D.—No. 5

I never allow them to go into the Court of Bankruptcy if I can avoid it." This is the result of the experience and practice of one thoroughly acquainted with the working of the English system. The AttorneyGeneral's Act is an attempt to introduce the English Bankruptcy Law into this colony; and if it shall be allowed to remain on the Statute Book for any length of time, New Zealand will undoubtedly suffer in similar ways. The remedy for the evils of the English system is, to place the managemeni of the estates of insolvent debtors into the hands of the creditors thereof; and the machinery necessary to wind up these estates in the way most beneficial to themselves ought to be provided by the Legislature. This has been done in Scotland, and that system has received the unanimous approval of the mercantile community of Great Britain ; and a similar Act would have been introduced into England but for the obstacles already alluded to. This colony is at present in a position to take advantage of tli3 experience of the old country. We are not trammelled by old habits, vested interests, or other obstacles to reform. We are free to choose whatever laws we deem most beneficial, and best adapted to the peculiar circumstances in which we are placed; and there being no hindrances in these respects to the introduction of the Scottish Act to this Colony, your Committee would suggest that this course should be recommended to Mr. Sewell and the Government. A few changes of names and phrases would be the only alterations that would be necessary to adapt its machinery to our requirements. Each province could have the right to dispose of its own cases ; but there should be a general register at head-quarters, and the Accountant should be settled where the Government and Supreme Court may be, and the General Government Gazette published. This would be necessary to secure uniformity and regularity in management, and due publicity, so as to guard against fraud and imposition. In a community like that of New Zealand, where large transactions are being carried on between parties residing in the different islands, it is necessary that what takes place in one locality should be known all over the Colony, so that Creditors at a distance, as well as the public generally, may know that a Bankruptcy has occurred, and be saved from further loss and imposition. Under the Scottish system, all this is carefully provided for. The application for sequestration, the meeting for electing a trustee, and the final discharge of the Bankrupt, are published in two or three of the local newspapers, and in the Gazette; and the public, as well as those more immediately interested, are thus informed of what has taken place. The proceedings in Court are also useful in this respect. One other peculiarity of the system alluded to is, that all the proceedings of the trustee are open to the inspection of tbe Creditors, and any one feeling himself aggrieved may appeal to the Court for redress. The Creditors have every facility for ascertaining whether the estate has been properly realised and divided ; and, in fact, the trustee's accounts must be open for inspection a certain number of days before he can divide : and the very fact that the accounts will be thoroughly investigated by parties not only cognisant of, but deeply interested in, everything connected with the estate of the bankrupt, has been found to operate most beneficially in preventing mismanagement on the part of trustees, and fraud on the part of bankrupts. The facility with which fraud can be punished under the Scottish Act is also a useful deterrent in the same way. There are other peculiarities in that Act which might be noticed, such as the simple mode of winding up the estates of small debtors, of deceased debtors, and pauper insolvents ; but it is not necessary to dwell upon these. Nor is it necessary to advert in detail to the defects of the law at present in operation in this Colony, because, if the suggestions made in this report are given effect to, these defects will be obviated. For the same reason the Committee have not thought it necessary to answer categorically the questions put in Mr. Sewell's circular letter of 20ih January last. Every question there put will be answered by the adoption of the Scotch Act. Your Committee, in conclusion, beg to recommend that the present Act be at once repealed; and fhat the Scotch Act, so far as apph'cable ;o the requirements of this Colony, should be made law here. Thos. Macfarlane, Convener of Committee. Mr. Thomas Macfarlane moved the adoption of the Report, and that a copy of it be sent to the Attorney. General. Mr. Webster seconded the resolution, which wa3 carried unanimously. J. A. Gilfillan, Chairman, Chamber of Commerce. Auckland, 27th July, 1865. No. 42. Mr. J. Bathgate to the Attorney-General. Sir,— Dunedin, 7th July, 18.05. Several members of the Dunedin Chamber of Commerce, including Mr. E. B. Cargill and myself, are of opinion that the memorandum sent you by the Chairman is somewhat imperfect, and does not fairly represent the ideas of the members on tbe subject. We think the principle of the Act good, and deprecate any organic change, believing that a few amendments would make it work in a satisfactory manner. I took thelibcrty of stating my own opinion in writing, and in case you may find a hint or two worth your consideration. , I have sent you a copy of the Daily Times of sth July, containing a copy of my letter, and I also enclose another copy gummed on a sheet of paper. I have, &c._ John Bathgate. The Hon. the Attorney-General, Wellington.

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