Part 7 (1/2)
The bankrupt has a curious affection for jewellery. He buys large quant.i.ties of this commodity, and sells it again at a loss to stave off the evil day and add to his deficiency. I read in the Board of Trade reports of a failure due to gambling and extravagance, in which the debtor purchased jewellery for 40,000 and sold it the same day for 10,000. If he had been a poor man I think maybe the police would have tried to find a law to give him a rest cure for a few months in one of His Majesty's gaols, but he failed for over 70,000, and the probable value of his a.s.sets was 175.
Perhaps he was a bit of an aristocrat. Anyhow the police left him alone. I cannot even tell you his name, for the kind Inspector-General in Bankruptcy, fearful of causing pain to the sorrowing, never tells you the names and addresses of the people whose history he writes. He speaks of him as ”No. 1512 of 1911.” The poor fellow had no occupation, his cruel father only allowed him a miserable thousand a year, so what could No.
1512 do but run into debt? The wonder is that he failed for so little as 70,000.
No. 614 of 1907 was not much of a record, but he will do as another example. He, too, had no occupation except qualifying for a bankrupt and ultimately failed for 21,292 with a.s.sets _nil_. He started his wild career at the age of nineteen with expectations of a fortune when he got to the age of twenty-five. With that charming simplicity and cunning, characteristic of the whelps of the vulgar rich, he proceeded to moneylenders, and at the date of the receiving order had created charges exceeding 430,000 on his reversion of such complexity that every mortgagee disputed the right of every prior enc.u.mbrancer. This would not matter so much, as all these victims were doubtless moneylenders and a lot of the money would go to estimable lawyers to smooth out the wrinkled parchment muddle, but then at the back of all those were the unsecured creditors, poor tradesmen and others. They were to get nothing.
No. 1103 of 1908 was an even smaller fellow. This debtor was educated at Oxford and, on leaving the university in 1901, he was in debt to the extent of 4,500. I have a pa.s.sion for statistics, and I should like to see a balance sheet showing on one side the expenses of the four thousand Oxford undergraduates during three years of residence, and on the other side the earnings of the same four thousand undergraduates for a similar period in, say, fifteen or twenty years afterwards. I fear it would not be much of an advertis.e.m.e.nt for Oxford. No. 1103's father paid up his creditors to the extent at least of fifteen s.h.i.+llings in the pound, and gave him a fresh start. He was in trouble again in 1906, through betting and extravagance, and failed for 20,392--a.s.sets 1,103.
The French have an excellent system of declaring these youngsters to be prodigals and putting them under a committee as we do lunatics with property, and no doubt in money matters they are akin to the insane, and are really to be pitied and cared for. But to the poor it must be strange to see debt and the disaster of debt causing such different results in law to different cla.s.ses of people, and it must be hard for them to understand why they, too, are not fit subjects for the blessings of bankruptcy rather than gaol.
And what am I to say to my friend Joseph the signalman, at twenty-nine s.h.i.+llings a week, when he shows me some of these spicy stories of the Inspector-General's report cut out of the local paper.
”What has it all got to do with you, Joseph?”
”Well,” he says, ”I've been thinking why should not I do a bit of a failure like No. 1512 of 1911? I can buy a gramophone and a watch, and a few lucky wedding rings and a family Bible, and a plush drawing-room suite on the instalment system, and I can borrow a pound or two on a promissory note. Of course betting and beer cannot be done on the nod in my cla.s.s of life, but one can owe a bit of rent, and altogether I see my way to do a failure up to, say, thirty pounds. Why shouldn't I go bankrupt?”
”Well, the answer is very simple,” I have to tell him. ”The rules of the game are made by the rich for the rich, and not for you, Joseph, at all.
Oh, dear, no! In the first place you must have a debt of fifty pounds.”
”Well,” replies Joseph, ”I think I could bring it as high as that if I tried.”
”And next you must have a creditor to make you bankrupt, and unless he thinks there is some stuffing in you or wool on your back a creditor is not going to waste his time and money making the likes of you bankrupt.”
”But,” says my hopeful friend Joseph, ”what is the meaning of a chap filing his own pet.i.tion? I've often read of that. Why shouldn't I file my pet.i.tion?”
”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 pet.i.tion 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 publis.h.i.+ng 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 s.h.i.+llings 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 cla.s.s 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 a.s.sure 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 cla.s.s 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 hards.h.i.+p 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 s.h.i.+llings, 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.”
”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 compet.i.tion 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-cla.s.s 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 cla.s.ses flourish more vigorously in the North than in the South.
You must not suppose the working man is allowed to cast off his debts in the wholesale way in which the thorough-bred, blue-blooded bankrupt does.
Not a bit of it. The order made against him is that he shall pay his debts to the extent of so many s.h.i.+llings in the pound at so many s.h.i.+llings a month. If he does not carry out the order there is prison for him for every instalment he fails to pay if the judge so orders, or at the best his order is rescinded and all his creditors are down on him again as before.
But the main drawback to the business is the extortionate fees charged by the Treasury. Here is a poor devil with twenty-five s.h.i.+llings and a wife and family and, let us say, thirty pounds of debt, and the judge gives him an administration order to pay ten s.h.i.+llings in the pound at five s.h.i.+llings a month. The Treasury are at once down on him. Their fees are always calculated, not on the dividend paid, but on the total amount of the debts, and they insist in every case on two s.h.i.+llings in the pound.