better that the second reading should be put for an early day, and that the Committee should be postponed to such a period as will enable those who take an interest in it to examine the details of the measure. That there may be no mistake upon the points which will arise on the second reading, I will state briefly what I consider are the objects of the Bill. I conceive those objects are, first, a speedier and more economical administration of the bank- ruptcy laws; second, as a consequence of that, increased facility to private arrangements, compositions, and agreements between creditors and debtors; third, a gradual approximation to the abolition of the punishment of imprisonment as the means of obtaining satisfaction for a debt; and fourth, a gradual assimilation of the laws of bankruptcy and insolvency, so that the same principles shall apply in future to the trader and non-trader. These are the four great points involved in the Bill, and it is obvious that if hon. Gentlemen agree mainly on those points, the second reading may be fairly assented to on an early day, and the details considered when the Bill has been in the hands of the public. I will not enter into any discussion of those points at the present moment, because I think it is almost unfair to the hon. and learned Attorney General that we should throw doubts on portions of the Bill until we are satisfied from examination of the Bill itself that those doubts are well-founded. The luminous exposition which the hon. and learned Gentleman has made of the whole of the measure, also, is such as to preclude the possibility of cavil at this stage. If I throw out one or two suggestions it is more with a view to keep them open for myself in future discussion, than anything else, for in the general objects of the Bill I most heartily and entirely concur. The points which I should like an opportunity of considering are these:—First of all, with regard to the administration of the law, whether it would be wise to place the administration of bankruptcy in the County Courts—whether we cannot acquire a facility of administration independent of those courts. The reason that I have a doubt on this point is that the County Courts are, and ought to be, kept as litigant courts. The Court of Bankruptcy is essentially an administrative court, and there must be great difficulty, though I do not say it is impossible, of reconciling those two kinds of jurisdiction in the same court, without detriment to the court to which the jurisdictions of the other is transferred. I entirely approve, also, of the provision that where a debtor has been guilty of misconduct the Court should have power to come upon any property which he may subsequently acquire, so that he should not be able to defeat his just debts by his misconduct. As to the mode of trying offences, I am not quite sure that I understood my learned Friend. It seemed to me that he proposed that a case of misconduct should be sent, if the debtor demanded it, to a Court of law where it would be heard before a jury, but that where no such demand was made by the bankrupt, the ease should be proceeded with before the Chief Judge in Bankruptcy. I would suggest that such cases should not he removed from the Bankruptcy Court, but that the Chief Judge should have in all cases the assistance of a jury. I would confine the trial to the court that is to administer the property; but I think it is due both to the Judge and to the bankrupt that the assistance of a jury should be called in. I will not go into the grave question of the gradual abolition of the punishment of debt, nor the equally, if not more important question, of the assimilation of bankruptcy and insolvency, because my learned Friend has treated those subjects so clearly, and has alleged such forcible reasons for the propositions he has made, that with proper precautions, I think they must recommend themselves to general approbation. I will say no more, except that I hope my learned Friend will receive such assistance as the House can afford him in promoting this measure, and that, after all the changes that have been made in the law of bankruptcy, and after all the dissatisfaction that has been expressed as to the administration of a matter so important to a mercantile people, he may be able to identify his name with a measure that will be at once satisfactory and permanent.


said, he concurred with the right hon. Gentleman in trusting that the learned Attorney General would be able to proceed without delay to the second reading of the Bill. He would not utter a word that might be deemed fulsome praise of the Attorney General for the very lucid manner in which he had explained the measure to the House. There were one or two important principles involved in it which would require the serious consideration of the House. One of these was the new plan which, he believed, would be an improvement, of allowing creditors to settle their own affairs among themselves. It must not be forgotten, however, that, although the system of official assignees had proved costly and troublesome at the first, it had led to the collection of large amounts and long arrears; and that cases were well known where creditors' assignees had retained large sums in their possession for a very long period without distributing them among the creditors. Abuses of that nature might, however, be guarded against by a stringent system of audit. There were, he conceived, safeguards in the present Bill which entirely removed the just objections urged against the assimilation of bankruptcy and insolvency in the measure of last Session. He approved the power which the Judge was to have with regard to property afterwards acquired. It would be the duty of the Judge to consider, not merely whether the debtor had contracted the liability in a fraudulent and improper manner, but also whether the creditor's share in the transaction would bear investigation—for if there were extravagant and fraudulent bankrupts on the one side, there were also grasping and avaricious creditors on the other. The Courts of law and equity frequently brought to light the most monstrous conduct on the part of creditors against young men with expectations of future means. He himself had been concerned in one case in which a debt of £25,000 was alleged against a young man who had declared to him on his honour that the only portion of that sum he had ever received was £500, which had been advanced by a Jew money lender; but by renewals and interest the debt had risen from £500 to the enormous amount he had stated. If non-traders were to be brought under the bankruptcy law they ought to be protected from the extortion of avaricious and usurious creditors, and he believed the measure of the learned Gentleman would secure that end.


said, he was glad to see that there was no room this year for the reproach which had been cast upon the mercantile community for having caused the failure of the Bill of last year, by abandoning it to the bickerings of the lawyers. That night the representative of a great commercial constituency bad been amongst the first to rise and express his approval of the Bill. It was all very well for the lawyers to discuss these questions, but the commercial men were those who were chiefly interested in them. The lawyers were, in fact, the cats, and the traders the mice. What the mercantile community sought was, that where a bankruptcy was due to misfortune the bankrupt should receive honourable acquittal, and that the creditors should be enabled to realize speedily and inexpensively whatever property was left. He could express general approval of the Bill of the learn- ed Gentleman, and he hoped its progress would not be delayed. If misfortunes occurred, mercantile men were perfectly ready to allow their debtor to be honourably acquitted; all that they wanted was, that a debtor's estate should be promptly realised and equitably divided, and which he believed the measure of the Attorney General was well calculated to secure.


observed, that he thought the present Bill steered clear of all those objections raised against the Bill of last year, and that it would be likely to pass without serious objection. That portion of the Bill which gave power to creditors to make arrangements particularly met with the approbation of his own constituents.


said, he wanted to ask the hon. and learned Attorney General what he meant when he said that his Bill was not a Bill which gave any compensation for losses created by the Bill itself? He not only took away the power of the official assignees, but their means of support also; and he would ask what he proposed to do for the remuneration of those persons whose services we had had for many years. They certainly could not be turned adrift without any compensation. He had only one word to say as to the statement of the hon. Member for Manchester, who, on speaking of the commercial men and the lawyers, had compared them to cats and mice; the lawyers being the cats and the commercial men the mice. He would only remind the hon. Member that he placed commercial men in the category of vermin.


said, he agreed that it was most desirable that the Bill should be proceeded with early in the Session, and he would suggest the hon. and learned Attorney General should induce his colleagues to reserve, after going into Committee, one day in each week for the consideration of the Bill.


said, he had to thank hon. Members on both sides of the House for the manner in which his humble effort to amend the laws of bankruptcy and insolvency had been received. As the measure was one almost entirely of detail, he should not consider that its second reading pledged the House to anything more than the simple proposition that the law and the administration of the law of bankruptcy required amendment. He had quite felt the force of the doubt which had been suggested by his right hon. Friend the Member for Cambridge as to giving jurisdiction in bankruptcy to the County Courts; but his right hon. Friend would observe that he gave to those Courts no greater powers than they already possessed, except as concerned that voluntary jurisdiction, if he might so express it, which they would receive by the vote of creditors. If the hon. and learned Member for Sheffield (Mr. Roebuck) referred to the reports of the speeches which were made upon the measure for establishing official assignees, he would find that those officers were appointed upon the hypothesis that the income received by them in London would be about £800 or £1,000. The returns which had been made by themselves for a series of years showed that the income received by them in London had been about £1,100 a year. This Bill proposed to make allowances to official assignees, which would give them in London a maximum of £1,200, and in the country of £1,000 a year—a standard exceeding that of their own returns. They would also be relieved from the responsibility—which some of them had severely felt—of being liable to the costs of suits that might be brought against them; and, therefore, he thought that the proposition which was to be made would leave them little grounds for complaint. The Bill which he introduced last year was allowed to be read a second time pro formâ, and under those circumstances he should venture to ask the House to allow him to take the second reading of this Bill on Thursday; not that there might be a debate, but that the House might more rapidly go into Committee, where there must necessarily he much discussion. In Committee he trusted that the Bill would receive such consideration that we might not two years hence find ourselves in such a situation as that in which we now stood with reference to past changes in the law.

Motion agreed to.

Bill ordered to be brought in by MR. ATTORNEY GENERAL, Lord JOHN RUSSELL, and MR. SOLICITOR GENERAL.

Bill presented, and read 1°.