Our Bankruptcy Fiasco.
News of the World. Sir Henry James has an opportunity of distinguishing himself as the author of a Bankruptcy Bill, if he will only lay down one principle —the interest of the public. We have had several Bankruptcy Acts, which have been intended to benefit creditors, debtors, solicitors, and accountants in succession, and they have all failed. The cause of failure is not far to seek. When one Bill made a bankruptcy too expensive, creditors and debtors concurred in agreeing upon a composition. When a Bill, like that of 1861, was made too favorable to debtors, bankruptcy became fashionable, and now creditors appear inclined to-abandon all hope of a dividend out of assets which are generally only found sufficient to pay the costs. The principle of the Acts of 1842 and 1849 was that a bankrupt should make an application in public for a certificate of conformity, and thus the opportunity was created by which the conduct of the bankrupt in contracting his debts and disposing of his effects could be questioned. That wholesome principle should be restored. It may be all very well for a majority of creditors to accept a composition and to register their resolution to do so, and so far as the distribution of assets go nothing can be more equitable. It ( is a very different matter when a creditor in a minority has a just cause of complaint against a bankrupt. The debts of a bankrupt may be considerable; he may owe his family a good deal of money, and his trade creditors may have supplied ■all the assets. Once when two creditors, who had just sent in their goods to a trader who had declared his insolvency, made a reasonable application for the return of their goods, the bankrupt replied, “Oh, but if I give you them back I should have nothing for a dividend !” This is really the principle upon which many men proceed when they find themselves in the entrance to’ Basinghall street. Noav a reasonable check would be that when an agreement had been made between a bankrupt and his creditors he should give notice to every creditor of his intention to apply to the County Court Judge for a certificate that his" conduct had been that of an honesty straightforward trader. It should be in the power of the- Judge to deal out an .original jurisdiction as to the costs, which now amount to a scandal greater than ever occurred in the administration of this branch of our jurisprudence. We have imitated unsuccessfuly the practice of the Scotch system, but the result has been to reveal very sadly that there is a wide distinction between the professional morality of London and Edinburgh, and the contrast is not to the credit of England. When we come, however, to that question we are bound to remember there are other professional classes to whom the same criticism applies in England, and some allowance ought to be made accordingly. We ought not, however, to be deprived of a good bankruptcy law merely be cause* accountants have so closely followed the example of the bar in the matter of pay. Law will soon be .too great a luxur}'.
Permanent link to this item
Our Bankruptcy Fiasco., Ashburton Guardian, Volume 2, Issue 259, 3 February 1881
Our Bankruptcy Fiasco. Ashburton Guardian, Volume 2, Issue 259, 3 February 1881
Using This Item
See our copyright guide for information on how you may use this title.