MR. MOFFATT, in rising to call attention to the position of Parliament in reference to the amendment of the Law of Bankruptcy, and to the expediency of introducing a Bill into the House for that purpose without delay, said, that the law as it now stood gave immense privileges to debtors, restrained greatly the rights of creditors, and vested large discretionary powers in the Judge. He ventured to say that the Law of Bankruptcy was one of the most important of laws in a commercial community like that of this country. The Bankruptcy Law was amended by Lord Westbury's Act in 1861, and in 1864 the number of bankruptcies had increased from 1,432 to 7,224, whilst the amount of assets had decreased about 50 per cent. In 1867 the number of bankruptcies had increased to 8,994. By Lord Westbury's Act it was provided that persons might become bankrupts on their own petition; and in 1864 there were of these 5,260, and in 1867 the number was 6,532, showing an increase of gentlemen who, having nothing to pay, chose to become bankrupt, of 25 per cent. In 1864 there were discharged without any punishment 5,335 bankrupts, and the number in 1867 was 6,902; but the amount collected had shrunk from £677,000 to £583,000. The number of bankrupts who had paid no dividend was no less than 5,876; and this, he submitted, could not be considered a satisfactory state of things. He indeed believed that the whole 266 system had fallen into such a state that it was as bad as it could be. The figures to which he had referred did not at all show the extent of the evil; for the facilities given by the Act of 1862 for private arrangements had led to gross abuse, which reflected the greatest possible discredit upon the legislation of the country. Under the Act of 1862 composition deeds became a part of the Bankruptcy Law; and the number of them had since very largely increased. Their number in 1862 was 698, and in 1867 3,971, giving a gross amount of unsecured debts of £373,000, as against £8,246,432. The number of the deeds of assignment registered in 1862 was 1,886, in 1864 2,284, and in 1867 2,803; but the gross amount of unsecured debts had risen from £1,013,000 in 1862, to £5,725,592 in 1864, and £10,642,646 in 1867. The same result had occurred with deeds of inspectorship, which from 46 in 1862 had increased to 138 in 1867, showing a gross amount of unsecured debts of £190,400 in the former year as against £10,753,550 in the latter. No man could go into any counting-house in the City without finding the present state of the law strongly reprobated. It really would almost appear that the House of Commons had successfully endeavoured to invent some system by which creditors should be mulcted of the money to which they were entitled. Seeing how the Act of 1862 was working, the House in 1864 appointed a Committee which inquired very carefully and fully into the question, and afterwards made a Report, recommending the establishment of some cheap and simple mode of administering bankrupts' estates, such as the Scotch system. The Committee endeavoured to disentangle the question of punishment of debtors from that of the distribution of their estates, and they recommended the abolition of the Bankruptcy Courts, both the London and the District Courts. He could not say that these recommendations had been productive of much good. It was quite true that they caused the introduction of a Bill in the following Session; but that Bill was of so cumbrous a character and so little regarded the recommendations of the Committee that it soon ceased to exist. The Bill of 1866, though more formidable in appearance than its predecessor with its 480 clauses, required two Bills to prop it up, and was now considered useless. He thought that the House of Commons should be specially charged with a subject which was so intimately 267 connected with trade, and he found with deep regret that this great question was relegated to the other House. He could not refer to what had occurred in "another place"; but he hoped to receive some information as to the principles of the Bill which the Government intended to bring before the House of Commons. The present law was a remnant of the old system of protection which governed all our commercial dealings two centuries ago. We began by protecting the creditor, and then went on to protect the debtor. The result was that we had a system of protection so perfect for the debtor, and so adverse to the creditor, that it was as discreditable to fair dealing as any of the worst cases of protection in the matter of trade which had long ago ceased to exist. It might be described as giving immunity to fraud, and as confiscating the assets of creditors. In 1865 the amount divided among creditors was £450,000, and to divide that sum it cost £375,000. When they coupled this with the fact that every man could make himself bankrupt and get discharged from his debts with the greatest immunity, he thought that it must be felt that there could not be a worse system. A debtor who did not want to pay his debts frequently said, "I court inquiry, and I will put my affairs into the Court of Bankruptcy," and under this threat creditors took anything they could get rather than lose the whole. When these matters were considered they could scarcely be surprised at the distress which paralyzed the country, and the effect of this vicious legislation had been greatly increased by the facilities given to Limited Liability companies. In his opinion the sooner they abolished the whole system of the Bankruptcy Law the better. He hoped that they would adopt the Scotch system, modified to suit the wants of this country. Small changes would be of no use, and whilst they retained the present staff of Bankruptcy officials the Bankruptcy system would never have the public confidence, and would not deserve to have it. He wished to know the principles upon which the proposed Bill was founded; whether it was in accordance with the recommendations of the Committee of 1865; and further, whether, instead of a Bill framed in cumbrous and tortuous language, it would not be possible to bring in a short and simple measure? If they did not do this they had better at once repeal the existing Bankruptcy Law, and do for one year without a Bankruptcy 268 Law; for he was satisfied that this even would be a great relief to the commerce of the country.
THE ATTORNEY GENERALsaid, that it would be very inconvenient for him to state the principles of the measure. The House was perfectly aware that a Bill had been brought in and read a second time in the House of Lords; and, in due course, he hoped it would come before the House of Commons, when they would have the advantage of the hon. Member's knowledge of the subject in discussing the measure.
§ Motion, "That Mr. Speaker do now leave the Chair," agreed to.