Hawkes Bay Herald TUESDAY, MAY 13, 1879, THE BANKRUPTCY LAWS.

Hawke's Bay Herald, Volume XXI, Issue 5380, 13 May 1879, Page 2

Hawkes Bay Herald TUESDAY, MAY 13, 1879, THE BANKRUPTCY LAWS.

The numerous failures -which are occurring all through the colony are attracting public attention to the unsatisfactory state of the law of bankruptcy. At a recent meeting of the Wellington Chamber of Commerce the chairman, Mr Krull, even went so far as boldly to advocate the adoption of the German system, which looks upon a man's bankruptcy as prima facie evidence of reckless trading, and unless lie can prove to the contrary makes liirn amenable to the criminal law. The French law is somewhat similar. There a man is imprisoned for a term of not less than one month, nor more than two years if his personal expenses (which must be entered in a day-book) appear excessive ; if he has spent considerable sums at play ; if he has, when insolvent, borrowed largely, or re-sold merchandise at a loss ; if he lias issued negotiable securities to three times the , amount of his available assets ; or if he has kept his books in an irregular manner, though the irregularities may not indicate fraud. For more serious offences he is liable to be condemned to the galleys, This last catalogue includes everything which is deemed an offence undor the English law. Stringent as are these provisions they apply only to men in trade. For those with fixed incomes, who have lived beyond their means and so become insolvent, the law has still greater terrors, and the punishment is much more severe, If any Government introduced into Parliament a measure one-half so stringent as the French or German laws they would be howled at for interfering with " the libertyj of the subject," . and popular agitation would talk largely about the " Heaven-born, gift of liberty," which, to hear them, one would think was invented solely for the. benefit of Britons. No doubt such laws are too inquisitorial to find acceptance, in an English community, but there is a " happy mean," in all things, and ifc is high time that some, more severe bankruptcy law should be passed in this colony. It is commonly said of Acts of Parliament that they are nets ingeniously made to catch the small fry, and to let the big fish go free, but the meshes of the bankruptcy net are so constructed as to catch neither big nor little fish. The first portion of the title of the Debtors and Creditors' Act, 1876, is "An Act for the relief of Debtors." There is a grim humor about this bit of legislative truthtelling, but the continuation; — "and for the better security of creditors " — ' spoils it. Far be it fiom us to say that all insolvents, or even the majoiuty, are fraudulent bankrupts. What we do say is that the present law does not, make proper provision for the punishment of the minority who are fradulent. It is not sufficient that a ; man . runs a slight risk of punishment if he surreptitiously make away with his assets. The merchant or storekeeper who trades reoklessly is not less morally guilty, and the punishment for both should be sure and quick. So bungling, cumbrous, and expensive is the existing law that even where creditors are convinced that there has been fraud they hesitate before plunging into so troublous a sea of protracted litigation. Many bankrupts openly admit that they have kept no proper books, and cannot say how they got into difficulties. A stringent and wholesome law would in many cases quicken their memories, and enable them to recollect one or two nest-eggs snugly hidden away, to be produced only after a certificate has been issued, and tlio debtor stands whitewashed and ,

beyond the reach of those whom he has swindled out of money or, goods. The utmost care and the most ; business-like habits will sometimes be powerless against some sudden misfortune, obliging the sufferer to seek proteofcion in the Insolvency Court, Let such be right quickly relieved from their embarrassments j hvA when a debtor is guilty either of active fraud or passive carelessness he should be punished. It is not a month since a man in a large way of business in Wellington filed his schedule, and a committee was appointed to examine his accounts. The committee reported that the books had been so 'badly kept that they could not say whether the debtor was ever solvent. He will be whitewashed, and it is ten to one that he will again start in business, to " break ",again with large liabilities and >yery small assets. No doubt some of these bankruptcies are rendered possible only by the injuriovis system of long credit, and we shall have something to say upon this point in a future article j but if the law were more. stringent, merchants and others would for their own sakes conduct their business more cautiously, and a severe shock would be given to the credit system. While there are men destitute of commercial hondr the law must be so framed as to prevent them indulging their natural proclivities for fast living at the expense of. others, by inspiring them with a wholesome dread of punishment. .