HC Deb 05 April 1869 vol 195 cc142-72

Order for Second Reading read.


said, that the Bill had only been delivered to Members on Thursday, and there had consequently not been time to ascertain the feeling of the country either respecting it or the other measure (Imprisonment for Debt Bill) which must be considered with it. He would therefore suggest that, in order to afford the Attorney General every possible facility for carrying the measure forward, the Bills should now be read a second time, but that the discussion should be postponed until the Motion for going into Committee.


I have no objection to such a course being pursued.


said, he did not propose to go into the details of the Bill now. They were better reserved for discussion in Committee, but there were one or two observations which it might not be deemed presumptuous in him to make with regard to the general principles of bankruptcy law. There was no law in the world affecting civilized communities which was much older than the Law of Insolvency; and, therefore, in discussing this question, they had the benefit of a more extended experience than it was possible to obtain on any other subject of commercial law. The principles established were few in number, and of general application. Everyone must admit that the chief object to be secured when a man failed to pay his debts was to obtain as soon as possible an arrangement between him and his creditors. He spoke, of course, of an honest debtor, leaving dishonest debtors to be dealt with by the criminal code. In the case of an honest debtor it was established by what might be called universal legislation that such an arrangement was the first thing to be secured, and that it should be limited simply by the will of the contracting parties. When talking of an arrangement of this nature they must remember that it was impossible on any occasion to get entire agreement between large numbers of persons. Therefore the legislation of almost all countries had given a right to the majority of creditors to bind the remainder. The Roman law had formed the basis of the legislation of almost the whole of the civilized world, and only in a sense was it true that our Common Law was not based on the Roman law, for we had used the Roman law as the Turks used the remains of the splendid temples of antiquity. We had pulled out the stones and used them in constructing buildings which we called our own. On this subject our laws began with the Roman legislation more or less corrupted, and adopted as something entirely new. The main object of bankruptcy legislation in almost every continental nation was to bring the creditors to an arrangement by enabling a majority to decide; the requisite majority being, in most States, a majority in number and three-fourths in value. The smallest majority required was in the State of New York, where two-thirds were required. On this point English legislation had been far from uniform. The old law did not enable creditors to make arrangements, but it empowered them to give a creditor his discharge; and that power was limited to a majority of at least four-fifths in value. This amount of four-fifths was subsequently altered to three-fifths in value, and a provision was adopted giving power to the creditors to stop commenced proceedings in bankruptcy and to turn them into arrangements. That was then thought a terrible innovation, and therefore it was required that the assents should be nine-tenths in value. The amount was afterwards changed to six-sevenths, and again to three-fourths, and he saw no reason for the provision in the present Bill altering the figure to five-sixths. He thought it ought to be the guiding principle of legislation on this subject that the majority of creditors should be perfectly free to make any contract they pleased with the creditor. Such was the law on the Continent, where they might agree either to a composition or to give the creditor time, or do both, granting him a complete or only a limited release from his debts, and leaving the whole or a portion of his after-acquired property liable to pay the rest. When once this principle was adopted, precautions must be taken to secure a genuine majority of creditors, by preventing persons not really creditors from voting in that capacity, and also by preventing real creditors from voting in respect of a larger debt than was due to them. One great reason, he believed, why the Bankruptcy Law of 1861 failed to give satisfaction was that there were in it no adequate means for preventing this. It was another defect in the law that the debtor himself was allowed to make the arrangement. The deed was drawn up by his solicitor and then proposed to the creditors. This was the reverse of the practice in foreign countries, and anyone acquainted with the law of contracts could not be blind to the enormous difference in the results produced by the two systems. It was important that the principle should be adhered to that the creditors should propose the arrangement to the debtor; and to secure the object of excluding all but genuine creditors he would have all persons prove their debts in the same way as in bankruptcy. Such was the practice in France and, so far as he knew, in every other State of the Continent. Having ascertained who the creditors were, the next step would be to ascertain their wishes. At present, a solicitor took up a case for the petitioning creditors; and sent round to the other creditors a letter authorizing him to prove for them, and enclosing a proxy to vote for the choice of assignees. The creditors, to save themselves trouble, signed both, and the result was that the assignee was chosen not by the creditors generally, but by one, or perhaps two, solicitors who had obtained the largest number of nominations. This could not occur if there was a general sitting of creditors to discuss not only who was to be the assignee, but whether there was any possibility of coming to an arrangement with the debtor in order to avoid bankruptcy. Then, another danger to be guarded against was the possibility of any creditors assenting to unfair arrangements as regarded others, by being paid in some way or other to give their assents. This practice had never been made penal in this country, though in every foreign code it was a fraud which was criminally punishable. Not being aware that this country was entitled to consider itself superior in morality to other nations, he did not think that on this point there should be an exemption from the terrors of the eriminal law, which alone were sufficient to prevent fraudulent practices of this nature. Having secured these objects, he would give the creditors the fullest power to make arrangements before bankruptcy proceedings commenced, or at any other time before they were finally closed. Their arrangements should be altogether independent, if they thought fit, of the transfer of property by the debtor, and of his freedom or non-freedom from liability as regarded his future-acquired property. Now, without wishing to speak disrespectfully of the framers of this Bill, he must say, looking at the 75th clause, which was the only clause in the Bill relating to this point, it was extremely imperfect. It seemed to be confined to the disposition of property and to liquidations similar to bankruptcy. It ought to extend to stopping the bankruptcy proceedings at any time the creditors thought fit, a power possessed, with certain limitations, under the present law. Passing from that which was the first principle in bankruptcy—namely, that of arrangement, they came to the case where, for reasons that occurred now and then, it was not possible to make any arrangement with creditors. They had here only two principles to look to—first, to secure that the property of the debtor was fairly divided among his creditors; and, second, to protect the debtor in his endeavours to re-instate himself in the community, and obtain future property with the view of satisfying his creditors. He must respectfully dissent from the proposition now made to relieve the bankrupt's future-acquired property when he paid 10s. in the pound. He thought the future-acquired property of the debtor should be liable until he had fully paid his debts. That appeared to him not only sound morality, but also prudent legislation. He could not conceive any state of society more discreditable or more distressing than that in which they might see a man who had been bankrupt three or four times, a daring and unscrupulous speculator, riding in his carriage, while his unfortunate creditors were ruined. It was sometimes said if a bankrupt were to be always liable for his debts until they were discharged, he would not exert himself—as it was for the interest of society he should—to acquire future property. But, looking to experience, that objection was without foundation. The Roman legislation—the law of cessio bonorum—contained in the Digest, did not allow the debtor to free his future-acquired property from his debts, but simply protected him from being cast into prison. That law had prevailed for thirteen centuries over the whole civilized world; and under that law debtors did exert themselves and acquired property. The decay of the Roman Empire was followed by the rise of the great commercial cities of Italy, and at a later period of the North of Germany and Holland; and in every case they adopted the Roman law. And, as had been shown by Mr. Burge in his third volume on Foreign Law, and by Professor Leone Levi, in his great work on Commercial Law, that principle was carried out by Louis XIV. in France, and by other European States. When a debtor had made cessio bonorum, his creditors could no longer proceed against him for any debt incurred before the bankruptcy; but the curators, or, as they were called here assignees in bankruptcy, were entitled at any future time to bring him before the commercial tribunal, and compel him to give an account of his affairs; and if the state of his affairs warranted it, the tribunal made an order, by which he should pay a portion or the whole of his debts. That law prevailed in every civilized community except our own, and he could not conceive on what principle our law formed an exception. Whenever he found that the English law differed in some point from what he called the universal law of other nations, he was tempted to believe that the difference had arisen from accident; and so he found in the present instance. The first statute of bankruptcy was the 34 & 35 of Henry VIII., c. 4, passed in 1542, which not only contained no discharge of the future-acquired property of the debtor, but the 6th section expressly enacted that if the creditors were not satisfied by the means provided by the Act they should have the same remedy for the recovery of the residue of their debts as before the passing of the Act. The next statute of bankruptcy was the 13 Elizabeth, c. 7. That did not contain any discharge. The 10th section was almost verbatim with the 6th section of the Act of Henry VIII. The statutes of James did not alter the law in this respect; so that from the passing of the Act of Henry VIII. till 1705 there were no means by which a bankrupt could relieve his future-acquired property from the claims of his creditors. Up to that period English law was in exact accordance with that of the rest of the civilized world. The 4 & 5 Anne, c. 17, for the first time, introduced what was called a certificate of conformity, by which a bankrupt conforming to the law was allowed 5 per cent of his property, and was discharged from all further liability for debt theretofore contracted. That met with universal disapproval, and the next year the amendment was introduced that no certificate of conformity should avail a bankrupt, unless it was assented to by four-fifths in value of his creditors, nearly the same proportion as required in other countries. The law was slightly modified by the well-known Act of Geo. II., but remained substantially unaltered, until the 122nd section of the Consolidation Act of 6 Geo. IV. which provided that the certificate should be signed by four-fifths in value of the creditors, unless an interval of six months had elapsed, and then by three-fifths. Up to the time of the passing of the 5 & 6 Vict., c. 112, no man's future-acquired property was freed from liability for his past debts without the consent of his creditors; but it was then suggested that creditors sometimes withheld their consent vexatiously or from some improper motive, and instead of providing for that, as other countries had done, by preventing the creditors taking the law into their own hands and harassing the debtor, the Act of 1842 gave the Judge the power, or rather enforced on the Judge the duty, of discharging a bankrupt's future property from the payment of his debts, if the bankrupt was not fraudulent and had conformed. When the great Consolidation Act of 1849 was passed, an attempt was made to classify certificates, but the classification was abolished by the Act of 1861, and neither of those Acts made any alteration in the power of the Judge to relieve the future-acquired power of the debtor from liability for his debts without the consent of his creditors. Since 1842 it had been possible for a man to speculate at other people's expense. He might speculate rashly four or five times and lose the property of his creditors, but if he happened to succeed the sixth time, and to make £ 500,000, he might laugh at his former creditors, who might be starving. That state of things was, he thought, a disgrace to our system of legislation. They ought not to neglect the experience of the whole world. He believed a man would not work less hard because he knew he was working for an honest purpose, and with a view of paying his creditors who had just demands upon him; and he thought that the only way to make people less reckless in their expenditure and more honest in their dealings was to compel a man to pay his creditors when he was fairly able to do so. He therefore hoped that when the Bill went into Committee the law in this respect would be made consistent with the principle and practice of every civilized nation. Upon another point our law stood alone. It was right to divide the property of the bankrupt among the creditors, but it was not right to divide the property of other people among them. The doctrine of reputed ownership arose from an accident. The original notion was that if a man put property into the hands of another in order that he might represent that property to be his own and obtain credit upon the strength of possessing it, the creditors had the right to take those goods. That was the Roman law, and the law of every civilized country. But how did it happen that this country had allowed the bankrupt's creditors to take other people's goods? Merely from a slip in framing an Act of Parliament. The doctrine of reputed ownership was that whenever any goods were allowed to be left in the possession or disposal of a man with the consent of the true owner, and that possession remain undisturbed until an act of bankruptcy was committed, the assignees were to take the goods and divide them among the creditors; and although the person to whom they belonged left them with the bankrupt, in perfect good faith, and although the creditors did not know at the time of their dealings with the debtor that those goods were in his possession, yet the owner was deprived of them for the benefit of those who had no moral claim nor any legal claim, except under the bankruptcy law. The law was so inconsistent that though that was the practice in bankruptcy, the creditor could not take the goods in execution even though he had lent on the faith of such goods being the property of the debtor. The mistake arose in this way. The statute 21 James I., c. 19, contained this clause— And for that it often falls out that many persons, before they have become bankrupt, do convey their goods to other men upon good consideration, yet still do keep the same, or are reputed the owners thereof, or dispose of the same as their own, be it enacted, that if at any time in future a man shall become bankrupt, and shall at such time be the true owner and in possession of any goods or chattels, and shall be the reputed owners of them and take upon themselves to sell them, the Commissioners shall have power to sell the same for the benefit of all the creditors. The persons who framed that Act intended to prevent fraud arising from the practice of reputed ownership, when persons about to become bankrupt conveyed their goods to others upon good consideration and yet were the reputed owners thereof. For many years this clause was construed, in accordance with its Preamble, to apply only to such cases. In 1708, however, it was expressly decided by the Court of Queen's Bench that according to the interpretation of the clause it was to be thus restricted. That was doubted by Lord Chancellor Cowper; but it continued to be the law, and in 1750 Lord Hardwicke decided that it was the law, and things remained as they were till 1774, when Lord Mansfield, in the Court of Queen's Bench, reversed the law. He had no fault to find with the logic of the Judges, except that it seemed to be logic run mad. They declared that what was supposed to have been the meaning of the section could not be so, because of the prohibition contained in the statute of Elizabeth against fraudulent debtors, of which they could not suppose the framer of the section to have been ignorant. To give effect to this view they were compelled to read the enacting half of the section, without any reference to the Preamble, reversing all that had been done from the time of James. When the Acts came to be consolidated in the time of George IV., the draftsman left out the Preamble, and retained only the enacting part of the section; and so the law remained till the present moment, and that law was proposed to be continued. Let the House bear in mind to what an extent that principle had been carried. A bankrupt might be entitled to a reversionary legacy, which might be called invisible property—nobody knew he had it; and he sold it to a man who paid him the money, but by some slip forgot to give notice of the assignment to the executors. The consequence was, that the legacy might possibly be transferred by the bankrupt to somebody else who might acquire a title by giving the notice; and, therefore, the law deemed the legacy in the reputed ownership of the bankrupt and the unfortunate purchaser lost the reversionary legacy, and it was distributed among the creditors. Let them then take the case of a man who assigned a policy of assurance to the trustees of his marriage settlement. The trustees neglected to give the notice to the assurance office, and the innocent people claiming under the settlement were thus robbed. He did not wish to interfere with the beneficial provisions of the Act of Elizabeth, but when the Bill went into Committee he would ask the House to strike out that clause of it which was a mere repetition of the clause which had stood so long, and had been inserted originally by a mistake; which created an anomaly and every now and then worked great hardship. He would now pass to a matter of much greater importance, involving a state of law which existed in this country alone—he meant the mode of disposing of the property of a man who died insolvent. No one but a lawyer, and one who had devoted considerable study to this subject, could fully understand the complexity and injustice of the law relating to bankruptcy and insolvency. Was it credible that if a man who was insolvent was adjudicated bankrupt, and died the day afterwards, his property would be divided rateably among his creditors, while if he died the day before adjudication his property would be divided among different persons and in totally different proportions? According to the law which prevailed in most Con- tinental countries, the estate of a deceased insolvent would be divided rate-ably among his creditors, without preference or priority; and the majority of his audience, even those who were lawyers, would be willing to admit that such a division was consistent with equity and justice. But in this country, on the death of an insolvent trader or non-trader, all those claimants who had got a seal to their contract, came forward and got 20s. in the pound, while those who held promissory notes, bills of exchange, or book debts very often received nothing at all. As a general rule, trade creditors did not get bonds or mortgages, but merely bills of exchange or promissory notes. On the other hand, members of the family or private friends who lent money, got things signed and sealed; and the consequence was that when an insolvent trader died before he was made a bankrupt, all his friends and relatives, including of course the trustees of his marriage settlement, came in and were paid in full, while the ordinary creditors got little or nothing. The wonderful results produced by affixing a seal he had never been able to make a foreigner understand, though he had seen them exemplified but too clearly in practice. A few years ago an attorney died insolvent, having committed several frauds. He was a trustee of two marriage settlements, and in each case managed to possess himself improperly of £5,000, making £10,000 in all. His assets were about £4,000, and the estate was brought into Chancery, when it turned out that in one case he had executed a deed by affixing his seal to it, while in the other case he had omitted that ceremony. As long as the attorney lived this made no difference, for the stock had been transferred to him in both cases, and he robbed both parties equally. But when he died it made all the difference; and the result was that the claimant who had got the seal got the whole of the £4,000, while the other parties got nothing, and, moreover, had to pay the whole of the costs, including his (Mr. Jessel's) fees. That was a case calculated to make a strong impression, but he had witnessed in his own practice still more remarkable illustrations of the state of the law. An insolvent trader, possessing a great deal of property, but owing debts to a still larger amount, and, therefore, not being worth a fraction, got married. He had nothing to settle, but he covenanted that his executors should pay to the trustees of his marriage settlement the sum of £10,000 for the benefit of his wife and the children of the marriage. Men of that stamp were apt to be liberal in their promises. He was insolvent at the time of the settlement; he lived and he died insolvent; and when they came to administer his property in Chancery it was found that he had died worth a little over £10,000, and that he owed his trade creditors £25,000. The estate was administered according to law. First of all, the costs of the Chancery suit were paid, thereby reducing the fund a little below £10,000, and then the whole of the estate was handed over to the trustees of the marriage settlement, the creditors obtaining nothing beyond the pleasure of paying their own costs. That case afforded probably as good an illustration as could be found of the evils of a state of law which, having existed for centuries, would, he hoped, be abolished on the passing of this Bill. Again, if a man had a mortgage or other charge upon a debtor's property, and the property was insufficient to pay the mortgage or charge, and the debtor became a bankrupt, the value of the mortgage or charge was deducted from the secured debt, and the creditor proved for the difference; but if the debtor died first, the creditor proved for the whole against the personal estate, without making any deduction on account of the mortgage security. He came next to a still more important point in the administration of assets. As long as a trader was alive he must not commit what was called a fraudulent preference. A debtor, knowing that he was about to become bankrupt, must not go voluntarily to any of his creditors and pay him the amount of his debt in full; and if he did these consequences followed,—the bankrupt was punished and the creditor was made to refund. But supposing a man died insolvent before he had been adjudicated a bankrupt, what was the law as regarded his executor? Why, the executor had a full right to prefer one creditor to another amongst creditors of equal degree. He might pay one creditor in full, and leave the rest to go without anything; the executor was not punishable, and the creditor who received the money could not be compelled to refund. He would illustrate the operation of the law by giving two instances that had come within his own knowledge. In the first case a gentleman of high rank, who had a life interest in large property, died, owing large sums to tradespeople and others. His personal property, if equally divided among his creditors, would have paid 4s. or 5s. in the pound. The executor, being a man who had some knowledge of law, came to the conclusion that the tradespeople ought to be paid, and therefore he collected the assets as quickly as he could and paid those persons in full before his (Mr. Jessel's) client could file a bill in Chancery to stop him. The result was that while the tradespeople were paid in full, the other creditors only obtained 9d. in the pound. The second story to which he had alluded was as follows:—Four or five years ago a China firm sent over to this country a young man who had been a clerk, and established him in business, giving him credit to a large amount. The young man's affairs did not prosper; he borrowed large sums from his father-in-law, his wife's brother, cousins, and other relatives and intimate friends. Well, he died one day, when it was found that he was insolvent. His widow proved his will, and being a woman, she put the administration of his affairs in the hands of her father, who adopted this course—In the first place, he paid himself in full; next he paid the brother, then the cousins, then the other relatives, and then the intimate friends. By the time that the principal creditors, who resided in China, could file a bill in Chancery the remaining assets were not sufficient to pay the costs of the suit. These were not isolated cases, they happened under the eyes of Chancery lawyers daily. And why should the executors have this power? Why should they possess a power of dealing with the estate which the persons whom they represented did not possess? The law might be altered easily by enacting that no executor or administrator should be allowed here- after to give any preference to his own or to any other creditor's debt as between the creditors; and, secondly, that there should be no priority between the creditors themselves; and, thirdly, that mortgage creditors should be put on the same footing as other creditors. He had only one further remark to make, which was to thank the House for the patience and kindness with which they had listened to his observations.


said, he was anxious to have the opportunity of making a few remarks upon this Bill, as he had conferred with several Members of his profession upon the subject. He would endeavour, as clearly as he could, to lay before the House the conclusion at which they had arrived with respect to the changes that ought to be made in the existing law, and he trusted that the suggestions he might make would be of use to the hon. and learned Attorney General. In the first place, the gentlemen with whom he had the honour of acting were of opinion that the object of a Bill of this nature should principally be to meet the views and the interests of the mercantile and the trading classes of the country, and that it was the duty of that House to co-operate with those classes in endeavouring to render the Bill efficient for that purpose. What he might call the great principle of the Bill—the administration of the bankrupt's assets by the creditors themselves—had met with general approval; but the establishment of a special bankruptcy tribunal was much deprecated. The first objection to a special tribunal was the natural tendency of such tribunals to take narrow views of the principles of the law; and another objection was that, although the first appointment of a Judge might be a very good one, made with great care and the greatest regard to his qualifications for the office, the same might not be the case with the second or third; and they might have a Judge ill-adapted for the special functions he was to fulfil, while suitors were bound to his court, having no choice of going elsewhere. Again, he would point out that, except for the purpose of appeals from the counties, the jurisdiction of this special tribunal was confined to the London district. As regarded these county appeals he thought it would be more satisfactory if they went to the ordinary courts of law in the usual course, in i the same way as motions for now trials; and it would also be preferable for the metropolitan bankruptcy business to be taken before those tribunals. They were to use the existing tribunals in such places as Birmingham, Liverpool, and Manchester, and, therefore it appeared to him that they might very well use the existing tribunals in the metropolis also. That was the only objection he had to offer upon this subject, and he did not propose to trouble the House at any length upon the details of the Bill; but there were one or two points to which he thought it right to advert. He thought the hon. and learned Gentleman would find he had limited the Bill a little too much with respect to his definitions of partnership and of trade; and he did not see why he should have made any difference between traders and non-traders at all. It might lead to difficulties of construction hereafter. It would also have been as well if further facilities had been given for the inception of bankruptcies. He considered it very objectionable that the whole of the proceedings should depend upon personal service. Under the present law great difficulty and expense were often incurred in putting bankruptcies into force. It was now provided that a bankruptcy should not be effected unless the proceedings for making a man bankrupt were brought to his knowledge. He need not say that this was a species of knowledge which many gentlemen were anxious to avoid, and which they had facilities for avoiding. Again, with reference to the administration of assets, he thought it was desirable to give the creditors an opportunity of knowing what was going on; that they should have full access to the accounts, and should have power to bring the assignee or the liquidator before the Judge, and raise any question they judged necessary as to the mode in which the administration of the assets was carried on. He spoke on that point with some experience of proceedings in the Court of Chancery connected with the winding-up of joint-stock companies, which were often of a character discreditable to any civilized country. Under the "Winding-up Act an official liquidator was appointed by the Court, and in those cases in which the services of a man of high standing happened to be secured matters were managed very fairly and honestly; but there were instances in which the appointment was referred to the Judge's clerk; when it was made no adequate control was exercised; the result being that nearly the whole of the assets realized by repeated calls upon the wretched shareholders were expended in meeting the demands of the liquidator and the attorney whom he employed. Unless an individual creditor were af- forded an opportunity of knowing how matters were going on, and bringing them, if necessary, under the notice of an authority competent to deal with them, the provision in the Bill would not completely meet the objection to which he referred. The hon. and learned Member for Dover (Mr. Jessel) had touched on the question of securities, and particularly on securities on mortgage. He thought the hon. and learned Gentleman had carried his doctrine a little too far. He even thought that the provisions of the Bill went too far, in giving power to the administrators to take mortgage securities out of the hands of creditors and realize them, whether they would or not. That was a new doctrine. He had always thought that a mortgage was in strict right and justice the property of the mortgagee, all that remained to the mortgagor or his representative being the equity of redemption; and he thought that a shock would be given to property in general if mortgage securities were to be placed on something like the footing of bills of exchange. He wished also to say a word with regard to composition deeds. The Bill in its present stage placed those deeds very much on the footing of bankruptcy. He was aware that they had been frequently attended with fraud, but it should be borne in mind that this species of fraud had, to a great extent, been put a stop to by the Act of last Session, requiring a declaration from those who were parties as creditors to these deeds. He could not agree with the hon. and learned Member for Dover as to the manner in which these composition deeds originated. They were usually the result of a meeting of creditors who fairly represented the general body, and who agreed upon a composition which it would be fair and right for the debtor to pay; and they entered with their eyes open into the arrangement for the purpose of avoiding the expense and annoyance of proceedings in bankruptcy. He did not deem it expedient, therefore, that these deeds should be dealt with, as the Bill proposed. There were other details which he would not at present enter upon, but he was sure that all would appreciate the motives of the hon. and learned Gentleman who had brought in the Bill, and thank him for having taken upon himself the responsibility of it. He had ventured to make these remarks under the impression that the hon. and learned Gentleman was open to receive any suggestions which had a tendency to increase the efficiency of the Bill, from whatever quarter they might proceed.


said, he concurred with his hon. and learned Friend the Member for Dover (Mr. Jessel) in much that had fallen from him in the course of his able speech, but there were, at the same time, some remarks of his from which he felt bound to express his dissent. He highly approved, in the main, of the Bill, because it struck out in the right direction, and sought to attain what ought to be the first object of a Bankruptcy Law—a fair distribution of the assets of the insolvent debtor among his creditors. One great feature in the Bill was the separation of what he might call the penal branch of the Bankruptcy Law from that which related to the distribution of the property. Under the present laws they had not only provisions for the distribution of the bankrupt's estate, but they had also provisions for punishing fraudulent or improvident bankrupts, and these provisions were so elaborate as to bring almost every conceivable misconduct within the jurisdiction of the Court. Much time was spent and great expense was incurred by examinations for this purpose. The present Bill would be a great improvement on that course, and he congratulated the Attorney General upon his proposal to separate these two branches, and to refer to another Bill—which would be read a second time afterwards—all offences against trade, whilst he confined this Bill to the true and cardinal object of a Bankruptcy Law—a settlement of the affairs of the debtor with his creditors. With regard to what the hon. and learned Member for Dover said respecting the pro-portion of creditors that were to have power to effect a composition, he confessed he (Mr. Serjeant Simon) did not clearly understand his hon. and learned Friend's argument. He would not go into such legal antiquities as the lex Julia or the cessio bonorum; if so he might perhaps, go higher still, for there was once such a thing as a cessio personarum. But the Bill was to be tested not by the wants or necessities or the sentiments of a re-mote age, but by the wants and necessities of the age in which we live; by what was morally right and just, and what was expedient and practicable under the circumstances of the case. The principle of the Bill was correct so far as it sought to secure that the estate of the bankrupt should be dealt with for the benefit of his creditors. With regard to the majority of the creditors that was to bind the minority, that was, to a great extent, a matter of expediency. Up to the time of George IV. the whole question was left in the hands of the creditors themselves. The creditors could do as they pleased, and it often happened that a large creditor would vote himself an assignee, and pay himself out of the funds. The only redress the other creditors had was the slow and expensive one of going before the Court of Chancery. By the statute of William IV. Parliament went to the other extreme. It took the assets out of the hands of the creditors, and placed them under the protection of a court of law and equity—the Court of Bankruptcy with the Court of Review. It was found that that did not work beneficially for the creditors; and then there was a Consolidation Act, in 1849, which abolished the Court of Review, but which did not take away the cumbrous legal process. He therefore congratulated the Attorney General on having taken, what he (Mr. Serjeant Simon) believed to be, the best course in giving the creditors power over a bankrupt estate, tempered by a certain amount of control by a legal and impartial Judge, who would keep matters straight as between the creditors and the debtor, and as between the creditors among themselves. He did not see why a creditor, because he had a large claim should be allowed to fiver-ride a number of smaller creditors, who, though their claims were smaller in themselves, could less afford to lose any portion of their debt; and he therefore approved of the provision of the Bill which, would place the proportion of creditors who were to approve of the settlement as nearly as possible at the whole number. With regard to the question of reputed ownership, the lion, and learned Member for Dover had given examples of cases where great injustice was done. But he would give one case where a person who had become a bankrupt had had a few pictures sent to him by members of his family for his inspection; they were, unfortunately, allowed to remain in his house till the bankruptcy took place; and then, because they were sent back to their owners, the bankrupt's whole family were summoned before the Commissioners and charged with the fraudulent removal of the property. The creditors claimed the pictures and received the proceeds of their sale. He did not say that the clause ought to be struck out of the Bill altogether; but he thought that it might be so modified as to protect the creditors against fraud, while, at the same time, property which had come by accident into the hands of the bankrupt, but which did not belong to him, and by the possession of which he had not obtained credit might be protected against the claims of strangers. With regard to the appointment of a Judge of the court he could not agree with the proposal of the hon. and learned Attorney General, and he must ask him to consider if the County Court Judges in the country were able both to distribute the bankrupts' estates and to administer the law in addition to their ordinary duties. Then if they had a separate court in London the business would be either too much for a single Judge or it would not be enough. One Judge could not dispose of the bankruptcy business of the London district and also hear appeals from the country. On the whole, it appeared to him that it would be well if a Commissioner were appointed to administer the law in London, and that the hearing of appeals should be left, as at present, to the decision of the Lords Justices. He did not approve of one of the Judges of a Court of Common Law being appointed to administer all the details of bankruptcy, and to act as a Judge of Appeals as well. If he were to sit to administer the law as a Commissioner, and at the same time to hear appeals from the County Courts, then he wanted to know who was to hear appeals from him. The Judge would, he presumed, have to hear appeals from his own judgments, but on this point the Attorney General would, perhaps, be able to give some explanation. There was, indeed, a clause in the Bill providing for a second appeal to the Lord Chancellor, and in certain cases to the House of Lords; but for his own part, he was strongly opposed to a multiplicity of appeals, especially in bankruptcy, and he thought it would be much better, both in respect of economy and efficiency, if there were but one appeal, and that should be to the present Court of Appeal in Bankruptcy. The Attorney General had introduced into the measure an excellent amendment, that of depriving the insolvent trader of the power of making himself a bankrupt; but no provision was made against cases of collusive petitions. Any friend of the debtor might present a petition for his bankruptcy under the Bill as it now stood; for it allowed a creditor of £50 to present a petition. He would suggest the introduction of a clause to prevent this provision from being fraudulently used. With regard to another part of the measure—the release of the bankrupt—he entirely agreed with the hon. and learned Member for Dover. He thought it was a distinction without any foundation in expediency or justice that any person who was a trader could get a release from his creditors, while a man who was not a trader had his property always subject to the action of his creditors. He knew the reason of the law to be this—it was said to be for the advantage of commerce—that credit was a necessity for commerce, but was not necessary in the other walks of life. But that was not so. Credit was necessary to every man. It was as necessary to the man who was not a trader as to the man who was. He thought, however, that if the present system of release allowed to creditors were abolished a wholesome check would be given to the reckless speculations that were often undertaken. It would also be a wholesome check on the abuse of credit—it could, in fact, be salutary to all parties. It was said that the state of the law encouraged trade—he said it encouraged dishonesty. He believed there was always a disposition among mercantile men to treat bankrupts with every degree of fairness and consideration. He had not been for twenty-six years in the profession of the law without having seen much of the working of the Bankruptcy Law, and he had witnessed much kindness and commiseration shown by creditors to bankrupts—not only to persons who had failed through misfortune, but even to those whose failure had been owing to their recklessness, if only they had been honest. But the law did not protect men whom it was intended to protect—it protected swindlers who had no capital but the credit which they had dishonestly obtained. He thought it was derogatory to the country, and discreditable to commercial morality that this scandal should be suffered to continue. As to the provision in the Bill that the debtor should be released on paying 10s. in the pound, he could see no principle in it. Why should they stop there? He would insist, in all cases, on the payment of 20s. in the pound, unless the creditors, or a certain proportion of them, agreed to release the debtor from further obligations- To them only was it fair to give the powers of release. He had made these observations in the hope that his hon. and learned Friend the Attorney General would consider them before the Bill came into Committee.


said, it appeared to him that there were two points in the Bill which seemed to re- quire consideration. The Bill provided that the estates of bankrupts should be made over to trustees. But some provision was requisite for the case of a fraudulent trustee. Under this Bill, a trustee might receive a large sum of money; he might leave the country and retain the money; and there was no power of treating him as a fraudulent person and a criminal. The Bill merely provided that the trustee was not to retain in his possession any larger sum than £50 for more than fourteen days, under a penalty of paying 20 per cent interest upon it; but if the trustee chose to disregard this provision, there was no further power afforded of dealing with him. Again, he thought full power should be given to every creditor, either by himself or his legal agent, to examine the bankrupt in a public court, not only as to the disposal and the concealment of any part of his property, but also as to any transactions in his trading which might have led to his bankruptcy. The Bill, he believed, was taken from the Scotch Law of Bankruptcy, and the principle of that law was favourable to the examination of bankrupts. It was often most important, in connection with certain kinds of trading, that the whole system should be unfolded before the public, in order not only that the bankrupt himself and those; who might have been connected with him might be exposed, but that a check might be placed upon a particular mode of trading. Sometimes strange causes for their insolvency were assigned by bankrupts, as, for example, insufficiency of income. That ought never for a moment to be allowed to appear in a schedule as the cause of a man's running into debt and avoiding the payment of hi? creditors. In conclusion, he begged to congratulate the Attorney General on having so far produced a Bill which, upon the whole, met with the approval of the trading interest of the country.


said, the reason why hon. Gentlemen connected with the various Chambers of Commerce in the country had not expressed their opinions upon this measure was that several of them had seen the Attorney General in reference to many matters of detail connected with the Bill, whom they had found ready to listen to any suggestions which they had to make; and it was thought by those on whose behalf he (Mr. Morley) spoke that it would be convenient to defer any discussion in regard to the measure until the House came to deal with it in Committee. He could not, however, refrain from expressing his conviction that the Bill was an excellent Bill, the chief and leading feature of which was its simplicity. The Preamble of the measure might run somewhat in this way—If the creditor class of England desire to secure for themselves promptitude and economy in the realization and distribution of assets, they must mind their own business—in other words, the time for the employment of officials had gone by. He was thankful that the hon. and learned Gentleman had decided upon sweeping away the officials in Basinghall Street, and saying to the trading class for the future—"You must meet and conduct your own business for yourselves; we have tried to help you by messengers, by brokers, by official assignees, by all conceivable agencies, which have involved an enormous outlay of money; henceforth if your business is to be conducted expensively it will be your own fault." There were many questions which would need to he considered, and which those whom he represented would be prepared before the Bill got into Committee to submit to the Attorney General for his consideration. He was thankful that they were to have a Chief Judge. The Judge to lie appointed would, he hoped, have a real sympathy with the trade of England. He used the term advisedly. The trading classes wanted no favour, but they desired that in the arrangements of the court every proper facility should be given them in dealing with bankrupts. They contended that if protection against vindictive treatment on the part of his creditors were extended to the insolvent debtor, then every facility should be given to the creditors to secure possession of property which they alleged belonged to them, and not to anyone else. He understood that to be the principle of the Bill, and he was satisfied, therefore, that it would meet the just and anxious expectations of the trading community. He thought, however, that the present measure was dejective in two points—namely, in excluding certain acts of bankruptcy which existed at present, and as to its penal clauses. There were many acts committed by traders which would require to be dealt with more distinctly than the Bill proposed to deal with them. He saw an increasing need of a public prosecutor. They had no guarantee at present for the prosecution of a fraudulent trader. Action in that matter was made to depend upon the will of the creditors; and he (Mr. Morley) was enabled to state, from many years' experience of these matters, that when a body of creditors met to consider a bankrupt's estate, they were unwilling very frequently to add to the heavy loss which might already have been incurred, the enormous expense which would be entailed by the prosecution of a fraudulent trader. He had known, however, cases in which a small number of the creditors, unassisted by the general body, had undertaken to bear the expense of such a prosecution rather than allow the trader to go free. If some agency could be devised, irrespective of the creditors, for prosecuting fraudulent traders, it would be an immense improvement. He also wished to impress upon the Attorney General the necessity of some better mode of dealing with deceased insolvents' estates. In that matter creditors were frequently plundered, and some provision ought to made to meet such cases. They might be told that they had a remedy by applying to the Court of Chancery, but they had generally found that where it had been necessary to go to that court the shells had been thrown to them, and the oyster itself had disappeared. The present measure was certainly defective in some of its details, and it would require careful looking at when in Committee; but taking it as a whole, he thanked the Government for introducing it, and he believed that the trading classes would hail it with great satisfaction.


said, he would put it to his hon. and learned Friend the Attorney General whether it was worth while to do away with the facilities by which a debtor became bankrupt on his own petition, when it was left open, by a slight collusion with one of his creditors, for the creditor to file a petition on which the debtor might be made a bankrupt? It seemed to him that it would be almost better to allow a person in insolvent circumstances himself to petition to be made a bankrupt, in order that he might free himself, as far as he could do under the Bill, from the debts which were pressing upon him.


said, that the suggestions which had been thrown out by legal Members were most valuable, but the fact that the measure had been received with general approbation by influential Gentlemen connected with commercial interests was even more important than any approval it might meet with at the hands of the legal element in the House. One of the greatest misfortunes hitherto attendant upon our system of administration in bankruptcy was that it had been too much overridden by legal officialism; and he regarded it as one of the great merits of the Bill before the House that it altogether abolished the system which had proved so entirely abortive. There were various details in the Bill which would require amendment in Committee, but its main principles, he was glad to find, had been sanctioned by the commercial element in the House. That there should be a Chief Judge he regarded as a most wholesome provision, and he hoped it was one which his hon. and learned Friend would not abandon without mature consideration. He believed it was one source of failure in the Bill of 1861 and other measures that there had not been a recognized chief Judge, who should be looked upon as the head of the bankruptcy administration of the country; and the reason was because it involved more than the hon. and learned Serjeant (Serjeant Simon) had taken into account; for such a functionary, besides hearing appeals, would have, under the sanction of the Lord Chancellor, to frame a code of practice, and lay down such rules and regulations as would be required in order to inaugurate a new system. This measure was the commencement of an entirely new era in bankruptcy administration. By vesting in the creditors themselves the administration of the bankrupt's estate, it would prove a great advantage to the commercial interests of this country.


said, he had listened with great attention to the speech of the Attorney General, when introducing the Bill, and was sorry to say that he (Mr. Peek) differed from the hon. Members for Bristol (Mr. Morley) and the City (Mr. Alderman W. Lawrence), and could not receive the measure with the same satisfaction that they had. He had taken care to place the Bill in the hands of some of the best accountants in London, and had gone very attentively through its provisions himself, and the conclusion he had come to was that if it were intended that we should start fresh with a comprehensive bankruptcy law, it would be much better if the present Bill were withdrawn and another introduced in its place, even at the cost of going on as we were for another year. How much so ever the Bill had been praised almost every Member who had spoken had found some fault with it, and even the hon. and learned Attorney General himself pro- posed to introduce two important Amendments. If that were so would it not, on every ground, be well to withdraw it and bring in another? Hardly any subject could engross the attention of the House to better purpose than the Law of Bankruptcy, because, in his opinion, it had done more to lower English character than almost any series of measures that had been passed in this country for a long time. He was one of these who thought that when a man could not pay 20s. in the pound the onus of proving himself an honest man should rest upon him. The hon. and learned Gentleman had stated on a former evening that the delay which had arisen in placing the Bill in the hands of Members had been owing to instructions which had been given to the draftsmen to make it as short as possible. But if this Bill were to be a codification of the law, as he under- stood was intended, brevity might, perhaps, be obtained at the cost of efficiency. What the Bill contained was, on the whole, good, but the omissions were striking. There was no clause in it enabling an estate to be taken out of bankruptcy, nor any under which composition could be arranged if the estate was in bankruptcy; and, what was very singular, there was no clause repealing the Acts now in force.


said, that a separate Bill would be introduced as part of the scheme.


said, he thought the remark of the Attorney General had given great force to his (Mr. Peek's) words. If he had already put two important Amendments on the Paper, and would have to introduce a supplementary measure, would it not be bettor to withdraw the Bill at once, and if we were to have a codification of the law let a good strong Bill be introduced. A short Bill had been brought in by the hon. Member for Southampton (Mr. Moffatt) last year which had given great satisfaction to the commercial classes; but the principle of that measure had been, he would not say ignored, but omitted in the present Bill. He hoped the Attorney General would take that Bill into consideration. It was his earnest wish to see a Bill on Bakruptcy that should be a credit to the country, which previous measures on the subject certainly had not been.


said, there was one point, not without importance, to which he wished to draw attention, and that was the mode of appointing a Chief Judge, which he found laid down in the 57th and 58th sections. It was there proposed that one of the Judges of the Common Law Courts should be selected for the office, and that if thus a want was created in the court from which he was taken, a new Judge of that court should be appointed. If the House had been informed positively that a Judge could be spared from one of the Common Law Courts, there might be an economy in doing what was proposed, but the step had not that recommendation, and the only effect of it would be to exclude any gentleman at the Chancery Bar from the appointment. Now he saw nothing in the character of the Chancery Bar which would justify such an exclusion, and the only precedent for it was to be found in the Election Petitions Act of last Session. In that case, however, there were reasons that did not in the least apply in the present instance. There it was considered advisable, he presumed, to encourage the idea that bribery was a crime, by appointing to hear election petitions, functionaries, part of whose previous duties it had been to preside at criminal trials. Besides, it was thought desirable to endeavour to avoid the suspicion of political bias in a matter so closely connected with politics, and therefore each of the principal courts of Common Law was required to select one of its own members to try election petitions. It was also truly stated that those Judges were in the habit of hearing and weighing vivâ voce evidence, and that such evidence would form the principal material for the decisions on election petitions. But in the present case, not only did none of these reasons apply, but it was also true that bankruptcy business was more analogous to the business of a Court of Equity than to that of the Courts of Common Law. Nor could it be doubted that at the Chancery Bar were to be found gentlemen as intelligent and honourable as in the other branches of the great profession of the law. On these grounds he thought it very objectionable to limit the discretion of the Advisers of the Crown in the way that was now proposed.


said, he hoped that the Attorney General would be firm and push the Bill through. We did want a change in the Law of Bankruptcy, for at present it was so monstrously bad that a measure must be a very poor one indeed which would not make it better. The present Bill was considered a great improvement on former Bills. This was the fourth Bill he had seen introduced, and he hoped it would not be talked out, and end in nothing. It was said that hard cases made bad law, and though there might arise an occasional hard case under the present Bill that was no reason for throwing doubts on the measure; it might prove the contrary. He found almost every one out-of-doors say that the Bill would be a great improvement, and therefore he hoped the hon. and learned Gentleman would not withdraw it.


said, he wished to offer his cordial thanks to the hon. and learned Gentleman the Attorney General for his introduction of that excellent Bill. He hoped that it would soon become law. He thought if a bankrupt paid 10s. in the pound he ought to be let go free. If a bankrupt were to remain liable for a certain number of years in the event of his debts not being paid in full, such a liability would exercise a prejudicial effect on the trade of the country. The bankrupt would not then be put in a fair position, because it would be hardly possible for him to obtain credit for the purpose of carrying on any kind of business, and he (Mr. F. C. Smith) therefore hoped the provisions of the Bill which related to that subject would remain unaltered.


AS one of the Scotch Members I might have left this discussion entirely to the English Members, but inasmuch as the firm with which I was connected often suffered from the bad state of the English Bankruptcy Law, I shall be much pleased to see the change which the present Bill proposes. In my opinion that law is so bad that almost any change must be an improvement. The hon. and learned Gentleman the Attorney General has told us that his Bill is for the most part founded on the Scotch Law, and I think I may congratulate him upon the fact that he has adopted from the Scotch system a great deal which is good, and he has even introduced some improvements. I think that particularly the proposal by which parties are to be induced to make known the state of their affairs before they have run their estates down to the dregs is a very great improvement. I will only add one further observation, and it is in confirmation of a remark of the hon. Member for Bristol (Mr. Morley) as to the want of a public prosecutor in cases of fraud. Of course, it is desirable that fraudulent bankrupts should be punished, and you never can secure this object without first taking the step suggested, and appointing a public prosecutor. You never will get creditors to go to the expense and trouble of a prosecution unless you have some such officer appointed. Indeed I may go further, and say that it is somewhat surprising to a Scotchman that you in England should have so long submitted to the annoyance, the trouble, and the expense of having to be prosecutors whenever any man does you an injury of a criminal character. In Scotland we have long recognized the principle that when a man perpetrates a criminal act he does an injury not only to the person who is the principal sufferer, but to the public at large, and consequently we have a public prosecutor to see that punishment is awarded to the offender. The Lord Advocate is at the head of this procedure, and in every district there is a Procurator- Fiscal under him. I think that in any- thing you may adopt from the Scotch system you could not do better than adopt this also.


said, he had to express his satisfaction at the manner in which the Bill had been received. With one exception, every hon. Member who had spoken approved of the general principles of the Bill. Differences of opinion on particular points would, of course, arise in the consideration of such a vast number of provisions in so complicated a measure as a Bankruptcy Bill, but he assured the hon. Member for Bristol (Mr. Morley), and those in whose behalf he spoke, that he would carefully consider any suggestions that might be made to him and adopt them as far as possible. Most of the topics which had been raised could more conveniently be discussed in Committee: he therefore proposed to deal with them lightly at present. The hon. and learned Member for Dover (Mr. Jessel), in his able speech upon the general Law of Bankruptcy, appeared to find but little fault with the leading features of the measure, but suggested that more powers should be given to creditors by arrangement clauses, and that they should be empowered to put an end to a bankruptcy if they thought fit. The Bill, he believed, already gave this power, but, if it did not, the addition of a few words would readily supply the omission. The hon. and learned Member also expressed an opinion on the subject of after-acquired property and the extent to which it should be liable. Upon this point he assured the hon. and learned Member that the Bill went further in the direction of severity than any that had ever before been proposed. Hitherto a bankrupt had been allowed to obtain his discharge, as regarded his future property, without paying any dividend at all; indeed, in the majority of cases during last year and for some years previously, no dividend whatever had been paid, yet the bankrupts in these cases had obtained their discharge and their future-acquired property had been in no respect liable. The Committee of 1865 recommended that a bankrupt should be re- leased on payment of a dividend of 6s. 8d.; in this measure the minimum was fixed at 10s. 6d. If it were resolved to make a bankrupt's future property liable to the extent of 20s., as some hon. Member had proposed, before a release were granted, the law of bankruptcy might as well be abolished altogether. It was desirable that the bankrupt should have some inducement for stepping early, before the estate was completely dissipated by unsuccessful efforts to regain solvency; it was desirable to make it his interest to stop when he could pay a dividend and not to go on until nothing was left; and it was desirable also to give him a fair chance after being declared bankrupt. He would have five years to relieve himself, and if he paid 10s. 6d. in the pound he would be released from his debts for ever; while if he did not pay that dividend his after-acquired property would be liable, but at the discretion of the Court. These requirements the Bill met, and he claimed the co-operation of his hon. and learned Friend (Mr. Jessel) in Committee. With regard to the question of reputed ownership the foundation of the rule was sound, though no doubt it worked harshly in some cases, and it was certainly carried too far when extended to what was called choses in action—invisible property on which the bankrupt could not have obtained, credit. But evidently the creditors had some claim upon property intrusted to a person who became bankrupt after having obtained credit on the strength of Ids reputed ownership of that property. The rule, therefore, was not dealt with in the Bill, but some modification of the clause on the subject might be made; and he would not follow his hon. and learned Friend in his remarks upon the subject further. The hon. Member for East Sussex (Mr. Gregory) had objected to some of the provisions of the Bill with respect to the service of notices and some other matters; but it was proposed to intrust' the Judge and the Lord Chancellor with a power of making rules and regulations for the guidance of the court in London, and of the different courts throughout the country. It was better to leave such matters of regulation to the discretion of a Judge in whom confidence could be placed, than to attempt to prescribe every rule of practice in an Act of Parliament. He relied on that provision in a great mea- sure for the working of the Bill. That arrangement enabled them to make the measure much shorter than it otherwise would have been, and thus it was that, while the Bill of last year contained no less than 530 clauses, the present Bill contained only 130. The worthy Alderman, the Member for the City of London (Mr. Alderman W. Lawrence) seemed to fear there would not be power to reach fraudulent, absconding, and embezzling trustees; but such cases were met by the Fraudulent Trustees Act. He believed it would be found there was ample provision for the examination of bankrupts; and his answer to the suggestion that penal clauses should be introduced was that they would be found in the Imprisonment for Debt Bill—which he should presently ask the House to read a second time—where it was thought by the draftsman and himself better to place them. There had been no omission, either in this respect or as regarded the repeal of existing Acts, for it was thought better to have a separate Repeal Bill and to bring it in when the Bill had passed through Committee and it had been seen what statutes had been repealed. Only one more question required any remark—namely, the appointment of a Chief Judge. To that appointment he attached a good deal of importance. It was proposed by Lord Westbury, in his Bill of 1861, and it was approved by this House; but the House of Lords rejected the proposal, and to that the author of the Bill attributed almost entirely the failure of his measure, for the provision was material to the working of that Act. Lord Westbury likened the Judge in that case to the mainspring of a watch; and although he (the Attorney General) was not prepared to go quite that length, he regarded the appointment of a Chief Judge—a Judge of the highest authority—as a most important portion of the scheme. He looked upon it as the keystone of the arch, for they must rely upon a Chief Judge to frame rules of practice for London and provincial courts, and to introduce uniformity of procedure and of practice. Without disrespect to the Commissioners of Bankruptcy, it must be said there had been an utter absence of control over the officials of the courts, which had not existed in the superior courts; and it was hoped that by the appointment of a Chief Judge it would be possible to keep better order among officials and to exercise more control over them; there would be fewer officials in future, for it was proposed to make a clean sweep of several. It was necessary to have a Chief Judge also for the purpose of trying important cases and hearing appeals; and he could not help thinking it was a proper provision that the appeals should go to that superior Court of Common Law, from which the Chief Judge was taken. With regard to the remarks of the hon. and learned Member for Reading (Sir Francis Goldsmid) as to not giving the Chancery Bar a chance, it might be said that no chance was given to the Common Law Bar either. The appointment of an existing Judge who had proved his capacity would probably carry with it more weight than the appointment of any gentleman who could be selected from either the Chancery Bar or the Common Law Bar. The main objects sought by the Bill were to simplify the law, to abolish a vast amount of officialism which had encumbered the operation of our bankruptcy system, and to cheapen the administration of bankrupt estates which, in many cases, had cost 75 per cent in this country, while in Scotland the average cost was not more than 12 or 13 per cent. These figures pointed strongly to the expediency of adopting as far as possible the Scotch system; and they had the testimony of a Scotch Member (Mr. Anderson) that the Bill not only embraced the main elements of that system, but was, in some respects, an improvement upon them. They had endeavoured to go upon the principle of separating the judicial from the administrative functions, leaving the administration entirely to the creditors, and giving the judicial functions entirely to the Court. He was glad to hear the general judgment which had been pronounced upon the Bill by his hon. and learned Friends, and by those Gentlemen who were entitled to speak in behalf of the mercantile community, and he should be happy to receive any further suggestions for the purpose of making it more acceptable to the public. Bill read a second time, and committed for Monday 19th of April.