munication. the hon. Gentleman chose to move for a debate on the subject, and the House them. He might add that the colonial did not seem to look very favourably on newspapers showed that great interest a tax of this nature. As far as I am existed throughout Australia on this concerned, I should be glad to see an subject, and that all the colonies were income tax imposed on charities. But anxious for a fortnightly postal com- it appeared to me that my duty was not to take any action at all until the pleasure of the House was more distinctly known. If it be the opinion of the House that such a tax should be imit. In the meanwhile I shall propose posed, I shall give my hearty assent to the Estimate as it stands, and the House can do whatever it thinks right in the COPYHOLD, INCLOSURE, AND CHARITY MR. GOLDNEY said, he wished to "That the expenses of the Copyhold, Inclosure, and Tithe Commission, Inclosure and Drainage Acts, and the expenses of the Charity Commission, ought not to be borne by the public?" THE CHANCELLOR OF THE EXCHEQUER: I have to inform the hon. Member and the House that the Inclosure Commissioners have made provision by fees in their office for raising £17,000 towards their expenditure, which is a little more than £20,000. I hope this arrangement will prove a satisfactory one. I am sorry to say that I cannot give as favourable an account with regard to the Charity Commission. Wishing to carry out the Resolution of the House, I put myself into communication with that body and begged them to consider any means which might occur to them for providing the sum required to defray their expenditure, but after a good deal of consideration they reported that they did not see how by fees in their office they could raise much more than £1,000 a year, and from what I know of the Commission I believe that statement is true, because the proceedings in the office are of a very informal nature, and it is difficult to require that stamps should be used for the purposes of revenue. The result is that the only way in which the Charity Commission can be made to pay its expenses is by subjecting charities to an income tax. Now, I have found myself in considerable difficulty on this point, because, although the House resolved that the Charity Commission should pay its own expenses, yet the House was not aware that the income tax on charities; and I believe only way of doing so is by putting an that a Resolution was passed by this House on a former occasion, negativing such a tax. [Mr. GLADSTONE: There was no Resolution.] At all events, there was BANKRUPTCY BILL.-[BILL 50.] (Mr. Attorney General, Mr. Solicitor General.) SECOND READING. Order for Second Reading read. MR. NORWOOD said, that the Bill had only been delivered to Members on Thursday, and there had consequently not been time to ascertain the feeling of the country either respecting it or the other measure (Imprisonment for Debt Bill) which must be considered with it. He would therefore suggest that, in order to afford the Attorney General every possible facility for carrying the measure forward, the Bills should now be read a second time, but that the discussion should be postponed until the Motion for going into Committee. THE ATTORNEY GENERAL: I have no objection to such a course being pursued. MR. JESSEL said, he did not propose to go into the details of the Bill now. They were better reserved for discussion in Committee, but there were one or two observations which it might not be deemed presumptuous in him to make with regard to the general principles of bankruptcy law. There was no law in the world affecting civilized communities which was much older than the Law of Insolvency; and, therefore, in discussing this question, they had the benefit of a more extended experience than it was possible to obtain on any other subject of commercial law. The principles established were few in number, and of general application. Everyone must admit that the chief object to be secured when a man failed to pay his debts was to obtain as soon as possible an arrangement between him and his creditors. He spoke, of course, of an honest debtor, leaving dishonest that the majority of creditors should be debtors to be dealt with by the criminal perfectly free to make any contract they code. In the case of an honest debtor pleased with the creditor. Such was the it was established by what might be law on the Continent, where they might called universal legislation that such an agree either to a composition or to give arrangement was the first thing to be the creditor time, or do both, granting secured, and that it should be limited him a complete or only a limited release simply by the will of the contracting from his debts, and leaving the whole or parties. When talking of an arrange- a portion of his after-acquired property ment of this nature they must remem- liable to pay the rest. When once this ber that it was impossible on any oc- principle was adopted, precautions must casion to get entire agreement between be taken to secure a genuine majority of large numbers of persons. Therefore creditors, by preventing persons not really the legislation of almost all countries creditors from voting in that capacity , had given a right to the majority of and also by preventing real creditors from creditors to bind the remainder. The voting in respect of a larger debt than Roman law had formed the basis of the was due to them. One great reason, he legislation of almost the whole of the believed, why the Bankruptcy Law of 1861 civilized world, and only in a sense was failed to give satisfaction was that there it true that our Common Law was not were in it no adequate means for preventbased on the Roman law, for we had | ing this. It was another defect in the law used the Roman law as the Turks used that the debtor himself was allowed to the remains of the splendid temples of make the arrangement. The deed was antiquity. We had pulled out the stones drawn up by his solicitor and then proand used them in constructing build- posed to the creditors. This was the ings which we called our own. On this reverse of the practice in foreign counsubject our laws began with the Roman tries, and anyone acquainted with the legislation more or less corrupted, and law of contracts could not be blind to adopted as something entirely new. The the enormous difference in the results main object of bankruptcy legislation produced by the two systems. It was in almost every continental nation was important that the principle should be to bring the creditors to an arrange- adhered to that the creditors should ment by enabling a majority to de- propose the arrangement to the debtor; cide; the requisite majority being, in and to secure the object of excluding all most States, a majority in number and but genuine creditors he would have all three-fourths in value. The smallest persons prove their debts in the same majority required was in the State of way as in bankruptcy. Such was the New ork, where two-thirds were re- practice in France and, so far as he quired. On this point English legisla- knew, in every other State of the Contition had been far from uniform. The nent. Having ascertained who the creold law did not enable creditors to make ditors were, the next step would be to arrangements, but it empowered them ascertain their wishes. At present, a to give a creditor his discharge; and solicitor took up a case for the petitionthat power was limited to a majority of ing creditors; and sent round to the other at least four-fifths in value. This amount creditors a letter authorizing him to of four-fifths was subsequently altered prove for them, and enclosing a proxy to three-fifths in value, and a provision to vote for the choice of assignees. The was adopted giving power to the credi- creditors, to save themselves trouble , tors to stop commenced proceedings in signed both, and the result was that the bankruptcy and to turn them into ar- assignee was chosen not by the creditors rangements. That was then thought a generally, but by one, or perhaps two, terrible innovation, and therefore it was solicitors who had obtained the largest required that the assents should be nine- number of nominations. This could not tenths in value. The amount was after- occur if there was a general sitting of wards changed to six-sevenths, and creditors to discuss not only who was to again to three-fourths, and he saw no be the assignee, but whether there was reason for the provision in the present any possibility of coming to an arranger Bill altering the figure to five-sixths. ment with the debtor in order to avoid He thought it ought to be the guiding bankruptcy. Then, another danger to principle of legislation on this subject be guarded against was the possibility of any creditors assenting to unfair ar- than that in which they might see a man rangements as regarded others, by being who had been bankrupt three or four paid in some way or other to give their times, a daring and unscrupulous specuassents. This practice had never been lator, riding in his carriage, while his made penal in this country, though in unfortunate creditors were ruined. It every foreign code it was a fraud which was sometimes said if a bankrupt were was criminally punishable. Not being to be always liable for his debts until aware that this country was entitled to they were discharged, he would not exconsider itself superior in morality to ert himself as it was for the interest of other nations, he did not think that on society he should-to acquire future prothis point there should be an exemption perty. But, looking to experience, that from the terrors of the eriminal law, objection was without foundation. The which alone were sufficient to prevent Roman legislation-the law of cessio bofraudulent practices of this nature. norum-contained in the Digest, did not Having secured these objects, he would allow the debtor to free his future-acgive the creditors the fullest power to quired property from his debts, but make arrangements before bankruptcy simply protected him from being cast proceedings commenced, or at any other into prison. That law had prevailed for time before they were finally closed. Their thirteen centuries over the whole civiarrangements should be altogether in- lized world; and under that law debtors dependent, if they thought fit, of the did exert themselves and acquired protransfer of property by the debtor, and perty. The decay of the Roman Empire of his freedom or non-freedom from lia- was followed by the rise of the great bility as regarded his future-acquired commercial cities of Italy, and at a later property. Now, without wishing to period of the North of Germany and speak disrespectfully of the framers of Holland; and in every case they adopted this Bill, he must say, looking at the the Roman law. And, as had been shown 75th clause, which was the only clause by Mr. Burge in his third volume on in the Bill relating to this point, it was Foreign Law, and by Professor Leone extremely imperfect. It seemed to be Levi, in his great work on Commercial confined to the disposition of property Law, that principle was carried out by and to liquidations similar to bankruptcy. Louis XIV. in France, and by other It ought to extend to stopping the bank- European States. When a debtor had ruptcy proceedings at any time the cre- made cessio bonorum, his creditors could ditors thought fit, a power possessed, no longer proceed against him for any with certain limitations, under the pre- debt incurred before the bankruptcy; sent law. Passing from that which was but the curators, or, as they were the first principle in bankruptcy -called here assignees in bankruptcy, namely, that of arrangement, they came were entitled at any future time to to the case where, for reasons that oc- bring him before the commercial tricurred now and then, it was not possible bunal, and compel him to give an acto make any arrangement with creditors. count of his affairs; and if the state of They had here only two principles to his affairs warranted it, the tribunal look to first, to secure that the property made an order, by which he should pay of the debtor was fairly divided among a portion or the whole of his debts. his creditors; and, second, to protect the That law prevailed in every civilized debtor in his endeavours to re-instate community except our own, and he himself in the community, and obtain could not conceive on what principle our future property with the view of satisfy- law formed an exception. Whenever he ing his creditors. He must respectfully found that the English law differed in dissent from the proposition now made some point from what he called the to relieve the bankrupt's future-acquired universal law of other nations, he was property when he paid 108. in the pound. tempted to believe that the difference He thought the future-acquired pro- had arisen from accident; and so he perty of the debtor should be liable found in the present instance. The first until he had fully paid his debts. That statute of bankruptcy was the 34 & 35 of appeared to him not only sound moral- Henry VIII., c. 4, passed in 1542, which ity, but also prudent legislation. He not only contained no discharge of the fucould not conceive any state of society ture-acquired property of the debtor, but more discreditable or more distressing the 6th section expressly enacted that if the creditors were not satisfied by the was made to classify certificates, but the means provided by the Act they should classification was abolished by the Act have the same remedy for the recovery of 1861, and neither of those Acts made of the residue of their debts as before any alteration in the power of the Judge the passing of the Act. The next statute to relieve the future-acquired power of of bankruptcy was the 13 Elizabeth, the debtor from liability for his debts c. 7. That did not contain any dis- without the consent of his creditors. charge. The 10th section was almost Since 1842 it had been possible for a verbatim with the 6th section of the Act man to speculate at other people's exof Henry VIII. The statutes of James pense. He might speculate rashly four did not alter the law in this respect; so or five times and lose the property of his that from the passing of the Act of creditors, but if he happened to succeed Henry VIII. till 1705 there were no the sixth time, and to make £500,000, means by which a bankrupt could re- he might laugh at his former creditors, lieve his future-acquired property from who might be starving. That state of the claims of his creditors. Up to that things was, he thought, a disgrace to period English law was in exact accord- our system of legislation. They ought ance with that of the rest of the civilized not to neglect the experience of the world. The 4 & 5 Anne, c. 17, for the whole world. He believed a man would first time, introduced what was called a not work less hard because he knew he certificate of conformity, by which a was working for an honest purpose, and bankrupt conforming to the law was al- with a view of paying his creditors who lowed 5 per cent of his property, and had just demands upon him; and he was discharged from all further liability thought that the only way to make peofor debt theretofore contracted. That ple less reckless in their expenditure and met with universal disapproval, and the more honest in their dealings was to next year the amendment was intro- compel a man to pay his creditors when duced that no certificate of conformity he was fairly able to do so. He thereshould avail a bankrupt, unless it was fore hoped that when the Bill went into assented to by four-fifths in value Committee the law in this respect would of his creditors, nearly the same pro- be made consistent with the principle portion as required in other coun- and practice of every civilized nation. tries. The law was slightly modified Upon another point our law stood alone. by the well-known Act of Geo. II., It was right to divide the property of the but remained substantially unaltered, bankrupt among the creditors, but it was until the 122nd section of the Consoli- not right to divide the property of other dation Act of 6 Geo. IV. which pro- people among them. The doctrine of vided that the certificate should be signed reputed ownership arose from an acciby four-fifths in value of the creditors, dent. The original notion was that if a unless an interval of six months man put property into the hands of had elapsed, and then by three-fifths. another in order that he might represent Up to the time of the passing of the that property to be his own and obtain 5 & 6 Vict., c. 112, no man's future- credit upon the strength of possessing it, acquired property was freed from lia- the creditors had the right to take those bility for his past debts without the goods. That was the Roman law, and consent of his creditors; but it was then the law of every civilized country. But suggested that creditors sometimes with- how did it happen that this country had held their consent vexatiously or from allowed the bankrupt's creditors to take some improper motive, and instead of other people's goods? Merely from a providing for that, as other countries slip in framing an Act of Parliament. had done, by preventing the creditors The doctrine of reputed ownership was taking the law into their own hands and that whenever any goods were allowed harassing the debtor, the Act of 1842 to be left in the possession or disposal of gave the Judge the power, or rather en- a man with the consent of the true forced on the Judge the duty, of dis- owner, and that possession remain uncharging a bankrupt's future property disturbed until an act of bankruptcy was from the payment of his debts, if the committed, the assignees were to take bankrupt was not fraudulent and had the goods and divide them among the conformed. When the great Consolida- creditors; and although the person to tion Act of 1849 was passed, an attempt whom they belonged left them with the "And for that it often falls out that many persons, before they have become bankrupt, do convey their goods to other men upon good consideration, yet still do keep the same, or are reputed the owners thereof, or dispose of the same as their own, be it enacted, that if at any time in future a man shall become bankrupt, and shall at such time be the true owner and in possession of any goods or chattels, and shall be the reputed owners of them and take upon themselves to sell them, the Commissioners shall have power to sell the same for the benefit of all the creditors." bankrupt, in perfect good faith, and that had been done from the time of |