The Southland Times. FRIDAY, AUGUST 26, 1870.

Southland Times, Issue 1298, 26 August 1870, Page 2

The Southland Times. FRIDAY, AUGUST 26, 1870.

The second annual report of the Inspector" in Bankruptcy furnishes the information that the number of bankruptcies in this colony during the past year ie greatly in excess of the number'of sequestrations throughout Scotland during a like period. The of Scotland being over three millions, and that of New Zealand under -a- quarter of -a ~ millk>iir«tbe statement affords room- for much conjecture anH 'speculation in explanation of the fact. TKe Inspector Stales X— "'TEeTast annual return I have received from the Accountant in Bankruptcy, Scotland, shows that 452 estates were seq uestrated ; while in this colony there were, during the year ? ending 30th November, 1869, 520 persona adjudicated bankrupts. This is, the mdre to be regretted when it is considered that of 821, the totalnumber of bankruptcies for the two years ending 30th November, 1869, there were 360 cases in which the liabilities did not exceed £300, while the assets recovered are merely nominal." There can be no question but that- the effect of the bankruptcy laws of the colony „up to the present has been to ifnota Y^JjV^ pleasant and honorable occupation' to the debtor, facilities for fraud have been so apparent _ in "bankruptcy legislation as to lead to the supposition that they were intended. Detection of fraud has been seldom! if ever expected, and its. punishment regarded as impossible of accomplishment. Hence creditors have too often been willing to submit in comparatively uncomplaining silence to the first loss rather than incur an additional one, with the accompaniment of the trouble and vexation entailed by the cumbrous and ineffectual machinery of the court. The result of this has doubtless been the serious detriment of creditors by inducing recklessness and extravagance in trading, and fraudulent resort to the bankruptcy court to wipe off existing obligations, and to put the debtor at once in a position to repeat the operation, as soon and as often as the kindness or credulity of creditors might render it practicable. The introduction, of the " Bankruptcy Act Amendment Bill " will materially remedy the existing state of matters, afford to creditors such protection r as they are entitled^ to expect from legislation, operating it the same time to deter from the gambling recklessness and fraud which the history of recent insolvencies has disclosed. The new Bill will come into operation sanctioned in all its important features by the express recommendations of the various Chambers of Commerce in the colony. A late writer (Mr J. S. Mill) on the subject of insolvency, gives the following : — " The law is bound to take care that insolvency shall not ie a good pecuniary speculation; that men shall not have the privilege of hazarding \ other people's property without their knowledge or consent, taking the profits of the enterprise, if it is successful, and if it fails, throwing the loss upon the rightful owners ; and that they shall not find it answer to make themselves unable j£j>ay their just debt?, by _spending^the money of their creditors in personalindulgence. .It is admitted that what is called fraudulent bankruptcy, the false" pretence of inability to pay, is, when detected, properly, subject to punishment. But does it follow that insolvency is not the consequence of misconduct because the inability to pay may be real! If a man has been a spendthrift, or a gambler, shall he pass scot-free because the mischief is consummated and the money gone ?" The principle involved in the above . has been virtually ignored in oui bankruptcy legislation, and it is therefore all the more satisfactory now to know that the new law meets the difficulty— a declaration of insolvency, which formerly afforded facilities to dishonest debtors for concealment and improper disposal of effects, is how to be regarded as an act of bankruptcy, and followed by an immediate surrender to the Provisional Trustee of the estate of the bankrupt. Another source of fraud is aimed at and comparatively provided for by the new Bill, making void all settlements within two years' of bankruptcy, except in cases of ante-nuptial settlement, and unless the claimants under such settlements can prove solvency at. the time of making. The value of such a provision as this — copied from the English Act — will be readily recognised here, many cases being of very recent memory in which the whole of the property of a debtor has been cleared off by a friendly arrangement. The occasional punishment of now and tlien ono— of— fcho smallest of the debtor fry, who had been either barefacedly dishonest, or culpably incautious in his mode of managing matters, was barely sufficient to impart the; slight sense of danger to the proceedings, necessary to furnish a zest. : JUvery one , knew Lthat it was the small fish who were caught, while the larger escaped to enjoy the fruits of their legalised plunder. : By the Erench Code de Commerce the word" banquerdijte" (which can only be 'translated by "bankruptcy 0 ) is confined to culpable insolvency, which is distinguished into simple bankruptcy, and fraudulent bankruptcy. Simple bankruptcy relates to such offences as,-— excessive housekeeping expenditure (all traders' house expenses being required to be entered day by day), large borrowing, sale of goods at a loss, losses by gambling, or improper or excessive issue of negotiable as. bills of exchange,, &c. -^For I tiny or either of the foregoing ' offences, the penalty is imprisonment for a. term. off nojb less-th^n pne"jno"rith, r nor,mpre than twcyearsi By the same i codV the following are dealt with as fraudulent bank-^ ruptcy, of which- the punishment iB travauccfoices (the galleys) for a term :-4---"If he has" attempted to account for; his property by fictitious expenses and

losses, or if he does not fully account tor all his receipts : " If he has fraudulently concealed any sum of money or any debt due to him, or any merchandise or other moveables : "If he has fraudulent sales or gifts of his property : ."'-,. "If he ha 3 allowed fictitious debts to be proved against his estate '• ; • % . «Xi to ka3 been." entrusted? with property, either merely to keep, or with special directions as to its use, and has nevertheless appropriated it to his own use" (for such acts of peculation by trustees there_is_generallj., in only a civil remedy, and that, too, through the Court of Chancery) :; ,-1V- *• j -" -If-he has purehasedreal-property ;in a borrowed name : < " If he has concealed his books. The following may also be proceeded against in a -similar way : — " He who has not kep,t books, or whose books shall' not exhibit his real situation as regards his. debts aad credits. .. , j " He who, having obtained a protection j (sou/ conduit), shall not have t duly J atfenae-a.'^ ''■••■ ; ' ' : l ' ■ These various provisions relate only to commercial : insolvency. > The laws ; in, regard' to 'ordinjxy, debts are considerably more, rigorous to the debtor.,, .... . . :; By far the majority of operators under •the i bankruptcy ' laws of this colony; have treason to congratulate themselves on not being under the jurisdiction of the French code, or the number of those fulfilling the expressed wish of a member of the Legislature hr the discussion of the j Amendment Bill, - by macadamising the public ways, would be very considerable. The tendency of the existing law has really been to make debtors distonest, and inasmuch as a truly honeßt man will never feel that the operation of law discharges him morally from the payments of his just obligations, he will noj quarrel with any law that furnishes hill with sufficient protection to do this. In the Amendment Bill the conditions of the | English Act have been copied relative to the discharge of a debtor. It'ia now provided that a dividend of 10s AQ ... the ... . pound. - shall ... -be:xcpaid. - by : the debtor to entitle him to his discharge, or that it shall bet clearly showed that but for circumstances over which the debtor had no.'coitrol, the estate would have paid that sum, or 'such discharge shall ; be granted at request iof his creditors, at a meeting duly, convened for that purpose, and certified < T to the court. In cases in which the estate does not realise 10a in the pound, protection- may at the discretion of the court be granted for three .years, during which time 'the debtor! /may make up the amount and claim his discharge, or the balance of his liabilities may be registered against him as judgment debts for which he is ever after liable, and in reference to which he has no protection. It is admitted that by no possibility can a law be framed to meet every conceivable circumstance, yet the Amendment Bill is a considerable advance in the right direction, and one thing is certain as to its operation, that no really dishonest personhaving, come within the range of the law, will wish to continue under - a system which renders him liable to such an extent. The community will thus to a great degree become purged of the rascals who enter 4uto bankruptcy -as a -speculation,- by which they intend to make money, regpdless of the wide-spread ruin consequent upon their nefarious transactions.