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-------BANKRUPTCY REFORM.

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BANKRUPTCY REFORM. (From The Times.) Among the measures to be introduced early in the coming session will be a Bill for the amendment of the Law of Bankruptcy. That this is a pressing necessity has long been agreed on all hands yet the successive attempts of Parliament to deal with the subject have so far proved abortive. The subject is now to be taken up, as we may hope, with a more assured prospect of success. Mr. Chamberlain is to have charge of it, and he has already shown his capacity for getting his Bills through Parliament. There is, moreover, a strong consensus of authorities as to the general outlines of the required legislation. A Select Committee reported last session and drew up a series of resolutions embody- ing certain accepted general principles. During the recess two important memorials, forming valuable con- tributions to the discus-ion, have been presented to the Government. One has tb. authority of the Council of the Incorporated Law Society, and, no doub., re- presents the opinion of the majority of respectable solicitors the other consists of the group of suggestions made by the Council of the Institute of Bankers. These various authorities may be held to have traced the outlines of a sufficient and acceptable measure. There is, in fact, no difference of opinion as to the aature of the evils to be redressed. It is on all hands agreed that the scandalous expense in the distribution cf assets, the melancholy frittering away of consider- able estates in solicitors' and accountants' charges, must, if possible, be checked. Under no system of bankruptcy ought the expenses to amount to the pro- portion with which the annual reports of the Comp- troller have made the public familiar. Everyone in a position to be impartial agrees that there must be a check to the laxity and facility attending liquidations by arrangement, which are more and more superseding bankruptcy proper, which are the cloak to so much fraud, and which enable a debtor to get rid of his lia- bilities without first being examined in Court on oath as to the real state of his affairs that the supervision of authority should be exercised at every stage, and Hot, as now, rarely and perfunctorily and that a debtor should not be able to obtain his discharge unless all his creditors have had an opportunity of thoroughly satisfying themselves as to the real condition of his affairs. The Bill to be introduced by the Government will endeavour in the first place to remove these acknow- ledged anomalies and abases. It will propose that all proceedings in regard to an insolvent estate should uniformly commence in bankruptcy. It will, there- fore, put an end to these alternative proceedings by way of liquidation and composition which form the opprobrium of the present law. In so doing it will follow the recommendation both of the Select Com- mittee of last session and of the Institute of Bankers, and it will further enact that proceedings in bankruptcy should commence on the petition of a debtor as well as on that of a creditor. The first leading provision of the new Bill will therefore involve the practical repeal of sections 125 and 126 of the present Act, and cer- tainly no one who has examined the subject can help agreeing that the repeal of those sections, which sanc- tions liquidations and compositions, is the necessary pre- liminary of any change likely to do much good. Under cover of these provisions, which form so insignificant a part of the present Act, and which are, nevertheless, more important in practice than all the rest of it put together, is perpetrated most of the misohief of which business men complain. As things now stand, if the requisite number of creditors have pissed a resolution that a debtor's affairs are to be liquitated by arrange- ment, or that a composition is to be accepted in satis- faction of his debts, the matter passes out of the sight of the Court. All is done in the dark, A trustee may act very much as he likes. If he has made things plea- sant with the solicitor and the committee of inspection, he may treat the estate almost as a private perquisite, Reform in this direction is obviously aud by common consent the first requisite in Bankruptcy legislation, and it will, therefore, be generally acknowledged that the new Bill will make a good beginning. The next important point to be provided for is that the creditors should in all cases be furnished with full and authentic information as to the exact condition of the bankrupt's affairs. In order to secure this, the Bill will propose that all initial proceedings between the adjudication of bankruptcy and the first meeting of creditors should be conducted by officers specially appointed for the pur- pose by the Board of Trade. These officers will take interim charge of the estate, will inquire into the con- duct of the debtor, will examine him, and make a pre- liminary report OR his affairs at tho first meeting of creditors. When this is done the first meeting of creditors will be held, and they will be required as at present either to appoint a trustee or to accept a com- position, and thereafter the proceedings will remain as they are at present. Thus the creditors will from the first secure full publicity and thereby obtain adequate security that their interests have been duly considered in the administration of the bankrupt's estate. At pre- sent they are too often called on to act ei t ber altogether in the dark or merely on the imperfect and ex parte in- formation furnished sometimes by the debtor and bis solicitor, sometimes by the debtor and his solicitor. Moreover, it may fairly be contended that, apart from the special interest of creditors, an important public interest is concerned in any suspension of payments, and, therefore, the provision for the official and public conduct* of the initial proceedings in any case of bank- ruptcy is ;.>1.e dictated no less by general considerations of public policy than by a due regard for the material interests of th e creditors of a bankrupt estate. It will further be proposed that the audit of a trustee's account should be conducted no longer by the committee of selection, a3. at present, but by the Bonrd of Trade, whose staff will be reinforced for the purpose by the ereation of a strong audit department, under the im- mediate superintendence of the Comptroller in Bank. ruptcy. These, we believe, will be found to be the anain provisiens of the forthcoming Bill to be intro- tlucea by the President of the Board of Trade, but it will further embody most of the subsidiary amendments of the existing laws recommended by theSelect Committee of last Session. There can be no doubt that such a measure, if it become*, law, will strike at some of the worst of the svils complained of in the existing bankruptcy proce- dure. The mere substitution of uniform proceedings in bankruptcy in all cases for liquidation by arrangement and for composition will go far to remove a great and increasing scandal, while the provision for conducting all ini: proceedings by an independent public autho- rity will operate directly as a security for the interests of creditors, and indirectly no doubt as a check on reckless c- fraudulent ..ling. The bankrupt's affairs will be ex- amined irom the first by an impartial and disinterested authority, and the result of such examination will be reported to all the creditors before they proceed to the appointment of a trustee. They will thus have all the accessary conditions of the case before them and will be able to keep an efficient check on all subsequent proceed- ings. At present after the first adjudication and still more after a resolution of liquidation by agreement the proceedings run very much, as it were, underground and the assets have a strange tendency to remain there. Even if the debtor is declared a bankrupt—a fate which the ComptroUer tells us is reserved for only a small percentage of those who fail—a lenient trustee and an interested committee of selection may make matters very easy for him. But it will be very difficult for such comfortable arrangements to be made when the whole condition of the bankrupt's affairs is accurately ascer- tained beforehand, and when the accounts of the trustee are audited by public authority. It may, perhaps, be thought to be an objection to the proposed measure that it places a large share of power and responsibility in the hands of a public department. But the adjudication in the first instance will still remain with the Court, and the administration of the bankrupt's estate placed as heretofore nnder the management of the creditors or their representatives. The function of the Board of Trade will be confined to enabling the wliole body of creditors of act with the requisite knowledge, and to securing, by an effective audit, that their interests are not neglected by an Ir- responsible trustee. It is, in fact, the desires of the real majority of the creditors, duly informed of the state of affairs, not those of an interested section or of an intriguing outsider, that should be respected, and the experience of the working of the Act of 1869 has made it clear that the real suffererg from failures often require protection either against an unscrupulous minority, which is often in league with the debtor, or against the trustee, who too often regards an estate as hIs lawful prey. Such protection would be effectually afforded by the provisions of the forthcoming Bill; and though they will need careful consideration and may prove susceptibte of improvements in detail, they will be welcomed as a real attempt to redress an admited evil. We cannot doubt, in fact, that the irre- sponsible trustee, who can make what arrangement be pleases with the debtor, who can vote his own re- muneration, audit bis accounts or not as he pleases, and grant himself a full release and pass a vote of thanks to himself, will soon be known only as an unsavoury and scarcely credible thing of the past. It would be absurd to expect that any system would triumph over cunning and interest when banded together. Creditors who are careless will be fleeced, trustees who are rogues will act as wreckers" to the end of the chapter. But the proposed measure of the Government will deal with the worst evils of the existing system, and certainly deserves a better fate than that which has befallen so many of its jredeceeaors.

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