TOWN EDITION. The Daily Telegraph THURSDAY, DECEMBER 1, 1881.

Daily Telegraph (Napier), Issue 3250, 1 December 1881, Page 2

TOWN EDITION. The Daily Telegraph THURSDAY, DECEMBER 1, 1881.

The existing Bankruptcy Acts appear to afford very little satisfaction to either debtors or creditors, and nearly every session a promise is made that their amendment shall have the early consideration of the Government. A very sensible article recently appeared in the New Zealand Herald on the subject of the bankruptcy laws, and on the relations that subsist between the State aDd the affairs of debtors and creditors. It is possible that the opinions expressed in that article may not coincide with the views generally entertained upon this question, nor is it likely that any very satisfactory amendment of the Act can be arrived at until the several Chambers of Commerce in the colony themselves are prepared to suggest needed alterations. It is as well, however, that the public should consider the propriety of the State's interference in matters that are purely private until bankruptcy proceedings are undertaken, and we are inclined to agree with our northern contemporary in the opinion that it is by no means certain that the State ought to have anything to do with the relations of debtors and creditors. The New Zealand Herald says:—"lt is the duty of creditors to look after their own interests, and it is probable that they would do so a little more sharply, and the cause of morality be a gainer, if they were left entirely to their own devices. For much of the misconduct ot debtors creditors are fre quently to blame, and sometimes have a band in it. Were it proposed that the insolvency law should be abolished there would be a mighty outcry, and there would be hard times for the propounder of the proposition. Nevertheless, we shall venture to express an opinion that, if relief were refused in every instance in which credit was given to a man who had previously made a bad default, it would be no more than the State was entitled to. A man fails disgracefully in a way that shows that he is either a rogue or a fool, obtains his certificate because of the apathy of his creditors, starts afresh, gets afresh into difficulties, and the State is expected to protect the interests of the creditors, who, despite their fingers having been burnt, gave him credit, hoping that next time it will be the fingers of someone else. " Oh," we shall be told, " but the State must vindicate morality." The State has no duty of the kind, and we fancy that a considerable portion of society would find itself in considerable trouble if it were the censor of the term in its fullest expansion. There would be some creditors in trouble for encouraging dishonesty and injuring honest men by selling their goods to a man who had already made default. They might be charged with sapping public virtue, impairing the fortunes of honest men, and deceiving by their example those who were ignorant of the circumstances. If the State were an agent for the preservation of morality, it would have to deal with that mean and ugly thing—lying—in which case it would have a pretty busy time of it. The moral argument is only a make-believe, and involves reciprocity on the part of the creditor. The State no more takes cognizance of the question of commercial morality than it does of social manners. It would make a pretty mess of the matter if it tried, and be voted an intolerable nuisance. The insolvency law is a matter of public or rather trade policy, till of late years pushed so far in the interests of trade that a poor wretch who could not pay a debt stood on the same footing as the man who would not. Misfortune and misconduct were treated as convertible terms. It is extremely discreditable that the law should be so ineffective for the purpose of suppressing dishonest trading, and the blame rests with the commercial classes. What is the fact ? Parliament has conceded to creditors large powers to enable them to punish offenders, guarded with precautions to prevent the success of vindictivenoss. What is the result? A is a creditor. The debtor has shamelully misbehaved himself, and ought to be punished, with A's assistance. But the estate is a very poor one, and he estimates the time he would expend in doing his duty of more value than any dividend he will be likely to receive, and en far as he is concerned the law becomes a dead letter. He does not trouble himself about the matter beyond relieving his feelings, by the expression of his opinion

that the debtor is a scoundrel. B is heavily hit, but has done a large business with the debtor. He expects biin to start again, to make more profits out of him, and, taught by experience, get out before a second crash occurs, and let someone else stand in his shoes. From this point of view his interest lies in the insolvent getting his certificate. He ha 3 no wish to embarrass or punish him, on the contrary, he uses the influence of a large creditor to make things pleasant, and keeps back the creditors who are disposed to be resentful. Cis an important man for the debtor, and has been so treated that he has to congratulate himself on the smallness of his loss, The sense of a moral obligation to punish fraud no more troubles him than the other two, and from him too the law and the Court receive no assistance His sympathy runs with the debtor, who, having treated others so badly, treated him so well. Thus amongst the list of creditors, what with the icdifferent and the interested, those who would do their duty and punish the offender find themselves powerless—the Court can do nothing, and the law fails. But it does not fail because it is a bad law, but because the creditors will not enforce it. Of course it cannot be said that this is always so, but the instances are sufficiently numerous to bring the law into contempt, and encourage fraudulent insolvency. There is no remedy for this state of things, except a better appreciation of their duty by creditors. The State cannot do what they will not, at least it ought not.