Pagina-afbeeldingen
PDF
ePub

on insolvent estates began to fall fearfully short. The Court of Bankruptcy was a sink into which money was continually poured, but from which, with the true instinct of gravity, it never rose again. Even Blackstone himself could not have been content with such a state of things. The system worked with what Lord Byron somewhere calls. ruinous perfection. The army of bankruptcy was complete in all its parts, and the very model of a perfect and well-ordered department. It were a waste of time to enumerate all the officers who ministered in this great temple of ruin and failure. Never was the goddess of waste and destruction worshipped with such elaborate and such costly ceremonies. All went merry as a marriage bell, until a fault, which in no degree injured the symmetry but somewhat diminished the popularity of this splendid system, began to make itself manifest. It was at length discovered, to the horror of all concerned, that the official assignees were, as the Greek poet says of the infernal gods, better to hold than to let go. Vast sums were poured into the capacious lap of the Court of Bankruptcy, but comparatively little ever came out of it. The official assignees somehow or other gathered to themselves an evil repute. Just as poor Peter Peebles boasted that it was a very fine thing to have his name thundered out in the Outer House, but admitted that he whiles missed the comforts which he used to enjoy before he reached that forensic elevation, even so the creditors discovered that the Bankruptcy Court had one fault-like Saturn, it ate its own children; a great deal of money went into it, and a very little ever came out. This objection became so serious in the eyes of creditors that I grieve to relate that the patience of the public utterly gave way, and the creditors came to the conclusion. that it was as well, or perhaps better, to be robbed first as last, and that their money might, as it was not to go into their pockets, just as well remain in the pockets of their debtors as in the pockets of the assignees. Thus, in the full glare of publicity, and in the very face of a philanthropic and progressive age, was the whole machinery of bankruptcy brought to a standstill, and a clear demonstration once more offered that a plan conceived with the best intentions and the amplest knowledge had proved quite inadequate to deal with this subject, which a hundred years before Blackstone had imagined to have reached the acme of perfection.

Parliament went to work again, and another Bankruptcy Bill was the result. The plan of trusting the property of bankrupts to officials had, I blush to say, turned out a complete failure, and something else was to be tried. One might have thought that such a series of miscarriages would have been accepted as proving that there was something radically wrong in the idea of bankruptcy altogether, and that if the thing was to work at all, it must be by the agency of some simpler and less delicate machinery.

It was felt on all hands that the state of the Bankruptcy Court

The

had been allowed to become a public scandal. The time was come when an heroic effort must be made to put an end to a system of plunder by Government officials which, like Trinculo's bottle, was not only a scandal and disgrace, but an infinite loss. The Government of that day were struck, as well they might be, with the gross and scandalous spectacle which was revealed to them. They thought, and with some reason, that there was nothing in the nature of things which should render a bankrupt's estate more peculiarly an object of plunder and peculation than any other trust fund, and they proceeded under the best advice to seek a remedy for so crying a mischief. evil which they had to remedy was, to speak plainly, the unpleasant fact that after having bestowed enormous pains to get together the relics of a bankrupt estate, it was intrusted to hands from which it was found impossible to extract it. I will not stop to inquire by what abuse of patronage it came to pass that persons chosen by high authorities from a learned and honourable profession should have been found unequal to withstand this not very trying temptation. It puts one in mind of the king of England who said, 'I know not which of my lawyers to appoint, for on my soul they be all rogues.' The course which the Government of the day took was a very natural one, and deserved better success than it achieved. They said: 'We have been disappointed by those from whom we looked for aid and honesty; the temptation has been too strong for them. Let us try those who have a direct interest in obtaining the very largest dividends possible-the creditors themselves.' Nothing could seem fairer than such a proposition. Where were they to look for care in keeping and diligence in augmenting the estate of the bankrupt, if it was not in the creditor himself, who would be paid precisely in proportion to his own diligence? This idea was elaborately worked out in a Bill drawn with infinite care and skill, containing no less than one hundred and thirty-six clauses. In another Bill were contained some highly penal and, as it seems to me, unjust clauses based on a revival in modified form of that very imprisonment for debt from which the bankrupt laws took their origin. With the terror of a renewal of imprisonment for debt on the one side and the control by the creditors themselves on the other, it seemed as if the riddle had been at last read, and the working of a bankrupt estate was about to take its place among the exact sciences. It was clearly the interest of the creditor to obtain as large a dividend as possible, and as clearly he was invested with the power: what more could be desired? I cannot say that there was any fault in this reasoning as far as it went. Its error was that it did not take into consideration certain other feelings which ultimately proved too strong even for the very powerful motives which in this case seem at first sight to make the private identical with the public interest. In the first place, the creditor dislikes the whole subject. He has been done, and this lowers

him in his own estimation. dealing with these subjects, seem studiously to forget, that without lenders there could be no borrowers, and instead of throwing, as people strive to do, all the fault on the borrower, he knows that the failure of judgment was his own. He does not like to pose as an unsuccessful man, still less as a man who has been taken in. He would rather do and think of something else. The business is intricate, and the prospect of a dividend scarcely worth the trouble it is sure to entail. He easily persuades himself that his time will be better spent in seeking after new gains than in maundering over old losses. He prefers new pastures to fields nibbled to the roots.

He knows what many people, in

These are only guesses and suggestions, and may not be true. What is unquestionably true was, that what is everybody's business is nobody's business, and that this is exactly the sort of work which everybody leaves for everybody else to do; the result being that a great deal of it is not done at all.

It is now quite evident that a system of this kind can be satisfactory to no one but the dishonest trader. It is founded on a totally false estimate of human nature. It makes no allowance for any other feeling than the desire to get back a few pounds and a small percentage out of a great loss, and as that is not a true view of mankind, the bankrupt flourishes, and the creditor loses his dividend under the influence of a false psychology. The present law relating to insolvent debtors seems to satisfy no one. It is a signal and conspicuous failure, and the riddle is as far from being solved as ever.

But, with a courage which does him infinite honour, the President of the Board of Trade is ready to throw himself, like Curtius, into the ever-widening gulf, and add yet one more to the tragical list of unsuccessful experiments which we have been chronicling. It is impossible not to admire his daring, or to wish him anything but good luck in a voyage which has baffled the skill of so many bold and experienced navigators. His Bill is, I fear, not fated to receive during the remains of the present session the notice which it deserves, and the attention which I have been able to give to it does not encourage me to believe in its healing virtue. I will give a few reasons for this opinion very briefly.

I see no reason why the Board of Trade should displace the Chancellor, nor why an official of less rank and infinitely less knowledge should displace the unquestioned head of the English bar. This is wanton innovation. It is proposed that the Comptroller in Bankruptcy and his staff shall act under the direction of the Board of Trade. It is a very bold and startling innovation to mix up a political office like the Board of Trade with the duties of a court of law, so as to make the conduct of purely judicial proceedings an element in the stormy arena of politics. Much might also be said of the difficulties which such a supervision would impose on a court

fettered and dictated to by such superior officers of the courts, whose principal duty shall be to act as spies upon the bankrupt, and who, as ad interim receivers of his estate, do not appear to me very promising additions to an already somewhat discredited institution. They seem too closely connected with him to be his judges, and too hostile to be able to act as his friends. Much more might of course be said on these proposals, but I have said enough to make it plain that there is but little probability that the new scheme laid on the table of the House of Commons will redress the evils of a system which has for so many centuries baffled the efforts and mocked the industry of mankind.

The fault of bankrupt proceedings is indeed clear enough, and will instantly appear when compared with ordinary litigation. From the Shield of Achilles till the present time the only litigation which has really worked successfully has been that which is carried on between two adverse parties, representing thoroughly hostile and conflicting interests.

An impartial judge and two litigants or advocates, whose interest or whose business it is to sustain a distinct and clearly marked controversy, has been found by the theory and practice of mankind to be the only way of satisfactorily determining controversies relating to property. In the time of Homer the fee was given to the judge who gave the best opinion, but experience has transferred the fee from the judge to the advocate.. The essence of a lawsuit is the shock and conflict of opposing opinions and interests. Neither side speaks fairly and candidly, but it has been by experience found that out of these contradictions and exaggerations truth is most surely and easily evolved. No one could have presumed that à priori this would have happened, but no one will deny that it is the case, and that out of the exaggerations and sophisms of hired advocates, truth is most easily evolved. One great and fatal weakness in the Court of Bankruptcy is that this conflict is wanting. The question is not as to the decision of the battle, but as to the quantum of the loss. The Court of Bankruptcy is a forum in which there are no litigants, and to which, therefore, the machinery of a court is obviously inapplicable.

What shall we do then? Must we give up in despair the hope of making any reasonable and just settlement between debtor and creditor? People talk, and, what is worse, act, about persons who are unable to pay their debts as if the act were purely one-sided; as if the fault were all on the side of the debtor, and the creditor were utterly passive in the matter; as if the creditor were always the injured, and the debtor always the injuring party. But as the credit must be the act of both, and as every man is quite free to keep his money in his pocket if he pleases, it appears to me that in judging of such transactions moral considerations are quite out of place, and no intervention of penal law is demanded. The ancient legislators

were so engrossed with the wickedness of not paying that they quite forgot the equal fault of lending what might never be repaid. This simple consideration, that borrowing is the act of two, not of one only, at once divests the fact of being in debt of its penal character, and utterly destroys the ground of all bankrupt laws founded on the guilt of the borrower and the spotless innocence of the lender. The natural remedy for a doubtful loan is to refuse it or to demand interest sufficiently high to cover the risk, but not to punish the borrower because you were so imprudent as to trust him. Any doctrine short of this breaks down the distinction between borrowing and stealing, between a crime and a breach of a promise. This simple, and as it seems to me undeniable distinction, takes away altogether a question of punishment unless we are prepared to hold that every default is a crime.

There are three grounds on which the adoption of a bankrupt law may be supported. The first is to mitigate the cruelty of the common law, which is now entirely obsolete; the second, the necessity of punishing the failure of this particular contract in a manner quite different from the manner of treating all other contracts, which I have, I trust, shown has nothing left on which it can be supported; and the third, which consists in the machinery devised for making an equal division of the wreck of the property among the creditors. With regard to this last we must observe that in bankruptcy, as in politics, those who worship mere equality will generally find it a very expensive luxury. The expense of liquidation is a' grievous burden on a state which cannot pay its way, much less afford the complicated operations which are necessary before it can be ascertained exactly what portion of the miserable dole each creditor ought to receive. In order to ascertain the exact proportion due to each, the whole estate is often miserably impoverished. There is a strong flavour of Laputa in the whole proceeding. Symmetry is worshipped at the expense of substance, and the creditor is consoled for an unnecessarily meagre dividend by the information that all his fellows have been mulcted in exactly the same proportion. But it may be said natural equity requires that the wreck of the estate should be divided among the creditors. What is the basis of this natural equity? It is no part of the contract. It never, I apprehend, was known that a lender stipulated as to the payment which he was to receive in case of failure: he would be sure to say, if such a question were proposed to him, 'If it is necessary to provide for such a contingency as this, a still better way will be not to lend the money at all.' The equality of the rule-of-three sum which adjusts the payment with reference to the loss is a pure figment of law-a necessary consequence of the principles of bankruptcy, but bought far too dear at the expense of time, trouble, money, and vexation, which we must pay for it.

« VorigeDoorgaan »