The Daily Telegraph. TUESDAY, JULY 10, 1883.

Daily Telegraph (Napier), Issue 3739, 10 July 1883, Page 2

The Daily Telegraph. TUESDAY, JULY 10, 1883.

In moving the second reading of the Bankruptcy Bill Mr Conolly said that the main principle of tho measure is the establishment of a special Court to be called the Bankruptcy Court, Avith special Judges. The one material alteration in the Bill is that it to a much greater extent than before places the management of bankrupt estates in the hands of official persons, in contradistinction to placing them in the hands of trustees appointed by the creditors. In this respect the Bill bears a considerable resemblance to the first Bankruptcy Act that was ever in force in this colony—"The Debtors and Creditors Act, 1862." Since 1862 Aye have had several alterations in the laAV—five or six Bankruptcy Acts, and one, under Avhich Aye havo for several years been acting, is one under Avhich the whole power of ' appointing trustees is placed in the hands of the creditors. The general if not universal opinion is that that has been a failure, and, whatever defects thero may be in the administration of an Ac* of this kind if placed in tho hands of official persons they will be fewer than those arising from thoirregular way in which trustees have hitherto been appointed. If this part ot the Bill should pass in its present form the official assignee will be a -public .officer having a public office, having no other employment, and being remunerated by salary. It may be a question Avhether, in addition to the salary, any inducement should be held out t)y hw receiving a bonus wherethero are dividends to a certain extent. It is not intended to'propose that he should receive fees If persons can be found ip up their' whole time to the business .pi .official assignees, tho system will work .much better than the present, where there is competition for tho office of trustee between porsons calling themselves public accountants, who seem to manage those estates very ?ittlo to the advantage of the general creditors. Of course there aro exceptions, but- a vast number of these trustees are really incompetent to perform the duties, and have other and more profitable work as accountants, a"-ent= and so on, to Avhich thoy' devote their attention. It will be infinitely better, therefore, in carrying out the management of bankrupt estates, that there should be persons wlua can give their' whole time to t_e busiftesc. f f%B assignees v_J have certain districts as iriay be convenient.' This Avill be their sole occupation, | and their attention will not bo disturbed'by other and more profitable business. Tbe I

Bill provides, in accordance .with the recommendation of the Committee, that, in addition to the official assignees, there shall bo persons appointed by tho creditors, to be called supervisors, avlio arc to work Avith the official assignees. In deference to the opinion of the Committee that provision is retained in the Bill. Another portion of the Bill intends to check those fraudulent practices AA-hich aro too often found in cases of bankruptcy. Arrangements Avith creditors arc prohibited, except where the debtor has declared himself a bankrupt. That will be a most important change from tho present system, under which it is most common for a debtor to get a certain number of his creditors together to assent to a deed. Having perhaps some preferences which arc concealed, but really exist, ho manages to get a majority of hia creditors to agree to a deed, Avhieli is not to tho advantage of tho creditors generally. Under this Bill tbe debtor must first become bankrupt, and place his estato in the hands of the official assignee, and then only can he make an arrangement for a composition Avith his creditors. Another provision is one by which bills of sale can in certain cases be voided. The estates being in the hands of the official assignee and the Court, the proceedings will be carefully watched to see that there is uo fraud. Another most important provision is that summary powers arc given to tho Judge. If the debtor has committed any of tho numerous offences under the Fradulent Debtors Act, he must be afterwards prosecuted, and there must be all the formality of committal, indictment, and trial, and it almost invariably happens that through some tcchnicnlity the case breaks clown. That is especially likely to be the case under the present system, where the original proceedings—examination, and so on—under Avhich tho debtor is liable to punishment, aro conducted by trustees many of Avhom arc incompetent. By this Bill, however, the Avholc matter is brought under a Judge, aa*lio has summary power to punish the fraudulent debtor. There aro also stringent provisions with regard to costs.