§ Order for Second Reading read.
§ Mr. NORWOOD
said, he rose to renew the protest he had already made against proceeding with the Bill, which was not in the hands of Members until Friday last. Several telegrams were received in London, from various Chambers of Commerce throughout the country that morning, requesting second reading might be postponed on the ground that it had been totally impossible to examine the Bill. Although it was rather unfashionable not to believe in the abolition of imprisonment for debt, he did not see the hardship of the pre- sent law, for a man could be imprisoned only after a final process, and then for a very limited period, as Registrars were obliged to go round to prisons and almost to drive debtors out by compelling them to pass through the Bankruptcy Court. He believed that if the power of imprisonment were given up very great fraud would ensue. Persons arrested for debt were seldom mercantile men, for these had assets and came readily under the provisions of the Bankruptcy Law; but persons arrested were for the most part non-traders who had no ostensible or available means on which to levy executions or defray expenses of bankruptcy, so that imprisonment was the only means of securing the payment of the debts owing by them, He objected to the want of principle in this measure. By the Bill it was pro- posed to retain the county system of imprisonment in respect of debts below £50; but there was no power to touch a fraudulent debtor who owed £51, who might be a non-trader and have no avail-able assets, so that he would not be made a bankrupt, and who yet might have re- sources which were withheld from his creditors, and upon which he might be living in affluence. This would be making one law for large debtors and another for the poorer classes, and he was certain the Bill would not give satisfaction by placing such a premium on roguery. The limitation of £50 ought to be removed, and, whatever the amount of the debt, the debtor ought to be liable to be summoned before a Judge, and then if it were proved that he had the power of 174 paying the debt, or a portion of it, imprisonment ought to follow. He distinctly protested against the short time that had been allowed for the examination of a Bill, which, as it stood, would open the door to considerable fraud.
MR. STAYELEY HILL
said, he agreed with the hon. Gentleman who had just sat down in hoping that the Attorney General would not press the second reading of a Bill which had only just been placed in the hands of Members, and which contained provisions requiring much consideration. He did not, however, agree with the hon. Gentleman in his opinions respecting the 6th section. He hoped that section would be fully discussed before its principle was sanctioned. If there was one thing more than another which pressed hardly upon the working classes, it was the power of commitment possessed by the County Court Judges. It involved the loss of more labour, the wasting of more money, and the infliction of greater hardship than those who had not had practical experience or seen statistics on the subject could easily imagine. As the Bill also introduced an entirely new principle into our law—that of allowing persons accused to give evidence before a criminal tribunal—he trusted that the second reading would be a little longer delayed.
§ MR. M'MAHON
said, he hoped that the Attorney General would proceed with the second reading of the Bill, which really represented nothing more than a return to the old Common Law of the land. At the Civil Law a debtor might be arrested and sold in consequence of his inability to satisfy his creditor; and by one law if he owed money to several people, which he was unable to pay, his creditors might seize him and cut him up. But by the Common Law imprisonment for debt was a special Prerogative of the Crown and the King, who might, in satisfaction of a debt, seize the body, lands, and goods of his debtor. The whole system, as it now stood, of final imprisonment in satisfaction of debt was merely Judge-made law. lie hoped that when they went into Committee on the Bill, a clause would be inserted repealing all the statutes on which the Judges had founded the right of imprisoning a man for debt. When arrest on mesne process was abolished shortly after the passing of the Reform Bill, it 175 was then said that credit would be disturbed, and that traders would not be able to carry on their business. But those forebodings were purely imaginary, and in the same way he believed no evil would attend the good that must undoubtedly result from the abolition of final imprisonment. If, however, they allowed the rich man to escape under the bankruptcy system they ought not to permit the poor man to be liable to imprisonment; for, by so doing, they would certainly be open to the charge of having one law for the man in broadcloth and and another for the man in corduroys. At present the County Courts were converted into agencies for the collection of small debts, many of which were incurred by the wives of poor men in consequence of the importunities of traders. These debts were frequently left outstanding till the harvest season, when the creditors insisted upon payment or sent the debtors to prison, and the men so imprisoned were committed again and again unless they satisfied the harpies to whom they were indebted. In White cross Street Prison, he was told, the County Court debtors were imprisoned in something like the cages for wild beasts at the Zoological Gardens, while persons imprisoned for large debts were provided with all the luxuries to which they had been accustomed. All political economists, from Adam Smith to Mill, laid down that it was not for the interest of a State to encourage credit, and he believed that if they were to-morrow to abolish imprisonment for debt trade would be all the more flourishing, and men would be less tempted to embark in those specculations where their gains were their own and their losses their creditors'. He contended that unless a fraud or a crime were committed it was not the province of society to interfere, and if this interference were to cease both the trade and the morals of the country would benefit thereby. He trusted, therefore, that the measure would be proceeded with.
§ MR. CANDLISH
said, he did not agree with the hon. Member for Hull (Mr. Norwood) that the Bill made one law for the poor man coming before the County Court with a debt under £50, and another for the man whose liabilities were greater. The principle in both cases was the same; the procedure only was different. The Bill gave power to the County Court Judge to imprison if 176 the debtor had been guilty of fraud, or, having the means, persistently refused to pay; whereas debtors in bankruptcy of upwards of £50 would have to take their trial before a jury in a criminal court. That was simply a difference in procedure. He believed that imprisonment in cases of fraudulent indebtedness was right, but that the man who was merely unfortunate should not be regarded or treated as a criminal. He trusted that the learned Gentleman would proceed with the measure, though there were one or two points which he should like to see altered. He would suggest that instead of referring, as in Clause 4, to other statutes the Act should be complete in itself. In Clause 10 there was a sub-section directed against the concealment of goods, and the onus of proving innocence was laid upon the person charged. In the next sub-section it was provided that if a man removed his goods from the premises he was presumed to be acting innocently in so doing, and the onus of proving him guilty lay upon those who charged him. Now, he could not see any good reason for this distinction. He could not see why in the case of concealment guilt should be presumed, while in the case of removal the presumption was to be in favour of the party's innocence. This measure, in connection with the Bill for amending the law of bankruptcy, was, however, a great improvement upon the present Bankruptcy Laws, and he thought the thanks of the whole commercial community were due to the Attorney General for having introduced this and the Bankruptcy Bill.
§ MR. SERJEANT SIMON
said, that, while anxious to assist the Attorney General in carrying out the principle on which this Bill was founded, he thought that Section 6 was open to very serious objection, and not calculated to give satisfaction to any portion of the community. He had never been an advocate for imprisoning men merely because they had the misfortune of not being able to pay their debts. He would not imprison a man merely because he had been unfortunate; but, at the same time, he thought that there ought to be some protection for persons who, in the course of business, were obliged to give trust, and who without such protection might find themselves defrauded. Section 6 of this Act preserved to the 177 County Court Judges the power of committal in certain cases. He did not complain of the principle of the section, but what he did complain of was that it made a distinction between the rich man and the poor man, because the power of committal would only apply in cases where the debt was £50 or under. He did not see why the operation of the Bill should be thus limited. Why should the man who owed £50 or less be punished, and the man who owed £500 or £5,000 be allowed to escape with impunity? Provisions existed under the old Insolvency Law and the Bankruptcy Laws for meeting cases of reckless trading, and of persons who contracted debts without a reasonable prospect of paying. These provisions were to be withdrawn; the new Bankruptcy Bill confined the functions of the Judge in Bankruptcy to the administration of the assets; while the effect of this Imprisonment for Debt Bill would be to authorize, under certain circumstances, the imprisonment of persons who owed only small amounts. As the Bill at present stood the Attorney General was not faithfully carrying out his own principle with regard to the total abolition of imprisonment for debt. He proposed to punish the man who committed a fraud upon a small scale, whilst he allowed the man who committed it on a large scale practically to escape. He (Serjeant Simon) hoped the hon. and learned Gentleman would make the 6th section applicable to all classes of debtors. In that case he (Serjeant Simon) would give the Bill his support.
§ MR. RATHBONE
said, that the credit given under the protection of the County Courts was given with the idea of making those courts agents for the collection of small debts. A working man's wife was induced to incur a debt for an article which perhaps she did not really want. and then the County Court obliged the husband to pay. In another respect his constituents were of opinion that the Bill did not go far enough. It was no doubt a great improvement upon any previous legislation, because, to a certain extent,it supplied the want of a public prosecutor, directing the Judge in certain cases to order a prosecution. Now, if the Judges had done their duty under previous Bankruptcy Acts, and had carried out the law as it was meant to be administered, very different results would have ensued, but the most important pro- 178 visions of those Acts were reduced to dead letters by the mode in which they were interpreted. What he now suggested was that, instead of leaving the prosecution of a fraudulent debtor permissive, it should be made compulsory. To undertake this disagreeable duty required an amount of moral courage which few men possessed. The Bill should therefore be altered so that a trustee should be required to report, and the Judge to order a prosecution in cases of fraud.
§ MR. WEST
said, he had come to the same conclusion as his hon. and learned Friend (Mr. Hill) had arrived at with regard to commitments for small debts. He trusted the hon. and learned Attorney General would give a candid consideration to the arguments which had been advanced in regard to the distinction between debts of £20 and debts of a greater amount. The 6th section would in his opinion require careful consideration in Committee, but he thought that the Bill might meanwhile be read a second time.
THE ATTORNEY GENERAL
said, he did not under-rate the importance of this question, and hoped no Member of the House would suppose that he intended to stifle discussion upon it. If, therefore, he asked hon. Members to allow the Bill to be now read a second time it was on the distinct understanding that there would be further discussion on going into Committee. Although as a whole the Bill had been favourably received, certain misconceptions seemed to prevail with regard to it, and he should like, if possible, to clear away some of those. The principle of the Bill was the abolition of imprisonment for debt, and he did not think it necessary at this time of day to enter into any lengthened argument on that point. The question, as he had before said, was almost concluded by authority. The Commission of 1832, consisting of a number of the Judges, had reported in favour of abolishing imprisonment for debt. The Report of the Bankruptcy Commission in 1842 was to the same effect; the Bankruptcy Committee which sat in 1864 and 1865 were also unanimous on the subject; and all the Bills introduced since that time—the Bill of the hon. and learned Member (Sir Roundell Palmer), and that of the Lord Chancellor last year, as well as the present Bill—were founded on the same principle. Imprisonment for debt, he would repeat, was not justifiable as a punishment, because it made no distinc- 179 tion between the innocent and the guilty, and, if it were meant to be an effectual remedy for recovering the debt, recent legislation had prevented it from being such a remedy, because, if a man were imprisoned for debt, he could not be kept in prison; he might get out on his own petition, or would be turned out by the Registrar in Bankruptcy. There was one important reason for abolishing imprisonment for debt, and this had not hitherto been dwelt on. Mr. Commissioner Holroyd, when examined upon this question, said—The consequence of retaining imprisonment for debt in final process has been that a multiplicity of petitions for adjudication of bankruptcy on the debtor's own petition are filed where there are no assets whatever, and these are resorted to mainly, either for the purpose of being released from prison or to avoid being put into prison. In most of these cases a certain expense is incurred without the least utility to the creditors. The following are the number of cases where there were no dividends in the years 1862 and 1863, and, therefore, where there were little or no assets:—In 1862, 6,910 out of 9,663; in 1863, 5,630 out of 8,470.It was upon the abolition of imprisonment for debt that he founded his proposal to put an end to adjudications of bankruptcy upon a man's own petition. It was a process which had been most pernicious, which realized no assets, produced no dividends, crowded the gaols, and was of no use to anybody. It was said—"If you abolish imprisonment for debt you ought also to abolish it in the County Courts." Now no one could suppose that he was favourable to any extension of the power of imprisonment in the County Courts, for he had given earnest of an opposite tendency by introducing a Bill for the limitation of that power, which had before been very much abused. He was not, therefore, too friendly to this power of imprisonment by County Court Judges, and he could only say that he should rejoice if the House could come to the conclusion in Committee that this power could be abolished without danger to the working of those courts. It was his duty, however, to lay before the House the reasons which had induced the Government to maintain this provision. In the first place, it was a mistake to suppose that the County Court Judges had the power of imprisoning for debt. They had only the power of imprisonment in the cases specified in this Bill, which re-enacted the existing law—namely, where it appeared to the satisfaction of the Judge 180 that in incurring the debt which was the subject of the action the defendant obtained credit—Under false pretences, or by means of fraud or breach of trust, or wilfully contracted the debt or liability without having had at the time a reasonable expectation of being able to discharge the same, or had, with intent to defraud his creditors or any of them, made or caused to be made any gift, delivery, or transfer of, or any charge on his property, or had with such intent concealed or removed any of his property.And then there was another case in which imprisonment was allowed—where it was proved to the satisfaction of the Judge that the person contracting the debt had since the date of the order obtained against him the means to pay, but refused to pay. It was only in those cases that the Judge might imprison, and that was in the nature of a quasi criminal imprisonment. The Bill also limited to some extent the power of imprisonment, for it required that every order for imprisonment should be made in open court. This provision applied not to the County Courts, but to the Small Debts Courts, where orders were made by Registrars; and, further, the term of imprisonment for default in the payment of any one debt was limited to three months. He had received a deputation of County Court Judges, and had put it to them whether they could safely answer for the operation of the system if this power were abolished, and they replied that they could not. They observed that in reference to the orders of imprisonment not one in fifty really took effect, and that with respect to the class of persons appearing in the County Courts the possession of the power of imprisonment was absolutely necessary to insure the payment of debts. It appeared that in many cases men came into a County Court with the money they owed in their pockets, but refused to pay the debt until an order for imprisonment was made out. The power of imprisonment, he had also been informed, operated in favour of the labouring classes, for without its existence they would not be able to obtain credit, and in some cases credit with them was almost a necessity of existence. On these grounds the Government had not felt justified in abolishing this power, which was retained in the Bill, subject to consideration by that House. It had been observed that a distinction was drawn between the cases of the rich and the poor, but it should be recollected that in 181 respect to the debts above £50 the bankruptcy law could be put into effect. The debtor could then be compelled to appear in the Bankruptcy Court, and to discover all his property, and if he did not do so his income could be sequestered, and himself made liable to penalties far more severe than any to which a debtor in a County Court was subject. The longest term of imprisonment which the latter could suffer under the sentence of a County Court was forty days, but a debtor for an amount above £50, if he committed offences of the same description, would, in the Bankruptcy Court, be subject to imprisonment for twelve months, and in some cases might be deemed guilty of felony, and be imprisoned for two years. However, those were matters for consideration in Committee, and if it should be deemed possible safely to withdraw this power from the County Court Judges he should be glad to do so.
§ Bill read a second time, and committed for Monday 19th April.