The Sun.
London, England, 1844-08-24 00:00:00

STATE of the INSOLVENCY LAWS.
(FROM A CORRESPONDENT.)
" It is very possible for a man to act dishonestly every
day, and yet never to defraud another of a shilling ; a
merchant who conducts his business partly or wholly
with borrowed capital, is not honest if he endangers the
loss of an amount of property, which, if lost, would dis-
able him from paying his debts ; lie who possesses a thou-
sand pounds of his own, and borrows a thousand of some
one else, cannot virtuously speculate so extensively as that,
if his prospects should be disappointed, he would lose
one thousand two hundred pounds. The speculation is
dishonest, whether it succeeds or not: it is risking ether
men's property without their consent; under simila9 cir.
cumstances, it is unjust not to insure. Perhaps the, ma-
jority of uninsured traders, if their houses and goods
were burned, would be unable to pay their creditors;
the injustice consists, not in the actual loss which may
be inflicted, for whether a fire happens or not, the in-
justice is the same, but in endangering the infliction of
the loss. There are but two ways in which, under truth
circumstances, the claims of rectitude can be satisfied;
one is by not endangering the property, the othe4., by
telling its actual owner that it will be endangered and
leaving him to incur the risk or not, as he pleases; those
who hold the property of others, are not warranted, on
the principles of justice, in neglecting to inform them-
selves, from time to time, of the real situation of their
affairs."—Dyniond's Essays on the Principles of Morality..
It will only be when intelligence and ability to
reason and judge are qualities possessed in a greater
degree by the commercial classes, that the Com-
mercial code of this country will be based on seand
philosophical principles, and the public mind disabused
of the prevailing fallacies. The bankruptcy
somewhat, and the insolvency laws altogether, by the
late Act, are ruinous and demoralising in their prac-
tice ; based as they have been on false assumptions,
they appear to have no other consistent or rational
object in view, but, through the calamity of a parcel
of creditors, to take occasion, under pretence of seiz-
ing the debtor's wreck of property, to put the
whole, or nearly so, into the pockets of lawyers. ,
Our bankruptcy courts, whose function it i 4 to
collect the miserable remnants of a shipwreckedlfor-
tune, charge some hundreds for the service, and then
distribute the few remaining farthings among the
claimants—the oyster is devoted by the lawyers; the
shell, with what few filaments of flesh may adhere to
it, fairly enough divided among the litigants. These
courts have encouraged and protected the offence of
insolvency, but they should have had the same object
in view as other courts of law—viz., the prevention of
the evil concerning which they had jurisdiction, by
inflicting salutary punishments. In the early times,
when feudal lords ruled the land with iron sway,
there were not many creditors but themselves, and
almost the only debtors were their own stewards and
bailiffs. The practice on those who did not pay their
debts was then sharp enough (there was no false
humanity then abroad), although it might be a little
contrary to the principles of the Constitution to throw
a steward whose accounts were in disorder into
prison, without judge or jury, and there to let him
die. Successive regulations were made to modify
this practice. For a long series of years bankrupts
were liable to be hanged. In accordance with the
severe spirit of the times those wrong-doers were
treated with a wild and thoughtless severity; to
meliorate which has been the object of successive
Acts of Parliament, until the law, as now left, is di-
vested of its penal character almost entirely.
Lord Brougham has regarded the insolirent
as an unfortunate man, whom it is desir-
able to rescue from the persecutions of • his
creditors. Availing himself abundantly of this kind
of sophistry, plausible but false—" That except on
rarest occasions the effects and not the person of the
debtor were needed ; greater power over the property
(of course only when it could be got at) being given
to the creditor, his position was apparently improved,
and thus has he been wheedled into the surrender,
now complete, of all power over the debtor's person ;
and so well has this feint succeeded, that when, the
meshes of the most complex and extended trading
relations permeate the whole of British society, and
when, after a long depression of trade and manu-
facturing calamity, affords all sorts of people who
are in money-trouble a plausible pretence to break
their faith, and crowd themselves among the few
really unfortunate insolvents—at such a time has the
Legislature removed nearly all the penal sanctions,
and left the creditor class, usually the virtuous class,
by the fact of their having capital to lend, almost at
the entire mercy of the debtor class, usually the non-
virtuous class, by the fact of their wanting to borrow.
By virtuous is meant, of course, the practice of in-
dustry to product wealth, and self-denial to abstain
from entirely consuming it in sensual pleasures, or
from the risking it in gambling (or in the deceptive
language of commerce) adventures. This is the
moral training of the middle classes.
An attorney lately in a country town declared his
inability to pay one farthing on his debts of 14,0001.,
contracted with all classes of the inhabitants, from
the humble mechanic to the neighbouring gentleman
of fortune. The law has protected his person, and
his effects are all dissipated (or are made to appear
so) in genteel living. Another Bromley in a small
way. For him there is no punishment. The law
deems him an unfortunate man.
A London factor has a correspondent at Bury,
from whom he had just received and executed an
order, -when he received information that the man
was meditating to sell off and leave the kingdom. He
sent a person instantly to Bury, found the man pre-
paring for a sale by auction, and in the act of un-
packing the parcel above referred to. He was asked
to pay—to give some account of' his proceedings—to
return the parcel he was then opening, all of which
he refused, saying that the fresh goods would help
the sale. The creditor then applied to Judge Tindal
for a Judge's order, on the plea that he believed the
debtor was about leaving the kingdom. This the
Judge refused, and long, long before the period ar-
rived when by writ of summons the debtor could be
captured, he had sold off, not his own, but his
creditor's property, pocketed the proceeds, and was
on his way to America. The rogue escapes justice
on the speed of steam ships ; the law comes limping
after him at the speed of a spavined pack-horse, and
stops at the sea-shore.
There is a certain Baronet whose friends allow him
5001. a year, who owes various sums, aggregating a
heavy amount—his person is protected, his effects are
none, and his income cannot be touched.
There is a man living at Kennington who owed a
heavy doctor's bill, which he was liquidating by pay •
ing 10s. a week until the 9th current, when ho
snapped his fingers at his creditor, and said he should
pay no more. In one short week, thousands of trea-
sure have been confiscated by the new Act.
The late insolvency law affords a most striking ex-
ample of the injustice of class legislation. Governed
by a landed aristocracy—directly in the Lords, and
indirectly in the Commons—these laws have been
adjusted to favour that class so wealthy and powerful.
Except in the matter of tithe and rent, the recovery
of which is assured by special laws, these men and
their connexions are usually in the condition of
debtors ; they of course desire that the condition of
debtor—one who can't or won't pay his debts—should
be as little invonvenient as possible. The law-lords
are parvenus, ready to do anything for the patronis-
ing pat and smile of the ancient nobility ; they have
connived at this object; the mercantile men in the
Commons, not of direct aristocratic connexions, have
been quieted by an improved Bankruptcy Act. In
fact and appearance being rich, and conducting only
large operations, they have not known thet relationsthevery
of, nor have they had much sympathy h
numerous and comparatively little wealthy inerchantby-
factors, traders, and the like, whose r‘ sactions in-
cludes still the t
larger share of the capital transactions
the coun-
try, are affected solely by the insolvency laws, and
the result has been a state of the law, which surren-
ders all healthy control over debtors' persons, and by
their persons an efficient control over their effects' •
the social marks of dishonour have been obliterated,
the foundations of commercial morality still more
undermined, and a
a nation of shopkeepers" encou-
raged to become a nation of rogues, sharpers, and
cheats. 'Chancellor Onenstein might well exclaim,
" With how little understanding is this world go-
verned !" While mankind find it to their interest to
be honest ; and while some are living under the sanc-
tions of a religion which teaches "to owe no man any-
thing ;"
or while others have enjoyed a virtuous edu-
cation and habits, or the still greater happiness of a
mind of primitive virtuous texture, let the laws be
even more vice-encouraging than they are, there will
be no reason to fear that our commercial confidence
in one another will be dissolved, or that people in ge-
neral will not continue to be honourable, and keep
their promises, however much they may be disheart-
ened by the success of rogues, or insulted by the pro..
tection given to the comparatively few whose flagi-
tious delinquencies are caused by their own idleness
and extravagance. But the national capital will con-
tinue to be deteriorated by the evil perversion, or by
the wasteful destruction, of many hundreds of thou-
sands of pounds annually ; and as long as these laws
dishonour the statute-book, the nation will be
_less
rich, and the citizens less virtuous, and the condition
of the middle classes of society be rendered more and