Wairarapa Age MORNING DAILY. TUESDAY, MAY 30, 1911. THE BANKRUPTCY ACT.

Wairarapa Age, Volume XXXII, Issue 10251, 30 May 1911, Page 4

Wairarapa Age MORNING DAILY. TUESDAY, MAY 30, 1911. THE BANKRUPTCY ACT.

There is a growing feeling in the mercantile community of New Zealand that the Bankruptcy Act is in need of amendment in various directions. Tihe Mercantile Gazette, in a recent issue, ,sayis:— "We think it is queistionable whether publicity should be given to meetings of creditors; no one wants to have the foot of having made a bad debt obtruded iipon the comimuuity, uior is it just that an irate, and .possibly very small creditor, should have the right to make offensive and perhaps unjust statements about the debtor for the express purpose of having them disseminated broadcast through the community by means of the public press. The question of fees and the compilation of the debtor's four days' statement require consideration. We have always thought that a prohibitive entrance fee is charged and deters .many of .the poorer classes from taking advantage of the Act and Jirom regaining a clean start in lifie. If the bankrupt hns surrendered alt his .property, his discharge should be facilitated, unless the creditors are satisfied that .lie has not acted properly or the Official Assignee .should l>e of opinion that in the interests of commercial morality, the discharge should ,not be given. In suitable -cases, the creditors themsielyes should have the power at any time after the bankruptcy to vote, with the consent of the Assignee, that the debtor be discharged, and in such a ease the Official Assignee should issue tire necessary certificate of release. If he dissents from the creditors' action, then power should be conferred upon him to bring the case before the Court lor review. If the creditors fail to attend any meeting called for the purpose of passing a- resolution, of discharge to the debtor, the Official Assignee should himself bp empowered to grant tihe release. In all cases whore a dis-

■charge is refused by the -creditors, either the Official .Assignee or the debtor should have a right of appeal to the Court, which should be empowered to deal with the matter according ibo circumstances. If the debtor is charged, with fraud, then. he should be prosecuted under the ordinary criminal law. Under 310 circumstances should the bankrupt be compelled, except in special cases, to apply for a discharge an open Court. That is a relic of.a bygone age, when every bankrupt was considered as a criminal. Most of the offences mentioned in Section 137 can now he swept out of existence, two or three of >tflie sub-sections may be maintained. The law with regard to a bankrupt's hook of accounts, however, should stand; it is essential that every person in business should realise the importance of keeping fairly accurate accounts, and in our opinion the existing sections in the Act could well be made more drastic. It 'must be remembered that during the last eight years a very important change has been introduced by the Legislature, under which, two or more persons up to- 25 may carry on business as a, private company. Included in this legislation is that which is in complete contrast with the Bankruptcy Act, and shows that the severity of that law as applying to bankrupts, has been modified. Under the Bankruptcy Act, section 137 contains very many clauses creating special offences in respect to which, upon conviction, a debtor may be sentenced to a severe term of imprisonment with, hard labour. Now, John Jones, who carlies on business under his own nam© as a small storekeeper, is liable upon, his bankruptcy to two years' hard labour if he ■commits an offence under /section 137, but if he and his wife or son cform the business into a company, and trade as John Jones, Limited, no such results-, would follow." If any director or proprietor of »a .private company is guilty of <an act which, if he were a private trader carrying on business not as a company, wiould be an offence under section 137 of the Bankruptcy Act, he is liable not to two years' imprisonment, .but to himself repay the moneys which any creditor may , have lost'-through his -misconduct, it may be that the creditor might obtain judginrent and then apply"' to" 'lbiave the debtor made bankrupt, with < the - view of bringing him under the penal clauses, but there are many difficulties in the way of tliis, .and it is very questionable " whether, under such circumstances, an indictment could be sustained. The legislation shows the trend of public opinion; every encouragement is now given- to companies, and every company which is registered withdraws one more trader fa:om the operations of the Bankruptcy Act; and that which is wanted is .simplicity, the perpetuation of the system of piivate trustees, a minimum of red tape, and, above all, debtors should be encouraged to come to the court a.s a place of refuge, not to look upon it as the camp of an enemy, as a place of humiliation, and as a portal to prison.