The Daily Telegraph. MONDAY, SEPTEMBER 21, 1883.

Daily Telegraph (Napier), Issue 3804, 24 September 1883, Page 2

The Daily Telegraph. MONDAY, SEPTEMBER 21, 1883.

The AVellington Evening Post furnishes its readers with an explanation of some of the more prominent reforms introduced by tho Bankruptcy Act of last session. Tho first and most important change is the transfer of tho administration of insolvent estates from trustees elected by the creditors to official assignees appointed by the Gflvernor. This is no new thing. It has been tried before, and not with conspicuous success, nevertheless there is a general clamour for its re-introduction, because tho system in force during the last few years has proved so thoroughly bad and inconvenient that the country would not stand it any longer. The cry has been—Let us try the officialassignee plan once more ; it cannot possibly be worse than the creditors-trustee method, which, if placed on a better footing than formerly and coupled with improved machinery, it may turn out, if not a panacea for presentills, at least a greatly superior mode of dealing with the matter. Here, then, is one very material change from the existing practice. Bankrupts estates, instead of being administered by trustees elected by the creditors themselves, will be left in the hands of the official assignee for each judicial district. Two supervisors chosen by tho creditors will "advise with the assignee, and superintend tho administration of the estates." But all powers are vested in the assignee. Viewing tho exceeding unsatisfactory results of creditors' trustee management —its enormous costliness ; its inordinate tediousness; its singular capacity for exhausting in expenses all tho resources of tho estate, leaving only an infinitesimal dividend for tho unhappy creditors, all weary with tho heart-sickness of "hope deferred": its fertility in expedients for permitting the escape of culpable debtors, and for completing the ruin of him who is simply unfortunate—looking at all these glaring drawbacks to tho system which will pass away on the 31st of December next, one is disposed to look forward with hope to the other method which comes into forco on the Ist of January, 188-1, It cannot be worse. It may, and should, be very much better, provided, of course, the Government make a judicious selection of men to fill the important position of official assignee. Another noteworthy reform effected by this Act is tho prevention of those "shady" private compositions with croditors, which are tho means by which so many scandalous frauds are condoned. Under the new law, instead of a man being able to avoid bankruptcy by compounding with his creditors, he must become a bankrupt before lie can compound, and then the composition is subject to stringent review by the Court. This 'is also a valuable change, and should have a useful effect in improving commercial morality. And there is a third prominent alteration which is likely to tend in tho same direction. Provision is made for the summary punishment of fraudulent or negligent debtors. Hitherto there has been an almost insuperable difficulty in bringing to justice this class of criminals. It is nearly impossible to make out a case for the prosecution on which juries can be induced to convict. They always have some doubt whether the debtor may not be an honest but unfortunate man undergoing persecution at the hands of rapacious and hardhearted creditors, and so they give him the benefit of the doubt. But the new Act empowers the Bankruptcy Court to exercise a summary criminal jurisdiction in re-o-ard to these offenders. If it is proved that tho bankrupt has carried on trade by means of fictitious capital;_ or that he could not have had, at tho time when any of his debts were contracted, any reasonable or probable ground of expectation of being able to pay them; or has, with intent to conceal the true state of his affairs, wilfully omitted to keep proper books or accounts; or has within three years before his bankruptcy failod to kpop usual and reasonable book accounts, setting forth truthfully the state of his business transactions ; or has put any of his creditors to unnecessary expense by frivolous or vexatious defence to any action against him; or has obtained credit under false pretences or by any fraud; or has fraudulently transferred any property; or has, with intent to defraud his creditors, concealed or removed any of his property since, or within two months before any un* satisfied judgment or order against him; or if the Court is of opinion that his bankruptcy is attributable to rash and hazardous speculations, or unjustifiablo extravagance in living, then the Bankruptcy Court may summarily sentenco him to a year's imprisonment with hard labour, or to any lighter punishment that the Court may see fit to award. This is a very important and necessary provision, which is calculated, to operate as a severe discouragement to insolvencies of the class of which too many have occurred during the last few years without involving the slightest punishment of the delinquents. The law, which comes into forco on Now Year's Day next, is plainly calculated to render any kind of bankruptcy eminently disagreeable to tho bankrupt, and fraudulent bankruptcy positively dangerous. AAliich is a highly commendable reform.