HL Deb 26 June 1843 vol 70 cc341-67
Lord Cottenham

rose, he said, in pursuance of notice, to call their Lordships' attention to the effects of the change made in the law relating to bankruptcy by the act of last session, tie believed he should be able to satisfy their Lordships that the alteration then introduced was not only unnecessary, but that it had been in its operation very prejudicial. The remedy was easy; it would have been more easy, undoubtedly, to have provided a proper remedy before the act of last session was passed; but whether easy or not, if he succeeded in demonstrating the great evils which that system had produced, it was his hope that their Lordships would feel themselves obliged at any cost to apply a remedy. It was not his intention to blame those who took part in passing this bill; his sole object was to remedy what he believed to be a great public mischief, and if his noble and learned Friend on the Woolsack, when this discussion was closed, were satisfied that the mischief was in fact attributable to the act of last session, he hoped to have his assistance in framing a measure for its removal. The first point to which he should wish to direct their Lordships' attention, was, the particular locality of the several courts established throughout the country for the administration of the law. He should not ask their Lordships to follow him through any legal argument; but he would state a few facts to show the nature of bankruptcy transactions, and to lead to the conclusion that courts situated at a great distance from the residence of the parties whose affairs were to be administered, could not possibly do justice to them. The object of the laws of bankruptcy was, when a trader became insolvent, to secure the property for the benefit of those who had claims on it; next, to administer it faithfully; and lastly, to discharge the trader, after he had given up his assets, and they had been divided among those who had claims on them, from further liabilities. These laws had originated in an act of Henry 8th, but had not been extended into anything like a system till the reign of Elizabeth. It was obvious, that, as the object of the law was to take away the property of the insolvent, it became necessary to have a test of insolvency; therefore the act of Parliament adopted certain criterions whereby to test insolvency, as, for instance, when a man shut up shop, and denied himself to his creditors, or when he absconded from his creditors, this was deemed to be fair ground for a commission of bankruptcy. This law was applicable only to persons carrying on trade. A man applying to have the bankruptcy law carried into effect, had to prove himself a creditor, as well as that his debtor was a trader, who had committed an act of bankruptcy, otherwise the law would not impose its liabilities on him. When a person applied for a commission he had to go before the commissioners and establish these three propositions. The commissioners then allowed further proceedings, and a commission was issued to ascertain who were the creditors, and divide the estate among them. The next step was for an officer of the court to take possession of the estate, as far as it could be laid hold of. He mentioned these steps with the View of showing that every step taken under a commission of bankruptcy required the administration to be on the spot, or as near it as possible. If the court were 100 miles off, it was obvious that Very great expence must be incurred. When the estate was to be seized by means of a messenger, if the court were in the neighbourhood, it was no expense for the messenger to go and possess himself of it; but if it were situated at any great distance, it was quite obvious that great expence must be incurred by the employment of a messenger for that purpose. The next step was the choice of assignees, who had the duty cast upon them of collecting the estate, and dividing it among the creditors. The assignees were elected by the creditors, and all these things must be attended with great expence if the place of the bankruptcy was situated at a great distance from the court. If it was in the neighbourhood, it would be easy to manage this business; but if the persons had to travel to a distance, they would either not go at all, or go at great expence and inconvenience. Another step was the proof of the debts, which must be done by the creditors going before the commissi- oners in person, or making affidavit. That could not be done without great expense if the court was situated at a distance from the residence of the bankrupt. Again, the realizing of the estate would be difficult and expensive if the officers must act at a distance from the authority under which they were commissioned. Then came another proceeding—the division of the estate among, the creditors. He had not the means of stating the exact average dividend in country bankruptcies, but he could give an approximation to the correct sum, and he believed he would be considerably overstating the amount at 5s. in the pound. It had been stated so low as 2s. 6d. In country bankruptcies, the greater proportion of the creditors were for small debts, and when the sum was divided by four, the interest of the creditor was very much reduced, and he had but a small amount to receive. How then was he to receive it, if the court were far off? Was he to go perhaps 100 miles to the place where it was to be distributed, to receive, perhaps, 2l. 5s., or was he to send some one in his place? Coming, lastly, to the grant of the certificate, which was formerly at the option of the creditors, but was now the business of the commissioner, whose duty it was to hear any objections that might be made by creditors, if the creditor attended at all for that purpose, it must be at the inconvenience of a long journey. It was quite obvious, that, having got all he could expect from the estate, he would not be induced to undertake that journey from a sense of justice alone, to prevent an unworthy person from obtaining a benefit. He apprehended no further statement was required to satisfy their Lordships that these several duties could not be properly performed except by a jurisdiction near the residence of the bankrupt, From the time of Queen Elizabeth to the close of last session of Parliament this system was adopted. There were no regular courts of Bankruptcy except in London, but each case had a court established for the particular purpose of trying it; and there were courts of commissioners in all the considerable towns of the country, to whom, on a bankruptcy happening in the neighbourhood, authority was deputed by the Great Seal to do what was necessary to be done for the execution of the bankruptcy laws in that particular case. There were in all about 140 lists of barristers and solicitors, whose courts were held on such occasions as near as possible to the place where the bankrupt lived. The Northampton petition stated that during the year preceding the commissioners had met in no less than 300 courts or places for the purpose of administering the bankruptcy laws. This system was not unobjectionable. It was not always possible to obtain competent persons in so great a number, each of the lists containing five, to exercise those duties, and it might also occur that they might have some connection with those whose affairs they administered. This inconvenience had been long felt, and he had on several occasions unsuccessfully endeavoured to induce their Lordships to apply a remedy. That which suggested itself to him was, to divide the country into districts, to place two persons in each, one of whom should reside at the principal place, and the other go a circuit within the district, holding sittings in the most considerable places, for the purpose of administering that part of the business which could not be conveniently transacted at a distant point. This was recommended by the commission which made a report in 1841, and which suggested several alterations in the law, independently of the mode in which it was to be carried into effect. All those alterations required the administration of the law to take place in the immediate neighbourhood of the scene of the bankruptcy. One alteration provided that if the bankrupt was likely to run away he might be arrested, and it provided Very properly, that, being arrested, he should have immediate means of applying to the court for his discharge, if the grounds for his arrest could not be shown to be good. There was another important alteration recommended by the commission. A great hardship often arose from the possibility of a man's being declared a bankrupt without his knowing anything about it. Many a man who was quite solvent had found himself, to his great surprise, advertised as a bankrupt. This system was originally adopted as a precaution against a bankrupt's making away with his property, as he might do if he had notice of the proceedings instituted against him. The alteration in question went to stipulate that if the bankrupt could satisfy the commissioners that there had been no good ground for those proceedings they should go for nothing. He had stated, that, formerly, the assignees to a bankruptcy were chosen by the creditors. Since then an alteration had been introduced, by which official assignees were appointed to look after the estate, and in London, he believed, this alteration had been productive of great benefit. The creditors in London had not the time to look after the estate of a bankrupt, and he believed, that in consequence of the change in the system a great mass of property had been saved. But it was obvious that the official assignee ought to be near the property which he was expected to look after. By the act of last session, the system of official assignees was extended to the country. But suppose the property to be realised lay fifty or a hundred miles away from the official assignee, great expence must in that case be incurred, and the estate would derive little benefit from it, the creditors losing the security which it was intended they should derive from the active interference of a well-informed person. So much of the report of 1841 as was adopted produced the act of last session. By an order in Council, the London district was greatly extended; in one direction 122 miles, so as to include Yarmouth: He would now state some of the towns that had been deprived of their own courts and been obliged to go to a considerable distance for all bankruptcy proceedings. Nottingham, with 80,000 inhabitants, had to go fifty miles; Boston, with 14,000 inhabitants, had to go one hundred miles; Louth, with 60,000 inhabitants, ninety miles; Yarmouth, with 25,000 inhabitants, one hundred and twenty-two miles; and Norwich, with a population of 72,000, one hundred and twenty-two miles. From the return of 1841 it appeared that of the fiats sued out, 1,714 executed in places not now enjoying the benefit of a local court. In 866 of those fiats, the distance the parties would have to go was 40 miles, and in 176 it was as much as 80 miles. The majority of the debts in those fiats was under 10l. A petition from Leicester stated the details of five fiats, in which of 213 debts, 117 were under 5l. and 75 under 10l, and no less than 178 creditors proved in person. In many of those cases the dividend would not pay the expenses of the creditors' journey, and the natural consequence would he, that the system would act as a great discouragement to the creditor troubling himself at all in the matter. Not only had the creditor to make a long journey and to be at great ex pence of money, time and trouble on his own account, but he would often be put to additional expense in taking his witnesses with him, and thus the mere show of opposition might be sufficient to induce an honest creditor to abandon his claim altogether. In the statement from Northampton, signed by the solicitors of the town, it was shown that the expense of opening a fiat had been so much increased by the removal of the court to a distance, that the costs often amounted to 20l. and even to 40l. In the statement of 149 London solicitors acting as the agents of 1,200 country solicitors, embodying there fore to a large extent the information of that branch of the profession best acquainted with the law of bankruptcy, the expenses of opening a fiat were stated to amount to from 30l. to 60l. owing to the great distance which parties had to travel themselves, and take their witnesses, and the result, of course, was a great waste of the estate at the Very commencement. All these expenses were naturally owing to the system established last year. It appeared that the rate of remuneration allowed was 6d. a mile, and 1l. 6s. 8d. a day besides. Suppose the estate to be taken possession of was 100 miles off, the messenger would have to be paid his travelling expenses there and back. Was he, then, to remain there? There was no difficulty in his doing so when the estate was in the same town as the court; but if the messenger was sent to one place 100 miles off, and to another in an opposite direction fifty miles off, he could not of course remain to take charge of both. The consequence was, he mast employ an agent, and this they would find, by referring to page 182, he was expressly authorised to do; and it was moreover directed, that after an agent had been appointed, the messenger himself was not to go again without an especial order. The official assignee never went at all. What chance was there, under such circumstances, that the estate would ever be properly realised? The books had, of course, been carried away, and put into the hands of the official assignee. The parties were probably at Yarmouth, the books in London. The messenger was not to go down again without a special order. The agent was probably a common person, with little or no information. What under such circumstances was to become of the interests of the creditors? The next step was the choice of the assignees. He had already stated, that a large proportion of the creditors had not a sufficient interest to induce them to undertake the trouble and expense. If they resided in the same town in which the court was placed, and if they exercised the right of electing the assignees, no doubt they would look after their own interests, even when the amount was inconsiderable, because they might do so without any material sacrifice of time and trouble. Another point to which it was necessary he should refer was this. It was Very desirable that throughout the proceedings the bankrupt should himself be present to explain every point that might appear to be obscure. The official assignee had the books, it was true, but in many cases the books proved nothing. A question might arise whether a debt that appeared on the hooks should be sued for or not. Without some explanation from the bankrupt, it might often be impossible to know whether it would be expedient to incur the expense of doing so. Then, if a creditor came to prove a debt, who was to know whether he ought to be allowed to prove? The bankrupt might know, but how could the official assignee? At almost every moment, matters arose on which those who had to administer the estate, must have information from the bankrupt. The next, and the most important of all the points to which he should direct their Lordships' attention, was the effect of this bill on the small creditors. He had already stated, that a large proportion of the creditors were for sums under 10l. and 20l. The petitions which had been presented to the House showed that the creditors for these sums lost all the benefit of the new enactment. The expense and trouble necessarily incidental to proving a claim of this description were such, that they preferred abandoning their rights to attending upon these Courts of Bankruptcy. It was so stated in the petitions; and all his experience tended to confirm those allegations. What was the effect of this? To take their property out of the hands of the small creditors, and to put it into the hands of the rich creditors. The latter, of course, thought it worth while to prove their debts, and they were willing to incur expense, for they were sure to derive a benefit from it. But they have another advantage. Of course, the sums belonging to poorer creditors, when not claimed, go to swell the fund, to be divided amongst the rich. So that the effect was to take their property from those least able to bear the loss, and to hand it over to those who had the strongest interest in the commission, and were best able to bear the expenses of its proceedings. He had stated, that these creditors of 10l. and 20l. were generally excluded. That this must be so, was proved from the mere calculation of the expenses necessarily incurred, either in taking a journey to the court of the commissioner, or in arming themselves with an affidavit to make that proof. The petitions stated, that the expense of employing an attorney and drawing up an affidavit was from 30s. to 3l., and this expense was to be incurred for the chance of getting at some future period, perhaps, a dividend of 50s. This calculation showed, that it was no rash statement to say, that such creditors were actually excluded from all the benefit of this measure. What he had stated hitherto was the obvious result of the arrangements which had been made under this system, or was derived from the petitions of solicitors, or from returns on the Table of the House. He was furnished, however, with particular instances which fell in with what he said, and confirmed what he had attempted to establish. If their Lordships appointed a committee, these parties were ready to verify the statements they supplied to him; if they were not, of course those statements would fall to the ground. He should avoid stating the names of the parties, but the first occurred at Bodmin, forty-four miles from Exeter, where a chief commissioner was appointed. The bankrupt stated, that fifteen months before the commission, his property was worth 8,779l" while 700l. was all that was realized under the bankruptcy. It appeared, that but two creditors under 10l. proved, and the greater number abandoned their claims. There was another case at Leicester, 112 miles from a chief court. The balance sheet of the bankrupt showed he had eighteen creditors, but not one of them proved. The petitioning creditor consequently got the whole of the estate. This only proved, that the people of Leicester had a fund of good sense, which prevented them from pursuing a phantom they were never likely to catch; namely, a bankrupt estate administered 112 miles from the residence of the bankrupt. There was another case supplied him from a place in Shropshire, which was seventy-four miles from a principal court, where only four creditors proved, and these were for sums above 100l.; all the others abandoning their claims. It was unnecessary to trouble their Lordships with more of these cases; he had stated enough to show that the present system tended to the great waste of the es- tate, and the great hardship of small creditors. But let its general effect be also considered. When an estate was administered 100 miles from a place where a man lived, he was pretty sure not to be much troubled with creditors who could prove. Where the commission was taken out for a fraudulent purpose, and to secure the trader against future liability, it was no bar to the creditor that he lived at a distance from the chief court of the commissioners; but it was a denial of justice to the bonâ fide creditor. Not only did this power of attracting all the cases to the chief court in each district operate favourably to the person who was anxious to commit fraud, but it had a powerful effect in tempting to the commission of fraud. The man disposed not to act fairly, might do so with impunity under the new system. Formerly, the creditors had it always in their power, when they suspected fraud, to have the commission issued to the place of residence of the bankrupt. That security was now gone for the creditor; but it remained in full force where it was the object of the fraudulent bankrupt to get the debts proved at a great distance from the places where the creditors resided. This was the case on which he did not ask their Lordships to come to a final resolution; but had he not stated enough to show that the alteration of the law was necessarily productive of great injury, and was proved to have been so by the experience of the solicitors who had petitioned, and by the returns on the Table. He asked their Lordships to appoint a committee, by which the facts he had stated might be investigated. He could not suppose, that the circumstance of the bill being brought in by his noble and learned Friend would induce him to adhere to it at all events, and even after it was proved by the evidence he had brought forward, that it did not answer its purpose. He hoped, their Lord. ships would not allow the Session to close, and leave in operation a system which was a denial of justice to all creditors of insolvents for a small sum. The noble and learned Lord concluded by moving for a select committee to inquire into the operation and effect of the Bankruptcy Act of last Session.

The Lord Chancellor

rose with great reluctance to oppose the motion of his noble and learned Friend, and to occupy for a time the attention of their Lordships on a subject which, however important in its results, was most uninteresting, from the mass of the details with which it was necessarily burthened. But it would be his duty to refer to those details, because upon them the measure which his noble and learned Friend condemned was found. and, and because by them that measure was to be justified. He considered the motion of his noble and learned Friend extraordinary and unprecedented. The bill to which it referred had only come into operation in November last. It comprehended ' a variety of details which could not be satisfactorily settled, save by the result of a long experience. It included the cooperation of a great number of persons by whose skill and energy it was to be carried into execution—and so to take it out of the hands of the Government before time was given them to modify its provisions, to cure its defects, to institute inquiry as to its practical working, seemed to him a course imprudent and unjustifiable. It was the more imprudent and unjustifiable from this circumstance—that all the objections which had been raised by his noble and learned Friend, or by the petitioners, whose case he had advocated, arose from the formation of the districts, and from the location of the particular persons who were to carry out the system. He was aware, and their Lordships must be aware also, that the formation of the different districts, and the appointment of the various officers to the different places, could only be properly and finally settled by the result of a long experience; and indeed, so well aware had their Lordships been of this, that, in the bill itself, they had not attempted to point out what the districts should be, or how the different officers should be allotted to the respective places. They saw that it would have been most imprudent to pursue such a course, for if they had, it would have been impossible to alter, at a subsequent period, the original division, without again coming to Parliament. They, therefore, referred to her Majesty in council, the original appointment of the places, and they gave to her Majesty in council the power of subsequently altering the districts, if it should be thought prudent so to do. Under these circumstances, the motion of his noble and learned Friend was, to say the least, premature. His noble and learned Friend, before he had made such a motion, ought to have allowed sufficient, even ample time for the full development of the system in all its parts. What was that system?, What was the principle of the bill to which their Lordships had consented last Session? A district of forty miles around London had for many years been included within the jurisdiction of the Court in London. In pursuance of recommendations from most influential and well-informed parties—merchants, bankers, commercial men of the first eminence—that jurisdiction had been extended. The forty miles around the London Court had been expanded to one hundred, and so well had this increased plan operated, that it was thought not unreasonable still further to carry out the principle. The same system had been adopted. The greatest commercial town of a large district had been chosen, a Court had been there established, and the jurisdiction of that Court had been extended to the country and the towns around it. That was the principle of the bill. He was not so ignorant of the world, or so little acquainted with the tendency of human motives, as not to foresee that such a bill would be opposed—opposed not only on its original proposal, but during, at any rate, the early period of its operation. By the bill 700 commissioners had been displaced—a body of men largely benefited under the old system, and who were possessed of very considerable local influence. Who could wonder that even from this source alone great opposition should have arisen? But there was another cause calculated to excite hostility to the measure. The bill of last year very seriously diminished the profits of solicitors in working the fiats. Many of these solicitors had been themselves commissioners, and if their Lordships knew how they could combine together for any purpose—the solicitors of the country co-operating with those of London—they would agree with him in thinking that nowhere was to be found so formidable a body to conspire against the success of any measure. There was another class, too, whose interests were very materially affected by the bill. In all great commercial towns there was a body of men possessing considerable local influence—who were styled accountants. The present plan vested all their work in the official assignees—and so they lost all the profits they had before enjoyed. Under the old system the assets were generally placed in the provincial banks, and much of the property of the bankrupt had been lost. By the new system this had been put an end to, and the assets were placed in the Bank of England. He knew that the co-operation of interests against the bill was powerful, but he most firmly believed, that when the system was once established it would be productive of general benefit, and meet with general support. They knew already what had been the result in London. He could not but think that the same result would follow in the country. The opposition against the system originated from the same quarters, and in the same motives. The petitions on the Table were cast in the same mould —they took the same shape, and were expressive of the same feelings. They all aimed at the establishment of the old system—not in terms, certainly—but in effect they did so; for they joined in sounding its praises, and they said of it, that it brought justice home to the door of every man in the country. And his noble and learned Friend had in some degree pursued the same course. His noble and learned Friend expressed his doubts as to the benefit of the change, and found much to admire in the provisions of the former statutes. This rendered it necessary to call the attention of their Lordships to the old system, and to show them, as he could most clearly, how requisite was the change. The House would remember, that his noble and learned Friend had read, in the presence of Lord Eldon, an opinion which he had expressed on the subject of the commissioners. He would now read to them an extract from it, to show what was the view of that learned and distinguished man in the matter. The speech to which he referred was to be found in the sixth volume of Vesey's Reports of the Decisions in the House of Lords. [Lord Brougham: "It was the first speech he made after taking the great seal. I think in 1816.'] After hearing the speech read by his noble and learned Friend, Lord Eldon said, that he had altogether forgotten it, but that he fully concurred in every word it contained. So Lord Eldon had confirmed his original opinion, at comparatively a late period. 'What was that opinion. It was as follows: — The Lord Chancellor took the first occasion of expressing strong indignation at the frauds committed under cover of the bankrupt laws, and his determination to repress such practices. Upon this subject his Lordship observed, that the abuse of the bankrupt law is a disgrace to the country; and it would be better at once to repeal all the statutes than to suffer them to be applied to such purposes. There is no mercy to the estate. Nothing is less thought of than the object of the commission. As they are frequently conducted in the country, they are little more than stock in trade for the commissioners, the assignees, and the solicitor. Instead of solicitors attending to their duty, as ministers of the court, for they are so, commissions of bankruptcy are treated as matter of traffic —A taking out the commission, B and C to be his commissioners. They are considered as stock in trade, and calculations are made how many commissions can be brought into the partnership. Unless the court holds a strong hand over bankruptcy, particularly as administered in the country, it is itself accessory to as great a nuisance as any known in the land; and known to pass under the forms of its law. That was the opinion of an individual who had had great experience under the old system, and, having heard it, he (Lord Lyndhurst) thought, that their Lordships would hold it impossible again to revive such a system. But it might be said, that subsequently to that period the law had undergone alteration. Yes, an alteration had taken place, and it was this:— the list of commissioners, established by Lord Loughborough, had been revised, but notwithstanding this alteration, with the new establishment of commissioners. the evils of the old system had continued. He did not say this without authority. He would refer their Lordships to the report of the committee which had been appointed on the subject, and he would read the opinions of some of the witnesses who had been examined by it:—Mr. Tilson, a solicitor of extensive practice in the city of London, in his evidence before the commission of inquiry, speaking of the old system in the country, said My observation would lead me to say that the dividends were very small, and the mode of proceeding very dilatory, very expensive, and very unsatisfactory to all parties.' Again he said, In a country fiat, where two of the commissioners were barristers, and one an attorney, by means of adjournments from one hour to another of the same day, and to the following morning, in five days the following fees were charged and paid, viz., to first quorum commissioner, 28l.; to second quorum commissioner, 28l.; to third commissioner, 12l

Mr. Alderman Thomas

Wood, of great experience and extensive practice in bankruptcy, in his evidence of the old system in the country, said, I do not think it can be much worse than it is.' He then illustrates his opinion by a case drawn by a solicitor under a country commission, for the opinion of counsel to advise the solicitor, the commissioners, and the assignees, how to act generally in working the fiat. He says, There is frequently a contrivance by the bankrupt's friends to get a commission executed in a particular place, where the gentlemen are not more acquainted with the Law of Bankruptcy than the gentlemen who drew those questions (referring to some questions which had been given to him), and there it frequently happens enormous plunder takes place. Particular persons get direction of the estate. Most of the creditors are probably carrying on business in London, but they are entirely at the mercy of the country commission. The dividend, he says, is generally very small. There is a decided defect of jurisdiction. [The noble Lord quoted similar testimony from the evidence of a Mr. Parker and a Mr. Maynard, and then continued.] So much as to the propriety of reestablishing the old system which was said to have taken justice to the door of every man in the kingdom. But this was not all. There had been a memorial from the merchants, bankers, and traders of the city of London, and of the other great commercial towns—and what did that memorial state? Upon this, the memorial of the merchants, &c., said— That an extension of the said Court to different counties within one hundred miles from London, would materially benefit your memorialists, and the public in general, and promote a more pure and speedy administration of justice. Your Memorialists, therefore, taking into consideration the increased facility of travelling, and the general benefits that would be conferred upon all classes in the metropolis, and particularly the commercial world, respectfully solicit your Lordships to order that all fiats be directed to the Court of Bankruptcy, where the bankrupt shall reside within one hundred miles of London, and that further and more extensive powers be granted to the Learned Commissioners, which will enable them the better to facilitate the business of the Court, and to promote the interests of those who are compelled to resort to it, and if to effect these objects it shall be necessary to apply to the legislature, such course may be adopted during the present session of Parliament. That was the language of the merchants and bankers of the city, on which the list of commissioners was issued, and on which the committee founded their report. But it might be said that these evils were all conjecture. Since the commencement of the new system he had had an opportunity of Verifying these statements. Under the new system the fiats of old bankruptcies were transferred to the new assignees, and he could detail to their Lordships some monstrous cases of injustice, if not of pos- itive fraud—of something very like a plunder of the bankrupt's property. In the Wentworth estate the expense of working the fiat was 21,000l., and out of that sum the amount paid to the commissioners was 1,200l. That case alone would show that these conjectures, if they ' were conjectures, were well founded. He could state many other cases. He remembered one in which the assets were 6.000l,, and the accountant's charge, his allowed charge, was 1,1001. The fees of the commissioners were exacted in the most unjust manner and on the most trivial pretences.. It had been no unusual thing for the commissioners to meet to adjourn, not as their Lordships did, when their work was done, but after an hour or two, to meet again in the afternoon, and then to charge for two meetings. Aye, and not only for two meetings but for the expenses of two travelling excursions, and this the commissioners frequently had done three or four times in the course of one day. He might here refer to the opinion of a learned Friend of his, who had gratuitously undertaken the duties of the Chief Judge of Review, and who had told him that "he had already seen quite enough of the old system to satisfy his mind of the necessity of the change." So much then for the old system, and for the anxiety which had been manifested to bring it back. But what was the new system? It had originated in the advice of the commissioners, and had been framed upon the best information which it had been possible to procure. He had already said, that the first step in the change had been the extension of the jurisdiction of the London commissioners. For 150 years that jurisdiction had been confined to forty miles from London. Of the system as far as it was then carried out, there had been no complaint, and could it be considered unreasonable that a system which thirty years ago was extended to forty miles from London, should be extended to 100 miles from London at the present day, when, through the improvement in travelling, there was a saving of half the time and of half the expense. But the bill had not originated with him, for the merchants of London had suggested it to the commissioners as a great improvement upon the then existing plan. The commissioners adopted what the memorialists had suggested, and a clause to extend the courts had been inserted in the bill. He asked, if the former system had been proved to work well, whether the reasoning of the merchant was not founded in good sense? He admitted that in the first formation of a system so complicated and difficult, it was necessary to act on the best information—and that subsequent experience might show that that information had been wrong, and might induce them to alter the original provisions. He admitted that Norwich was 110 miles from the city where the fiats were issued, and that only fifty miles could be travelled by railway; but he added to that admission, that in Norwich, though it was a commercial town of considerable size, there were only, on an average, six or seven bankruptcies in the course of a year. He would now tell their Lordships how he had endeavoured to put an end to the objections which had been brought against the measure; but, first, he would refer to the complaints which had been made by his noble and learned Friend. His noble and learned Friend had said, that it was hard to compel persons to make a journey of a great many miles to obtain justice on the bankruptcy of any of their debtors; but his noble and learned Friend had swept completely away all the commissioners in Ireland, and had placed one commissioner alone in Dublin. It was, perhaps, judicious and prudent, but whether so or not, it was most deliberately done—for his noble and learned Friend had found that the one commissioner in Dublin was not enough—and he still persevered in his system. The largest commercial town in Ireland was Cork, at a distance of 160 miles from Dublin. One might have fancied, that if two commissioners were to be appointed, one out of the two would have been established in Cork; but, oh, no! the two commissioners, by his learned Friend's bill, or by the bill which he had introduced—were both established and domiciled in Dublin, he did not mean to complain of this arrangement, but it certainly appeared to him inconsistent with the complaint which his noble and learned Friend had brought against the measure under consideration. He would now point out the course which they had adopted to carry into effect the intentions of the bill. The proposition in the bill was, that England and Wales should be divided into as many districts as her Majesty in Council should think fit. So they had divided the whole country into seven districts, and had taken a large manufacturing or commercial town as the centre of every district, and he would show how little ground there was for saying, that they had not been cautious in their division and allotment. He would first take Manchester—the London of that part of the country—and after hearing the figures he was now about to read, none of their Lordships could for a moment think that Manchester, and the other places to which he would refer, had not properly been selected:— According to the return the average annual number of fiats in the Manchester district during four years was 148; and according to the same return 113 of these, or more than three fourths of the whole number, were directed to the lists of commissioners at Manchester, and of the remaining thirty-five, eleven were directed to the lists of commissioners at Preston, only about thirty-two miles distant, with railroad, and twelve or thirteen to Bolton, about twelve miles distant, and six or seven to Macclesfield, about eighteen miles distant, one or two to Bakewell, about thirty-three miles, three to Burnley and Colne, between twenty and thirty miles distant, and only one fiat to a place exceeding thirty-three miles distant, namely Lancaster, which is about fifty miles, and railroad. According to the return, the average annual number of fiats during four years in the Leeds district was 130¾. Of these fifty-six fiats, or nearly one-half of the whole number, were directed to the lists of commissioners at Leeds, and of the remaining seventy-four, fifty-eight fiats were directed to lists of commissioners at four different places, namely, York, Halifax, Doncaster, and Sheffield, within and not exceeding thirty-five miles from Leeds, and railroad communication, leaving sixteen fiats, which were directed to lists of commissioners at eight different places, varying from between fifty to 100 miles distance from Leeds, with railroad communication wholly to some places, and in part to others. According to the return, the average annual number of fiats during four years in the Liverpool district was ninety, and seventy-two and three-quarters of these, or four-fifths of the whole number, were directed to the lists of commissioners at Liverpool, and of the remaining seventeen and a half, nine and a quarter were directed to four different places within forty miles of Liverpool, and the other eight to four different places within 100 miles:, He did not say that the selection, either of these or the other places which had been chosen as the centres of the different districts, was a final selection. They had the power of altering it, and if it were necessary they certainly would alter it; but their Lordships ought not to forget that the measure had only been in operation for six months, and he said plainly, that upon so short a trial they ought not to take the practical operation of the measure out of the hands of the Government. By next Session the system would be more mature; and if by that time his noble and learned Friend had not altered his opinion—an opinion, he must say, derived from interested and perverted sources—he then might properly and reasonably move for an inquiry. His noble and learned Friend had assumed, and to him it appeared a most extraordinary assumption, that the fiat should always issue from the place where the bankrupt resided. That was not the question to be considered. The question was—not where the bankrupt resided, but where the creditors resided. That had been the foundation of the whole of the arguments of his noble and learned Friend, and it was a basis the most unsound:— The Chamber of Commerce of Bristol said, the rule of directing a fiat to a list of commissioners near the residence of the bankrupt, without regard to the residence of a chief portion of the creditors, is a serious evil. That it is practically depriving the trading community of the means the bankrupt law affords for their protection against undue preference and fraud: because, in the majority of instances, the principal creditors would rather abandon their debts than incur the labour and additional expense of prosecuting the fiat at a small provincial town in the vicinity of the bankrupt's friends and connections, with such professional aid only as the place will afford, and deprived of the support and assistance of other creditors equally interested. A noble Friend of his had wished for a commissioner at Shrewsbury, but at Shrewsbury there were scarcely six bankruptcies in the course of a year. Another had wished for a commissioner at Derby. At Derby there were three bankruptcies in the year. Another had mentioned Newark, and had come to him with great pomp and parade, representing that town as one of very great commerce, in which the number of bankruptcies rendered a commissioner almost indispensable. The number of bankruptcies at Newark was one in a year. These were the absurdities founded on partial and interested views, which seriously were offered as objections to the bill. Almost all of these objections referred to distance, and he would now show to their Lordships how he had endeavoured to remedy the defects which related to distance. The Market Harborough Bank failed. There were a great number of small creditors, and he was de- rous of diminishing the expense of their proving their debts by affidavits, the usual cost of which was 10s. He had since received a letter from the deputy registrar, whom he had sent to take the proof of debts, and in it was stated, that the amount of debts proved was 105,000l., and that the number of witnesses examined was 887, and how much did their Lordships think was the total expense of taking the proof of the debt? 2l. 14s. 6d. That was the way in which they met any difficulties or defects which might arise in the Operation of the act. They sat and inquired into the complaints which were made. It was their duty to do so, and they ought not to be pressed down by a committee of inquiry before the experiment had been fairly tried. The letter to which he had already alluded proceeded to say, that under the old system the expense of one single sitting of the commissioners was 5l. or 7l., and now it was only 2l. 14s. He had also received a letter from Leicester stating, that the operation of the bill had there given Very general satisfaction, and the easy method of proving debts under it had led to an offer by several Masters Extraordinary of the Court of Chancery to take affidavits gratis, and to draw them also. It sometimes happened that debts were contracted with parties at a distance, and many witnesses were necessary to prove them. He proposed, in such cases, and indeed, whenever it was necessary and proper, that the commissioners should go to the places where the debts were to be collected. His noble Friend had said something about costs, and that the working of the commission was now more expensive than it formerly was. His noble Friend had moved for very voluminous returns; he had caused an abstract to be made of them, and he would state what were the results on the general average. The solicitors' bills up to the choice of assignees, under the new system, amounted to 281. 6s. 8d., whereas under the old system it was 72l. 1s. 5d. Mr. Parry, whose testimony was very. Valuable, stated that it was often 65l. in the country, and 25l. in London. The total expense under the new system was 283l. 3s. 8d., under the old, 463l. 5s. 8d., including travelling and all expenses. It was unfortunate that a clause appointing a taxing-master, which was contained in the bill as it passed their Lordships, was rejected in the other House. If that clause had remained, he was convinced that the expense would have been less than even now. The solicitors complained, that under the new system their emoluments were reduced. He was of opinion that it was for the interest of the public that solicitors should be well paid; for if they were not, the business would fall into the hands of persons of an inferior description, instead of remaining in the possession of a respectable class of practitioners. He was now, with the assistance of the London commissioners, maturing a scale of fees which he believed, would do equal justice to the solicitors and the public. His noble Friend had objected to the official assignees and messengers. The greatest part of the business was done at the head town, and the messengers acted in person. When the commission was opened at a distance they were allowed to appoint persons to act for them. His noble Friend had said that, under such circumstances there was no security for the estate, but he had never heard any complaint on the subject. He felt that while everything was being done to redress grievances, and place the administration of the law on a proper footing, their Lordships would not take the matter out of the hands of the Government, and give it to a commission till an opportunity had been allowed to examine and develope the system, so as to remove any objections which might exist. If there were to be commissioners appointed in every place, the business would be of Very small amount which they would have to transact, and they would not derive the benefit of that experience in conducting the administration of the law which a more extensive practice would give them. It was one of the objects of the district courts to bring so much business before the commissioners as would give them practical experience in conducting it. As this was the system which had been successfully adopted in London—as it was founded on a long experience—as it was recommended by the bankers and merchants of London—as it was advised by the commissioners and adopted by both Houses of Parliament, he trusted their Lordships would not consent to alter the measure at so early a period after it had passed.

Lord Brougham

was gratified that the merchants and bankers of London had approved of the plan of having an official assignee because he remembered that it was strongly objected to when he introduced his bill. His noble and learned Friend (Lord Cottenham) had said how unjust and hard it was to compel a man to travel forty miles to prove; but if it were a hardship, it was one which existed under his (Lord Brougham's)act, for Maidstone came within the ambit of the London district. But, then, it was said, that the official assignees—and here his noble and learned Friend was mistaken as to the operations and functions of those officers—that the official assignee at Leeds for instance, had to travel to Sheffield and other places, a great distance off, to look after bankrupts' estates, and to get them in. No such thing. The official assignees never stirred from London; he had, it was true, the care of estates which did not exist in London, but which was to be collected at Liverpool, Manchester, Birmingham, or at Bristol. He, however, never left London, but he opened a correspondence with professional men at a distance; and by the use of menaces to have recourse to the process with which the jurisdiction armed him, he succeeded in collecting the debts due to the estate committed to his care. He therefore did not agree with his noble and learned Friend, that there was any fatal objection to the constitution of those districts on account of the official assignees being obliged to leave the places at which they were located. Then it had been urged as a hardship that the bankrupt was obliged to appear at the place where the commission was to be worked, To be sure he was. No commissioner, or creditors' assignee, or official assignee, could tell the debtors to, or the creditors upon, an estate, without the presence and statement of the bankrupt himself. It was the bankrupt himself who must make his own statement, and throw his own light upon the condition of his affairs. Under his act, a bankrupt at Maidstone, for instance, was obliged to come up to London and lend his light to the official assignee. His noble and learned Friend, too, forgot that many commissions from distant parts of the country were worked in London. [The Lord Chancellor: Lard Eldon approved of that.] Precisely so. Perhaps it might have been carried out too far, but his noble and learned Friend proposed to check it altogether. True, said his noble and learned Friend, that special grounds might be laid for working a Liverpool bankruptcy, for instance, in London, just the same as a Maidstone bankruptcy. In all those cases every one of the objections which his noble and learned Friend (Lord Cottenham) had pointed out to-night, might be raised with equal justice to the act which he had the honour to pass through that House. It would have been well if it had been made part of the bill proposed formerly, and introduced by his noble and learned Friend, or of the bill which he had failed to carry, to provide for the appointment of local judges, who should in their local courts bring to every man's door the inestimable blessing of cheap, easy, and, above all, satisfactory justice in the trial of causes up to a certain amount; and to whom should be added an equitable jurisdiction as well as a power to act in commissions of bankrupt. That formed part of his (Lord Brougham's) proposed system; at the same time he could not shut his eyes to the fact, that if the system he had chalked out had been adopted, it would still have been liable to a great many of the objections which tonight had been taken by his noble and learned Friend who had brought forward the present motion, on the ground of the distance of the place at which the bankruptcy occurred from the central court. For instance, he had proposed for the West Riding of Yorkshire only one court, and, under that proposition, a bankrupt at Saddleworth would have had to come thirty miles to attend the court at which the commission was to be worked, and so also would a creditor have had to travel the same distance in order to prove a 4l. or 5l. debt. But then came the remedy which was now again brought under consideration by the motion of his noble and learned Friend, and which was to make the commissioners themselves ambulatory to a certain extent. On this he would venture to throw out a suggestion to his noble and learned Friend on the Woolsack. In bankruptcy cases, from the very nature of things, it was important that the proceedings should be taken suddenly and speedily, in order to prevent a making away of property on the one hand, or unnecessary hardship and oppression upon the bankrupt on the other. Expedition was every thing, and as in many, if not most cases, the proceedings were little more than matter of form, he would suggest that the deputy registrars (and if there were not a sufficient number, others, should be appointed) appointed to each district court, should make circuits, or in other words, be perpetually on foot in the district. This, he thought would get rid of all the objections together, and at the same time would bring their jurisdictions constantly home to the creditors and debtors of every bankrupt in every district. Some such arrangement as this, would make the system now in operation work perfectly. He had to apologize to their Lordships for having detained them longer than was convenient even to himself, but he wished to add his testimony as to the great saving in the expenses of a commission, to that of his noble and learned Friend upon the Woolsack. He had been favoured with a calculation or statement of the expenses of working a commission under the old and under the new systems, up to the choice of assignees, which included solicitors fees, and therefore was a true test. He found that the expenses of working a commission under the old system, up to the choice of assignees, was 40l. 15s., while under the new system it was 23l. 1s. He hoped as he was now upon his legs he might be permitted to appeal on another subject to his noble Friend opposite, who was at the head of the non-intrusionists, to postpone the bill relating to the Church of Scotland, which stood for to-night, as he could not possibly discuss it to-night. He would also take the opportunity of correcting a gross misrepresentation which had gone forth with respect to certain amendments which he meant to bring forward on the Church of Scotland Bill. It had been stated these amendments had either been suggested from Scotland, or by him. Such was not the case. He had received those amendments in London, had forwarded them to Edinburgh, and they had been returned to him with expressions of the highest approval, and accompanied with a hearty prayer that the noble Earl opposite (the Earl of Aberdeen) would adopt them.

Lord Campbell

said, he did not think his noble and learned Friend on the Woolsack, or his noble and learned Friend who had last spoken, had made any reply to the argument of his noble and learned Friend who had brought forward this motion. The complaints throughout the country of the operation of the present system were loud and almost universal. The noble and learned Lord on the Woolsack had entirely, and with great dexterity he admitted, evaded the complaints made by his noble and learned Friend who made the present motion, knowing that if he met him on the same issue, he would inevitably be defeated. His noble and learned Friend on the Woolsack exposed the abuses and evils of the old system, but his other noble and learned Friend had not in any way stood up as the defender of that system. For his own part, he believed that the old system was execrable. His noble and learned Friend (Lord Cottenham) had always been of a similar opinion, and when he sat on the Woolsack had appointed a commission, on the subject, and had afterwards brought in a bill which, if it had passed, he verily believed would have effectually removed the abuses under the old system. When, therefore, his noble and learned Friend on the Woolsack averred that the old system was a bad one, and that the present was a better, he did not at all meet the gravamen of his noble and learned Friend's charge, which related to the manner in which the new bill had been brought into operation under the orders in council issued by his noble and learned Friend. He was convinced that nobody who read the bill but would have anticipated that it was intended to institute ambulatory 'courts, which would bring justice home to every man's door throughout the country; but, instead of this, his noble and learned Friend had contented, himself with instituting seven stationary courts in different districts, to which all suitors would have to resort, oftentimes, from the very nature of the circumstances, from a very considerable distance, sometimes, as in the case of North Wales, 150 miles. This was the grievance of which his noble and learned Friend complained, and this complaint his noble and learned Friend on the Woolsack had not attempted to meet. His noble and learned Friend on the Woolsack said, that all these complaints were made by solicitors, from interested motives; but if that were the case, it should be the Very reason why he should be glad to grant what the committee now asked for. But the noble and learned Lord should bear in mind that complaints came, not only from the country solicitors, but from those of London; 129 of the latter, the most respectable in the profession, having signed a petition in which, it should be observed, they were actually speaking against their own interests, be- cause it was to their interest that business should come to London, a large part of their business being in the way of agencies for country solicitors. To show the inconvenience of the new system to parties not residing in the immediate vicinity of any of the seven stationary courts, he would just draw their Lordships' attention to the fact that every suitor in a bankruptcy occurring in North Wales would have to travel to Liverpool, a distance of 150 miles. Every suitor in Cumberland would have to travel 100 miles, and every suitor in Northampton sixty miles. Any man against whom a fiat might be issued, however unjustly, would have to travel all this distance, or run the risk of being gazetted as a bankrupt, and have all his property stripped front him. These were grounds of complaint which his noble and learned Friend on the Woolsack had not held out any hope of redressing by sending commissioners occasionally upon an ambulatory tour amongst those distant suitors. The noble and learned Lord mentioned that he had sent a deputy register to Market Harborough, but this did not afford a sufficient remedy for the evil complained of, inasmuch as that person had not the power of holding a court for hearing evidence. [The Lord Chancellor: He may swear a party to an affidavit.] He might, but this was a most inconvenient mode of doing business, and the very least that it would cost would be 30s. The consequence of all the evils which the present system engendered was, that they would have fraudulent bankruptcies, on the one hand, whilst in cases of real bankruptcy, parties would be deterred from issuing fiats, by the trouble and expense which they would have to incur. In either -case, many innocent parties would have to consent to any compromise, to put up with any expedient, rather than go through the regular process of law. In America there were general complaints of a bad state of commercial credit. To what extent these complaints were well founded he would not pretend to say; but to whatever extent they were so, he believed that the evil was mainly owing to there being no regular bankrupt courts to which parties in such circumstances could appeal. He did trust that upon consideration his noble and learned Friend would either grant the committee which was now called for, or would at least give an assurance to the House and the public that the bankruptcy courts in future, instead of being stationary, should be ambulatory. He thought his noble and learned Friend could not deny that such an arrangement would tend greatly to the convenience of the public: and he would foretel to him that, if he did not consent to its adoption, the complaints which were now heard on the subject would become wider and louder, until the noble and learned Lord would have to regret that he had not yielded earlier.

Lord Cottenham

said, that, even if his noble and learned Friend who had just sat down had not spoken, he apprehended that he should have had little to reply to in the speeches of his noble and learned Friend on the woolsack, and his other noble and learned Friend, whom he did not, he regretted, now see in his place. His great ground of complaint was against the courts being stationary, and at so great a distance from a large portion of the suitors throughout the country. With regard to the practice of sending a deputy registrar down to secure proofs of debts, he must say he thought it a very objectionable expedient to meet an evil which his noble and learned Friend could not deny was Very generally and loudly complained of. The statement of his noble and learned Friend would, he could assure their Lordships, be found to be no answer to the complaints made on this subject throughout the country. These complaints he had submitted to their Lordships, in the hope that they might obtain some redress. He brought them forward, actuated by no party motive. The petitions of 129 London solicitors, representing 1,200 solicitors, were entrusted to him, not for party purposes, but in the hope that a general grievance might be redressed, and that which was felt to be a great and a serious evil might be removed. So far, too, were the petitioners from being influenced by any unworthy motive, that if the prayer of these petitions were acceded to, it must tend considerably to trench upon their pecuniary advantages. They petitioned, for instance, against the extravagant extension of the London district. The more that was extended, the more was increased the practice of the London solicitors, and therefore, in wishing it to be diminished, they were seeking to be deprived of a portion of their profits. They had, then, a petition from every im- portant place in the kingdom, against the measure; they had not a petition in its favour. What was, then, to be stated in its support? There was not a suggestion out of the House in favour of the bill. He did not mean to press his motion to a division, for he felt that it would be unnecessary, and yet it was some satisfaction to him to think that the present discussion would not be without its use. He believed that his noble and learned Friend would be compelled to turn his attention to this subject; for he would soon find that the grievances he had exposed would not be much longer tolerable, nor that the present system could be permitted to continue.

Motion negatived.