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130

BANKRUPTCY

the question of insolvency in England and ales, be here noticed. It has been pointed out that, under the Bankruptcy Acts of 1849 and 1861, nonofficial arrangements by deed between a Jearsraage_ debtor and the general body of his creditors meat. were not only officially recognized, but were in certain circumstances made binding on all the creditors, including those who refused to assent to them. Under the Act of 1869, although such deeds were no longer recognized or made binding on nonassenting creditors, the proceedings under the “liquidation by arrangement” and “composition clauses were practically private arrangements by resolution instead of deed, and were proved by experience to be open to the same abuses. It has also been shown that under the Act of 1883 no arrangements either by deed or by resolution have any force against dissenting creditors, unless confirmed after full investigation and approval by the bankruptcy courts. Private arrangements, therefore, cease to form any part of the bankruptcy system. But they are, nevertheless, binding as contracts between the debtor and such creditors as assent to them. Being, however, m the nature of assignments of the debtor’s property, they are either deemed fraudulent if the benefit of the assignment is limited to a portion of the creditors, or, if it is extended to all they become acts of bankruptcy, and, like any other voluntary assignment, are liable to be invalidated if made within three months prior to the petition on which a receiving order is made against the debtor. Treated as v oluntary assignments, which are not binding on those who do not assent to them, such arrangements, where honestly entered invested in public securities yielded for the same year an into and carried out by capable administration, in many form a useful and expeditious method of liquidating a income of £20,400; and (3) by interest on unclaimed cases debtor’s affairs, and where the debtor’s insolvency has been funds at the credit of estates under former Bankruptcy brought about without any gross misconduct they will probActs, which yielded £37,746; the total revenue of the ably always be largely resorted to. The danger attending department for the year 1900 being thus £170,020 Out them is that even in cases where the debtor has been of this were paid the salaries of all the officers of the de- °uilty of misconduct, a private arrangement may.be used partment, including the official receivers; the remunerascreen his conduct from investigation, while in many tion due in respect of bankruptcy services to the county to cases it may be made the medium for the concealment of court registrars; pensions, &c.,- payable to retired officers fraudulent preferences. The absence of any independent under the present and previous Bankruptcy Acts ; cost ol audit of the trustees’ accounts may also encourage or bankruptcy prosecutions ; and rents, stationery, travelling, conceal irregularities in administration. Previous to 188 /, and other incidental expenses; the total expenditure amount- however, much inconvenience arose from the fact that the in0, for the year ended March 1900 to £160,901. The execution of these private arrangements was frequently system is thus self-supporting, and involves no charge upon kept secret, and fresh credit was obtained by the debtor the tax-payers of the country. It has been objected that without any opportunity being afforded for the new inasmuch as the Act professes to be. based on the principle creditors becoming acquainted with the fact that they of enforcing commercial morality in the interests of the were dealing with an insolvent person, and that in many general community, the cost of administering it should cases they were simply supplying the means for meeting not be charged entirely to the bankruptcy estates con- past obligations in respect of which the debtor had cerned. But when it is considered that the revenue of already committed default. The “ Deeds of Arrangement the department, to the extent of £37,746, is derived Act 1887,” was therefore passed to compel the disclosure from funds to which estates administered under the of such arrangements, by declaring them void unless present Act have contributed nothing, this objection does registered within seven days after the first execution by not appear to be well founded. For the convenience of readers who may require more the debtor or by any creditor. Registration is effected lodging with the Registrar of Bills of bale at the detailed information, the accompanying summary of the by leading provisions of the law relating to bank- central office of the supreme court a true copy ol tne Summary niptcy procedure is submitted. It must be deed, and of every inventory and schedule attached thereto, o/pro borne in mind, however, that the . subject is in together with an affidavit by the debtor, stating the cedure.' f,omc Qf ;ts tranches extremely intricate, and total estimated amount of property and liabilities, the total amount of composition if any, and the names an that both the law and the procedure are being constantly addresses of the creditors. Where the debtor s residen affected by a considerable body of judicial interpretation. or place of business is outside the London bankruptcy A reference to the latest text-books or competent pro- district, the registrar is required to forward a copy °i the fessional advice will always be advisable for those who deed to the registrar of the county court of the district have the misfortune to be practically interested either as where the debtor’s residence or place of business i debtors or as creditors in bankruptcy proceedings. situated. Both the central and the local registers ar The “Deeds of Arrangement Act, 1887, although not open to public inspection on payment of a small lee, an falling strictly within the scope of the bankruptcy law, general publicity is secured by the action of various may also, in consequence of its important bearing upon

to £69,029,795, and estimated assets amounting to £25,667,785. It may also be pointed out that, according to the official figures, the cost of bankruptcy administration under the present system has very considerably decreased as compared with that under the Act of 1869. Estates are also closed at much shorter intervals, and, what is more important from a public point of view, it appears that while the estimated liabilities of bankrupt estates during the ten years ending 1883 amounted on an average to £22,380,000 per annum, the estimated liabilities during the ten years ending 1900 only averaged £6,902,979 per annum. But during the latter period there was a further estimated annual liability of £4,986,399 on private arrangements entered into outside of the Bankruptcy Act by insolvent debtors. There are no means of ascertaining the corresponding amount of liabilities on private arrangements outside of the Bankruptcy Acts prior to 1883, and therefore a complete comparison is impossible; but it is evident that on any method of computation there has been a very great diminution in the trading insolvency of England and Wales, while it is also clear as a mattci of general knowledge in commercial circles, that a great decrease in the proportion of fraudulent trade and reckless speculation has been a marked feature of private trading during the period in question. The cost of bankruptcy administration under the Act is provided for: (1) by fees charged to bankrupt estates which for the year ended 31st March 1900 Revenue amounted to £111,874; (2) by interest on and ex ' balances at the credit of such estates with the penditure. •bankruptcy estates account, a portion of which