Star.
London, England, 1829-10-20 00:00:00

TUESDAY EVENING, OCTOBER 20, 1829.

early surrender, and to hold out •to those who do other.
wise that they must expect no relief from the law until they have
gone through an imprisonment. There is no distinction made be-
tween cases of misfortune which may happen to persons not in
trade, and ordinary cases of imprudence and blameable thought-
leafless. It was probably thought that no general criterion could
be fixed on for judging of the degree of blame imputable to the
debtor, but the comparative amount of his debts and his means.
But a case may easily be put of a person having his fortune, for
example, in the bands of an agent or banker, who fails, and who
is thus left with much less than half the amount of his Debts, to
whose case all the considerations of the policy of the law would
apply, both as regarding humanity to the Debtor and justice to his
Creditors.—The Act is temporary, being only to continue till the
Ist of March, 1833, and is avowedly intended as an experimental
measure ; so that if it shall be thought proper to confer a discre-
tionary power on the Court to receives petition of Insolvents in
the like cases, or if there shall appear to be any other cases un-
Provided for. Parliament will have an opportunity of supplying the
defect.

3. The third and only other class of persons in the contempla-
tion of the Act, are persons engaged in trade, and deemed Traders
by the Act 6th of the King to amend the Laws in England relating
to Bankrupts. Any person, a creditor of such trader to the
amount of 1,000 sicca rupees, or two creditors to the amount of
1,500 aim rupees, or three or more creditors to the amount of
2,000 sicca rupees, may present a Petition to the Court, praying
the Court to proceed in like manner as if the Insolvent had himself
petitioned, and the first adjudication of the Court finding that the
Debtor has committed an act of Insolvency, vests by force of the
law all the property of the Insolvent in the common assignee for
the benefit of his creditors, in the lame manner and to the same
effect as the debtor's assignment in the two former cases. The law
has fixed on two circumstances, which are to constitute such an
act of Insolvency as shall entitle a creditor to petition in the man-
ner I have mentioned. First, the Debtors being in prison for
Debt for 21 days. Secondly, his departing from within the limits
of the jurisdiction of the Supreme Court of the Presidency with
intent to defeat or delay his creditors.
Agreeably to the terms of the Act—and the powers conferred

on the Supreme Court, the Court has framed Rules and Regula-
tions for the Proceedings in the Insolvent Debtors' Court, which

may be seen at the clerk's office. It is only necessary fur me to
state at present. that It is provided that due notice be given in the
Newspapers, English and Native, of every application for relief,
or for rendering a person Bankrupt under the Act ;—and sufficient
time is to elapse to enable such of his creditors to appear as live at
or near the Presidency.—After this, the busineu of collecting his
effects and other matters, preliminary to a general distribution,
will proceed—but before that distribution is made, sufficient. time
must be allowed for all his known creditors to have notice who
live within the British Dominions in India.

It-iv provided by the Act that where an insolvent petitioning the
Court for relief shall be possessed of any real or Personal Estate,
and no Commission of Bankruptcy shall issue. it skill be lawful for
the Assignee appointed by the Court to proceed to get poesession
of the Estate, and to dispose of the same for the benefit of the Cre-
ditors, that-the Court, on the Bankrupt doing fairly all that'is re-
quired, may grant hint a protection from arrest during the pleasure
of the Court—or discharge him from Prison, if in Prison. It is
also provided, that if any Insolvent, at the time of making assign-
ment, shall hold any public office, appointment, or benefice. ad',
Military, or Ecclesiastical, and if his interest in such appointment
be saleable, such interest, for the purpose of sale, shall be trans-
ferred to the assignee for the benefit of his creditors ; and if his in.
terest therein may oot be lawfully sold, the Court may order the
Insolvent'to pay a proportion of his Receipts therefrom to the As-
signee. By f 63 of the Act, it is enacted, " That whenever it
shall be made to appear to the satisfaction of any Court for Relief
of Insolvent Debtors, upon the application of any Insolvent, his
assignee or assignees, or any of his or her creditors, that the Estate
of such Insolvent Debtor which shall have come to the bands of
the assignee or assignees shall have produced sufficient to pay and
discharge Three-fourths 'of the amount of the Debts which shall
have been established in such Court, or that Creditors to the
amount of more than one-half in number and value of the. Debts
which shall have beets so established shall signify their consent in
writing thereto, it shall be lawful for such Court to inquire into

the conduct of the said Insolvent; and if it shall appear to such
Court that the said Insolvent has acted fairly and honestly towards
his or her creditors, such Court shall be fully authorised and em-
powered thereupon to order that the said Insolvent shall be for
ever discharged from all Liability whatsoever for or in respect of
such Debts so established as aforesaid."
These Provisions are for the fair distribution of the effects—and
the relief of fair Debtors. But the Act has not been unmindful of
the due punishment of those who either fraudulently, or with that
degree of thoughtless •eittavagance which can hardly be distin-
guished front fraud, have betrayed their creditors into trusting
them to an extent which they either never meant, or could not
reasonably believe they should be in condition to repay. On these
the Court has the power of 'maiming in truth a sentence of impri-
sonment by delaying their discharge from custody for any period
net more than three years from the time at which they would
•therwi/e be entitled to it.'

There are two provisions which should be specially mentioned;
one for insolvent married women having separate property, au-
thorising the benefit of the Act to extend to them on surrendering
their separate property only.—This is applicable to eases where
they'may by law contract debts.—The other is a provision for in-
solvent lunatics who are in confinement. In this case the gaoler is
bound to give notice to the Court, and if, on Inquiry, the Court
shall he satisfied, it is to proceed in the case of such unhappy per
son as if be were of sound mind, to the effect of releasing his person
and collecting and distributing his property ;—provisling for his
subsistence as tire occasion may require.

These, very shortly stated, are, I think, the principal provisions
of this law. It is, as I have said, a most important statute—and
must produce a very material and a very beneficial change in the
character of the relation of Debtor and Creditor in India. Where
no laws ezistfor compelling the Debtor to make a fair distribution
of his properly among his Creditors when he cannot pay all, on
one hand,—nor'for releasing the Debtor from the vengeance and
resentment of a disappointed Creditor, when he is fairly wiWng•to•
do all that the state of his stairs admits of to discharge his debts
on the other, the trade of lending money becomes a sort of
gambling, and a separate business and mofession, and generally not
the most creditable badness and profession. Where men lend
money without much'idq'niry into the security of the borrower—

Out trust to the effect which their power of punishing Debtors by
a protracted, in come cases an endless, imprisonment, will have in

frig btening mom men into some caution in this respect, or at least
into the keeping within such bound as that they may generally
have a fair chance of paying one man by borrowing from another
before their Ofrairs are totally desperate, and their credit trre-
tikevably gape 1 andlisass *di original lender thinks he will, M a
..rest majority of cam, he protty sure tole' out, and be compen-
sates his chances of loss, toed or partial, amounting to a certainty
. . •

'of loss in a considerable number of instances—by the extravagant
rate of interest he charges in all.

Thus the honest, and careful, and industrious man, who has
occasion to borrow money for reasonable and legitimate purposei
—on good security—is obliged to pay an extravagant rate ot inte-
rest, in order that his payment may compensate the loss the lender
expects to sustain from having trusted a spendthrift, a prodigal, or
a needy and thoughtless adventurer.
No man can have sat in this Court half of the short time I have
done without seeing that this is the state of things here. .
The lowest rate of interest charged by the most respectable
bousesi and monied men is I per Cent. per month. more than 9
per Cent, per annum ; while the Government obtains money at S
per Cent. per annum, and the Banker or Scroll who charges above
9 on his advances, allows only 6 per Cent. on his receipts, an
which beagain charges I per Cent. commission, which reduces the
Intorost allayed to 6.

__lf you compare this ram of Interest. 9 per Cent. to the profit
which can be made of matey in any fair speculation, it will be evi-
dent that no man can borrow money at this rate to embark in any
such speculation.

These who are engaged in trade or who have money vested in
Homes or in Shipping.
Many other things are necessary to enable a country to take ad-
vantage of the largest bounty of nature so as to convert her gifts
into wealth generally diffused, and the possession of those things
which follow this disuibution of wealth, comfort, civilization. and
good morals generally spread among a people.—To this purpose
good laws are necessary as well as a just administration of them,
and the making of good laws consists rather in the removing of
obstacles which occur in the natural path and progress of society
than in any elaborate contrivances for accelerating her march.--
These advantages India has never possessed.

Any general diffusion of wealth therefore was not to be expected.
But I think, considering her natural advantages, a somewhat
greater diffusion of wealth, &tad a somewhat greater power of ap-
plying it to promote its own increase might have been expected.
Among many other disadvantages, I think the state of the law
of Debtor and Creditor has been one of the greatest, especially in
places where, as in this great place of trade, wealth and commerce,
have established themselves to a considerable extent,—short as that
extent is of what ought to result from its natural advantages, from
the liberal and fair bearing of the Government towards the inhabi-
tants, and its splendid liberality in useful public works, end from
the just and equal administration of British laws.—l should say
that When a country had advanced even the shorten way on the
road of commerce for the improvement of her condition, the very
first thing necessary to disembarrass her on her journey is a good
system of law applicable to the relation of Debtor and Creditor, of
which system oue of the most essential parts is that which relates
to the case of Insolvent Debtors—and 'without some system of
Bankrupt laws no material advance in trade, industry, and in
wealth, can ever be made in any country.

Accordingly, ao country in which any such progress has been
made has ever existed without it.

The foreign countries of Europe early adopted the Roman sod
Canon Laws—and with them the Casio Ilesentss—by which a
Debtor gave up all to his Creditors.—ind by so doing

obtained the release of his person—and a freedom from
legal process till be should acquire new wealth though
not the Anal discharge of his Debts;-and different regu.
lations in the trading countries of Europe gradually modified
this process, and adapted it in some particulars to the wants of a
more extended commerce.

In Itogiandi—whkh rejected the Civil and Canon law though
she borrowed largely and profitted largely from the maxims and
doctrines of the former—no such preens has ever prevailed,—till
the late introduction of the insolvent acts.

But so early as the reign of H. 8, a system of Bankrupt Law
was introduced—regarding merchants, bet merchants only.—lt

was improved in the reigns of Biz. and James I. and several 'oboe-
quent statute'.

These statutes and the learned &positions of them by the
Courts down to the present time have been all consolidated by 6
G. 4. e. 16. and these Benefits are now extruded to India by the
British legislature.—The leading Objects of Bankrupt Laws are
two.-1. That the effects of the Insolvent should be equally di-
vided among his creditors—no one having an advantage over others
from the favour of the Bankrupt, or from soy practice to benefit
himself at the expenoe of the rest, both of which in troth are
frauds.

2. That on a fair surrender of his effects the Bankrupt should b•
free, that he should not be at the mercy of a merciless creditor— '
be pdnished as if for a crime for what may be a miforfuner—or, if
btanseabk, without distinction of degree or endurance, the Judge,
who is to limit his punishment and decide of its extent being •
creditor, irritated, resentful, perhaps justly provoked but not the
less unfit to to be a judge in his own cause. In the prison of this
very place is an instance of one man 13 or 14 years hi gaol—and
there are cases of many who have been in gaol for debt for many
years who have all along been receiving support from tie Creditor—
having sworn that they are without the means of supporting life.—
These persons are evidently suffering a mast undue pasiaksisent, or
they are cheating their creditors and guilty of the most criminal
perjury. Yet there was no remedy by law.-3. It is an object of
all well considered systems of Bankrupt Law to make a distinction
between innocent and Criminal Bankrupts. This is done in the
statute before us—by giving a power to punish the latter in a
manner prescribed by law in the discretion of the Judge.
The Benefits of the system of law this introduced will be felt
equally by the Lender and the Borrower ;—men will become more
careful in lending money and in giving Credit to such as wish to
deal with them.
They will come to look to the nature of IN security on which
they advance money,—or furnish their goody—with a view to
certain payment with a reasonable profit—not to a gambling profit
with the risk of total less ;—and in considering the Security they
will take into consideration the character of the Borrower as well
as the known extent of kii fortune.—They will regard an honest,
industrious, and careful man of small meats as a safer Debtor than
a man of a different character with more apparent wealth—and
this will prove equally beneficial to all parties.
The prudent man will obtain credit. The thoughtless and pro-
digal will not, and as to a person of the latter description, this is the
very best thing for him ; so the most injurious to him of all things
is the careless credit which is here constantly afforded.
To Europeans it is the constant source of irretrievable ruin.—
How often is a young man here on his very landing offered credit,
which to him who perhaps never had the command of 100 rupees
in his life appears unbounded ; while hundreds and thousands of
rupees are almost forced on him on his bond, which is not worth
the clothes on his back, and those perhaps not paid fur ; by all
which he is perhaps led into dissipation and extravagance, which
end In Ms total ruin ; and talents and good dispositions th.,t might
►ave been of the greate.t beitefis to himself and to society abso-
lpstely rendered of tio value to either.
Itltri'ire the misekiefi of this system confined to Europeans. To
•

•

PRICE SEVENPEN::E.

the Natives it is equally injurious—and more so than it mould be
in Europe, from the nature of their occasions of expense .
In England a man who lives by his industry, as he gels richer
increases his usual and daily expense. The labourer, when he is
fully employed and gets good wages, and feels that b• has snare
money to spend, has a better dinner Leery Sunday—adds some
little bits of furniture to his stock—and increases his constant every
day comfort. The shopkeeper sets up his buggy—takes a house in
the country—his wife dresses better. The merchant keeps a more
expensive cook,—gives better dinners and more frequent,—drinks
finer wines,—lives in a larger and better furnished house,—in short,
all classes extend their ordinary and daily expense—and none but
the most thoughtless a•d extravagant will go on lot.g doing this
with borrowed money constantly added to their debt.
But Is this country the great expenses of the natives are merely
occasional ; and the ease of getting money ruins them. A man ha•
a marriage Is Mt family; and if he can borrow as much money as
will enable him to do so be will spend upon it what will render bins
an embarrassed man fir life. He will tint unfrcquently go further,
and place himself at the mercy of his creditor, to be sent to jail for
life if he so chooses.

But when it is known that if this measure is had recotit sr to,
the borrower may pay his debt by surrendering his litti •
all to his creditor., without distinction, rues will hesitate it.
thus affording to dude neighbours the means of ruin, without
knowing what sort of dimes they have of recovering their own.
and will be driven to calculate for their repayment rather on their
inquiries into the substance and character of their Debtor than on
the tenor inspired by a barbarous power to imprison a beggat fur
life if they will Word him the means of the scantiest subsistence.
Oa the other hand mossy will be obtained at a reasonable rate lot
fair speculations, according to the risk that may be incurred—and
if an honest and industrious man is unfortunate in trade, his cle-
diton who have run a risk in common will suffer the loss in com-
mon, and the industry sod talents of the Bankrupt will no longer
be lost to the public and himself.
In framing the Regulations:the court has adhered strictly to the
Previsions of theist, with such variations in point of arrang-sent
and the supply of such additional provisions under the powers it
confers u appeared necessary, on such consideration as can be
given to the subject without the benefit of experience— I am hope
ful they will be found sulident at least for the commencement--
and where they doll be found deficient or erroneous the defect cars
be supplied er the error corrected in the course of that careful
attention to the execution of this law which it will be the duty of
the Court at all times to give to it.

I have- appointed a Gentleman of the Bar, Mr. lawny, to the
important Olice of Examiner.—Much will depend on the due dis
charge of its duties—in the ascertaining facts, and the preventing
deception and fraud. His fitness for the situation cannot he
doubt ..4—and the Court has reason to congratulate itselt on having
so able an assistant.—His duties will require much care and atten-
tion to be devoted to them especially in the commencement, but
these I am sure he will gladly afford knowing the great benefit, ht•
will be conferring on this community.
The other G.l.enssen 1 have appointed are Mr. Fitaium., :Le
Prothonotary of the flatmate Court, whose integrity and know -
ledge of hmisem, and careful attention to it are two weU known
to require me to say any thing in his commendation to be common
Assignee;—and Mr. Caw, now discharging the duties of Master
in Equity and Clerk of the small causes, to be the Clerk,—and I
have no doubt his attention will give the same satisfaction Au that
capacity, as I hope it has done in the other offices he has for sonic
time filled.—The act requires the Court for the relief of insolvent
Debtors to be held at Calcutta at least once a mouth ;—at the
other Presidential the frequency of its sitting is kft in the discre-
tion of the Court.—l have thought it right, at least at first, to
hold the Court more frequently than once a minds, in order that
nothing may be wanting oaths part of theesurt to extend the bene-
fits of the law to those who require them without delay.—Whether
it will be necessary to hold the Court so frequently hereafter we
shall be able to judge when we see the amount of business to come
before the meanwhile the Court has resolved to sit for the
relief of Insolvent Debtors on the first and third Monday in every
montla—and it will therefore sit again on the first Monday in April.