The Sun.
London, England, 1859-02-08 00:00:00

might be forced to distribute the whole of their property
among their creditors—having stripped and turned them
naked out of the court, it would not be just and reasonable
to give them the same benefit which was given to bankrupts,
and allow them,:from the time of obtaining the order of dis-
charge,to be free men—to be safe from the claims of their pre-
vious creditors,and enabled to pursue an independent course 1
with respect to the acquisition of new property. (Hear.)
He had thus introduced to their lordships the mode in which
it was proposed, first of all, to constitute the Court, and
next the objects which administration by that Court would
embrace ; and now he would turn their attention for a short
time to what was proposed by the Government with respect
to the proceedings in regard to the administration of deb-
tors' estates. Their lordships were aware that many peti-
tions had been presented to both Houses of Parliament on
this subject. The great demand which the commercial
community had uniformly made was to obtain a greater
control over the proceedings when the affairs of their cre-
ditors were administered in the Bankruptcy Court, and in
the petition which he had had the honour of presenting
last session from 4,000 bankers and merchants in the City
of London this was not only particularly prayed for, but
greater facilities were also desired for liquidating the affairs
of debtors under proper administration. The Government
have considered that the demand made with respect to the
propriety of creditors being allowed to interpose in the
management of these affairs passing through the Court to
be a reasonable and just one, and he would explain the
mode in which it was proposed to meet that object. Their
lordships would find clauses in the bill providing that at
the first meeting of creditors for the choice of assignees,
the majority in value of them might, if they chose, agree
to dispense with the official assignee altogether, and allow
the assignees of their choice to have the management and
control of the affairs of the bankrupt or insolvent in the
course of liquidation; but it had been thought that the
creditors might possibly require tho experience of an
official assignee, and therefore they would be enabled to
select that officer as their trustee. When, however, that
officer was so selected, he became to all intents and pur-
poses the trustee of the creditors, and lost his character
as official assignee. There was another very important
provision—namely, that though proceedings might have
commenced in insolvency, and the Insolvent Court got
possession of the assets of the insolvent, yet if the cre-
ditors and debtor, in the course of the investigation,
considered that it would be to their advantage that
the liabilities of the debtor should be liquidated by arrange-
ment, they might take the business away from the Insol-
vent Court, and convert it into a private arrangement. In
accordance, also, with the wishes expressed in the petitions
he had referred to, there were clauses which it was thought
would facilitate the liquidation of the affairs of insolvents,
under the control of the Court, but with an inspector ap-
pointed by the creditors. Their lordships would also find
some important clauses with respect to private arrange-
ment by deed. He would not detain the house, by now ex:
plaining the nature of those various provisions, which were
matters of entire detail. Theref6re, he would pass to the
very important question respecting the certificate. Under
the existing law there was a classification of certificates.
There were first, second;and third class certificates, which
the commissioners were empowered to issue according to
their notions of the merits or demerits of the bankrupts.
There had been no more fruitful source of uncertainty,
expense, and litigation than this mode of classifying certi-
ficates with which the commissioners were armed. Natu-
rally enough, the commissioners took various views, ac-
cording to the different dispositions of their minds, as to
what was delinquency in these matters, and the issuing of
these certificates of the first, second, or third class was ex-
tremely' capricious, and it was difficult to calculate what was
to be expected, except from the temper and disposition of
each particular commissioner. The commissioners had
also the power to refuse certificates altogether, so that a
man in that case would remain uncertificated for the whole
course of his life. In framing the present bill it was not
deemed desirable, expedient, or just that a man should
remain unprotected and undischarged for the whole period
of his existence, without the opportunity of acquiring any
alter property, and with the danger, at the same time, to
which other people were exposed who, not aware of the
man's position, might deal with him, and entail on them-
selves the consequences of dealing with an uncertificated
bankrupt. According to the bill no person would ulti-
mately be deprived of his certificate. It was deemed right
that on certain grounds the commissioner should have
the power of suspending the certificate, but, inasmuch
as under the existing law when protection was denied to a
debtor he could only be imprisoned for twelve months, so it
was thought that the suspension of the certificate should
not be allowed for a longer period than two years. The
suspension of the certificate would apply to those cases
which were peculiar offences under the bankrupt law or
administration, but not to those very important cases which
rose to the class of misdemeanours. For instance, the
circumstance of a debtor not keeping his books properly
was a very serious impediment to the administration of the
estate, but still it would be harsh and severe to characterise
such matters as offences, and make them liable to extreme
punishment. They would be visited by a temporary sus-
pension of the certificate—for two years at the maximum.
With regard to those real offences which had always been
regarded as such and treated as misdemeanours, he was
surprised to find that there was a very generaldemand
among the commercial community for a very summary
administration of the law in respect to them. They thought
that the commissioners should be intrusted with summary
jurisdiction, enabling them to send persons committing
those offences to the House of Correction, subject, also, to
hard labour, for a period of no less than three years. With
great deference he must say that, though that might be an
excellent remedy to place in the hands of creditors desirous
of gratifying feelings excited by disappointment at not re-
ceiving their debts, he would never consent to any man
being subject to an imprisonment of that severe kind
unless first tried by one of the superior courts and by a
jury. (Hear, hear.) Therefore he had refused to give
way to that demand, and their lordships would find
included in the class of offences called misdemeanours
(to be tried in a regular manner and punished only
after conviction), those offences, which had been
regarded as real offences on the part of a bankrupt. He
now turned from the proceedings of the Court to the officers
of the Court, and first of all he would direct the attention
of their lordships to the position of the official assignee.
There had been great difficulty in determining how the
official assignees were to be remunerated. At present they
were paid by fees, but the amount of business which they
had to transact was so variable and uncertain that in some
years they had very little, while in others their emoluments
rose to an enormous sum, and he belteved that, in the result,
it was found that since the date of their appointment their
incomes had averaged from about £l,OOO to £1,200 a-year.
The inequality between them, however, was very great,
especially in the country, where their emoluments ranged
from £5OO to £2,000. Various suggestions had been made
upon this subject. On the one hand, it had been said that
payment by salary would be at least certain and invariable;
but, on the other, it had been urged that it would destroy
a needed stimulus to exertion in getting in the effects of a
bankrupt. Some parties had su.ggested a compounding of
the two modes of provision, paying them partly by salary
and partly by fees. For his own part, he thought the mat-
ter was hardly ripe at present for decision, because it was
impossible to say what would be the extent of the business
which the new court would have to transact. If great fa-
cilities were given to liquidation, either by private arrange-
ment or under the sanction of the court, that would of
course diminish what was now called bankruptcy, but what
would then be called insolvency business, and therefore it
was imposstble to say what would be the amount of duty
performed by an official assignee. But he proposed to in-
troduce a clause into the bill by which certain persons
would be empowered to make general orders regulating and
equalizing the emoluments of official assignees, to fix a
maximum and minimum, and from time to time to introduce
such alterations as circumstances might seem to warrant.
He did not know that any better arrangement than that,
considering the uncertain and precarious character of the
measure which he proposed, could be adopted at present.
(Hear, hear.) He turned now to another officer of the
Court—most improperly so called—the broker. Up to
1843 the business of taking an inventory of a bankrupt's
estate was the duty of the messenger who was
in possession of the estate, but in that year it
was supposed that it would be convenient, and would
diminish the expense, if a broker were appointed to do this
duty. The result had disappointed the expectations of
those who introduced the alteration, for the expense had
been very considerably increased, because the emoluments
of the messenger had not been at all reduced, and we had
had in addition the expense incurred by the broker. He
proposed to do away entirely with the broker, who was
improperly called an officer of the Court, who was a person
casually employed, not entitled to compensation, and who
might therefore be removed without difficulty. (Hear,
hear.) One word with respect to the messengers. He had
been told, to his surprise, that these persons actually re-
ceived as much as from £,1,500 to £3,000 a year. That very
morning a gentleman, practically acquainted with the sub-
ject, had assured him that such was the ease, and had
pointed to one messenger who had £1,500 a year, and £5OO
in addition for performing a duty which properly belonged
to his office. So that these persons, occupying a subordi-
nate official position, were actually receiving mere than the
country commissioners obtained. Ho thought something
should be done with regard to them, though what that
something should be must be left for future consideration.
(Hear, hear.) He had abstained, as their lordships must
have observed, from entering into minute and particular
details of the mode in which the various provisions of this
important measure were proposed to be carried out. He
had thought that he should better discharge his duty,
and that it would be more satisfactory to their lordships,
if he were to explain what were the leading features and
characteristics of the bill, leaving the details to be dis-
cussed in committee. He could not quit the subject,
however, without one or two further observations. In the
first place, he would venture to call the attention of
their lordships to the language and style of this measure.
Those who were accustomed to the ponderous character of
the provisions of modern Acts of Parliament would per-
haps at first be startled, but certainly he thought in the
end would be pleased. at the simple, short, and concise
style in which the provisions of this bill were ex-
pressed, rendering them perfectly intelligible even to those
who were not acquainted with the subject. (Hear.) There
was another circumstance to which he earnestly desired to
direct attention, although some might, perhaps, regard it
as a defect. Their lortships would observe that this was a
bill strictly and properly for the amendment of the law of
debtor and creditor, and that he had not attempted to con-
solidate the whole of the bankruptcy law into one system.
That subject was most carefully and deliberately considered
before the Government came to the conclusion that it was
desirable, first of all, where such largo amendments were
proposed to be introduced, to see whether they would or
would not be adopted by Parliament, before they ventured
to grind the whole law into one consolidated measure.
There was a disadvantage, as it appeared to him, in intro-
ducing into the same bill large amendments of the law with
out consolidation. (Hear.) On the' one hand, there was the
extreme difficulty of understanding what part was new and
what old; and, on the other, if the whole of the law, in-
cluding that which there was no desire manifested to change,
were brought under discussion, it would be impossible that
that discussion could be carried on with any convenience or
advantage unless the clearest possible. distinctions were
maintained between that which existed and was intended
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of both houses he trusted that at no distant
time either he or some more fortunate legislator might
be permitted to consolidate the whole of this important code
of laws, after it had undergone the requisite revision and
consideration, into one entire system, which would continue