THE COUNTY COURTS AMENDMENT BILL.
IF there is any one thing on which jurists might have been . supposed to be finally agreed it is the uselessness of im- prisonment for debt, and it is now practically at an end in this country for all persons who are either above or below the necessity of working with their hands. Any one who owes fifty pounds can become or, if arrested, is made a bankrupt ; his property is taken from him, and he is then sent naked into the world, but not without that incentive to labour which consists in the certainty that his future earnings will be his own. With respect to traders the equity of this system has never been disputed, and even in the case of persons living on a fixed income it can scarcely be considered doubtful. Look- ing at the question as a whole, the creditor in this latter class of cases is as much to blame as the debtor, and if the latter yields to temptation, the former is the tempter. Justice is satisfied so long as the penalty of imprisonment is inflicted on those whose debts have been contracted under such circumstances as make it clear that they never intended to pay, and imprisonment, be it observed, is then the punishment not of indebtedness but of fraud. For the labourer alone a different system still obtains. The one member of the com- munity, living on a fixed income, who can lay by nothing, and therefore when in sickness or out of work must live on credit, may be imprisoned over and over again and his family driven into the union for debts, trifling it may be in amount, but still a hopeless incubus to him. For we pass by the quibble which insists that he is imprisoned not for the debt, but for contempt of court in neglecting to obey its order to pay. And when we learn that the commitments of the County Court judges average nine thousand a year, we may well feel, even allowing for the cases of fraud which this number includes, that something ought to be done to place the working man in the same positon as the rest of his countrymen. Whatever may be the faults of the Chancellor, he has at least as a legislator the merit of seizing on a principle and carrying it fearlessly out to its legitimate consequences. His plan is simple. He proposes that whenever a debtor has suffered the judgment of any Court for a sum not exceeding 20/., his creditor may summon him before the County Court judge of the district in which he lives. If the debtor appears to have no means of paying, and no chance of being able to pay any part of the debt, the judge may refuse to make any order ; but if he thinks that the debtor can, or may reason- ably be expected to, pay some part of the debt, he mast make an order by which the debtor is for all practical purposes made a bankrupt. The debtor has to give in a list of his debts and assets, and may be examined by any creditor, and finally, if his debts are under 50/. the judge summarily directs him to pay by instalments either the whole amount of his debts, or such part of them " as the Court may see fit," and the sum so recovered is to be divided rateably among the creditors. If the debtor's liabilities are found to amount to 50/. he is to be made a bankrupt in the ordinary way. On the other hand, the power of imprisonment for debt is taken away altogether, but the debtor may be committed to prison for two months as a misdemeanant if, in incurring any of his debts, he "obtained credit by false pretences," or "was guilty of fraud or breach of trust," or " wilfully contracted it without having at the time any reasonable expectation of being able to pay it;" and he exposes himself to the same penalty by concealing any property he may have, and finally if, after the order; "he wilfully wastes his income or earnings by unjustifiable extravagance or conduct." It is not easy to see the force of the objections to this scheme which have been expressed in 80 many different quar- ters. It simply treats the small debtor on the same prig.- ciples as the daring financial genius who has managed to conduct his operations on a larger scale. It invents a cheap system of bankruptcy ; but it has been denounced as at once immoral and inexpedient. It will, we are told, make all the working men rogues, and at the same time deprive them of all credit. To a calmer reasoner it might seem that to cheat his creditor the labourer must get credit, and that if the Bill prevents him from getting any credit he can scarcely cheat his creditor.
Let us, however, examine both objections more in detail. The Bill, it is said, will destroy all credit. Nobody under such a system will trust any one who is without tangible pro- perty. The matter does not rest on mere probabilities, we have had actual experience of the working of the system. A few years back imprisonment was abolished in the case of all debts under ten pounds, and the result was such a complete disturbance of social life that it was necessary to repeal the enactment in the very next session of Parliament. The argu- ment from experience is always telling, but it seems to be in this case completely fallacious. The error of these reasoners is that they have considered the effect of the clause abolishing imprisonment for debt taken singly, and not the effect of the whole Bill. To abolish imprisonment simply is to enable any man living in lodgings and supported by the earnings of his personal labour, either mental or bodily, to defy his creditors ; it is to take away the creditor's only remedy, and give to him no substitute, and it is not necessary to resort to experience to know what must be the consequences of such a system. But the Chancellor's Bill does provide a sub- stitute.. It gives the creditor the power of making his debtor a bankrupt, of cross-examining him as to his means, his con- duct, his prospects, and of compelling him to make a public disclosure of the whole state of his affairs. This is a far more terrible punishment to the dishonest debtor than imprison- ment, and a power far more useful to the creditor himself; and if people are found ready to trust others with 1,000/. in reliance on that alone, we cannot discover why they should refuse to trust them with 10/. The amount of a debt is, or ought to be, determined by the character of the transaction and the apparent means of the debtor, not by the amount of pressure which the creditor can legally apply to extort payment.
Therefore we do not believe that the Bill will prove any obstacle to the working man's obtaining legitimate credit, though we should be the first to admit that if it did the result would be most mischievous. It is in times when trade is brisk that the pawnbrokers do the most, for it is then that the journeymen are most in want of capital. These men may be a minority of the class of small debtors, but certainly their interests ought not to be sacrificed to the merely improvident majority. But such persons are trusted because they are steady, industrious men, and the same remedies which are suffi- cient for all other creditors will be sufficient for theirs. So far, moreover, as they are trusted for any other reason, credit is not an advantage to them, any more than it is to the wife whom the tallyman tempts with his rags of cheap finery, or to the husband who puts himself into the grocer's power that he may keep his wages to buy beer. The difficulty is to put obstacles in the way of the dishonest creditor without- depriving the honest debtor of all credit. We do not doubt that the aboli- tion of all imprisonment for small debts may have failed to effect this, but we do not see why success should not be attained by a system which extends the advantages of the bankruptcy principle to the lowest class of the community, which gives to the honest creditor its powers, and exposes the dishonest debtor to its penalties. The objections of the would-be moralists may be shortly disposed of. The only power of which this Act will deprive the County Court judge is that of extorting the money from the debtor by repeated imprisonments. He will still be able to make an order on the debtor's future earnings—a power which we believe the Commissioners in B inkruptcy do not possess. He will still be able to inflict two months' irnpri-am- ment for every kind of fraud in contracting the debt, and even for wilful extravagance after judgment obtained. Only where he sees that the debtor really cannot pay, and has no chance of being able to pay, a debt honestly contracted, he is to let him go free. If there be any encouragement to im- morality in that, the only comfort we can suggest is that it is nothing new, for it is the principle of every bankruptcy act which ever existed. A still flimsier ob- jection is that the principle of bankruptcy is only pro- perly applicable to cases in which some property is , surrendered, and that in most cases in which the debts 'amount to 300/ and therefore come before the Commissioners, property is surrendered. We very much doubt the truth of this position. In last Thursday's Times we observed that before Registrar Roche sixty-nine audits had been held, and that in only twenty-two were there any assets whatever. Before Registrar Bethel there had been forty-three audits ; in thirteen there were no assets, and in twenty-one more it was still uncertain whether there would be any. The true prin.
ciple of bankruptcy is that when a man cannot pay he should be set free. If there has been culpability he should be punished once for all; if not, take his property if he has any, and let him go. The debtor whom a load of liabilities pursues from which he cannot escape is inevitably dragged down into pauperism. The creditor gains nothing and the community loses a man—a greater loss than some moralists seem to imagine.
The other salient provision of the Bill—that which limits the time for recovering debts under twenty pounds to one year—seems of very much less value. Having provided a cheap practical system by which the humble debtor may be relieved of his liabilities at any time, why interfere with the Statute of Limitations which affects all classes alike? Owing less than twenty pounds is not an incident peculiar to working men, and it is difficult to see why one's grocer or tailor should be compelled to sue within a year or lose his debt. It all events the amount, we think, should be reduced one-half and the time for suing doubled. But the clause as it stands is so ill-drawn that it is difficult to say what it means, and cer- tainly it does not say what the Chancellor means. The clause enacts that "any debt or money demand (whatever that may mean) not exceeding twenty pounds" shall be irrecoverable by action, "unless within one year after such debt or money demand, or some part thereof, became due or payable." Un- less some occult meaning is to be given to the words "money demand," the effect of this is obvious. If A has a running account with B, and orders goods on the 5th, 8th, and 10th of January, 1855, B's remedy is lost unless he issues a writ in respect of the first order on the 5th of January, 1856, in re- spect of the second on the 8th, and so on in respect of every separate order included in the account, and no part payment is of any avail to keep the debt alive. But Lord Westbury, in his speech, stated the enactment of his Bill to be that debts under 20/. were to be sued for within a year from the time when the last item of the account was contracted or the last pay- ment made. The proposition of the speech would have very little practical effect, arid what effect it had might probably be beneficial. The proposition of the Bill would, we feel sure, prove intolerable. The proposal to extend the jurisdiction of the County Courts to certain equitable souses, to petty administration suits, petty partnership suits, petty foreclosure suits, and the like, has met with general approbation, and it is one more step towards the fusion of law and equity—the one great juridical reform to which all others are secondary in point of import- ance. Errors of detail there may be in these provisions, and, as we have seen, the Bill seems to have been carelessly drawn pr the draughtsman insufficiently instructed. But its leading principle is, we believe, sound and just, for it puts all debtors from every class of the community on the same footing,— punishes fraud with imprisonment but not mere indebtedness, —and makes no difference between the man who owes much and the man who owes little, except in the elaborateness of the procedure by which his conduct is investigated and his property divided among his creditors.
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