The Sun.
London, England, 1861-02-12 00:00:00

have therefore thought it right that all petitions for adjudi-
cations of bankruptcy, except in those smaller cases where
the debts do not exceed £3OO, shall be presented in the first
instance to the Court of Bankruptcy or the Dist' 'ct Court.
These are the material changes in the structure f the bill,
and these are all the differences that exist on this part of the
subject between the bill of last session and the present. I
now come to the procedure in cases of bankruptcy. I have
thought it most desirable to secure the creditor of an insol-
vent the opportunity of determining whether he will
enter the Court of Bankruptcy or net. The great
fault of the present system is, that the creditor cannot
get the benefit of the provisions of the Court of Bank-
ruptcy without entering the walls of the court. There
is, also, the further evil that once within the walls
he cannot escape until he has paid the utter-
most farthing. (A laugh.) He must remain there
until the whole of the estate has been ground down, col-
lected, and administered. But I think it right that, with
the consent of a certain portion of the creditors, a man who
is an honest trader, or who not being a trader is an honest
debtor, shall have the opportunity of surrendering his pro-
perty and having it duly administered without incurring
the opprobrium and stigma of bankruptcy. (Hear, hear.)
It is necessary to deal with this part of the case with very
great caution, because if you give to the trader any protec-
tion during a certain period of time while he has solicited,
or has represented that he has solicited, the consent of his
creditors, you have suspended during that period the right
of the creditors, and, unless care be taken, the opportunity
may be converted into the means of defrauding the creditor
by the debtor. I have endeavoured as well as I could to
provide a remedy for this, and, while the creditors' rights
are suspended, there will nevertheless be a provision in the
bill enabling the debtor's estate to be administered under
a private deed without the necessity of an adjudication
of bankruptcy. I consider that a pat t of the utility of
the measure will depend on the possibility of working this
portion with convenience and success; and, though, no
doubt, it may on many occasions be desirable that, while
the rights of the creditors are protected, the estate should
be wound up without the debtor being subject to the oppro-
brium of passing through the Bankruptcy Court, yet I pro-
vide in the bill that the creditor or debtor may at any time
pass over the boundary and go into the Court of Bankruptcy,
in order to meet any emergency or necessity, er to have a
determination on any question which may arise in the ad-
ministration of the estate under the trust. But supposing a
petition presented for adjudication, and that the debtbr is
adjudicated a bankrupt, the next form of procedure by the
bill is that there should be an immediate meeting of the credi-
tors, at which meeting it should be decided whether the admi-
nistration of the estate should continue in the court by which
the adjudication had been pronounced, or be transferred to
any other court, as, for example, the county court. At the same
time, the creditors would have the opportunity of receiving
any proposal of the debtor, and of determining whether the
estate should go on in bankruptcy, or be wound up by
private deed. Therefore, at the very first meeting—and
there would be power to call any future meeting for the
same purpose—an opportunity would be afforded to the cre-
ditors of deciding which was the best mode of administer..
hag the estate. Then, with regard to the proofs of debts—
a proceeding at present attended with much unnecessary ex-
pense,—l hex() introduced, in conformity with general re-
commendation, a most simple mode of procedure. A written
declaration, containing a statement of account, signed by
the party, is, when unopposed, to be taken as proved, a
penalty being attached for any false statement. Another
point to which I wish to call attention is the posi-
tion in which the creditors' assignees and the offi-
cial assignees will be placed by the bill. All ac-
quainted with this subject know that official assignees
were introduced in 1831, in consequence of the great evils
which were felt, chiefly from what I have denominated the
indifference and carelessness of the creditors. The official
assignee was invested with the right to receive the whole
estate, and the consequence was that creditors found them-
selves, in their own opinion, entirely excluded from their
proper position with respect to control over the administra-
tion. There has therefore been a general cry to be emanci-
pated from the official assignees, as great as there had been
previously for relief from the maladministration and
neglect incidental to the former system. I have endeavoured
to provide a mode of proceeding which should be something
between the two propositions. I hope the house will agree,
1 with me in thinking that it is proper to leave to the credi-
tors' assignees the right of receiving, applying, and admi-
nistering the estate ; but that it is most essential that there
should be an efficient auditor, active inspector, and vigilant
•
superintendent over the creditors' assignees—able to ascer-
tain, and who would have an interest in ascertaining, that
the property was receive by them and taken into hand
for the benefit of the creditors. I propose, therefore, by
the bill, that as soon as the creditors' assignees should
be appointed the functions and duties cf the official
assignees should cease with respect to the collection and
distribution of the property, save in one particular. I have
found by an examination of the returns that small debts—
debts not exceeding £lo—due to bankrupts' estates are col-
lected by the machinery in the power of the Court with
infinite economy, and therefore I propose to continue to the
official assignee the power of collecting debts not exceeding
£lO. With regard to the rest of their duties, I make it in-
cumbent on them to require accounts from the creditors'
assignees, to audit them, and send copies to the creditors.
The creditors' assignee will also have to return quarterly
accounts of the estate, and those quarterly balance-sheets
will be audited with the aid of the official assignee. The
next question is that of the discharge to be granted to the
bankrupt, and here the bill which I am now seeking to in-
troduce will be found to differ materially from the measure
of last session. It has appeared to me, upon much conside-
ration of the subject, that an obligation should be thrown
upon the commissioners and upon the chief judge, whether
there be any accusation by the creditors or not, of examining
with care and attention the conduct of the bankrupt. Sup-
posing, therefore, that there is no accusation by the credi-
tors, or supposing the commissioner to whom the matter
may be committed thinks it right that the conduct of the
bankrupt should be brought before the chief judge, the
question of the discharge will, in the London district, be
brought, in the first instance, before the chief judge for de-
cision. I propose to arm the chief judge with two kinds of
authority. In the first place, I give him authority to exa-
mine the conduct of the bankrupt in all cases of miscon-
duct not included in the list of offences which the law treats
as misdemeanours. The house is probably aware that, ac-
cording to the existing law, the conduct of the bankrupt
may be the subject of examination by the commissioners,
and that the certificate to bo given to the bankrupt varies
according to the opinion so formed of his conduct. There
are three kinds of certificate—those of the first, those of the
second, and those 'of the third class. The first class is a
declaration that the insolvency of the bankrupt is attri-
butable entirely to unavoidable misfortune ; the second
class states that it is attributable not entirely to unavoid-
able misfortune; while a certificate of the third class sets
forth that it is attributable wholly to causes other than mis-
fortune or accident. I am told, however, that practically
the distinction between the different classes of certificates is
almost wholly disregarded ; that it is of little more use than
if the certificates were written on so many pieces of white,
or red, or pink paper. (Hear, hear.) Hence, I have thought
it better to persevere in the proposition which I made last
year that these certificates should be wholly abolished.
(Hear, hear.) I do so with the more confidence now, be-
cause I believe it is necessary that something more strin-
gent, something more definite, something the effect of
which may be more severely felt, should be placed in the
hands of the judge, than the mere power of giving a certain
description of certificate. (Hear, hear.) I have therefore
described a number of instances of misconduct which are
not characterised as misdemeanours, but which are treated
as grave offences, warranting the judge in refusing or
suspending the order of discharge, or in committing the
bankrupt to prison for any period of time not exceeding one
year.. Among the offences so enumerated is one which I
should have been. very glad to make a criminal offence if I
could have found the means of defining it with that amount
of accuracy with which every criminal offence ought to be
defined. I mean the acquiring of fictitious capital, the
trading with false capital, principally produced by the ex-
cessive use and unjust application of accommodation bills.
(Cheers.) That, in point of fact, is nothing more than a
mode of obtaining the means of trading by fraudulent pre-
tences, and ought in the excess to be punished as fraud.
Bodneufiltynteihndeldnhieffiwecoxulzs:tsyi,s in making criminal that which is so
althoughbecause nt the emaii excesscan is
hesitateincapable
about o f
recog-
nising it when it comes before him in actual business. It is
impossible to assort that being a party to an accommodation
bill shall, of itself, be an offence ; yet no man of *lay infor-
mation on the subject,can hesitate to say that such a sys-
tem of trading by accommodation bills, as that which has
been exhibited in the public journals, in connexion with a
sr
ce
rciepntti
ocase f oo fffebna
cneksr.utct chye,er(Cheers.)
.)
', amountshnve to
one of the worst de-
not hesitated, there-
fore, to give the chief judge, who will be a judge of the
highest rank, the power of inflicting a sentence of imprison-
ment for 12 months in those cases of delinquency which aro
not included in the list of offences amenable to the criminal
law. I du so with less hesitation, because the existing law
gives the power to a creditor, if he pleases, of inflicting a
greater amount of imprisonment. The law as it at present
stands is characterised probably by as much inhumanity and
at the same time inefficiency and inipolicy as any law that
eouldbedevised. If the Commissioner suspends a certifi-
cate, or refuses it for any limited time, during that period
any creditor may apply to the Commissioner for a certifi-
cate of his debt, and upon that certificate he has a right to
commit the bankrupt to prison. Then, at the end of the im-
prisonment, which is an imprisonment for a limited period,
any other creditor may proceed against the bankrupt in
the same way, and subject him to a similar incarceration,
I think that, if the delinquency of the bankrupt is such
that it is just to expose him to the penalty of imprisonment,
that penalty ought not to be left at the caprice of any
creditor who might be prompted by. malice or a vindictive
Reeling—(hear, hear)—while, on the other hand, I am
equally of opinion that it is unfair that the creditors should
lie made the agents and instruments of inflicting a criminal
sentence. (Hear, hear.) Such a sentence, to have any
'tiled in the way of deterring from similar crimes, ought
to come from a judge of the highest dignity. I therefore
propose to take away the power of imprisonment now given
to the creditors, and,
in cases where the judge shall be of
opinion that the order of discharge ought to be refused or 4

suspended, to give him the power of inflicting the amount
of imprisonment I have mentioned. I have also thought
it right that the same judge—viz. the chief judge—should
be armed with authority to trythe bankrupt for any offence
of which he may be accused, because in handing the bank-

rupt over from the Court of Bankruptcy to a criminal tri-
bunal there is not only very considerable difficulty in caus-
ing proofs of the offence to accompany the accusation, so as

to enable them to be brought forward in the manner re-

quired by any ordinary criminal court, but there is great in-

justice in subjecting the estate to cdl the expense and delay
incident to that description of prosecution. I have thought
it right, therefore, as we propose to place at the head of
the Court of Bankruptcy a judge of the highest rank and
character, the equal of any of the judges of 'Westminster
hall, that such judge should have the power of administer.
ing this part of the criminal jurisdiction. The Bill provides
that, if the bankrupt desires to be tried by a jury, he shall
be tried by a jury in the ordinary manner ; but that if he
does not desire to be so tried, then the judge is to examine
his conduct, the Commissioner who has had the immediate
prosecution of the matter sitting as the assessor of the chief
judge. The final sentence is to proceed from the Court so
constituted, no appeal being allowed to any other tribunal.
From the decisions of the commissioners in the country and
County Court judges an appeal to the chief judge ap-
pears to be desirable, but from the sentence of the chief
judge in this matter I think it right that there should be
no appeal. I think these provisions are not more stringent
than the absolute necessity of the case requires. I hold
that justice should be administered in a manner in which
humanity and consideration may be united with necessary
severity, and so as to operate more efficiently than the pre-
sent system. I have mentioned to the House the procedure
applicable entirely to the case of traders. It was part of
the proposition of last year that the non-trader also should
be brought within the area of the same tribunal. That
was a preposition which, I believe, as far as general
discussion has gone, has received the approval of, I
pnoeliacrylyofaltlhwe h.boanhkaruveptaltatwendies,d
Itobthelieevseu,bjthecat:
may The trusap,
sr
auye
every species of encouragement should be given to at
debtor the moment he finds himself in a state of insolvency
to do that which justice requires, namely, to divide his
estate equally among his creditors ; but I must beg you
also to observe that, with the exception of the trader--
in the case of the non •trader the whole tendency of your
laws as at present established is to produce the very oppo-
site result. You admit of execution against the person of
the debtor ; you admit the debtor being consigned to prison
on that execution—for what purpose ? You cannot for
one moment say that he is sent to prison for punishment.
You have not been administering the criminal law at all.
He is sent to prison at the pleasure of a creditor. Well,
the creditor has become his creditor by his own voluntary
act. To every debt, in that sense of the word, there are
two parties—the man who contracts it, and the man who
permits it to be contracted. The creditor, of his own
accord, willingly gives credit—to what had he the right of
trusting at the time he gave it ? He trusted, of course, to
the solvency and means of the individual. In the very
nature of the contract, it is impossible to suppose that the
power of consigning the debtor to prison ought to be re-
garded as one of the natural rights of the creditor. Con-
signing the debtor to prison cannot be justified on any
other consideration than this, that it is a means of com-
pelling the debtor to give up his property for payment of
his debts. But if you can accomplish the same thing
without imprisonment, the imprisonment would be with-
out reason to justify it. The imprisonment of the
debtor is undoubtedly the means of rendering the
debtor useless to himself and a burden to the community.
(Hear, hear.) To the creditor it produces no good ;to the
State at large it is an unmitigated evil. The debtor is de-
moralized ; he is in a state of idleness and depravity fre-
quently while in gaol ; he comes out of gaol a worse man
than he entered it. The whole process', therefore, is neither
more nor less than a process of unmitigated evil, unless
you say it is effectual as a preventive to men going into
debt. But I say you are not justified in imposing any such
law with a view to prevent that consequence when men
only get into debt with the consent of their creditors ; and
if the creditor consent, the act of the creditor entitles him
to nothing more than the aid of the law, in the most expe-
ditious manner, to get at the property of the debtor and
divide that property among his creditors. But here, again,
you give every temptation to fraudulent preferences, you
stimulate the debtor to do that which in bankruptcy the
judge would stigmatise with the imputation of fraud. I
cannot illustrate more forcibly the opinions that have pre-
vailed on this subject, and dictated by good policy as well
as humanity and justice, than by taking the liberty of
reading one or two passages from the reports of various
commissioners who have considered the subject. In the
report of the Common Law Commissioners in 1832 the re-
sult of the law is thus accurately described :
" The practical effect of the law of arrest on final process,
combined with the insolvent law, is the imprisonment of
numbers merely to be discharged without opposition at the
end of afew weeks. The consequence is misery waste of
funds, and multiplied frauds and perjuries. -While no
benefit arises to the creditor, the arrest, imprisonment, and
expense are ruinous to the debtor. In short, the ordinary
consequence is disappointment and loss to the creditor, de-
struction to the debtor."
I say this is a correct view of the case; statistical returns
prove it in the strcngest way by the number who are com-
mitted to prison, the short time they remain there and then
are discharged; not one estate in 250 profiting thereby. You
are bound by the principle of your law of debtor and
creditor to give the creditor the most available remedy, but
it so happens that the most available remedies to the credi-
tor are those which are most consistent with humanity and
justice to the debtor and the general benefit to the State at
large. You tell the insolvent debtor that he shall be re-
leased and discharged on surrendering his property—why
do you make it a necessary condition that he shall go to
prison before he surrenders his property ? (Hear.) You
have felt the injustice and have modified the operation of
these laws by various acts, which have had in them per-
haps more humanity than consistency, and which were not
quite impartial. You will recollect the Act of Parliament
that was passed for an object I won't stop to explain, and
which is commonly denominated the " Gentleman's Act."
That is an act by which in reality the insolvent may get
the benefit of bankruptcy without going to prison. The
Legislature, in passing it, at the same time condemned the
general system because it has by that and other protection
acts in effect declared that if a man will communicate with
his creditors, and get the assent of a certain number and
surrender his property, his person shall be free from arrest.
Now, all I desire for the benefit of non-traders is this—
that the law should give them an opportunity of at once
surrendering their property, and, upon that surrender and
free discovery, that they shall be protected from arrest.
This is the first thing therefore that is proposed, and for
the benefit I trust of the non-traders. I will venture to add
one or two more extracts from the report I have referred to,
in order to vindicate the proposition I have laid down. In
another part of the same report I find this statement :
" Thousands are every year imprisoned and discharged, not
only at great pecuniary cost, but at a moral expense infinitely
more.detrimental to the interest of society." Another re-
port was made in 1810 by the commissioners appointed to
consider the Bankruptcy and Insolvency Laws. The report
is signed by Mr. Justice Erskine, previously Chief Judge
of the Court of Review, Mr. Evans, Mr. Fonblanque, and
Mr. Holroyd, Commissioners of the Court of Insolvency,
and Mr. W. Crawford, Mr. W. Ellis, Mr. B. Hawes, jun.,
Mr. G. C. Glyn, and Mr. John Horsley Palmer—a combina-
tion of authorities of the highest character. There are two
passages I would read :—" It appears to us," the commis-
sioners say, " that to unite the jurisdiction in matters of
bankruptcy and insolvency would, upon principle, tend
much to benefit the public, but this benefit cannot, we think,
be obtained without placing all insolvent estates under the
administration of one uniform system of law. We can per-
ceive no good reason why the estate of one debtor (a trader)
who is unable to pay his debts in full should be adminis-
tered "in a different manner from that of another debtor not
a trader under the same disability." I cannot but think,
therefore, that you must arrive at the conclusion that the
greatest injustice is under the present system done to the
non-trader, and the greatest injury inflicted upon the credi-
tor; because, as matters now stand, the former is led to
submit to considerable sacrifices from time to time, fre-
quently even to commit fraudulent acts, in order to evade
the penalty of imprisonment; so that, instead of deeming
it to be his interest to make an honest surrender of his pro-
perty to his creditors, every species of inducement is held
out to him to do that which under a just and politic admini •
stration of the law of debtor and creditor might not occur.
That hundrediand thousands of debtors should be impri-
soned only, as it would seem, to keep up a costly tribunal
for the purpose of their discharge from confinement, would
appear to be the very extreme of folly. If then the case be
as I state, it becomes the interest of all parties to place
the law of insolvency upon the same footing as that of
bankruptcy. It has, however, been made manifest to me
since last year that some degree of odium attaches to the
word "bankruptcy" in general acceptation, and that that
circumstance would be likely considerably to detract from
the beneficial results which I anticipated from the changes
in the law which I then proposed. I have, therefore, been
desirious of embodying in the present bill words which
should be certain and unmistakeable, as defining the tests

of insolvency as applied to non-traders; so that the law of
bankruptcy might be brought into operation in such cases
upon the most distinct evidence of general inability to meet
one's just claims. Now, I think the house will agree with
me in the opinion that one of the greatest subjects of re •
preach in connexion with cases of this description with
which we have to deal is that which results from the
habit which exists among men who happen to be involved
in debt of withdrawing their property from this country
and seeking a residence in some part of the Continent, where
they may enjoy it, thus defrauding their creditors of that
which ought to be distributed among them. (Hear, hear.)
We are all perfectly well aware that there are abroad cer-
tain localities which are well known as being the places of
refuge of English debtors, and that being so, I have made
the first test of insolvency in the present bill the absconding
from the country with the deliberate intent of evading one's
just creditors, and the remaining abroad with the same
object. But now comes the question, which shall be the
overt act which shall meet with general acceptance as evi-
dence of the malus animus to defraud ? In dealing with
that question, in which you have to collect from the acts of
the debtor the proof* of the animus by which hie Osence

from the country is influenced, I have been desirous to
render it necessary that a certain process should be
gone through. I should require a petition against him
to be served at the last place of abode of the

debtor, as under the existing system the Courts of Chan-
cery and common law aro empowered to demand in the case
of a bankrupt, so that it would be impossible for any man
to be declared an insolvent upon the ground of fraudulent

absence from the kingdom without having a fair opportunity
of showing what is about to be done with respect to him, of
entering an appearance against the petition, and of proving
that he in reality was animated by no fraudulent intention
in taking up his residence abroad. The next test of bank-
ruptcy which I would make applicable to the non-trader is
the fact of a creditor having obtained a judgment against
him in accordance with the ordinary process of law or equity,
and being unable to find him to enforce that judgment, and
I propose that under those circumstances an opportunity
shduld be afforded him of appearing to answer the demand,
and of giving either satisfactory security to the creditor or
proving that he was not liable to be called upon to liquidate
the claim made upon him. If that be•not done you will, I
think, agree with me that a criterion of general insolvency
is furnished which makes it the duty of the debtor to deliver
up his property for the payment of his liabilities, and which
renders it incumbent upon the framers of the law to enforce
that surrender. Another test of insolvency is the fact that
the debtor being a non-trader has been arrested on final pro-
cess, and is placed in prison... Every hon. member at all ac-
quainted with this subject must be aware that it has not been
unusual for persons so situated to prefer to remain in gaol
and enjoy their property there to giving up that property
to be distributed among their creditors. The most absurd
part of the English law with respect to this particular point
it this—that it seems to assume that when you have got the
body of your debtor you have obtained satisfaction of your
debt, thus reminding one of the doctrine attributed to the
Roman law of sanctioning the division piecemeal of a debtor
among his creditors. The test of insolvency which I have
last mentioned may be made the occasion of a petition for
adjudication of bankruptcy being presented against a non-
trader, and the result would be that his estate would be ad-
ministered on the same principle as that of a trader. Touch-
ing
upon this part of the question we are naturally led to
ask the very important question, whether in altering the
law of bankruptcy we ought to import into the amended
system that principle of the law of insolvency which makes
the future estate of the debtor liable for his debts, or whe-
ther it would not be more advisable to extend to the nen-
trader the benefits of that humane principle of the bank-
ruptcy law which gives the debtor an unqualified and gene-
ral discharge for the future upon his giving up the entire
property in his possession to satisfy the claims which exist
against him. For my own part, I confess that Ido not
think a man, if he chooses to give credit, is entitled, morally
or upon grounds of good policy, to anything more than an
equitable distribution of all the means in the possession of
his debtor at the time when he gives him credit. It is not,
it seems to me, a just or a politic course to take so to legis-
late as to induce 'a creditor to speculate on the future
prospects of the person whom he trusts. (Hear, hear.)
We know that in equity all bargains with expectant heirs
upon the security of their expectations, and all contracts
relating to future acquisitions of property, are regarded as
unjust, and I feel therefore confident that the house will
be of opinion that a debtor, having once honestly delivered
up to his creditors all the property which he possesses,
ought not to be liable to be pursued by them through life,
and to be called upon to surrender that which he may
afterwards secure to satisfy their claims. That is a prin-
ciple on which the house 'will have to decide. I have the
greatest possible confidence in a general committee of this
house. I know of no more searching tribunal for the
examination of such a question ; and this, as well as all the
main provisions of this bill, I shall submit unreservedly to
discussion in committee, accepting altogether that which
its wisdom and sense of justice may approve. I must,
however, tell you that in that part of the measure which
deals with the orders of discharge of bankrupts, whether
traders or non• traders, I have given to the' chief judge in
case of any delinquency the power of annexing to such
orders of discharge conditions affecting future acquired pro-
perty. It will be for you to determine the prudence and
propriety of that course ; but the bill proposes, as a penalty
upon the bankrupt trader or non-trader, that in cases
coming within just censure such censure shall involve the
liability of future acquired property. (Hear, hear.) Now,
it may be asked whether this bill goes the length of totally
abolishing imprisonment for debt. My answer to that is
that I regret it does not. I have hesitated on this point
from a fear that if I had pledged myself to such a propo-
sition I might not have found it accepted by this house.
But I will tell you what I have done, and which in reality
will, I trust, arrive at the same result, although it is not
the same thing in name; neither is that boldly avowed
which reason, justice, and policy appear to me to
demand. The course adopted by the bill is this :—.ln the
first place, every pauper debtor, who, on account of his
poverty, cannot petition for an adjudication of bankruptcy
against himself, has the power of presenting a petition to a
County Court, and of presenting it at the expense of a fund
provided under the 33d of George TYF for promoting the
discharge of pauper debtors. That is one of the modes by
which I hope to relieve the gaols of some of their present
occupants. But another mode is this :—The gaoler, by a
provision of the bill, required to make out on the first day
of every month a return of all prisoners in his custody for
pure debt, or rather simply on account of debt, and to for-
ward this return to the chief :judge in the London district,
or to the commissioner in any country district of bank-
ruptcy. On the receipt of that return notice is to be sent
by the clerk to the execution creditor and the detaining
creditor of every such person; and on the expiration of 10
or not more than 20 days from the date of the return a
registrar will examine every prisoner, whether there be a
petition or not. The registrar will have power to make an
adjudication—that is, to make an order vesting the estate of
the prisoner in the official assignee—and, if he thinks fit, to
grant the prisoner an order of protection—that is, a quali-
fied discharge. When that machinery is in operation I
believe it will be impossible for any man to remain in
prison simply on the ground of debt for a longer period than
from 14 to 20 days. And, if that be so, I think it will fol-
low that no creditor would be willing to commit his debtor
to prison; for he pays a considerable sum for that privilege
or source of enjoyment, if it be such—(a laugh)—and he
would hardly avail himself of it when his debtor would be
released from prison in the manner I have described.
The house will recollect that prisoners for debt in
this country are now divided into two classes, One
of these classes, and by far the most numerous, are those
who are imprisoned by the orders of the County Court
judges, for there is a species of imprisonment which must
be called penal, not being for pure debt, infficte 1 by the
sentence of a County Court judge, or of a Commissioner of
Bankruptcy in cases of small debts which are found to have
been contracted either under circumstances of fraud, when
the debtor had no probable means or expectation of being
able to pay, or under some other species of falsehood or de-
linquency. Now, of course, it would be very wrong to in-
terfere with that description of criminal imprisonment, and
therefore, I do not propose that the registrar who attends
for this gaol delivery of debtors should have any power to
release persons so committed to custody. But for pure
debt, for debt unaccompanied by these circumstances of
fraud or reproach, no man will be permitted to remain in
prison ; but, whether he will or no, will be discharged and
his property, if he has any, taken from him and made avail-
able for the benefit of his creditors at large. These, then,
are the principal provisions, some of which wore included
in the former Bill. I have only to add that connected with
the additions made to the former measure there is this im-
portant circumstance :—I have mentioned my great desire
to facilitate the process by which debtors without incurring
the reproach of bankruptcy, should be enabled to surrender
their property for division among their creditors. Bat it re-
peatedly happens that the debtor cannot accomplish this,
because he is unable to ascertain who are his creditors at the
time, so as to obtain the assent of the required majority fora
composition or arrangement. Every trader is probably
liable upon promissory notes or bills of exchange which are
circulating about, it may be in foreign parts, and the
holders of which cannot be discovered in a short period of
time. I have, therefore, introduced this provision, that, if
the debtor obtains the required majority of those creditors
who can be ascertained, and is willing to make the trust
deed or deed of assignment, run in a very simple form, it
shall be as effectual and complete a discharge and protec-
tion to him as if he had gained the assent of all his credi-
tors. The simple form in which the deed shall run is to
this effect, that he conveys all his estate and effects to cer-
tain trustees, to be by them collected, applied, and adminis-
tered exactly as if he had been regularly adjudged a bank-
rupt. With regard also to deeds of arrangement after
bankruptcy, T have incorporated some provisions from the
Scotch system, in order to facilitate a change from the pro-
cess in bankruptcy to proceedings by private arrangement.
Such is the measure which I submit to this house for its
approval. It must be recollected that we have at present
a most artificial system. It is impossible, as I have already
said, to sweep that system entirely away, and substitute
for it a perfectly new one. All we pretend to do is to
remedy its worst defects, to remove its undoubted griev-
ances, and provide the means whereby, without incurring
the expense of all its present formal modes of proceed•
ing, the creditors may easiest obtain the property of the
debtor for the satisfaction of their just claims. If these
provisions work well and satisfactorily, I venture to
anticipate that the charges of bankruptcy, where bank-
ruptcy exists, will be diminished by one-half; but I
hope that bankruptcy will seldom be resorted to, and that
only in case of absolute fraud and delinquency. I hope
that the mode of administering debtors' estates by
private arrangement, incorporating as it does all the prin-
ciples and appliances of the law of bankruptcy, will be the
general rule, and the formal process of bankruptcy the ex-
ception. You cannot have a better illustration of the pre-
sent unfortunate state of the law than is presented by the
contrast between the number of cases of bankruptcy and
the cases of composition. It proves to you this great truth,
that whenever your law is not in harmony with the exi-
gencies of society—it has the effect of driving the people out
of their courts of justice into the by-ways which are still
Open to them, in order to secure those advantages which
They ought to be able to obtain in a more legitimate manner.
he cases of composition amount to between 8,000 and
10,000 a year, while the bankruptcies and arrangements
tinder the control of the Courts seldom awed 1,000 p'