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 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 1905 only averaged £6,168,567 per annum. But during the latter period there was an annual average of 3426 private arrangements involving a further estimated annual liability of £4,166,354 entered into outside of the Bankruptcy Acts 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 matter 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 is provided for: (1) by fees charged to bankrupt estates, (2) by interest on balances at the credit of such estates with the bankruptcy estates account, and (3) by interest on unclaimed funds at the credit of estates under former Bankruptcy Acts.

Out of this are paid the salaries of all the officers of the department, including the official receivers; the remuneration due in respect of bankruptcy services to the county court registrars; pensions, &c., payable to retired officers under the present and previous Bankruptcy Acts; cost of bankruptcy prosecutions; and rents, stationery, travelling and other incidental expenses. The system is self-supporting and involves no charge upon the tax-payers of the country. It has been objected that inasmuch as the act professes to be based on the principle of enforcing commercial morality in the interests of the general community, the cost of administering it should not be charged entirely to the bankruptcy estates concerned. But when it is considered that a large part of the revenue of the department is derived from funds to which estates administered under the present act have contributed nothing, this objection does not appear to be well founded.

For the convenience of readers who may require more detailed information, the accompanying summary of some of the more important provisions of the law relating to bankruptcy procedure is submitted. It must be borne in mind, however, that the subject is in some of its branches extremely intricate, and that both the law and the procedure are being constantly affected by a considerable body of judicial interpretation, while the acts also contain detailed provisions with regard to many questions incident to the administration of bankruptcy. A reference to the latest textbooks or competent professional advice will always be advisable for those who have the misfortune to be practically interested either as debtors or as creditors in bankruptcy proceedings.

The Deeds of Arrangement Act 1887, although not falling strictly within the scope of the bankruptcy law, may also, in consequence of its important bearing upon the question of insolvency in England and Wales, be here noticed. It has been pointed out that, under the Bankruptcy Acts of 1849 and 1861, non-official arrangements by deed between a debtor and the general body of his creditors 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 non-assenting 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 of the bankruptcy courts. Private arrangements, therefore, cease to form any part of the bankruptcy system. But they are, nevertheless, binding as voluntary contracts between the debtor and such creditors as assent to them. Being, however, in 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 voluntary assignments, which are not binding on those who do not assent to them, such arrangements, where honestly entered into and carried out by capable administration, in many cases form a useful and expeditious method of liquidating a debtor’s affairs, and where the debtor’s insolvency has been brought about without any gross misconduct they will probably always be largely resorted to. The danger attending them is that even in cases where the debtor has been guilty of misconduct, a private arrangement may be used to screen his conduct from investigation, while in many cases it may be made the medium for the concealment of fraudulent preferences. The absence of any independent audit of the trustees’ accounts may also encourage or conceal irregularities in administration. Previous to 1887, however, much inconvenience arose from the fact that the execution of these private arrangements was frequently kept secret, and fresh credit was obtained by the debtor without any opportunity being afforded for the new creditors becoming acquainted with the fact that they were dealing with an insolvent person, and that in many cases they were simply supplying the means for meeting past obligations in respect of which the debtor had already committed default. The Deeds of Arrangement Act 1887 was therefore passed to compel the disclosure of such arrangements, by declaring them void unless registered within seven days after the first execution by the debtor or by any creditor. Registration is effected by lodging with the registrar of bills of sale at the central office of the Supreme Court a true copy of the deed and of every inventory and schedule attached thereto, together with an affidavit by the debtor, stating the total estimated amount of property and liabilities, the total amount of composition, if any, and the names and addresses of the creditors. Where the debtor’s residence or place of business is outside the London bankruptcy district, the registrar is required to forward a copy of the deed to the registrar of the county court of the district where the debtor’s residence or place of business is situated. Both the central and the local registers are open to public inspection on payment of a small fee and general publicity is secured by the action of various trade agencies, which make a practice of extracting and publishing the information for the benefit of those interested. By section 25 of the Bankruptcy Act 1890, every trustee under a deed of arrangement is required to transmit to the Board of Trade within thirty days of the 1st of January in each year an account of his receipts and payments and such accounts are open to the inspection of any creditor on payment of a small fee. They are not, however, subject to any kind of audit or control by the department. The registrar is also required to make periodical returns of the deeds thus registered to the Board of Trade, in order that a report of proceedings under the Deeds of Arrangement Act may be included in the annual report which the department is required to make on proceedings under the Bankruptcy Acts. Full statistics of such proceedings are accordingly included in these reports, from which it appears that during the ten years ended 31st December 1905 the total number of registered deeds of arrangement was 34,273, with estimated liabilities amounting to £41,663,541, and estimated assets to £23,020,483.

Summary of Bankruptcy Procedure.—Subject to certain special provisions in the case of what are termed “small bankruptcies” (see below), the following summary sets forth some of the more important provisions of the various acts and rules relating to bankruptcy administration grouped under convenient heads to facilitate reference. In some cases the effect of legal decisions has been embodied in the summary.

Preliminary Proceedings.

Petition and Receiving Order.—Any court exercising bankruptcy jurisdiction in the district in which he resides or carries on business