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that the property of the debtor, divisible amongst his creditors, shall not comprise the following particulars:

1. Property held by the debtor in trust for any other person.

2. The tools (if any) of his trade and the necessary wearing apparel of himself, his wife and children, and his furniture, to the value of £25, or to such further value as the creditors in general meeting may determine.

It is seldom that maintenance money is granted the debtor by the creditors during the interval of filing his declaration of insolvency and obtaining his discharge. Sometimes the creditors may compensate him for services rendered in the settlement of the estate. It is in the power of the court to discharge the debtor upon the request of the creditors. If the creditors, however, refuse to meet and request his discharge, the court may suspend the order of discharge until such time as it may deem proper, within a period of three years.

The one hundred and eighty-fifth section of the act reads:

If no order of discharge shall be made within a period of three years from the date of the bankruptcy, a debtor shall nevertheless be deemed to be absolutely discharged at the expiration of that period.

15. Fortunes are not readily made and lost in New Zealand. In the early history of the colony the growth of its trade and commerce was very slow, but after the discovery of gold in large quantities a startling impetus was given to every branch of business. Between 1863 and 1871, when the export of gold was the heaviest, the rush to the mines was unparalleled. A little Maori village on the Thames in a short time contained a population of over 15,000 Europeans. The yield of the mines was enormous. The Caledonia mine alone in less than nine months distributed amongst its shareholders over $3,000,000 in dividends. The shares which originally cost $60 went up to $1,200. The value of the exports of gold between 1863 and 1871 was $109,365,240, and during that time the population of the colony increased from 99,000 to 270,000. The rush to the mines, the excitement created by every new discovery of gold, awakened the most reckless trading and the wildest speculation in stocks and bonds. This was followed by speculation in native lands and other enterprises. The sudden rise and fall of property brought about a very unhealthy state of affairs. The banks, which have always been well managed here, did what they could to regulate trade. They refused to discount all land-speculation paper, and in a short time business was restored to a normal basis.

16. The general effects of credit in New Zealand are about the same as in other countries. It is a maxim in political economy that credit makes commodities dearer. This maxim would apply as well in New Zealand as elsewhere.

A very great objection to the credit system is the encouragement it gives to reckless trading. The unscrupulous speculator, finding it an easy matter to obtain credit, rushes into all kinds of enterprises without considering the consequences, and at last ends in bankruptcy. When he deals in commodities the sale of which is precarious, or in articles which are constantly varying in price, the risk be runs is greatly increased. Credit also tends, I think, to encourage extravagance and indolence amongst the poorer or working classes. An artisan, who obtains goods without payment at the time, not unfrequently indulges in a greater supply and of a better quality than his requirements demand or his means allow. From this state of affairs two results are obvious: 1st, the repudiation of small debts; 2d, a vast number of legal actions for the recovery of debts. These actions give the

merchant the reputation of being hard or severe, whilst the debtor is not only compelled to pay the account but the cost of the legal proceedings, which in many cases amounts to more than the original claim. In conclusion, I will mention that very general attention has been directed to the effects of credit on the poorer classes by the introduce tion of a bill into the colonial parliament which has for its object thabolition of all laws for the recovery of small debts in the district courts. This would at once do away with the credit system in the retail trade. I am, however, inclined to the opinion that the bill will not pass. Much can be said in favor of it, but much more can be said against it. The fact that such a bill has been introduced would lead to the conclusion that the effect of credit amongst the poorer and middle classes is an evil demanding a remedy.

UNITED STATES CONSULATE,

G. W. GRIFFIN,

Auckland, New Zealand, August 10, 1883.

Consul.

TASMANIA.

REPORT BY CONSUL WEBSTER, OF HOBART.

In compliance with the request contained in your circular of 15th May, I have the honor to furnish my report on the systems of credit which prevail in, and their effect on the general prosperity of this colony. Credits of record during 1881 were as follows:

Mortgages registered, 753 for £407,483; judgments registered, 15 for £3,238. These figures, which show only a small increase since 1878, do not bear due proportion to the increased value of property, extension of buildings, and the general expansion which has taken place in business in all departments during the same period.

Of trade credits, bankers' advances on open account, secured and unsecured, form a very important element. Ordinary mercantile credit comprises: (1.) Wholesale transactions in all classes of imports, manufactured goods, and live stock, which are usually sold at three or four months' credit, with monthly settlement by bill of exchange. (2.) Retail rates to consumers, with quarterly settlements by bill at three months as a rule. In all cases cash buyers have the advantage of a discount or allowance in price equal to from 23 per cent. to 5 per cent. All the raw products of the colony, such as wool, grain, tin, fruit, &c., are usually sold for net cash.

With few exceptions people are not averse to contracting debts. There is no doubt that the facilities offered in many instances, due to the competition in most branches of trade, have the effect common in every community of leading to reckless trading; but, upon the whole, the systems of credit prevailing have worked fairly well amongst all classes.

The only law concerning credit in force here is that of the Parliament of Great Britain.

It is impossible to arrive at a satisfactory conclusion as to the extent to which credit prevails in proportion to the volume of business; but well-informed authorities estimate that 65 per cent. to 75 per cent. of the transactions are credit.

The same difficulty exists in reference to the proportion of losses in

cidental to credit, but probably 1 per cent. to 13 per cent. on the gross transactions is a near approximation of the truth.

Tradesmen of the smaller class extend credit to mechanics and laborers, but not very readily, and only from week to week, when wages are usually paid.

Time accounts are not frequent, but when adopted interest is demanded.

A person in business having failed under circumstances not discreditable, finds little difficulty in resuming. The greatest obstacle is the ob vious disadvantage of having to compete for business with those pos sessing capital.

Bankruptcies are not numerous. In 1881, the last year for which statistics are available, there were 29 petitions presented under the bankruptcy act, with liabilities stated at £13,770, and assets £9,600. These figures, however, do not represent totals, as statements were not filed in all cases.

The total population of the colony at present is about 123,000, and it is almost needless to say that in such a limited community fortunes are not easily made, nor are they easily lost if the most ordinary prudence be exercised.

The fact that little apparent ill has resulted, for several years past, from the systems of credit prevailing, is probably owing more to the steady progress in the affairs of the colony and the prosperity consequent thereon than to the beneficial influence of credit generally.

Whether credit in the abstract has the effect of stimulating trade is a question which business men usually answer at once in the affirmative. The possibility of altogether abolishing the system seems to present such difficulties as to preclude the necessity for any expression of opinion from me upon the subject.

UNITED STATES CONSULATE,

A. G. WEBSTER,

Consul.

Hobart, October 23, 1883.

POLYNESIA.

SANDWICH ISLANDS.

REPORT BY CONSUL M'KINLEY, OF HONOLULU.

I have the honor to acknowledge the receipt of the Department's circular of May 15 last, submitting certain interrogatories propounded by the Board of Trade of Scranton, Pa., respecting the system of credits, &c., prevailing in this Kingdom.

In order to furnish such answers as the importance of the questions submitted would seem to require, I submitted them to Hon. Charles R. Bishop, one of the oldest American residents here, the president of the Honolulu Chamber of Commerce, and who for many years has been a prominent merchant and banker here.

Herewith I hand you the replies made by Mr. Bishop thereto, which I trust will contain the information required.

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Are there any sumptuary laws or regulations concerning credits?

No.

To what extent does credit prevail in proportion to the volume of business?
Not less than one-half.

To what extent do losses incidental to business prevail?

Except on plantation adventures, losses have been small.

Do tradesmen extend credit to mechanics and laborers readily?

Only for quite small amounts.

What advantage have cash buyers?

They can get a discount equal to 1 per cent. per month, say 3 to 5 per cent.

Is interest demanded on time accounts?

On large accounts, such as agents' accounts with planters, interest is charged from and after the end of each quarter-year, but with small accounts creditors are not strict about interest.

With what classes are the evils of credit most conspicuous?

Jobbers, butchers, grocers, and boarding-house keepers have the larger number of losses, but those who have advanced to planters have lost a much larger amount. What kind of produce or manufactured articles command cash returns?

The principal products are exported by the producers and drawn against at sixty days sight. There are no manufactories except machinery, which is sold for cash. Åre credits of record (mortgages, judgments, &c.) prevalent; and, if so, among what classes?

They are prevalent principally amongst planters or persons improving their property. When a person has once failed, or has been discredited, can he resume, and what are the obstacles to such resumption?

Those who fail in business usually have no difficulty in getting a discharge under

the bankruptcy act, or by assignment; and if there has been no fraud there is no ol stacle to resumption except want of means.

Is bankruptcy frequent?

No.

To what extent do relief acts in bankruptcy prevail?

No special relief acts; bankrupts usually get discharged without unnecessary delay Are fortunes readily made and lost?

Not readily made. But few fortunes have been made, and comparatively few hav lost all.

What are the general effects of credit?

It is used too largely for the general good.

FRIENDLY ISLANDS.

REPORT BY CONSUL ATWATER.

Does credit stimulate trade?

Yes.

Are people averse to contracting debts?

No.

Are there any sumptuary laws or regulations concerning credits? No.

To what extent does credit prevail in proportion to the volume business?

Seventy-five per cent.

To what extent do losses incidental to business prevail?

Five per cent.

Do tradesmen extend credit to mechanics and laborers generally? Yes.

What advantage have cash buyers?

Two and one-half per cent.

Is interest demanded on time accounts?

No.

With what classes are the evils of credit most conspicuous?

All classes.

What kind of produce or manufactured articles command cash turns?

All produce.

Are credits of record (mortgages and judgments) prevalent; and, so, among what classes?

Yes; all classes.

When a person in business has once failed, or has been discredite can he resume, and what are the obstacles to such resumption?

Can resume by making an arrangement with his creditors.

Is bankruptcy frequent?

No.

To what extent do relief acts in bankruptcy prevail?

Very limited.

Are fortunes readily made and lost?

No.

What are the general effects of credit?

To encourage people to live beyond their means and enhance t price of every commodity to the buyer.

DORENCE ATWATER,

UNITED STATES CONSULATE AT TAHITI,
September 12, 1883.

Consul

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