Morning journal and courier., 1880-08-18
BANKRUPTCY IN ENGLAED.


 The people of the United States made a very unsatisfactory experiment with bank rupt act which in reality put premium on dishonesty, and the people of England are beginning to realize that it is not wise to al low business men to fail too easily. The last report of the English Comptroller in Bank ruptcy shows that the bankrupt law is not working we'll the most notable point being the large and steady increase in the number of debtors who avail themselves of the liqui- dation clauses. Thus in 1870 there were 3,651 cases during the flush years that fol- lowed the number increased till 1t reached 6,574 in the prosperous year 1873, and the same increase went on during the hard times that followed until last year there were ,976 cases recorded. There have never been so many of the better compositions i e., those exceeding 7s. Cd in the pound, or 374 cents on the dollar-as there were in the first year of the act before debtors found out that they could compound on easier terms Though in 1877 the business received check by decision preventing the registration of resolutions in favor of such compositions when they were manifestly in the interest of debtors, there are at present twice as many compositions between 9 and 374 per cent as there were in 1870; nearly thrice as many between 121 and 25 per cent more than six times as many between and 125, and nearly fourteen times as many under per cent, or q shilling in the pound. According to the Scotch returns, there were ,OOO unnecessary and undesirable arrangements and com in c4 that is to say, about 573 per cent. of the people who take advantage of the liquidation clauses are deliberately dishonest. Says the Comptroller q am unable to suggest any reasonable causes for the excessive numbers attained except the tendency of easy liquidation to encourage at all times the growth of 8 too rapidly growing opinion that 1t is unnecessary or even foolish to pay debts in full, and in times of prosper ity large amount of hazardous speculation and consequent 1nsolvency.' But whatever the causes may be, the consequences are easy to be pointed out-a tax of e20, COG, ,OO0 which is directly to be added to the cost of production and distribution, which brings about increased prices to the consumer, re- acting in increased price of labor to the pro- ducer, not to mention the more serious fact that an increasing amount of immortality and insecurity in business transactions'' is in dicated.
 English creditors, like American creditors, are, it seems, usually very accomplishing, too much accustomed to consider the amount of their debts as so much loss not worth wasting time or trouble about, and any dividends which may be received as so much unexpected profit" It is not surpris- ing, therefore, to learn that, although the taxation of costs in liquidation is strictly re- quired by general rules, the trustees ignore the law as regards their own charges and those of their agents and solicitors. The trustees charge what they like and do what they like. The Comptroller says
 It appears to be the regular practice in some parts of England to hold private meet ings of touting agents for the purpose of ar ranging that the proxies they have collected among them shall be used in the interest of one of their number. Stray proxies are bought from the holders, but where two or more agents hold each sufficient number to prevent the other carrying the resolutions. Q joint trusteeship may be agreed upon, though ] more often one becomes trustee Ion the usual terms an expression which means that the trustee shall pay the other one third of what ever he can make out of the trusteeship. Be- ginning with the sale and barter of proxies, a system of commissions and corruption pre- vails through every step of proceedings under the Bankruptcy act; solicitors raid by the trustees they are able to appoint, trustees being in turn paid by the auctioneers they employ, and so on; the whole amount of these commissions necessarily coming in the end out of the pockets of the creditors. I need not explain that these remarks apply chiefly to the smaller class of insolvencies and to class, but unfortunately very nu merous class, of professional agents; the larger insolvencies are generally placed in the hands of respectable solicitors and account ants. but the present system leaves the thou sands of smaller cases to be, so to speak, scrambled for, and in such a scramble the most interruptions are generally the most successful
 This is a bad state of affairs, and we hope the English people will soon find remedy for the worst evils complained of. If they can invent bankrupt law which will protect creditors and not be too hard upon 'honest'' debtors they will receive the thanks of the civilized world.