“My dear, simple fellow, you surely do not think the clever ones of the earth who look after your interests have not thought all that out? You take your petition to the Bankruptcy Court and see what happens. You will find the usual janitor at the door with his open palm. Of course you are expected to pay a fee—you have learned enough about English Courts to know that you do not get ‘owt for nowt’ in any of them. But in the Bankruptcy Court, my young friend, they foresaw you coming along and they have put the figure too high for you. Ten pounds, money down! That’s the price. If you want to set all the pretty little figures working, the official receiver smiling, the registrar writing it all down, and the judge nodding on the bench, and the Board of Trade publishing statistics about you—ten pounds into the slot, my young friend, and the figures will work.
“But you have not got ten pounds, Joseph, and you could not raise the sum if you tried, so you will have to go back to work and pay twenty shillings in the pound somehow. And don’t go and sell your gramophone and drawing-room suite, for they are on the hire system, and that would put you in the dock, where I hope you may never be. No. 1512 bought his £40,000 worth of jewels out and out, or said he did, and it was a Paris jeweller, anyhow, and I believe he was one of the ‘nuts’ and not your class at all, Joseph, but you may take it from me that you must not expect to be treated as he was. Have I said enough, my dear friend? Are you quite satisfied? Bankruptcy, I can assure you, is not for Joseph. Oh, dear, no!”
It is only fair to the law and to the memory of Mr. Chamberlain, who made the law, to remember that when he introduced the Bankruptcy Act of 1883 he invented a system of small bankruptcies called administration orders, whereby poor folk whose debts do not amount to fifty pounds may make a composition with their creditors. Let me set down in his own words exactly what he intended and tried to do. I quote from his speech on the second reading of the Bill:
“What he now desired to call attention to was the clause which followed and which dealt with the case of debtors who owed less than fifty pounds. That was the class of debtors who filled our County Courts with plaints and added very considerably to the number of the occupants of our gaols. It had always been felt to be a great hardship that while a large debtor could with ease relieve himself of all his liabilities he or his trustees might be prosecuting a poor man for thirty or forty shillings, and the latter might be sent to prison without having any means provided for him to make a composition with his creditors, and when, after satisfying the debt, he came out of gaol he was still liable in full to all his other creditors.”
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“But the more important provision which he had made for dealing with this subject was that under which a County Court judge might in future make an order for the payment by a debtor who owed less than fifty pounds by instalments or otherwise of all or any part of his debts. A debtor who was brought up on a judgment summons or a County Court plaint might state that he was indebted to other persons, might give in a schedule of his debts and propose an arrangement for discharging them, and, if the Court thought it reasonable, it might at once confirm it, so that a small debtor would thus be in exactly the same position as a large debtor who had succeeded in making a composition with his creditors or in arranging for a scheme of liquidation. Although he had not abolished in all cases imprisonment for debt, yet, if these provisions became law, it could no longer be said that any inequality existed as between rich and poor. The resort to imprisonment to secure payment would be much easier, and a large discretion would be vested on the judges to arrange for the relief to the small debtor by a reasonable composition.”
I have set this out at length because it is enormously encouraging to know that thirty years ago Mr. Chamberlain’s ideal was to destroy the County Court imprisonment for debt and to give the working man who fell into debt a bankruptcy system similar to that of the rich.
Why did it fail?
Well, it has not been wholly a failure, but it certainly has not fulfilled all its author’s generous hopes. In the first place the fifty-pound limit is too small, another reason of its non-success is that it is a voluntary system of some complication in competition with the simple, brutal method of the judgment summons and imprisonment for debt, but probably its unpopularity is chiefly due to the fact that the Treasury has always deliberately crabbed it by imposing harsh and unreasonable fees.
No system of this kind will be successful without compulsion and some clerk of the Court in the position of an official receiver to advise the poor how to go about the matter and to see that the order made is carried out. Such a system is in vogue in some Courts and has proved a success in mitigating imprisonment for debt and holding out a helping hand to those who were drifting into insolvency. But the system as it stands depends too much on the initiative of the County Court judge or the registrar. Thus we find on a working-class circuit like Oldham, Rochdale, etc., there will be over six hundred orders made, whereas in Whitechapel only two orders are made in the same year. Systems favourable to the working classes flourish more vigorously in the North than in the South.