The Press. FRIDAY, DECEMBER 7, 1883.

Press, Volume XXXIX, Issue 5685, 7 December 1883, Page 2

The Press. FRIDAY, DECEMBER 7, 1883.

When sometime ago we took it in hand to consider the question of bankruptcy reform, we urged very strenuously that it would be of Uttle good dealing with matters of administration so long as nothing was done towards insuring that there should be assets to administer':- We pointed out that as things stand at present proceedings in bankruptcy are initiated, as a rule, not by the creditors but by the debtors. We urged-that this way of going about the matter was, according to any commonsense view of it, just the converse of what it ought to be. The natural desire of the debtor is to put off bankruptcy as long as he thinks he has a chance of escaping itThe just claim of the creditors is obviously that the debtor's affairs should be investigated as soon aa his solvency is in real jeopardy. Bnt the fact is that the creditor who has every motive to act can do nothing. The debtor, who wUI certainly nOt act at aU if he can help it, has no pressure at his back to compel him to move on. And so the result comes about that there is no such thing as a bankruptcy until aU chance of a righteous dividend is out of the question. - We need hardly explain our meaning in asserting that the creditors can do nothing. No doubt they can file a petition in bankruptcy. What we complain of is that the conditions under which alone they are aUowed to do so practicaUy frustrate the object. A debtor can file his petition as soon as it suits him to declare that he is insolvent. But, although his insolvency may be patent to everyone he has dealings with, the like Bbertyisnot accorded to a creditor. He is obUged to wait until the debtor has committed some one out of a few specified acte before he can take any proceeding. And these acts, moreover, are such as no debtor would think of committing unless he were not merely in difficulties, but fairly arrived at the last stage of hopeless insolvency. He must either, for instance, have assigned his property for the benefit of his creditors, or he must have got rid of it for the purpose of defrauding them. He must have left New Zealand in order to prevent their getting at him; or, without taking this extreme step, he must have shut himself up or kept out of the way with the Uke object. Conduct of this sort, we need not repeat, means much more than that a man is in difficulties. When a creditor sees that it is resorted to he must be a sanguine man indeed if he expects a, 1 dividend, and unless he can prove thaw some one or other of these things has been| done he wiU not be in ia position to make his debtor a bankrupt. -. _. It would not be quite true to say that the Act does nothing in the direction of correcting this grave and long-standing defect in our bankruptcy legislation. We fear it would be almost equaUy untrue to say that what it has done is worth being thankful for. It just does make approaches towards barely touching upon something that may be made to look as if at some time hence it would consider whether any. thing could reaUy be done. It makes two infinitesimaUy short steps. Taken together, these steps are considerably short of what was done at Home nearly fifteen years ago by Sir G___ Jesskl's Act. But they do away with two glaring defects in the present law ; and so far they do in a manner improve the p oaition of the creditors. Hitherto, if a debtor filed his declaration, he had it pretty much his own way as to -he after conduct of 'the affair. If he did not file, and even if he had committed one of the acts of bankruptcy we have bsen describing there has stiU been a serious difficulty in the way of his creditors proceeding. The bulk of his engagements probably consisted of bills due to his merchants. These bills would naturaUy for the most part be stiU current, and 'until they had matured to a sufficient value none of these creditors could file a petition. Both these obstacles are now removed. If a debtor files a petition in bankruptcy his creditors can immediately treat that as an act of bankruptcy, and, we presume, obtain from the Court the conductof the matter jand 1 further itiaprovidedthatifa creditor's debt be of an ascertained amount, it need not be actually due at the moment in order to sustain his position. These are the two concessions made by the Act to the certainly growing feeling that creditors ought to be authorised to take the affairs of their debtor into their own hands, as soon as he is really insolvent,.and without waiting until his assets are dissipated. We reaUy cannot say that we see in them anything to be thankful for. It wUI be seen that the provision which makes the debtor's filing an act of bankruptcy, may easUy out two ways. If on the one hand it may secure the control to the creditors, on ihe other it wUI certainly cause any debtor who is fear- ] ful of that result to. delay filing ac long as .possible. As regards the second, the power now given to a creditor on a bUI to proceed in bankruptcy would undoubtedly be of great value if the conditions we have.above referred to as frustrating his success didnot stiU stand in his way. And it must be remembered that it needs no venturing into unknown regions to go much farther than is done by this. Act in accelerating the acts of the creditors. According to the English law, now weU settled in use, a creditor sueing for his debt has two modes of procedure. If he believes himself to be sueing a solvent man who for some reason or other refuses to recognise his demand, he- proceeds in the ordinary way, and thos-leaves the debtor to raise any legal defence which he may t-MpV he has to the claim. If, on the other hand, he conceives the fact to be that the refusal of. payment is really due to insolvency, he can avail himself of a summary proceeding, under which the debtor must- satisfy the Court of his solvency before he is allowed to proceed. We are aware that difficulties have been found in carrying .out this system. And to ourselves it appears as at present framed to be.pen to objection, but there can be no question as to the good sense of the principle. And there can certainly be no question that the'

system of procedure at Home has been t found adequate to deal V&*&*JB&\ serious difficulties than this natter. We s__-l -_f_rn to _fua branclg|_-_-._nbjec_ in a __re isatie.^ <. .j H' ' *J It is erideflfc __at dotting ...o be gained by th-._i ß c___on with the DaUy **» _«__». It is hopeless to an adversary who keeps continuaUy dlaftibg his ground, and refuses to deal with tiie various points which we have. raised. Our contemporary has not yet explained how he makes out _Ba_ _F_f _ "n-torioua ~"fact"that the Otago raUways are" "the v only "paying lines in the colony, when as a matter of facta loss of .£50,000 was incurred on them last year. He has not attempted to demonstrate bow it happens that-, in the 'matter of raUway charges, the people of Otago are being "daUy and hourly plundered" by "the drones in the North," who •'fatten on their labours," when in reaUty their own railways are at the present time a heavy charge upon the colonial chest, and when there is every prospect of that burden being enormously increased in future years by the construction of the Otago Central. The Daily Times is distressed at the discovery that we see no difference "between the expenditure in the South Island of the revenue raised within its boundaries, and the distribution of that revenue over the North Island." If our contemporary would have the candour to quote our own words instead of giving hiß own interpretation of them, his readers, at any rate, would have no difficulty in understanding the position we take up. What we did say was that it is the duty of the colony to manage the raUways in such a manner that the taxation imposed upon the community at large, owing to the loss on their railways, should be as light as possible. We wish to see that loss converted into a profit, and the surplus devoted towards reducing the annual charge of ..500,000 on account of "indidirectly" reproductive works, which would stiU have to be paid. But we added that if the principle of regulating the raUway rates by the local traffic was to be adopted, we wanted to know in what minner the Christchurch taxpayer would be benefited by having the surplus on the Canterbury railways employed in the relief of those who use the Otago lines. In the present state of the finances of the colony, we did not beUeve that the system of raUway administration advocated by our contemporary was practicable; but if it was to be adopted, all we contended for was that the principle must be logicaUy appUed, each district reaping the benefit of the traffic it contributes. The Daily Times prefers applying it to Canterbury and Otago combined. In other words, although he protests most vigorously against having to pay a share of the loss on the North Island lines, he is very angry with us because we cannot see the propriety of handing over the -89000 gain on the Canterbury raUways' for tha benefit of persons who use those constructed in Otago. - .