5. Bankruptcy laws encourage rash speculation and induce a great many improvident persons to go into speculation into which they would not venture if they did not know that they had a chance of getting a discharge from their liabilities if they should be unsuccessful.

6. The Act is too expensive in its operation. In most cases creditors are pleased to enter into deeds of composition in order to get anything at all.

7. The assignees and lawyers are too rapacious and it is to their interest to prolong the proceedings and increase

expense. Under the old system one man, namely the man with the first execution in the sheriff's hands, got his pay. No one gets it now. Nobody gets paid. They had raised up a class of official assignees who took it all.

8. Confining the operation of a bankruptcy law to traders is class legislation. The Act is detrimental to farmers and other classes of society who are shut out from the privileges of the Act. A trader got a non-trader to endorse his note, and after a while got into difficulties. He could call his creditors together and could get relief from his creditors, but the non-trader who had endorsed his paper must pay up to the last farthing and might be ruined. thereby.

absence of proper supervision of the assignees. Were there Government inspectors to supervise all the acts of the assignees things might be otherwise. assignees

9. One reason for the unpopularity of the Act was the

manage by
business and facilitate their bankruptcy.

some means to find out the affairs of persons in

10. Another reason for the unpopularity of the Act in Ontario was the permission to creditors to name an assignee outside the province, while there was no power to bring one who had acted improperly to the province to make him dis

gorge.

11. At a

held the heaviest claims were appointed inspectors, and they took good care of their own interests. They come to an understanding among themselves whilst the less fortunate suffer. The law did not protect those who did work for the merchants-the mechanic, the working man, the professional man, all those who work.

meeting of creditors one or two of those who

RURAL OPPOSITION.

It will be seen from these suggestions urged in the House of Commons debate at the time, that one of the powerful causes operating to bring about the repeal of the Act was the fact that only traders were entitled to its benefits. These objections were urged more especially by members representing rural constituencies. Repeatedly it was pointed out by such members that the majority of their constituents, farmers, mechanics, and professional men, received no benefit from the Act, though compelled to bear their share of the loss resultant.

Other causes more or less unconnected with the merits of the Act itself that conduced in no small degree to its repeal were:

PREDOMINANCE OF QUEBEC.

The fact that in Lower Canada they had a provincial law which enabled a creditor to hold an insolvent's property for the benefit of all creditors. It was pointed out that clause 766 of the Code of Civil Procedure provided a much. more simple, much more expeditious, and much less unjust remedy, and that the inhabitants of Quebec had the great advantage of protecting the unfortunate debtors from the bite or embrace of the official assignee. The strongest opposition came from the province of Quebec.

IS A BANKRUPTCY LAW VICIOUS?

The Commons were also influenced, as has been already mentioned, by the fact that in England they had not as yet. succeeded in devising a satisfactory bankruptcy procedure. The same thing was at this time also true of the United States. There was in fact much dissatisfaction in both these countries with their existing laws. It was strongly urged that this dissatisfaction proved the contention that all bankruptcy laws were inherently vicious and incapable of successful enforcement, and that it was no use trying to amend them.

Many of the complaints were well-founded. Parliament, however, overlooked the fact that no real argument against the principle of bankruptcy laws had been brought forward The objections, formidable as they were, were not to the substantive but to the adjective portions of the law. The

principle of the bankruptcy law was correct. The method of the administration and enforcement thereof was defective. All that was needed was the man to find the remedy. The man was found. He was the long-sighted, clear-headed, and capable Joseph Chamberlain, then occupying the position in the English Cabinet of President of the Board of Trade. After exhaustive enquiries he found the remedy, and for nearly thirty years the Act introduced by him, and which became law in 1883, has been administered in England in such a way as to secure bankrupts' estates for the creditors and justice, not slavery, for honest debtors. Similarly in the United States, after various experiments, Congress upon a careful and exhaustive inquiry into the operation and effect of bankruptcy laws in other countries, enacted a national bankruptcy law in 1898, which, with some amendments made in 1903, has been the law ever since and gives every evidence of being entirely satisfactory to the nation at large.

COMPARISON OF FAILURES IN CANADA WITH THOSE IN ENGLAND AND IN THE UNITED STATES.

That a bankruptcy law does not tend to increase the number of failures is apparent from a comparison between the number of failures in Canada in the past four years as against the number of failures in the United States and England.

These figures for England and Wales represent the numbers of receiving orders made under the Bankruptcy Act, and do not include cases of insolvency under deeds. of arrangement. The exact figures for these latter are not available but the indications are that if they were included the number of inhabitants to a failure would still be over 5,000. It would appear, therefore, from the foregoing that there are as many or more failures in a country without a bankruptcy law as in analogous countries possessing such an enactment.

ENGLISH ACT OF 1883.

The salient features of the English Bankrupt Act of 1883, may be said to be as follows:

1. An independent and public investigation of the debtor's conduct.

2. The punishment of commercial misconduct and fraud in the interests of public morality.

3. The summary and inexpensive administration of small estates.

4. Full control by a majority in value of the creditors of the appointment of a trustee and a committee of investigation.

5. Strict investigation of the proofs of debt with regulations as to the proxies and votes of creditors.

6. Provision that no arrangements between creditors and debtors, or compositions by deed or by resolution, should have any force against dissenting creditors, unless confirmed, after full investigation by the Bankruptcy Court.

7. An independent audit and general supervision of the proceedings and control of the funds in all cases.

In 1908, after the law had been in force for 25 years, a committee of the Board of Trade, after making full enquiry into the working of the English Act, and into those of

Germany, France, Australia, Scotland and Ireland, reported that the result of their enquiry did not disclose any dissatisfaction on the part of the commercial community with the main features of the then existing law and procedure. Improvements were suggested in certain minor aspects of the law and certain branches of its administration, but with regard to the general scheme they recommended no change.

It has already been pointed out that other parties are interested in insolvency than the creditors and the debtor.

Unless restrained by legal enactment, the predominant characteristic of the human mind is selfishness. Every man is more or less dominated by what is best for his own interests. It matters little to creditors that it is unsafe to the community that their debtor should be allowed to carry on his trade. On the other hand it also matters little to creditors that their debtor has talents and enterprise, which if allowed free scope, would be of great value to the community. In the one case, if he is willing to offer them five or ten cents more on the dollar than they can collect from his estate, they will give him a discharge, and allow him to prey generally upon the community, until he again fails, and pays only a percentage of his debts. In the other case, unless the debtor's friends are willing to come to his aid, and recognizing his talents and enterprise, are willing to contribute out of their own means towards his debts, they are willing that he shall be handicapped with such a load of debt as to deprive the community of his services. His only reliefs are the Statute of Limitation, the generosity of such of his creditors as recognise both his honesty and ability, and thirdly, the satisfaction of the demands of those sordid individuals, who refuse to give a man a chance until they have first extorted the uttermost farthing. The trading community does not sufficiently recognize that the dishonest sible for the honest man who pays one hundred cents on tlader is a menace to the community, nor that it is imposthe dollar to compete with the man who frequently fails and pays only a percentage of his debts. Many men are reputed to have become rich by so administering their affairs as to fail for a sufficiently large amount.

PROPOSED REMEDIES.

work out the details of a Canadian bankruptcy law. The It would be beyond the scope of this paper to attempt to

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