Lords Sitting of 28 February 1859

MINUTES.
PUBLIC BILL.—2a Debtor and Creditor.
THE STATE OF EUROPE.—EVACUATION OF THE ESTATES OF THE CHURCH.

  QUESTION. EXPLANATION.
  THE EARL OF CLARENDON: I wish to ask a Question of my noble Friend the Secretary of State for Foreign Affairs, of which I have given him notice, with respect to a discrepancy between the statement made by my noble Friend in this House, and a statement by the right hon. Gentleman the Chancellor of the Exchequer in the House of Commons on Friday night, relative to the evacuation of the Pontifical territories by the armies of Austria and France, the importance of which my noble Friend will admit. On Friday night the Chancellor of the Exchequer said:—
  "I have satisfaction in informing the noble Lord that we have received communications which give us reasons to hope that ere long the Roman States will be evacuated by the French and Austrian troops, and that with the concurrence of the Papal Government."
  The fair inference—indeed, the only possible inference—for that statement is that France and Austria have determined to evacuate the Papal territory, and that the Papal Government approved their doing so. That such was the impression produced on the House was shown by the speech of Lord John Russell, who immediately followed the Chancellor of the Exchequer, and who said:—
  "It was a matter of great anxiety to know, in the first place, whether Her Majesty's Government took that view of their position—namely, that they are in a favourable situation to use their influence, and to give advice to those Powers with whom these differences have arisen—to tell both France and Austria what is their calm
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  and deliberate view in the situation of the affairs of Europe. I rejoice to find that Her Majesty's Government have taken that view of their position. But we have heard from the right hon. Gentleman not only that declaration, but that advantages have already flowed from the interposition which has taken place, and that it is the intention of those great Powers to evacuate the Roman territory."
  That was the impression made on the House of Commons, and as the right hon. Gentleman, the Chancellor of the Exchequer took no means to contradict or to modify the view which Lord John Russell took of his statement, that impression remains. But a short time after the discussion had closed in the House of Commons my noble Friend opposite, on being asked a Question in this House, stated as follows:—
  "I have no objection to state that Her Majesty's Government have received communications which give them reason to believe that, within no distant period of time, the armies of France and Austria will be withdrawn from the Papal States and at the request of the Pontifical Government."
  The Chancellor of the Exchequer says the armies will be withdrawn with the "concurrence" of the Papal Government; but my noble Friend says they will be withdrawn at the "request" of the Papal Government. The discrepancy is quite clear, and may be of very great importance; because, if the French and Austrian Governments have agreed to withdraw their troops, and if that is approved by the Papal Government, there is an end of the question; nothing remains to be done, except, perhaps, as to the time within which the Papal territories are to be evacuated. But, if no communication whatever has taken place between the French and Austrian Governments on this matter, or between either of the Governments, and the Pope simply desires that their troops should be withdrawn, the case may assume a very different aspect. I should, of course, hope, as it would universally be desired, that those two Powers would not persist in continuing to protect a State which declares it is able and desirous to protect itself and that henceforward does not want them. But it is easy to see that contingencies may arise; that France and Austria may not agree as to the mode in which the evacuation is to be carried out; or that one or other may impose conditions on the Pope which he may think not consistent with his dignity to grant, and that this question may still linger in that state of uncertainty and suspense which has already become so dangerous to Europe. Therefore, if my noble

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  Friend sees no objection, I shall take the liberty to ask him precisely what is the information which has been received by Her Majesty's Government; and I am the more anxious that this information should be given in order that there may be no discrepancy as to the facts, to mar the discussion on Friday night, which, like the one on the first night of the Session, is likely to produce most beneficial effects throughout Europe, by showing the perfect unanimity with which men of all parties desire that the faith of treaties should be maintained inviolate, and peace secured by removing all possible pretext for war.
  THE EARL OF MALMESBURY: My Lords, I am extremely glad that my noble Friend has made his inquiry, and I am ready to give every information in my power to my noble Friend and to the House; but I think that his observations as to the discrepancy between what was stated by his right hon. Friend in the House of Commons and my answer to my right rev. Friend in this House seem rather to savour of a distinction without a difference. We meant, my Lords, exactly the same thing; and at the time our knowledge was confined to the fact that the Papal Government had requested, of its own accord, I believe, and not from any hint given to it by either of the other Powers—but however that may be, that it had requested the evacuation of its territories by both the Austrian and French armies. My Lords, I said I believed, therefore, that before long the Papal territories would be evacuated; and that was no piece of credulity on my part, because I cannot conceive that, if requested by the Sovereign of the Papal States to withdraw from his territories, either France or Austria would hesitate for a single moment to do so, having no right to remain there after the Sovereign of the Papal States requested their absence. Therefore, my Lords, both my right hon. Friend and myself were surely justified in saying that, having received a communication that the Pope desired the evacuation of his territories, that evacuation would soon take place. But, my Lords, we had, besides that, and previously to this information, received a general intimation from Austria that if the Pope desired the evacuation of his territories by her army she was ready to comply with the request. We had also previously received from France a general statement that she was also anxious to withdraw from Italy, and that if Austria
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  would also agree to withdraw, and if the Pope wished them both to withdraw, she was ready to evacuate those territories. But since I had the honour of addressing your Lordships the other night, the French Ambassador called upon me and stated positively that the request had been made to his Government, and that the French Government are willing and anxious to withdraw their troops. Though I have not had the same communication from the Austrian Ambassador, there is no doubt Austria will do the same, inasmuch as some time ago they stated what I have already stated to your Lordships. Of course a movement of this magnitude and importance cannot take place in a few days, and without some previous arrangement. With respect to these arrangements, or the conditions on which the evacuation will be made, if any, alluded to by my noble Friend, I am not in a position to inform your Lordships, because my knowledge is strictly confined to the fact I stated the other night—namely, that the Pope has demanded the evacuation of his territories; and therefore I conceive there is no reason or excuse for those Powers remaining in the Pontifical territories.
  LORD BROUGHAMwas glad to find that the two statements were believed to be substantially the same. But be it that there was no more than a distinction without a difference, as the noble Earl (the Earl of Malmesbury) represented, or be it that the two statements were not identical, at any rate we had now possession of the fact, and he trusted the hopes of a settlement that had been raised might prove well grounded. He must however take this opportunity of asking his noble Friend (the Earl of Malmesbury) respecting those continued warlike preparations which were still going on and were producing general anxiety from their supposed inconsistency with the peaceable intentions proffered. We had heard from quarters entitled to every respect, not in France merely, but in England, that those preparations really had no connection with the unfriendly position in which the French Government has stood for the last two months in relation to other Continental Powers; and he must be excused for regarding these warlike preparations as not to be viewed with indifference by ourselves from their bearing upon this country. It would therefore be to him a matter of the utmost gratification to learn that the preparations in question arose from the state of the magazines, arma-

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  ments, fortresses, and other means of defensive, or it might be offensive policy; that whatever had been lately done, would have equally been done had nothing happened on the 1st of January indicating hostile views; that in fact the preparations which had caused uneasiness, bore no relation to any change of policy in the councils of our nearest neighbour. It would be most satisfactory to find that the Ministers entertained this opinion. Indeed, he could hardly doubt it when he saw them choosing the present moment for bringing on discussions on Reform such as to shake the stability of their Government.
  THE EARL OF MALMESBURY: I do not quite understand the noble Lord's question.
  LORD BROUGHAM: My question is whether the military and other preparations so much talked of as going on in France, notwithstanding the profession of peaceable intentions, are not such as the state of the magazines of the country require, and which would have been going on independent of anything that may have happened since the 1st of January? Those preparations, I believe, have been the origin of all the alarm and apprehension that have taken place with respect to the intentions of France.
  THE EARL OF MALMESBURY: My Lords, I cannot satisfy my noble Friend's curiosity as to the state of the magazines in France; but I know what the French Government say with respect to the reported preparations for war in that country. They state that these preparations are being carried on merely to fill up the usual requirements of the military service, and that there is nothing special in those preparations, or anything to cause alarm in the slightest degree.

DEBTOR AND CREDITOR BILL.

  SECOND READING.
  Order of the Day for the Second Reading read.
  Moved, that the Bill be now read 2a.
  LORD ST. LEONARDSsaid, that he thought in general the law should be consolidated as well as improved, and considering how many clauses of the existing Act were repealed wholly or in part by this Bill, it would be found difficult for any man without some labour to ascertain how the law would stand when this Bill should have passed; but in this case the alterations were so many and of such importance as to render it expedient to introduce them
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  separately, so that the general operation might be seen without the incumbrance of all the existing enactments. Still the old and new law when the latter came into operation ought to be consolidated, and that his noble and learned Friend on the woolsack had declared it his intention to do. He did not, therefore, object to the Bill because it did not contain a consolidation of the law. In regard to placing on the same footing traders and non-traders; theoretically no doubt all would agree that they ought to be subject to the same jurisdiction, but practically it was a question of great difficulty. In the nature of things there was a solid distinction between the classes. Bankruptcy dealt with persons, who, speaking generally, had property to distribute between their creditors; they were subject to the vicissitudes of trade and commerce which none could control, and if their conduct was honourable, the law discharged them, and they began life anew with all their future earnings and property free from their former debts. The non-trader stood upon entirely different ground. His debts were generally many, his property often little or nothing, and now it is proposed to exonerate him from arrest, and to take from his creditors all remedy against any future property. This he thought was going too far. At present a non-trader insolvent had to give a warrant of attorney which bound his future property; but it could only be put in action by leave of the Court, and the Court acted with great favour to the insolvent. It never allowed his future earnings to be taken by his former creditors, and in case of property vesting in him by descent or devise, it allowed, as a general rule, the creditors to have one-third. He did not approve of the alteration of this law, and the House should bear in mind that unless care were taken, credit, which to many was capital, would be struck at. But there was no reason why an insolvent non-trader should not pay his debts under a just arrangement. In his (Lord St. Leonards') Bill of 1853, what were termed the dead men's clauses were introduced, and were most carefully prepared, and he thought that they ought to have been inserted in this Bill, but they ought to be, as of course they were in that Bill, confined to traders. As the law at present stood there were three classes of certificates. He (Lord St. Leonards), thinking they worked badly, in his Bill of 1853, attempted to get rid of them; in the Select

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  Committee a number of commercial witnesses were examined who expressed an unanimous opinion in favour of the system of class certificates; they desired that when a man got into debt and was unable to pay, he should receive a certificate which should show how the debt was incurred, and should express the opinion of the Court as to his conduct. But when they came to examine the Commissioners of Bankruptcy themselves it was found that every one had different views. The proceedings of the Select Committee were stopped by a Royal Commission and the Commissioners reported against the existing system of class certificates What he proposed in 1853 was to give power to the Commissioners, not to issue class certificates, but where they thought a bankrupt's conduct praiseworthy to express it so themselves. As regarded the provisions of the Bill with reference to official assignees, it was proposed to give the official assignee a fixed salary, with a proportionate amount of fees regulated by the business of the Court. Of this he certainly approved. The question of private arrangement was also dealt with in this Bill, and he (Lord St. Leonards) also agreed that creditors ought to have the power to make private arrangements with their creditors, but under due regulations. But these were all questions of a character and importance that called for consideration in Committee. He had on several occasions called attention to the state of the law as it affected clergymen, and there was a clause in the Bill relating to that subject, to which he (Lord St. Leonards) intended to propose an Amendment in Committee. There were many young clergymen in this country who were placed in livings where they were heavily burdened. Many of them had not the means to meet their wants or to furnish the requirements of the parsonage house, and the first thing they were driven to was to borrow money either from individuals or from some public body. Scarcely any man who took that step ever recovered from it, but fell step by step into irremediable difficulties. As the law of England stood at present, it was very singular, as regarded clergymen's livings, that creditors could not attach or seize them, because public policy forbade them to take away the maintenance of a clergyman who had dedicated himself to the service of religion and his parishioners; they could not strip him of that without which it would be impossi-
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  ble for him to perform his duties. But although they cannot do it directly, yet they can do it indirectly—though they cannot execute a judgment against his living, they can obtain a sequestration out of the proper Court, which enables them to seize the proceeds of the living and exclude other claims, and the clergyman could be left without a shilling. He thought that the diocesan ought not to give permission to the clergy to leave their parish simply on account of debt, and he thought that there should be no sequestration except under the proposed Bill; and the clause he wished to see inserted would have the effect of compelling the sequestration, who seized under this Bill, to allow the clergyman so much money out of the tithe rent-charge, according to the recommendation of the diocesan, as should give him a fit and convenient and decent maintenance, and the rest of the tithe rent-charge should go among all the creditors. That would have the effect of preventing a clergyman in effect charging his living in favour of one creditor to the exclusion of all his other creditors, and it would, he thought, prevent improper credit being given him. If there was to be a Church Discipline Bill it should be one to deal with these cases. If a man so misconducted himself as to be involved in debt and difficulty, he ought not to be forced on his parishioners, but the living ought to be declared void; he ought to lose the living he had shown himself to be unworthy of. What we ought to have in a Church Discipline Bill besides was, that where a man was suspended, and he could not give such voucher as to enable him within a fair time after his suspension ceased to appear again before his parishioners, the living should be declared void. He therefore gave notice that in a future stage of the Bill, he should move the insertion of the following clause immediately after section 99:—
  "And the sequestrator shall allow out of the profits of the benefice or curacy to the insolvent while he performs the duties of the parish or place such an annual sum, payable quarterly, as the Bishop of the diocese in which his living is situated shall think fit and proper and direct for the decent maintenance and support of himself and his family; and no sequestration except under this provision for any debt of any clergyman or curate shall hereafter issue. And every sequestrator appointed after the passing of this Act shall hold the profits of the benefice or curacy wholly discharged of any lease which the insolvent may have granted or attempted to grant, of his tithe rent-charge."
  LORD CAMPBELLsuggested that, inasmuch as there was a rival Bill on this important subject before the House of Commons, brought in by Lord John Russell, and which contained some 500 clauses, the one now under consideration should be postponed until their Lordships had the Commons' Bill before them. The House might then refer both Bills to a Select Committee, and by importing some of the best proposals into one or the other Bill, in that way the Legislature in the end might pass a perfect measure.
  THE LORD CHANCELLORsaid, he could assure the noble and learned Lord who had just sat down, that although he had every desire to facilitate the most complete investigation into this Bill, yet he was afraid, if he were to accede to the suggestion, the consequence would be that no Bankruptcy Bill would be passed during the present Session. The noble and learned Lord had said that there was a rival Bill in the other House which he anticipated would come up to their Lordships' House at some period of the Session, and that the two Bills might be considered jointly, and one measure framed out of them that would be satisfactory in every respect. But how did his noble and learned Friend know that the Bill would ever come up to that House? At any rate it would not be up for a considerable time, and a greater part of the Session would have passed, and if both Bills were then referred to a Select Committee the consequence would necessarily be that it would be utterly impossible to pass any measure on the subject during the present Session. Now he (the Lord Chancellor) had that very much at heart, and he could not believe that there could be any necessity for taking the Bill into a Select Committee, of examining it clause by clause, and entering into a discussion of its various provisions. His noble and learned Friend did not, he conceived, want it sent to a Select Committee in order that he might have the benefit of sitting upon it, for his multifarious occupations would prevent them having the advantage of his labours and his learning; and, therefore, what could be the ground? There were certain leading principles in the Bill under consideration which would be infinitely better discussed by their Lordships' House and decided by them than by a Select Committee. The matter would be discussed at considerable length, and he (the Lord Chancellor) would not be able to devote that time to the investigation of the
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  Bill, and the result would be that the Bill would be so delayed that it would be impossible to pass it during the present Session. The Bill was a Bill entirely of principle, and the House would have to decide upon its leading features, which were the abolition of imprisonment for debt, the getting rid of the distinction between traders and non-traders, bringing the administration of insolvents' estates under one system, and providing for the liquidation of the liabilities of debtors' affairs, either by private arrangement or public inquiry in the Insolvent Court. There was nothing to decide except the details of the different provisions applicable to these leading principles, and he therefore must, with great respect for his noble and learned Friend, decline to accept his suggestion for sending this Bill before a Select Committee.
  LORD BROUGHAMsupported the suggestion to send the Bill before a Select Committee, as the proper and advisable course. It might be objected that it would lead to delay; but still he must hold that that was the most advisable course. The clauses comprehended a number of details which might be best considered in that manner, which would also give them an opportunity of obtaining evidence, and especially of obtaining the testimony of those who were connected with the commerce of the country. He did not mean to doubt that this Bill would diminish one branch of expenditure in cases of bankruptcy, but it was not improbable that it would increase expense in other branches. It was highly important to hear the views of the commercial public on the new and old systems, especially relative to the position of the creditor, the assignees, and the solicitor. It might be said that this Bill did not revert to the old system, and did not abolish the new. He would ask upon what did this new system depend, and what was its main advantage over the old but in the existence and in the functions of the official assignee? and if that went the whole system must go? Before 1831 the law of bankruptcy was administered in a most unsatisfactory manner, the persons who were appointed assignees frequently retaining the funds of the estate which they had collected in their hands for years, to the injury of the creditors; but by the Act of 1831 official assignees were created, who, by their diligence, within a year and a half collected between £2,000,000 and £3,000,000, which they divided among the

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  creditors to whom it belonged. He therefore could not help thinking it a matter of more than doubtful expediency whether the services of those officers should be altogether dispensed with. With respect to another provision of the Bill—that which related to imprisonment for debt—he could only say, that in his opinion—while he would not say that imprisonment was not to be justified in any case—that punishment ought not to be inflicted if the debtor were guilty of no greater crime than that which was involved in the simple fact of his being unable to discharge his obligations. But although such was the view which he held upon the subject, yet he could not fail to bear in mind that the debtor was primâ facie in the wrong while the creditor was in the right, and he would therefore throw upon the former the onus of extricating himself from the charge to which, in consequence of the non-payment of his liabilities, he was undoubtedly open; he ought to be called upon to show that his case was one of innocent misfortune, and not of culpable misconduct. Imprisonment for debt was, he thought, justified in the case of a person who refused to pay his debts when he had the means of doing so, to execute a deed, or to do any other act which lay in his power, and which he was fairly called upon to perform. It was also justified if the debtor had been guilty of any fraud, and was defensible on principle where there had been on his part any culpable extravagance, or any recklessness in contracting debts when he had no reasonable expectation of being able to pay them. Entertaining that opinion, he could not see why there should be any objection to give to the Bankruptcy Commissioners the same power as that which was now vested in the Insolvent Commissioners, of visiting penally any offence coming within the category which he had just described. With regard to private arrangements, he was inclined to think it much better not to facilitate them; and he was supported in that view by the opinion of practical men, who were acquainted with the magnitude of the commercial frauds that were committed, and fully persuaded of the importance of public investigations. As to appeals, he was aware that the decisions of the present Court of Appeal had tended to puzzle the London Commissioners. The Commissioners examined all the circumstances of a case, and saw them developed; whereas the Lords Justices could not by possibility know anything about
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  them, and must necessarily, to a certain extent, decide in the dark. He knew it was not safe to grant powers to any tribunal without the wholesome apprehension of the consequences of an appeal which existed over every jurisdiction which was not final, and therefore he did not hold that appeals in bankruptcy should be abolished; but, at the same time, he thought some better mode than the present might be adopted.
  LORD OVERSTONEsaid, that though he felt that it would be great presumption on his part to attempt to discuss fully a measure of so comprehensive a nature, and fraught with consequences of such vast importance to the mercantile community, he must and respectfully add his authority as a man of business in earnestly and emphatically stating the absolute necessity of submitting the Bill to that full investigation which could only be obtained by the proceedings of a Select Committee. If he might make one reference only, it would be to the principle involved in the provision which tended to restore to creditors the unrestrained power of conducting affairs in bankruptcy in their own way, without the controlling authority of a public officer; and to that principle he had the strongest objection. It was necessary, in his opinion, to the proper working of any measure of this kind, that the position of the official assignee should be rightly defined. The object sought is to secure the faithful, honest, and efficient collection and distribution of the assets of an insolvent's estate, to bring to light fraudulent practices and preferences, and by exposing them to keep up a moral tone throughout the trading community. He spoke from having had close opportunities of experience and observation. There were some who contended that creditors ought to be left to manage an insolvent's affairs in their own way, but a little analysis would show the working of that system. Take the case of an insolvent estate. Many creditors were engaged in the management of large and prosperous concerns on their own account, and it was not worth their while to trouble themselves with the management of an insolvent's property. A second class of creditors did not wish to have their claims and the amount of their debts too much exposed to public view. Others remained inactive, or shrank from interference from various motives. The remaining creditors were usually the friends and connections of the

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  insolvent, who were anxious to protect his interests at the expense of the just claims of the creditors. Others had themselves been engaged in transactions with the debtor, and which would not bear exposure. Behind these stood the interests of the solicitors and others. These circumstances affected the realization of assets, and interrupted the course of justice. He believed that fur the suppression of improper practices and the due collection and distribution of assets the interposition of a public officer, appointed by authority independent of the creditors, was absolutely essential for the due administration of justice. The knowledge that everything connected with the insolvency would come under the inspection of a vigilant and impartial officer, would greatly influence the proceedings of all parties, and these advantages would be entirely compromised if the principle of this Bill should be adopted. The best course to be pursued would be to refer the Bill to a Select Committee, and then he should ask their Lordships to avail themselves of the experience of persons in the city before they took such a decisive step as that proposed by the Bill of the noble and learned Lord. At present the Bill was retrograde alike in principle and practice, so far as it has reference to the management of an insolvent's estate.
  LORD CRANWORTHsaid, that the Bill contained many important principles, some of which had his entire concurrence, while others met with his decided opposition. In the first place, the Bill proceeded on the basis of abolishing imprisonment for debt. It might be said, that imprisonment for debt was by the present practically abolished, except in the case of a debtor suspected of an intention to abscond. In other cases, indeed, application might be made to the judge either at or after trial, but these cases would scarcely occur once in twenty years. He did not say this in opposition to the Bill. As to this case of the absconding, it was undoubtedly—as to other cases—right to retain the power. In all other cases much might be said on both sides of the question; but on the whole he concurred that in the present state of society it was better to get rid of imprisonment for debt altogether, and the Bill proceeded on the legitimate principle that the debtor should be summoned so that he might be examined as to any property he possessed, and that his pro-
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  perty might be distributed among his creditors. He doubted, indeed, whether the principle had been sufficiently carried out by the Bill. Take the case of the impunity of the Members of both Houses in regard to the payment of their debts. If a Member of either House of Parliament were possessed of property and would not apply it to the payment of his debts, he did not see why he should not be liable to a judgment debtor summons, like the rest of Her Majesty's subjects, and why the whole of his property should not be applied to the payment of his debts. If his noble and learned Friend on the woolsack would not propose a clause to remove this anomaly and defect in the present state of the law, he would do so. The next main principle of the Bill was, that it united the tribunals of bankruptcy and insolvency. Upon that point he concurred with the Lord Chancellor in thinking that the same tribunal ought to administer estates both in bankruptcy and insolvency. Great difference existed, however, both among lawyers and merchants on this subject, and objections were felt by the latter to being compelled to go into the same Court with many of the present class of insolvents. But this difficulty might be remedied. In the country all the small cases are, according to the Bill, to go before the County Court Judge, and he did not see why an exception should be made in London. He concurred with those who regarded it as a great anomaly that a spendthrift, just before his father or his aunt died, should be entitled to go before a Court and say, "Whitewash me, and then I shall succeed to a large property." The present law was very mild, and it was worth consideration whether the Bill would not work injustice to the creditors of those who might be in a short time in a position to pay their debts. Clause 111 was open to strong objections. It and the three subsequent clauses gave a son, who might be heir to an estate, power to say that his interest in the property should not be sold until it fell into possession, because it was likely to sell at a great loss. This, however, was unjust to the creditor, to whom it was indifferent what it realized, provided only it produced sufficient to satisfy him. This part of the Bill would, he hoped, receive reconsideration, for it appeared to him to be fraught with unmitigated evils. By the 93rd clause his noble and learned Friend proposed to give an option to creditors, if

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  they so thought fit, to choose assignees, and that thereon the official assignee should cease to be an assignee of that estate. It was, as their Lordships knew, formerly the law of this country that creditors had the choice of assignees to manage their affairs; but a Bill brought in by his noble and learned Friend (Lord Brougham) altered that state of things, and provided for the appointment of official assignees. It was now proposed to go back to the old state of things, on the ground that it would save expense. He believed that it would do no such thing. But if it did, in the case of this or that estate, what would that be in comparison of what his office saved to creditors generally? That was proved most decidedly by the statement that when the Bill providing for official assignees came into operation, it was found that there were between £2,000,000 and £3,000,000 of property of creditors in the hands of bankers that had been neglected by the creditor assignees. If, then, the cost of the official assignee was what was stated, they must set off against it the loss that arose from there being no one to check the creditors' assignee. It was contended that no one but those who were chosen by their fellows could manage affairs so well; but he thought that was a mistaken notion. The creditors' assignee was chosen by a majority in value of the creditors, therefore any one creditor who had a majority of debts had the power of appointing any one he pleased to be assignee. Now, the official assignee was nominated by the Court, and was only paid as each dividend was declared. It was his interest to close the affairs as soon as possible, and to make the money divided as large as possible, and to save legal expenses. It was not the interest of creditor assignees in former times to do this. In truth, the assignees under the old system were, in reality, the solicitors of the assignees, who had a very strong interest in protracting proceedings. He must say that he thought a return to that old system was deeply to be deprecated. His noble and learned Friend seemed to be distrustful of his own principle, for in the next clause it was provided that the creditors might, if they thought fit, appoint a committee of creditors to superintend their assignees. He distrusted the mode in which the assignee might discharge his duties, and made provision for a Committee to see that these duties were rightly performed—Quis custodiet castodes ipsos?
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  They would not find creditors willing to undertake the duty in ordinary cases, and the chances were, that instead of promoting the better management of their affairs, this arrangement would only embarrass them. He believed that the effect of the clause as it now stood would be, that the interests of small creditors would be sacrificed for those of the larger creditors; and this change, he thought, likely to be fraught with the greatest difficulty and danger. He trusted that these clauses might be either modified or withdrawn from the Bill, for he believed it was the view taken by a large number of persons in the city, and he thought this might be done without damaging the rest of the provisions of the Bill, which he believed, upon the whole, would be useful to the mercantile community at large. The same argument that applied to the official assignee applied to private arrangements; but he had great doubt of the policy of any Act of Parliament that gave to any person, making arrangements in private, the opportunity of coming forward and having the sanction of courts of justice without having the matter fully and publicly investigated.
  LORD WENSLEYDALEsaid, it was not his intention to oppose the second reading of the Bill, but, at the same time, he would have been much better satisfied if his noble and learned Friend on the woolsack had acquiesced in the suggestion of his noble and learned Friend, the Chief Justice, to refer it to a Select Committee. It was a measure, the bearing and wording of every clause of which required to be well considered—though the Bill seemed to be extremely well drawn—and it was more likely to come out of the ordeal of a Select Committee in a state approaching perfection than it could be expected to leave their Lordships' hands. If his noble and learned Friend (the Lord Chancellor) should persist in refusing to refer the Bill to a Select Committee, he had only to say that, concurring, as he did, in several portions of the measure, there were, however, parts of it to which he could not assent, and which he should feel it his duty to oppose in the future stages of the Bill. He objected, for instance, to the taking away from the creditor the power of arrest, inasmuch as that power operated as a strong inducement with all both to pay their debts, and to refrain from incurring others which they might have no reasonable prospect of discharging. It was also absolutely neces-

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  sary to make a distinction between persons who were traders and liable to the accidents which arose in the course of trade, and those who were non-traders and free from those contingencies, as to freeing their future-acquired property from the discharge of their debts. He objected also to the provision exempting remainders in tail from the liability to immediate sale for the benefit of creditors.
  THE LORD CHANCELLORsaid, they had been on the present occasion discussing the principles of the Bill, and every one of the questions which his noble and learned Friends had raised were peculiarly and exclusively for their Lordships' determination; and though his noble and learned Friend (Lord Cranworth) complained of the way in which the Bill had been brought forward, he would have the opportunity of raising his objections in Committee: but he feared that if the Bill went into Committee, it would hardly be sufficiently attractive to draw a larger attendance than was at present in their Lordships' House. Some of his noble and learned Friends who objected to the distinction between traders and non-traders had yet suggested that it would not be right to make no distinction between a bankrupt and an insolvent with respect to future acquired property, Now, in framing the Bill before the House, that subject had been thoroughly considered, and they thought that inasmuch as for the first time they were now about to expose non-traders to the compulsory process of being obliged to give up all their property to creditors, that they would be placed in a different position, and that therefore it would be only fair that they should give them some equivalent for taking them out of the category in which they were at present placed, and give them the same advantage that bankrupts now enjoyed. It had been suggested that practically there would be no inconvenience, and probably no great effect produced by these provisions in the Bill. Now, of those who came under the Insolvent Act, nine-tenths were traders, and they were persons to whom the principle with regard to bankrupts ought to be applied; and with respect to the mode in which insolvents' subsequent property was rendered available, the Insolvent Court dealt very leniently with the subject, not touching in the slightest degree the property acquired by the industry of the insolvent, and only applying the law to one-third of the property acquired in any other manner. It appeared
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  to him it would be proper that the insolvent non-trader, who was forced now for the first time to give up the whole of his property to his creditors, should be placed on precisely the same footing with the bankrupt with regard to future acquired property. With respect to the case of a tenant in tail in remainder, it was apprehended instances might occur where, an insolvent standing in that position, a vindictive creditor might be disposed to sacrifice property of that description by a premature sale while it continued in remainder, doing thereby no benefit to himself. Now, a provision would be found in the Bill to the effect that when such property became an estate-tail in possession, it should be rendered available for the benefit of the insolvent's creditors. They had therefore carefully guarded against the ruin that would result from the premature sale of property of that description. He confessed that the earnestness of the appeal to him to refer this Bill to a Select Committee had embarrassed him; but the reason adduced by some of his noble and learned Friends for that course induced him to think it absolutely necessary, if their Lordships had any wish that a Bankruptcy Bill should pass this Session, that they should not accede to the suggestion. What was it that his noble and learned Friends proposed? Why, that a Select Committee should be appointed in order to take the evidence of witnesses with regard to the probable effect of the different provisions of this Bill. Was this a new subject? Had it never been considered before? Had there been no information obtained on it? Why, their Lordships had been deluged with every description of evidence and information on the subject. He held in his hand the Report of the Commission of 1854 which went into the minutest details, and showed that witnesses of every character likely to throw light upon the matter had been examined in relation to it. There were two distinct classes in the commercial world who held different opinions on the subject of the investigation of an insolvent's affairs. There were those in favour of publicity and those in favour of secrecy. If the Bill was referred to a Select Committee, there could be no doubt that evidence on both sides would be produced to an unlimited extent. The Report of the Commission of 1854 stated that one of the causes of the diminution of business in the Bankruptcy Court was the unwillingness manifested on the part of creditors to

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  undergo the formality of proceedings which they regarded, to a certain extent, as an exposure of their own concerns, and their objections to having the control over their debtors' estates taken from them. He (the Lord Chancellor) had last Session presented a petition signed by 4,000 merchants and bankers of the city of London, praying that a full control over the bankrupt's affairs should be given to inspectors or agents appointed by them in place of the official assignee. Thus it appeared that a large portion of the commercial community differed from the larger number of his noble and learned Friends, and desired to get rid of the official assignees and to leave the management of bankrupt estates entrusted to the creditors themselves. As he had said, if the Bill were sent to a Select Committee, every one would endeavour to impress his own views upon the Committee, and if they were to wait until they had gathered the opinions of the whole mercantile community, no Bill would be passed this year, nor for many years to come. A noble and learned Friend (Lord Brougham) had eulogised the official assignees, and had even desired to extend their powers; but many persons were desirous of getting rid of those officers altogether, by conferring upon creditors a power to summon a debtor before themselves, and after compelling him to disclose to them the state of his affairs, to distribute his assets at their pleasure. In the Bill before their Lordships attempts had been made to meet the views of all parties—to reconcile secrecy with publicity. By the suggestion he had last referred to, a dissentient minority of the creditors were bound by the decision of the majority; but in the Bill it was provided that some notice should be given to the creditors who were in minority by requiring, as soon as any arrangement deed was signed, that it should be filed in the Insolvency Court, and notice given in the Gazette, so that all creditors might be made aware of it, and be enabled to appeal, if necessary, to the Court to protect their interests against the decision of the majority. One of his noble and learned Friends had expressed an opinion that where private arrangements were made the Court should not interfere, but he must perceive that some provision was necessary to guard the rights of a minority of creditors whose wishes were overruled by the greater number. Any one who introduced a bankruptcy Bill was in no very happy position, and he had been assailed in every direction
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  with suggestions and proposed amendments all representing that unless he consented to the insertion of certain clauses his bankruptcy Bill never had a chance of passing. Under these perplexing circumstances he had striven to please the conflicting parties. If they were to wait until there was an entire accord in the matter they would have to wait until the end of time, and he had not the slightest hope of being able to satisfy everybody by the provisions of his Bill, but he had endeavoured to reconcile conflicting interests—he had endeavoured to meet everything that justice demanded, to steer his way evenly between contending parties entertaining extreme opinions. Perfect concurrence upon this subject was not to be hoped for. He believed, however, that the Bill was one which would grow in favour the more it was considered, and, therefore, he now asked their Lordships to read it a second time.
  Motion agreed to; Bill read 2a accordingly, and committed to a Committee of the whole House on Friday next.
  House adjourned at a quarter to Eight o'clock, till To-morrow, half-past Ten o'clock.