Hawke's Bay Herald TUESDAY, JUNE 17, 1879. DEEDS OF ASSIGNMENT.

Hawke's Bay Herald, Volume XXI, Issue 5410, 17 June 1879, Page 2

Hawke's Bay Herald TUESDAY, JUNE 17, 1879. DEEDS OF ASSIGNMENT.

At a recent meeting of creditors in Wellington Mr Krull, the Chairman of the Chamber of Commerce, expressed a strong opinion on the almost uni- | versal practice of creditors assenting to I deeds of assignment without due inquiry. Several leading merchants endorsed this expression of opinion, and emphatically declared that they would never assent to any more such deeds, but straightway assented to one then before them. Bills of arrangement undoubtedly open the door to many abuses. A debtor quietly makes over his estate, or what he chooses to represent as his estate, to his creditors, the deed is assented to without any inquiry, and the debtor escapes the disagreeable passage through the Insolvency Court, and not seldom retires to another field of operations, and again sets up in business on the snug little nest-egg saved from the " smash." In making these remarks we refer to no particular case, nor do we condemn all deeds of assignment. In one or two instances which have occurred locally an arrangement of this nature has been the best for all parties, and the creditors would certainly have gained nothing by putting the estates into the Bankruptcy Court. Our objection, is to the indiscriminate and unquestioning assent given to deeds of assignment whenever a debtor may propose that easy way out of his difficulties. A case in point is reported in th© Wellington papers. A storekeeper in that town failed, and immediately proposed to assign his estate which, according to a balancesheet he submitted, showed a considerable surplus. His stock in this statement figured for .36000, while a valuation fixed its value at £2900 ; the book debts were similarly over estimated, and it was doubtful whether the estate would realise 10s in the £1. Further than this, it- was shown that the debtor had obtained accommodation bills to the extent of several thousand pound's from different merchants on. the strength of a statement which, to put it mildly, certainly put a rather roseate hue on his affairs. These bills he had taken to the bank, and according to his own admission, had gob them discounted by representing that they were trade and not accommodation bills. Other facts, which certainly were not creditable to the debtor, were also brought to light, yet, after some comparatively mild condemnation from one or two creditors, the deed of assignment was assented to. Now, it may be that the debtor in question was in reality unaware of his own £>osition, as one of the creditors charitably suggested, but he certainly exhibited a want of business capacity in failing to look at _ji£j affairs in a true light, and j

was evidently guilty of great carelessness ; yet by the convenient loophole of a deed of arrangement he avoided the stigma of bankruptcy, and the creditors showed a really remarkable readiness ,to fall in with his views, and so save him any further trouble. It is hardly calculated to promote commercial honesty and a proper care in business when a man's creditors show so much misplaced sympathy for him in a " misfortune " which is often the direct result of a Want of business-like care in conducting his affairs. If he were compelled to pass through the disagreeable but wholesome process of bankruptcy, and had to submit to a searching cross-questioning as to the way in which he had disposed Of his estate, or into the mai-ftei 4 iti which he conducted his business, it is probable that in the future he would be more careful to prepare correct balance sheets, and to exercise proper supervision and care in his _xperiditure\