"FINANCIALLY SICK."

Dominion, Volume 2, Issue 317, 2 October 1908, Page 4

"FINANCIALLY SICK."

THE BANKRUPTCY LAWS. AMENDMENTS SUGGESTED. Erer since the days of Rome, perhaps earlier than that,* there have been bankrupts. Our ancestors suited their methods to the times. Nowadays, when a man " goes" through," his oreditors seize his - material: possessions and divide them up; but our ancestors not infrequently Used to chop up the unhappy insolvent and "divide his body! It is a long way. from those drastic days, but yet the mercantile community is not satisfied. The methods of 'dealing with bankrupts in vogue in New Zealand still leave, in the minds of some people, a good deal to b« desired. - i ■ ■.- By some, tho bankruptcy laws - aro held tobe too clastic, affording protection both to tho honest man and tho rogue. 'There is a., general and expressed opinion that some amendments in the present law would be a good thing for the moral health'of the business community, and to that end legislative amendments were actually contemplated, but they are still in tho air, so to speaK. What Is Wanted. A departmental head in- one of'tho big city wholesale:- houses, interviewed ;on the .subject,' remarked that he' disagreed • with; those who; advocated the principle that , the duties of ! an official assignee ' could beat bo carried out by a solicitor with an expert knowledge'of bankruptcy. The sort of man they, wanted was a business man, in close touch with the' mercantile portion of the community. L'ogal,knowledge, beyond that possessed on this- particular subject by any up-to-date business man, was v not. essential j it could be obtained when expedient. : "What .we want," he saidy "is some system of law in bankruptcy that will keep the commercial atmosphere clear, and healthy. We want :,tho Stato' to afford protection to the mercantile community from the rascality of unscrupulous\traders, -in much-, tho same, manner as it. protects the civil community from the thief. -If- - a - man steals ss. from a hotel the police will dog his footsteps end- of- the -.country-.to ..the other, and ''oven across to the ' other side'; but when a merchant informs >thcm-that lie apprehends - sonic., villainy on the. part of , a trader who. has obtained goods from l him on credit, their reply is that. it is a civil action."

The Benev6lont ;Creditbn '' " It would: appear ihat isonie Jcreditorß,,:like; ! some .bankrupts,'.' afo'' not'(ftltpgetlior'''ab"ove l suspicion, according-: to this gentleman. ''Sometimes," ho said, 1 ; "you may, notice,' in a pretty; bad.-banltruptcy, where the prospect of a dividend is almost invisible, that ; one of the 9roditprs.,at. ,tho.,meeting-sits: back; ,and says nothing; or, if ho docs say any-? thing, it , is: a word or two of pity for the; poor and an appeal for an easy,-'let-down.':' Ton',:to one,that complacent, bencvolent-lookinz creditor has gone previt oiisly to the bankrupt and said, "See here,;' old man, you owe me a hundred; I'll provo for two hundred, and got a decent slice of my money "back; and I'll stick up for you p at the meeting.' It's. been done often, I know." 7. ■

■The Credit System. ' : ' "- ' Another gentleman 'waß ■of opinion that' : the best way. j,to; clear ;the commercial at-. Biosphere of. certain business impurities was a drastic curtailment of tha credit system. "The more..-credit, the mora temptation," said he, in-exemplification of his assertion that a cash, basis of trade was tho best for instilling prudence and caution into,the minds' of certain.types of business'min.'' '" ;,/s•> The general opinion,: however,' is'tliat 'the bankruptcy .'laws, whether -the credit system be good or,.bad—and thero is a deal to be said either way—should be ■"revised, and materially :amenfled; -* = -In " what - direction,, from thg.point oi_iiejr:of_the mercantilc_coi3fc.. munity, they should be amended,i? clearly shown by the following i&fc'R: represent.-.the,crystallised views, of the. business the. Dominion;' - The \yellin"ton Chambfer of Commerce has had the: mat- : ter in hand for some time, and steps are to be taken to urgeiipou the' Government the. necessity, for, urging • legislation r iipon the linesi'suggcsted. .-• ■ Suggested Amendments; i - The amejidmentsjlrefer' chieflyto changes in the modo and personnel of tho administration of the Act, better protection of creditors, "revision" of 'eourt : fees," legal expenses, etc!, to 'enable .higher. dividends to bo paid out of any. estate. ' With referencs,',to . the . first-mentioned, it is suggested that the office of, deputy official assignee be .and .the. country divided into'eight districts, eaoli administered by an assignee at a salary of from £300 to £400—such 'officials to be selected from commercial accountants-or business, men. \\hero the duties of his office do riot occupy his whole time, some minor Government duty, subordinate, of course, to his principal duties—might bo added. Controlled by these assignees, agents, to act as official-receivers in various parts of the districts, should also bo appointed, under Section 65,. Subsection lb, of tho Act. • AH ordinary banking business to be removed from the Supreme Court to special district courts in bankruptcy, with the right of appeal to the Supreme Court in special cases'. 1 . The district '- court in bankruptcy—one for cacli Island—would°hold regular sittings in each assignee's ''district. He should be. a sound commercial lawyer, and should be paid a .salary of, say, £700 a year. ' Protection .of Cradltors. Regarding the protection of creditors, it is suggested that business wouia Do facilitate and costs reduced were the district judge in bankruptcy to.perform -chamber -work in the absence of the parties should a difference arise the assignee and: a 'secured creditor, i the parties to file'.affidavits-agreeing to,'.tho facts of the-case,: and: the judge to decide upon tho law points. Adjudication on debtorspetitions -should not, as at present', bo formal and at the-instance of. the 'debtors: They should be. heard, before,either the Bankruptcy Court pr-a stipendiary magistrate, complete: statements of assets, and liabilities to be filed and sworn to; beforo adjudication is either granted .or .refused. - All paymentsjma'do within Ono . month of. the.date of adjudication should bo voided; - and ;the money' recovered for the benefit of the "general estate, if it can bo shown to the satisfaction of tho Court that tho debtor was at . that time (under fair va uation of his assets) unable to ineefc his liabilities in full, contemporaneous advances excepted. . Tho disposal of tho wholo or a large; portion of. a trader's stock should simply, bo advertised,-and tho proceeds held for a given time to enable any creditor to establish his claini to part of the proceeds, or to have tho vendor adjudged bankrupt. Sundry changes, art also suggested.-with re- ■ gard to chattels,. sec.uri tips,, proper ties ] iold lij' - HMves, and -improvements' to,'such ! prPpe?ties ; eliected out,;of'dobtors.'.. earnings:', Lastly, there is urgecLiiii ihcreased-stririgeuoy-of most of tho sub-s.eotions 'qf;the.-jienaLclausc: (No! 1«') ?' the Artraiid/a''dlca'rdefimfion-W--\rh'dt constitutes a-penal-offence "in" the '■ conduct 'of book-keeping:; Legal and Other, Costs. At present; .Solicitors' costs,range from - ! two guineas to ten,guj(i(>as;;.pliis.a'filing.fee of £6. It is urged that th^c'ost^bft^ed- j^'ain>Qxi t mum of six .the 1 present' average solicitors' costs of "petitioning creditors-h-'£3o aiid over — should'- not • exc'o'ed -*£lo,'' plus l - out-pf-pocket expenscsr-Any'inoTbosoriir costs' should bo dealt with, qn-'ttppjication by the ; jlidgo; taxation of costs Would thus 'he rodiiced. Regarding Court fees, it is suggested .that the 10s. feoffor the.seal of the Court on order, and 2s.'6d. for copy orders, should be put on free of chargo; notices of motion should also be free, ~ as tho £6 feo to -the'-registrar is ample to cover the work done in-:tlio estate by the- Court. The present -system'- of taxation of costs by the clerk of-the district Court is held-to be unsatisfactory, and it is suggested that this bo done only by Supremo Court registrars. '.-"Whon ther Official Assignee thinks proper, tho Crown should pay costs, not thocreditprs. Judges in bankruptcy should.'be. able to act as advisers to assignees arid creditors on all matters of routine—ldgdl' 'and commercial— and should their time "not 'bo'fully-'occupicd thoy might act as stipendiary magistrates in commercial eases... _ ... • . . . > ' • 4