New Zealand Times. SATURDAY, MARCH 6, 1875.

New Zealand Times, Volume XXX, Issue 4356, 6 March 1875, Page 2

New Zealand Times. SATURDAY, MARCH 6, 1875.

It is seldom one reads anything in the reported utterances of the Judicial Bench that is worth a moment’s consideration. Sometimes the Judges, in their charges to Grand Juries, deliver themselves of a string of dry platitudes, or go out of their way to meddle with the mud pool of colonial politics. Occasionally, however, one stumbles across something worth reading for its vigorous style, and worth thinking about as well for the matter it contains. As the most recent example in point, we refer to Judge Ward’s remarks on the bankruptcy laws, at Balclutha, on the 19th ultimo. A report of his comments appeared in our issue of yesterday, and we commend its perusal to all interested in tx’ade or business of any kind, because caustic as the learned Judge’s remarks may appear to be, they are fully warranted by the existing state of the law. Indeed, nothing could be more unsatisfactory than the insolvency law, which appears to have been primarily designed to make fraud easy and pleasant to those who prefer the short way to affluence, and to create a number of well-paid offices at the same time. In fact, although we exonerate the respective Governments from serious culpability in the matter, we cannot exonerate them from carelessness, in not exercising a more watchful supervision over the whole, course of bankruptcy legislation. If that had been done, the complicated and contradictory enactment, which is now supposed to regulate proceedings in bankruptcy, could not have' been passed ; and this remark applies with equal force to the enactments which it superseded. Those who were behind the scenes well know that the creation of offices—of inspectors, accountants, official assignees, &c., in bankruptcy, had quite as much to do with insolvency legislation as the interests of the trading classes. In short, these are a mere secondary consideration in all bankruptcy laws. They are devised for the “relief ” of insolvent debtors. That is their primary object ; but as this most deserving class of the community could not well obtain “relief” from the importunity of their creditors, without making a show, however slight, of satisfying the creditors’ demands, the lav? is so skilfully devised that while the bankrupt obtains “relief” the creditors are relieved—of their money.; the little that remains for division amongst them of the bankrupt’s estate, being usually swallowed up in foes, commission, and charges of various kinds. That this is not by any means an exaggeration men in business will readily admit. Chambers of Commerce memoralise the Legislature on the'subject; commissions are appointed to consider, of any amendment of the insolvency laws ; fresh legislation takes place; but the result is precisely the same; —“ relief” to the bankrupt, complete “relief” to the creditor, and increasing fees to the officials charged with the administration of the law. ;

Judge Ward is unnecessarily severe, we think, on the Legislature. It did the very best it could with the material submitted to ' it. Chambers of Commerce in various places reported in favor of the draft Bill; —they were led up to it in fact, ill the most; Skilful' way. imaginable, and one can hardly forbear smiling at the fact, that of those who were most prominent in this species of commercial agitation, some quietly, slipped into office to carry put. the system pf their own devising—tlie ; Object ; of so much solicitude and so many fears,, But so it happened. The law as it stands was vouched for by the highest commercial authorities in the country, assuming Chambers of Commerce; to (represent;' the commercial ability of the colony, and therefore the General Assembly is blameless. When mercantile men get what they ask for,' what right have they •' to complain 2 They cannot blow hot and cold, even through the mouth of Judge Ward, whose remarks certainly go the length of’attributing blame to the Legislature. ; But we conceive that all insolvency" laws .are; based -on :a ! < false principle. They assume that it is the duty of the Slate 'to protect one class of the community from the consequences of their own folly ; hence they ‘lead to undue competition in business,, by encouraging a reckless extension of' tile credit system, and.result,in loss, dishonor and crime; —for the man, James Reid, whose certificate was suspended by Judge Ward for two years, was as much guilty •of crime, -in its ; moral aspect, as the man William Brown, who was sentenced to/twoi years’ imprisonment in' Wellington by Judge Johnston, on the criminal charge of uttering worthless cheques. The latter had a trifling balance at the Bank, which he made the foundation of his fraudulent operations ;. the former had £SO cash', which he made the foundation of his operations also, incurring debts he had not the means, nor the intention, of paying. Now, we hold that it is no part of the function of the State to tax the citizens, at large to collect the bad or doubtful debts of traders, or to punish a debtor for taking advantage of their credulous cupidity, inasmuch as they need not have incurred the risk of loss. We hold that not only should imprisonment for debt bo abolished, but that civil process should be abolished also. The country would be an immense gainer, and trade would be conducted on a basis of capital and credit which would leave little or no room for dishonest operators. Moreover, those who honestly pay their way now would bo able to live much cheaper, inasmuch as they would not then, as now, bo compelled to make up the defalcations of the dishonest classes.

We.may bo told that this system is impracticable ; that business has been so long conducted on the present system that any radical change, such sis that suggested, would unsettle everything. We really do not think so. On the con r trary, we think business would very soon settle down into its proper groove.- But so long as the State undertakes the duty

of collecting ordinary trade debts, so long must this exceptional state of the law have its compensating balance in an enactment for the relief of debtors, . The whole thing is -wrong at bottom. It is quite another ‘ thing, however, to require the State do enforce a civil contract., That comes clearly within the scope of its functions ; but with regard to the ordinary operations of trade, the less it is interfered with by legislation the better it will be for those engaged in it. Judge Ward deserves’the thanks of the public, however, for directing attention to this subject in the remarkably able way he has done. The tone of commercial morality is undoubtedly low; and the tendency of all bankruptcy laws is to -keep it low. Indeed, the enactment of these laws presupposes a low commercial tone. There is the inexorable creditor on the one side, and the unfortunate debtor on the other; or there is the fraudulent debtor, snapping his fingers at his creditors, who, good easy men, appeal to the Coux-ts of their country to get themselves righted. A substratum of truth underlies both positions, the real fact of the case being that with rare exceptions one is as much to blame as the other. If, however, the observations of Judge Ward should lead to the further consideration of this most important question, he will not have spoken in vain. It certainly needed some conspicuous case like that of James Reid, the Balclutha butchex-, and some judge of ‘ Mr. Ward’s ability to poixxt the.moralj so as to rouse public attention to this subject. While business is brisk and nxoney plentiful, few care about the bankruptcy laws; but when a reaction sets in, and the lawyers and official assignees begin to reap a golden harvest out of schedules filed and estates sequestrated, then the merchants are apt to think that they are a very hardly used class ixxdeed, and that something should be doxxe to check insolvency. They fly to the Legislature to help them, by enacting fx-esh laws which, on trial, usually make matters worse ; whex-eas, were they to obtain the repeal of the insolvency laws, and the abolition of civil process, tlxey would reduce their risk of loss to a minimum, and do a great deal towards establishing commercial morality. There woxxld then be few chances for carrying off their quarry by those birds of prey who invariably swoop down upon the colony ixx seasons of speculative excitement.