The Sun.
London, England, 1861-04-17 00:00:00

existed why in the event of his being unable to discharge I
his liabilities he should not equally with the trader be com-
pelled to surrender his property. While it would punish
the extravagant and fraudulently disposed, the Act would
entail no hardship whatever on well-intentioned persons.
By the next clause the Insolvent Court was entirely done
away with, for it was absurd and mischievous to have two
rival systems of jurisdiction, regulating cases of a kindred
nature by wholly different modes of procedure. The expense
of the Insolvent Court would be done away with, and in future
there would be one general court for traders and non-traders.
There weuld be in London one supreme judge in bank-
ruptcy. In the country all cases in which the property was
under £3OO would by law be referred to the County Courts,
and in all other casesit would be open to the creditors,if they
pleased, to take them into such courts. He hoped that
eventually all the bankruptcy business in the country would
be disposed of by the judges of the County Courts, and that
we should be able to do without country commissioners. In
this respect a good example had been set us by Scotland,
where already bankruptcies were administered by the She-
riffs' Courts, and a trustee was appointed by the creditors
to manage the estate. The result of this was that, while in
England the expense of distributing a bankrupt estate
amounted to 33, in Scotland it reached only 13 per cent.
By this Bill the Government promised to confer the man-
agement of the estate upon a trustee to be appointed by the
creditors. The measure did not, however, abolish official
assignees. The enormous profits of those officers would be
reduced, but it would still be their duty to take possession
of the bankrupt's property, to hold it until a trustee, or cre-
ditors' assignee was appointed, and to superintend the latter
functionary in the management of the estate--a check which
would, no doubt, prevent the waste and extravagance which
prevailed under the old system. The next improvement of
the law contained in this bill was the provision that all
deeds of composition should be registered, and that if any
dispute arose upon them the facts might be stated to the
Court of Bankruptcy, which would at once decide the ques-
tion. By this means justice would be done speedily, and at
little-expense, without the necessity of bringing the estate
into bankruptcy. It was further proposed to abolish the
classification of certificates. There had never been any
rules according to which certificates were classified, and in
consequence great uncertainty had prevailed in that respect.
For instance, in London during five years Mr. Commissioner
Evans out of 479 applications granted but 17 first-class cer•
tificates, or about 1 in 28 ; Mr. Commissioner Fonblanque
out of 663 applications granted 31 first-class certificates, or
about I in 14; and Mr. Commissioner Fane out of 653 appli-
cations granted no fewer than 161 first-class certificates, or
nearly lin 4. The punishments to which a bankrupt was
liable for not appearing when summoned, and for other
offences, were formerly excessively severe, but by the Bill
all such offences were made misdemeanours, and three
years' imprisonment was the heaviest punishment which
could be inflicted for any of them. He understood that the
clause imposing a stamp duty had given rise to a great deal
of complaint, which was really groundless. There were
now no sinecurists to be paid out of bankrupt estates, for
the Chancellor of the Exchequer had agreea, though not
without great reluctance, that the payment of compensation
for abolished offices should be transferred to the Consoli •
dated Fund. A number of fees were suppressed, and cer-
tain meetings rendered no longer necessary; and the stamp
was imposed for the purpose of defraying only the necessary
expense of proceedings. He had the most sincere respect
for the body of solicitors, but he believed that the distinc-
tion lrtween the bar and that branch of the legal profession
was salutary and ought to be preserved. He held therefore
that solicitors ought to be excluded from the,superior courts.
His lordship concluded by moving the second reading of the
bill.

Lord CHELMSFORD said the commercial world was
very much divided in opinion on the subject. Although the
subject was an important one, it was not an inviting one,
and therefore he feared he could not obtain their lordships'
attention while he referred to the proposal to abolish the
distinction between traders and non-traders. That was a
subject important to all of them. It was very hard to re-
concile conflicting interests, and he would be very glad if
the Government could succeed in passing a measure which
would satisfy all parties in the commercial community.
With every disposition t) look favourably o n this measure,
he regretted to say, that from communications he had re-
ceived from persons connected with the trade and com-
merce of the country, as well as from his own examination
of the bill, he thought it required considerable alteration
before it could secure the approbation of the country.
When, in 1839, he introduced a bill against premature
consolidation, his noble and learned friend (the Lord
Chancellor) said he was surprised at such patchwork
legislation. Now, the noble and learned lord had intro-
duced a fragmentary bill, and many of the fragments
were so misplaced, that they would require much
polishing and squaring before they could be made to adapt
themselves to each other. He missed here the guiding hand
of the Mercantile Law Amendment Society. This society
was composed of men engaged in wholesale houses—persons
of the greatest respectability, and who had peculiar views
on this subject. There were two classes of opinions on the
question as to how the bankruptcy law should be adminis •
tered. One class thought that the creditors should have
complete and absolute control over the administration of the
effects ; and others thought that official assignees should
exercise dominion, and should almost exclude the creditors
from any interference in the winding-up. The Mercantile
Law Amendment Society were in favour of the former view.
The property was then to be handed over to a person to be
called the creditors' assignee, and the first meeting of the
creditors was to be held in the place most convenient to
the majority of the creditors. How this was to be ascer-
tained he could not understand. The noble and learned
lord then went through the various details of the bill,
and proceeded to contend that great delay would take
place in winding up the affairs of the bankrupt, and
frequently to the prejudice of the estate of the bankrupt.
At present the debts of the bankrupt were collected
by the official assignee to the estate, and this was done in
a manner that gave satisfaction to the mercantile public.
Under this bill there would be a double collection, the
official assignee having charge of the collection of all debts
below a certain amount, while the debts beyond that
amount were to be collected by the trade assignee. How
that could be done without a double set of books was a
matter which he could not understand. His belief was
that these proceedings would add to, instead of diminish-
ing the cost of the bankruptcy. He ventured to say it was
impossible to pass the bill in its present state, for should
the house agree to do so, it would lead to mortification
and disappointment. - The noble and learned lord then re .
(erred to the clauses relating to traders and non-traders, and
said that the non-traders' clause had a retrospective opera-
tion, so that a person who had been a debtor, although not
in trade, could, under the provisions of this bill, be made a
bankrupt within six years from the passing of the measure.
He hoped to be, able to induce their lordships to insert a
clause in the bill to prevent it from having a retrospective
operation. Then as regarded the county court judges, he
did not concur in the proposal made in respect to those
judges under the bill. How was it possible for the county
court judge to administer the estate of a bankrupt, and how
could the county court registrar discharge the onerous duties
of an official assignee ? The thing must break down. The
judges and registrars were already overloaded with work,
but even if they could perform these new duties, there was

an injustice in asking them to do so without an increase of
pay, and in that case the jurisdiction of county court
judges ought t 3 be confined t 3 cases of bankruptcy under
£3OO. The gaol-delivery clauses, as he might call them,
were humane, and properly considered ; but they were
clogged by previous provisions in the bill which he trusted
_ _

their lordships would agree in considering inapplicable.
He especially alluded to the 115th and 116 clauses of the
bill. There was a general impression that this measure had
not received in the House of Commons the attention which
it deserved, and that was an additional reason why the bill
should receive from their lordships the fullest consideration.
The best mode of giving it that consideration would be, in
his opinion, to agree in the suggestion of his noble friend
(Lord Derby), and refer the bill to a select committee. He
hoped their lordships would adopt that course.
Lord CRANWORTH considered that there were many
excellent provisions in the bill, and he especially approved
the satisfactory and skilful manner in which the abolition
of the distinction heretofore maintained between trader and
non-trader had been framed. He also commended those
clauses which enabled an insolvent estate to be administered
by trustees, with power to appeal to the Court of Bank-
ruptcy for assistance, should necessity arise for so doing.
Some of those clauses, however, would require very con-
siderable modification, so as to give persons tried before the
Bankruptcy Court the same right of appeal as persons
criminally-tried before other tribunals at present possessed.
He adhered to the opinion he gave in 1859 as to official
assignees, and disapproved of the wish expressed to abstract
the proceedings in Bankruptcy from the hands of official
assignees and place them in the hands of what were called
creditors' assignees. He should like to see defined in the
bill what the proposed duties of the chief judge were to be.
If his duties were to be confined to appeals there would not
be business to occupy his time for more than twenty days
in the year.

Lord KINGSDOWN expressed himself decidedly
opposed to the abo:ition of the distinction between traders

and non-traders. He thought it most important that that

distinction should be preserved. He thought their lord-
ships should not act on a uniform rule for persons placed

in very different situations, nor should they pass a law

conferring a benefit on creditors to which they were nol

entitled, and inflicting an injury on the debtors to which
they ought not to be subjected. Why, for example,
should a creditor be enabled 0 seduce a young man at a
universtt.y to run into debt, and to come down upon his
(state the moment he attained his majority? The noble
lord then proceeded t review the various changes made in
the law of bankruptcy, and proceeded to observe that this
bill would in eff.ct renew the Court of Review, which hai
been abolished on account of its inefficiency. The bill also
would occasion much inconvenience by allowing a mul-
tiplicity of appeals, although the Lords Justices were quite
aompetent to pronounce a final decision on all such matters.
Lord WENSLEYDALE was understood to support the
bill.

The LORD CHANCELLOR said as no opposition to the
second reading of the bill was intended, he should not think
is necessary to occupy their lordships in replying to the ob-
jections urged. He thought, however, that his noble and
learn.el friends would have done better if, as they did not