The Sun.
London, England, 1859-01-20 00:00:00

" 1. I do not think that any legislata assistance
should be given to enable any majority of creditors
seeking what is called liquidation' (which, is
nothing but a plausible word for secrecy ') to

I control any minority of creditors, however small.
I would not allow even 99 creditors to control the
hundredth creditor. The hundredth man who in-
sists on publicity is the friend of the public.
" There is nothing so agreeable to an insolvent
and his creditors as secrecy, nothing so disagreeable
as publicity. The debtor is only too often a knave,
the creditors are almost all victims of their own
readiness to give credit without inquiry. The debtor
hates to have his knavery, the creditor hates to have
his folly, exposed. They are in a conspiracy against
honest men, and their engine is ' secrecy.'
" The usual course is this. When the debtor
cannot longer delay the evil day, he calls his cre-
ditors together to hear his statement of debts and
shillings in the pound. Generally
assets, and he submits a proposition which is always
poaflyerssoau mboantyas much as he can pay. The credi-
htoe
tors consider.his proposition, and almost always
stipulate for something more. The debtor is so
anxious for secrecy that he generally undertakes to
pay the something more, but he proposes to pay it
by acceptances, at three, six, nine, and 12 months.
Having thus bought secrecy, he obtains during the
12 months, of tradesmen who have not heard of his
insolvency, the means of paying his existing credi-
tors ; and thus Peter is robbed to pay Paul, and the
result is that a knave is turned loose on the world
unexposed. The existing creditors do not trust him
during the 12 mouths,rbecause they know hint;
new creditors do trust him, because they do not
know him. Is this a system which the law should
encourage ?
" If I could make the law, I would not only not
give the smallest power to the majority of credi-
tors to bind the minority, I would go further, and
would even enact that the creditor who established
the bankruptcy ,11,,idd—receive some advantage
as a reward for having been. the first to denounce
the insolvent, and so stop his mischievous career.
In a bankruptcy before me a short tithe ago, two
eminent banking houses in the City lost, one £5,000,
the other £1,500, by not knowing that a person
who put his name to a bill as a second security had
privately arranged with his creditors a year before.
" I, for one, will never lift a finger to assist pri-
vate arrangements. The true policy is publicity.
" 2. I think there ought not to be two laws—a
law of bankruptcy and a law of insolvency.
" I think that there should be but one law, and
that law should be the existing law of bankruptcy.
The principle of the law of bankruptcy is right. It
is this—take possession of the bankrupt's property,
realise it, and after paying expenses distribute it
among the creditors. Inquire into the conduct of the
bankrupt before and pending his bankruptcy, and
treat him accordingly, so far as punishment goes ;
but, in any event, return him sooner or later to the
world of industry, entirely free from all former
debts. Let him recommence the struggle to main-
tain himself and family ; do not impede, or, it might
be said, neutralise his exertions by weighing him
down with old debts. Creditors arc nearly as much
to blame as debtors, and ought not to be permitted
to oppress those whom they have misled by. the
carelessness with which they have given credit.
" Assuming there ought not to be two laws, a
law of bankruptcy and a law of insolvency, and as-
suming that the main principles of the law of bank-
ruptcy are right, it follows that the insolvent law
should be dropped, and the bankrupt law substituted
with such amendments as should be approved of.

" It is proposed to consolidate the Bankrupt and
Insolvency Courts, and have only one court, the
judges of which should be called judges, not
commissioners. This seems right. I think that
the word bankruptcy should be dropped. The pro-
per word is insolvency. The consolidated Court
should, therefore, be called the Court of Insolvency.
But it would be inexpedient to have all cases of in-
solvency managed in the same court, as there is
great inconvenience in mixing the lowest of the low
withipersons who have always moved in a higher
sphere. The proposal, therefore, to retain the court-
house and establishment in Portugal-street, as well
as the building and establishment in Basinghall-
street, and use the former for the lower class of in-
solvents and the creditors and the latter for the
higher classes seems judicious. It is a great advan-
tage that they are a mile and more from each other.
Insolvents should be divided into two classes—say
class A and class B. Class A should consist of those

insolvents• whose available assets would probably
exceed £2OO ; class B should consist of those whose
available assets would probably not exceed that sum.
Class A should be dealt with by the judges sitting

in Basinghall-strcet and the Bankruptcy Courts in
the. country; class B by the judge 3 sitting in Portu-
gal•street and the insolvency judges in the country.
" 3. The law which now enables a creditor who
has got judgment to take the property of his
debtor in execution for his own private use
should be abolished. He ought to have 20s. in
the pound on the cost he has incurred, but should
come in with the other creditors for a dividend
on his debt. Under the existing system, the debtor
is constantly in league with the execution creditor,
and the two contrive to cheat all the other creditors.
Even if the demand of the creditor is an honest de-

man-d, it is most unjust that he should get 20s. in
the pound upon his debt, when the other creditors
get little or nothing ' • but if it is not an honest de-
mand (and it is very difficult to find out whether it
is or is not) it is a most revolting piece of knavery,
because it is turning the law, which ought to be a
protection to honest men, into an instrument to
cheat them.

" 4. The law should declare that it is the duty of

every person, when unable to meet his engagements,
to record the fact in the Court of Insolvency. The
mode of proceeding should be for the debtor to go
before the registrar of the day, accompanied by an
attorney of the Court to identify him, and declare
himself unable to meet his engagements. The
Court upon this ought.to cause the insolvency to be
gazetted, and the usual proceedings should take
place. If the insolvent did not originate proceed-
ings against himself, any unpaid creditor should be
at liberty to go before the proper Court, and state
upon oath a prima facie case of debt due. There
should not be any specific amount required. The
smaller the debt due and unpaid, the stronger would
be the proof it afforded of the insolvency of the
debtor. , He who cannot pay £5 cannot pay £5O.
The judge should immediately issue his summons to
the alleged debtor, calling upon him to attend the
court on a fixed day, and show cause why heshould
not be adjudged insolvent. When the insolvent
attended, the Court would deal with the case as .
justice required. If the insolvency was declared,
everything would pass as now till the insolvent had
passed his last examination. He -would then ask for
his certificate, which would be granted as of course,
unless opposed, the Court granting a first, second,
or third class, according to the circumstances of
the case ; but I think that no certificate but a third
class certificate should. be given, unless the Court
should be of opinion that the insolvent had pro-
duced assets which, if they had been sold according
to the usual course of business would have amounted
to 50 per cent. upon his debts.
" There ought to be a code of commercial crimes
or offences and punishment. The punishment should
err on the side of mercy, not severity. A law con-
structed on these principles would, I think, win
public favour. lam very apprehensive that the
bill, if passed as proposed, will throw us all into
confusion, from which we shall not recover for a
great length of time.
" June 25, 1858."