LORD BROUGHAMreminded their Lordships that in the spring of last year his late lamented Friend, Lord Cottenham, had presented a Bill to them, in which they had concurred unanimously, and had afterwards sent to the House of Commons. It was a Bill abolishing patronage producing great emolument, and among other offices it abolished the office of Chief Registrar of the Court of Bankruptcy, which produced to its holder 1,200l. a year, and transferred the duties of it to the Lord Chancellor's Chief Secretary, and on his accepting the office the emoluments were to cease and determine. He had been much surprised to hear that this Bill had been denounced in the other House as something very like a corrupt proceeding—in a word, as a job—and had been lost accordingly. It would be greatly for the advantage of the country if many more such "jobs" were perpetrated; he meant the abandonment of great patronage by persons holding high office, for that was the "job" with which his late noble and learned Friend was most unjustifiably, in his opinion, charged. The Bill was, upon that representation, thrown out elsewhere. He was aware the excuse was that the office of Secretary of Bankrupts would be made an office for life; but the duties of Chief, Registrar would have been attached to it without a farthing remuneration. However, right or wrong, the Bill was lost. Mr. Serjeant Lawes, the former Registrar, had died a few weeks before the introduction of the Bill; the 130 consequence of which was, that the whole of the duties of the Chief Registrar had to be performed provisionally and temporarily by another Registrar. Lord Cotton-ham had consequently introduced into the Bill a clause giving validity to all proceedings since the death of the last Registrar, Mr. Serjeant Lawes, but for which every commission of bankruptcy, and all proceedings under them, were liable to be set aside for want of that necessary officer, the Chief Registrar, who held the seal, and whose duty it was to append the seal to the official documents. But the Bill was thrown out, and with the Bill was thrown out also the clause invalidating all the proceedings in bankruptcy which had taken place since the death of Mr. Serjeant Lawes. His late noble and learned Friend, displeased at the treatment which his measure had received, did not bring in another Bill, containing that clause, to which there could have been no objection; and he (Lord Brougham) regretted that, consequently, a little more than doubt existed with respect to the validity of those proceedings. Mr. Serjeant Lawes had now been dead a year and a half; and the result of the course taken elsewhere, to which he had referred, all proceedings in bankruptcy since were exposed to very, very great doubts; and he therefore felt it his duty to ask his noble and learned Friend on the woolsack whether or not the Government was prepared to bring in a Bill at all events to give validity and effect to those proceedings?
The LORD CHANCELLORobserved, that when he succeeded to the office he now held, he found that an office established and considered necessary at the time of the constitution of the new Courts of Bankruptcy had been abolished. He took it for granted due care had been taken that no public inconvenience should arise, and that provision had been made for whatever was necessary. Lately his attention had been called to the subject, and he certainly now found that the Chief Registrar was an essential officer to give validity to most important proceedings in bankruptcy, and to establish titles acquired under bankruptcy. He had heard some such explanation as had been just given by his noble and learned Friend; and undoubtedly, for want of care on the part of those who took the responsibility of throwing out the Bill last year, it would be necessary that a Bill should be brought in, for the purpose of rendering valid those pro 131 ceedings. Fortunately the blot had not been discovered; but the instance was proof of the necessity of great caution on the part of those who undertook to alter the existing law. His Lordship proceeded to say that he found some complaint had been made that he had not done more towards carrying into effect the recommendations contained in certain reports for the abolition of certain offices, as those of Secretary of Bankrupts, and Chaffwax and Sealer. The matter was broached on the faith of two Reports; but he could find no such Reports at all, and he believed there were none such. There had been an inquiry, and a report of the result of that inquiry, but he was not aware of any report expressing the opinion of any Committee of the House of Commons in favour of abolishing those offices. He had taken some pains to obtain accurate information, and he found that some of the offices to which allusion had been made had been abolished for years, and were no longer in existence, amongst which he might mention the office of Secretary of Briefs, and Chaffwax and Sealer. It had been alleged against him that the Lord Chancellor had seven secretaries. It might as well be alleged against the Secretary of the Treasury that he had a multiplicity of secretaries, because the secretaries in each department were under him as Chief Secretary. To the office of Chancellor were attached two offices, Gentleman of the Chamber, and Gentleman-at-arms. Their duties were not defined, and might therefore be considered in the nature of sinecures. They were State officers, but performed duties not at all of a nature to entitle their offices to be considered substantial offices. Lord Cottenham reduced the salaries of those officers considerably; and since he (the Lord Chancellor) had received the seals, he had discontinued one, and put the other on a reduced salary. The salary was formerly 1,000l. a year, but was reduced by Lord Cottenham to 758l. a year; and he (the Lord Chancellor) had reduced the one officer to 500l. a year, which one, though called Gentleman of the chamber, any one who called at his (the Lord Chancellor's) residence at twelve o'clock, would find there every night; he seldom left before midnight, and performed as arduous duties as any man could perform. The next was Secretary of Bankrupts. That was a very ancient office; but in consequence of the alterations in the proceedings in bankruptcy, the duties had been greatly reduced, 132 and the salary, 1,200l. a year, was much beyond the duties. But that officer had performed all the onerous duties of Chief Registrar during the last year and a half, and would continue to do so until some alteration was made. The salary of the Principal Secretary was also 1,200l, That officer's services were not personal to the Chancellor; his duty was to make certain reports, which were submitted to the head of the Court. The next was Secretary of Presentations, with a salary of 200l. a year. He received all letters on the subject of Church patronage; it was impossible to answer all; but those which required an answer he answered; he then made inquiries as to the qualifications of parties proper to be preferred, and received those qualifications. That place was held by the nephew of the late Lord Chancellor, and he continued in the office. At the present moment the duties were very responsible, and he (the Lord Chancellor) was confident the office, whoever held the Church patronage, could not be dispensed with. The next was the Secretary of the Commission of the Peace. That officer received applications from the Lord Lieutenant, recommending persons to be placed in the Commission of the Peace, and also applications for justices in boroughs. The recommendations from Lord Lieutenants required very brief examination, as great credit was given to them, but occasionally certain cases led to a correspondence. As to borough magistrates, in all cases inquiries were made, and a correspondence took place, for all which duties the salary was 400l. a year, There was then the Secretary of Decrees and Injunctions. The duty of that person was to see that no decrees were enrolled against which caveats were entered, or objections made before enrolment. The salary was 30l., and the duties were about equal to the salary. That office was associated with the Secretary of the Commission of the Peace. The next was the Secretary of Lunatics, a most important office. The salary was 800l. a year. It was his duty to read all the petitions; and he (the Lord Chancellor) could answer for it that he did read them. He (the Lord Chancellor) had communication with him on all petitions in lunacy which came before him. These were all the secretaries, and after dismissing one gentleman of the chamber, and reducing the salary of the other, he found he had not sufficient assistance, and he engaged another secretary at his own cost, who was 133 also to he found at his house every night until twelve o'clock. It had been said there had been much inquiry and but little done. Those who complained, knew not what had been effected, and although a great deal remained to be done, he ventured to say that a vast deal had been already accomplished. From the year 1824, when the first reform took place in Chancery, various orders had been made, which had been extremely beneficial in the way of producing an amendment in the form and practice of the court; and during the last year a body of orders had been issued which materially accomplished the same object. In consequence of the regulations adopted by arrangement with Vice-Chancellor Turner, hundreds of cases were now in the cause list ready to be, if not disposed of already, all which, were it not for those regulations, would have taken a very considerable time before they reached such a state of maturity. Those only who are acquainted with what is required, know what has been done, and it is only those who do not know the difficulties of making alterations, that slight and ignore the reforms which have been effected. It was only those who knew not the evils which were generated by alterations made by rash hands, who undervalued what had been done. A great many changes had of late years been made in the bankruptcy law—indeed it had been altered five or six times. The consequence of those changes was that no large bankruptcy was worked out now in the Court of Bankruptcy. [Lord BROUGHAM: Hear!] How it happened he knew not, but the parties who formerly came to the Court of Chancery, with all its evils unredressed, with bankruptcy cases, would not go into the Bankruptcy Court, but preferred having recourse to a private tribunal of their own. The very laws which had been passed were the subject of considerable doubt. With all their labours—with all their boasted care—the creditors of a bankrupt resorted to a private tribunal of their own. Having been in communication with some of the principal solicitors of London, he was able to speak upon this point. It was extremely difficult to point out objections to the law; but this much was certain, that it did not work well. It did not work in such a manner as to induce the merchants to resort to the court. From some reason or another, out of twenty large failures, only one of them was brought before the court. What did he mean to say by this? Not that they 134 were not to amend the law, but that they should not with rash and inconsiderate hands attempt to meddle with it. With respect to the charge made against him, of not having done anything to aid the cause of law reform, he would only take the liberty of stating that, since he had come into office, he had directed his attention most earnestly to the amendment of the law. As fast as he acquired a knowledge of any defect in its administration, he communicated with the Commissioners, and he endeavoured immediately to remedy the evil suggested. He had been a law reformer long before it was the fashion. He only wished that they had waited for the general recommendations of the body of Commissioners who had undertaken their onerous duties without pay or without reward, before they legislated in any bit-by-bit fashion; but others wiser than himself had thought otherwise. In conclusion, he could only say that his earnest desire since he had accepted office was to make the Court of Chancery a court where equity and justice would be cheaply and expeditiously rendered to all parties. He had now to thank their Lordships for the kind attention with which they had heard him, and to beg pardon for apologising at such a length.
LORD BROUGHAMconsidered that there was no occasion for the noble Lord to apologise to the House; his statement had been considerably interesting. But when he put the question to his noble Friend, with a view of enabling him to enter upon his defence against a general charge, part of which was that he had not abolished an office which he (Lord Brougham) had prevented his doing by having abolished it 17 years ago—when he put that question, having deferred it at the special request of his noble Friend, to enable him to enter upon his defence, while he expected an intelligible and a satisfactory answer, he was not prepared to find that the noble Lord should not only make an attack on those who preceded him in office; but, not content with attacking those who attacked him, not content with vindicating and defending himself, he should carry the war into the territories of his ally. He it was who had given the noble Lord an opportunity of defending himself—he was his ally; but, as the noble Lord had commenced the attack, let him take the consequences; his assault was upon his ally; the penalty of it fell upon himself; for 135 his own part, he was prepared for self-defence. It was his (Lord Brougham's) rash hand, then, that had interfered with the ancient and venerable system of the bankrupt laws in this country. It was he who had established the new and bad system which had superseded and abolished the former admirable and successful jurisdiction. Did the noble Lord wish to see the re-establishment of the seventy Commissioners sometimes called the Septuagint? Did he wish to see official assignees abolished? Did he wish to see the re-establishment of that vicious system which Lord Eldon, the first day he assumed office, had termed one of corruption and abuse from beginning to end, and on which, as is recorded in 6 Vesey, he pronounced an unmitigated censure? That was the system against which he was charged with having raised a rash hand. "But oh," says the noble Lord, "go into the court, and you will find that everybody is against this new system." Not everybody. Certainly some few. Solicitors, no doubt. Under the old system a bankruptcy was an annuity to a solicitor, a regular annuity—it was an income to him for life. "Oh," says the noble Lord, "out of twenty different insolvencies, only one is brought before the Court of Bankruptcy. I do not know why it is, but so it is." Now, what were the facts? By the amendment of the law, by the great and constant improvements introduced, they had so far remedied the evils of the old system as to give every possible encouragement to the insolvent to do that the effecting of which had always been regarded as the perfection of a bankrupt and insolvent law—to make the insolvent come forward at an early period with the remains of his property, and have it divided among his creditors, and not make away with it; partly by creditors getting an undue preference—partly by collusion between the debtor and creditor—partly through the medium of the respectable solicitor, to whom the bankruptcy, before the late alteration of the law, was an annuity—not seldom by the insolvent concealing his property, or vesting it in friends, to be enjoyed by him after his certificate was granted. But now the creditor was induced to come forward while he had some remnant of property left; and this was the phenomenon which so much astonished his noble Friend, that nineteen out of twenty cases should accordingly be decided without the intervention of a court of bankruptcy. But 136 who had a right to complain that this was the case? There must be two parties to such a composition. The debtor cannot wind up by himself. No, it must be by the debtor and creditor joining; and if the debtor and creditor are satisfied, who has a right to complain? Is it not the greatest benefit to the creditors? A larger dividend will accrue to him, as law expenses are not incurred. It was the creditor he mainly looked to. He wished to extend favour and justice to the creditor, but bare justice to the debtor, who always is primâ facie in the wrong—the creditor never. He should presently show how the other improvements in the system had all tended to produce the same diminution in bankruptcies. But the noble Lord objected that the law had been changed from time to time. So it was, and so it ought to be, according as they found one or other of its provisions required amendment. All the changes since the new system had been established had been the legitimate result of the experience of the Commissioners and practitioners in the Court. The noble Lord said that he was an enemy to law reform—he meant to say a friend; but it was curious how the truth would slip out in spite of himself. But the noble Lord wished it to be understood that he was a friend to law reform. Yes; but he (Lord Brougham) had seen many such friends in his days. He had seen many professing friends of law reform and law amendment. They were friends in general theory—friends in profession—friends in the abstract—but when you come to practical matters, you found them object to every particular reform, and when you come from their professions to their acts, you found that their acts were in an exact contrary direction to their profession, and their opposition to all improvement bore a pretty exact proportion to their declared wish to improve. Now to that class of law reformers his noble and learned Friend, considering his attainments and his position, was a distinguished ornament. Nay, if the respect and friendship which he bore him, did make him blindly partial, he was inclined to place him at their very head. The noble and learned Lord referred to the small number of bankruptcies which came before the Court. Did he object to the establishment of official assignees? If he did, he was the only person in or out of the city of London who did so—always excepting the respectable solicitors to whom he had before referred; but he doubted 137 very much whether he would find even among the solicitors any one—certainly among the traders he would find no one—who objected to the official assignees. He believed their establishment was one of the greatest improvements that had ever been made in the bankrupt law—an improvement which not only benefited the creditor, but even the debtor. When the measure was the subject of very considerable opposition in the House of Commons, his lamented friend, Mr. John Smith, of the great banking firm Smith, Payne, and Smith, in defending it, observed—"I am sure I have no interest in this measure passing; the consequence of it to our bank will be that we shall lose the use of from 6,000l. to 7,000l. per annum, arising from the funds which will be drawn out of the bank, and distributed among the creditors. The appointment of official assignees will do away with the creditor assignees, whose supineness and negligence caused this the greatest of evils." This statement caused all opposition to cease, and the Bill was passed. A very few years after the establishment of the system which he was accused of rashness for erecting, the utmost benefit was experienced from it exactly as might be expected, especially after Mr. Smith's remarkable statement. In the course of a year, or little more, after it was in operation, upwards of one million and a quarter was collected through the exertions of the official assignees; in the next few years the sum had been increased to nearly 2,000,000l., all of which had hitherto lain idle for twenty or thirty years in the different banks, in consequence of the idleness of the creditors' assignees, and by the supineness of respectable solicitors, those disinterested and trustworthy authorities whom the noble Lord had consulted, and the equal supineness of creditors, assignees, bankers peradventure, in whose houses the money was lying; all of whom, lawyers and laymen, had more or less interest in letting things sleep, in leaving the creditor unpaid, and leaving the bankruptcy unsuperseded. Many such cases as he alluded to were wound up and brought to a close through the exertions of the official assignees—through the medium of that system now for the first time openly and boldly condemned. Many bankruptcies were superseded after the lapse of twenty-five, certainly of twenty years. Many estates returned 20s. in the pound; and the bankrupt and the creditor alike received justice. This had happened in the case 138 of his lamented friend Mr. Roscoe's bankruptcy, though unfortunately not till after his decease, the old system having survived that excellent and distinguished person. But this was a frightful state of things which he depicted; it was the state of things to which the noble Lord would wish to revert. The activity of the official assignee brought into bold relief the indolence and supineness of the creditor assignee. What its enemies harped upon is, that in consequence of the late changes the number of bankruptcies brought before the court had diminished, while the number of those which were settled by composition had augmented. Undoubtedly great facilities had been given to composition, of which the noble Lord seemed to have such an ultra-professional horror. That had been admitted to be an improvement—an improvement which had been introduced by the same rash hand which violated the sanctity of the old system. But what did the noble Lord think of the three classes of certificates, acknowledged as it was to be one of the greatest improvements in a moral, as well as a commercial and a legal point of view. The noble Marquess opposite (the Marquess of Lansdowne) had already borne testimony to its great value in every respect, but especially for its moral tendencies. He would not now repeat that eulogy. The first-class certificate was given to persons pure in all respects—whose dealings had been without a slur or shadow of imputation, whether of indiscretion or of fraud, and whose failure arose from no extravagance, and from no undue speculation. He grieved to say that was a kind of certificate which was given in only very rare instances. But the second was given to persons not guilty of any fraud, but who yet were not so pure and free from all reproach as the first class he had described. Then came the third class, which was given to persons whose conduct had been more or less exceptionable in their commercial transactions for incorrect dealing with their creditors' property, and improper mode of keeping their accounts. As he said before, the noble Marquess opposite admired the moral consideration; but it certainly had the effect of lessening the number of bankruptcies. Many men did not like to go and be refused the second class, and be reduced to take the third-class certificate; others, more refined, disliked to be refused the first. The consequence 139 was, when their affairs became embarrassed, they came forward in time, they divided what they had left, creditors did not refuse a reasonable offer, and of course a composition was accepted. Was there any harm done then to the creditor or debtor by having the parties come before the court, and having the bankruptcy wound up? Was it not the great object to be aimed at in every bankrupt and insolvent law to induce persons to come in early, before they had made away with their funds? The diminution of the number of bankrupts, moreover, must be attributed in some degree to the prosperity of the country. This happy circumstance accounted in part for the number being so much smaller now than three years ago; but the permanent diminution was owing to the other causes he had stated, and it was a great benefit to all whose interest we ought to consult. Nevertheless, if his noble Friend could be persuaded by his City informants, those disinterested authorities, that the present system was as bad as he declared it to be—if he was in favour of the seventy Commissioners, and the system which Lord Eldon declared to be a mass of corruption—it could not be the change of the law effected in 1849 to which he objected, for all the great changes had taken place before 1849, when he himself was connected with those changes; and in the year of distress, 1848, there had been more bankruptcies than there had been since the year 1831. It now happened, for the first time since the violence of party spirit in 1831 and 1832 opposed the Amendments he introduced, that he heard them condemned. He had always heard from traders and honest disinterested authorities opinions entitled to consideration, either from the good sense or the knowledge of the persons who gave them—opinions decidedly and strongly in favour of this system, which the noble Lord, not content with vindicating himself, or answering the question put to him, had so vehemently attacked, and which he (Lord Brougham) took to himself the distinction of having with rash and inconsiderate hands established.
The LORD CHANCELLORthought he ought to apologise for having used an inadvertent expression, especially when he considered what it had brought upon the House in the shape of a speech from the noble Lord, and in the shape of a very considerable personal attack upon himself. 140 He therefore did regret having used the expression, and he had not the slightest intention of applying the expression of "rash hands" to his noble and learned Friend, although he had referred to the bankruptcy laws. His noble and learned Friend had spoken of his partiality towards him. He knew, and he had known, that he did feel most kindly to him, but he did not think that this partiality had blinded the noble Lord to his defects. They were all aware that when one word was said which reflected upon the vanity of the noble Lord, that his friendship and partiality would not preserve them from a vindictive attack. The noble and learned Lord knew well that he was as sincere a law reformer as himself; but he would have said, did he not know that it would lead to another half hour's occupation of their Lordships' time, not so rash a one. The noble Lord asked him did he wish the revival of the seventy Commissioners? Who were the instruments used to put an end to that system? It was not fair of the noble Lord to ask such a question, for he must have remembered that he (the Lord Chancellor) and the Hon. Mr. Erskine had the honour of working under him in abolishing the whole system. He did not know whether his noble and learned Friend was a party to the annihilation of the Court of Review; but that had passed away, as had some other things, and another system was established in its room. This Session they had seen another system by way of reform introduced, and such changes they were likely to have from time to time as long as they lived—[Lord BROUGHAM: Hear, hear!]—and very properly so, no doubt. But he nevertheless felt bound to say that a little care at the beginning would render such trouble unnecessary. What he had said was, that those individuals who did not know the course of the law, or its practice, were rash in attempting to make alterations in the law. He did not, however, apply those words to his noble and learned Friend; on the contrary, he said, that great as had been the labour and pains which his noble and learned Friend had taken in amending the bankruptcy law, unfortunately the amendment did not succeed. Beyond that he had said nothing to warrant the discharge their Lordships had just heard. His noble and learned Friend said the new system had reduced expense, had given certificates, and had done a great many other things; but he must tell their Lordships, that after all that had been 141 said, that creditors would not go into the Court of Bankruptcy; they did not find it to their interest to go into that court. Whatever advantages his noble and learned Friend might see in his new system of bankruptcy, he begged to say that both the solicitors and merchants of London were content to forego all those advantages; and he would add further, that out of very numerous bankruptcies, the largest, the most important, and those most requiring the advantages of a good system of bankruptcy, were just the cases that were managed elsewhere. It would not do to say this was the fault of the solicitors; for their clients were men of intelligence and business habits, and if they found that their solicitors were following a course contrary to their interests, they would soon check it. His noble and learned Friend had been a party to passing laws that created not a few difficulties, and involved people in expense. The public were no doubt indebted to him for his efforts in the cause of reform; but he (the Lord Chancellor) would, nevertheless, not forbear making suggestions occasionally to his noble and learned Friend, even though he should speak of his "partiality" for him, and call him an enemy of reform, and even though he should forget that he was an instrument in his hands in bringing about his reform in the bankruptcy laws. Why, nobody could say a word to his noble and learned Friend about his Bills but it put him in bad temper; but that would not prevent him doing so whenever the occasion might arise. He had passed not a short life. All that life had been in the profession of the law, and he had seen not only the advantages of reforms, cautiously adopted, but also the mischiefs that had arisen from constant alterations in the law, and from an increase of expense to those who had occasion to have recourse to it. Therefore he did not consider every one that brought in a measure to amend the law a reformer. He certainly should apologise if he had applied the term "rash hands" to his noble and learned Friend; but he had not done so. He used the words with reference to those who were wholly unfitted to make alterations in the law, being fully impressed with the conviction that whatever changes were made should be done with the best care and caution, and should proceed from the best informed minds. In conclusion, he begged pardon of their Lordships for having called his noble and learned Friend upon his legs, 142 and having thereby been the means of detaining them so long.
LORD BROUGHAMwas not aware that the offence of his noble and learned Friend was in the nature of suicide; he had thought it was in the nature of manslaughter; but it now appeared that the changes which he repudiated so much, and which were embodied in the Bill for the amendment of the bankruptcy system, were his own changes. His noble and learned Friend was a party to it, for he said he was one of those who prepared this measure.
LORD BROUGHAMWell, that. His noble and learned Friend was employed in preparing that measure, and it was of great advantage to the system. That system worked so well, and the Commissioners did their duty so admirably, that any appeal from their judgment was found to be superfluous, and the Court of Review unnecessary; and that, he begged to say, was the only change that had taken place.
§ House adjourned till To-morrow.