THK 
 
 
 British Empire League, 
 
 Offices at 
 
 BOTOLPH HOUSE, EA8TCHEAP, E.G. 
 
 (O. FREEMAN MURRAY, Secietary.) 
 
 CANADIAN INSOLVENCY LEGISLATION. 
 
 "^ 
 
 \ 
 
 3^eport of QXccting 
 
 OF THE LEAGUE HELD ON 
 
 Wednesday^ December 4th, 189S, 
 
 INCLUDING A STATEMENT BY 
 
 The Hon. Sir CHARLES TUPPER. Bart., 
 
 {Hi^h Commissioner for Canada). 
 
 Reprinted by ki h1 permission from "Commerce" of Decemlwr aj, 1895. 
 

 
 / 
 
 ^ 
 
BRITISH EMPIRE LEAGUE. 
 
 WITH tho Duke of Devonshire as President, Sir John Lubbock 
 as hon. treasurer, Hir Robert Herbert as chairman of the 
 executive, and Mr. 0. Freeman Murray, secretary, the 
 liritish League has lately been established, with every prospect of 
 becoming a truly Imperial organisation. 
 
 The primary object of the League is to secure the permanent 
 unity of the Empire, and among the moans by which this result may 
 be assisted is the assimilation, as far as local circumstances permit, of 
 the commercial laws throughout the Empire. The attention of the 
 committee having been drawn to the disabilities under which trade is 
 carried on with Canada, in consequence of the absence of any Dominion 
 bankruptcy legislation, by a forcible letter from Messrs. Dent, AUcrof t 
 and Co., who have a large Canadian business, communication was 
 entered into with Sir Charles Tupper and witli a number of the largest 
 wholesale houses dealing with Canada, which culminated in a meeting 
 being called by the League on the 4th Do('(>ml)<>r last, to consider what 
 action should bo taken to procure the enactment in Canada of a satis- 
 factory Bankruptcy Law. Sir Eobort Herbert, G.C.B., Chairman of 
 the Executive Committee, presided, and among those present were the 
 Hon. Sir Charles Tupper, l^art., G.C.M.G., C.B., Messrs. F. Faithful! 
 Begg, M.P., J. Lowles, M.P., Col. P. R. Innes, W. Herbert Daw, and 
 
C. Freeman Murray (secretary). The following firms were also 
 represented : — I. and R. Morley ; Cook, Son & Co. ; Dent, Allcroft & 
 Co. ; S. Hanson, Son & Tiarter ; Hitchcock & Williams ; Phelps, 
 Sidgwiok & Biddle ; J. Travers & Son, Ltd. ; John Howell & Co., 
 Ltd. ; Pawsons & Leafs, Ltd. ; Copestake, Lindsay, Crampton & Co. ; 
 J. H. Buckingham & Co. ; J. and C. lioyd & Co. ; George Brettle & 
 Co. ; Debenham & Freebody ; Game, Harrison & Larner ; Harrisons & 
 Crossfield, and Higgins, Eagle & Co. 
 
 In consequence of the resolutions adopted at the meeting the 
 Executive Committee have since decided to obtain signatures of 
 bankers, merchants, manufacturers, &c., interested in Canadian trade, 
 approving of the decision arrived at. This document has already 
 been signed by a number of the most important houses in the City 
 of London, and it is intended to obtain the support of provincial 
 houses also. 
 
 Sir Robeit Herbert, in opening the proceedings, said : — The question of the 
 present position of insolvent debtors in the Dominion of Canada is a very 
 important one, and the subject having been brought under the notice of the 
 Executive Committee of the League by a very lucid and useful letter from 
 Messrs. Dent, Allcroft & Co., they felt they could not hesitate to call this 
 meeting to consider the matter, more especially as I understand there is a good 
 prospect of our representations contributing to a satisfactory result. I may 
 remind you that one of the objects of the British Empire League as shown in 
 its Constitution, which members have before them, is — " To assimilate, as far 
 as local circumstances permit, the laws relating to co{)yi'ights, patents, 
 legitimacy, and bankruptcy throughout the Empire.'.' Of course, in dealing 
 with this question, we do not wish to do anything which could have the 
 appearance of interfering with the undoubted right of Canadians to manage 
 their local affairs, and I think perhaps the best mode of opening the (question, 
 after the secretary has read Messrs. Dent, Allcroft & Co.'s letter, will be to ask 
 Sir Charles Tupper to explain the steps which have led uj) to the prcisent 
 position and any difficulties with which the Canadian Government may have to 
 deal. 
 
 The Secretary then read the following letter : — 
 
 97, Wood-street, London, E.C. 
 To C. Freeman Murray, Esq., October \%th, 18{)o. 
 
 Secretary, The British Empire League. 
 
 Dear Sir, — We notice that one of the objects of the League is " to 
 assimilate bankruptcy law tiuoughout the Empire" We desire, there- 
 fore, to call your attention to the absence of a bankruptcy law in the 
 Dominion of Canada, and to the consecpient prejudicial effect such a condition 
 of things has upon British traders. In the Dominion a debtor can assig.. 
 a portion of his estate — say his book debts — to his bankers, or elsewhere 
 to the detriment of the rest of his creditors ; he can also make preferential 
 
 Sayments to favoured creditors. We have not forgottpn an instance where a 
 ebtor cabled for 3 months' time in order to have a sale to enable him to meet 
 his overdue bills. He forwarded figures showing undoubted solvency on the 
 
d 
 
 face of them. His liabilities were mainly British, but a considerable sum was 
 owing to a Canadian cash creditor. A meeting of a few of the largest creditors 
 was held and the time granted on a {promise, subse(iuently given, that no 
 preferential payment should be made. The time elapsed, and it was then 
 found tliat he had used the product of his sale to pay in full the Cana- 
 dian cash creditor. Here, under our Bankruptcy Act, such a payment 
 would be regarded as a fraudulent preference, and would be upset by a 
 Bankruptcy petition. If a Canadian debtor fail.*, he makes an assign- 
 ment ; it may be to a friendly third party. A composition is offered, 
 probably inade(juate, certainly unauthenticated. If we refuse to come 
 in under the assignment we have no remedy and no dividend. If we do 
 assent, it is doubtless conditional upon our granting the debtor his discharge. 
 We may hear that he has been making settlements upon his wife, or in other 
 ways providing for his approaching collapse, still we have no remedy. Under 
 our bankruptcy law an assignment of the whole or any part of a debtor's 
 estate is an act of bankruptcy, so is a preferential payment. If such acts were 
 committed a petition would follow, and the debtor's estate would be fairly and 
 legally administered. Why not in Canada also? Under these circumstances 
 we do not see how it is poasible for trade between the Mother Country and 
 Canada to expand, while there is so obvious an absence of equity in the 
 admmistration of debtors' estates. — We are, dear Sir, yourd faithfully, 
 
 DkNT, ALLCROtT & Co. 
 
 Sir Charles TurrER, after a few introductory remarks, then read 
 liis statement as follows : — 
 
 CANADIAN INSOLVENCY LEGISLATION. 
 
 The history of bankruptcy legislation in Canada shows that the laws passed 
 on this subject have all been of a temporary character. They were to continue 
 for a certain period and were enlarged as occasion re([uired. 
 
 The first act of the kind in Western Canada was passed in 1843, which was 
 amended and continued by subsetjuent Acts until ISrS, when it ended. After 
 the lapse of several years the Act of 1864 vas ado[)ted and remained in force 
 down to the year of confederation. 
 
 Under the British North America Act bankruptcy and insolvency are 
 among the subjects delegated to the legislative authority of the Dominion 
 Parliament. In 1809 it was decided to adopt a uniform system of insolvency 
 law for the confederated provinces, and the old Act of 1864 was re- 
 enacted with certain important additions. The law was to remain in 
 force for four years, but it was extended by st.atute down to 1875, when a 
 further Act was passed, known as the Insolvent Act of 1875, which 
 repealed the former. Changes were introduced in this Act in the Sessions 
 of Parliament of 1870 and 1877. In 1879, less than four years after its adoption, 
 a Bill was introduced to repeal the Act which was passed by the Commons, but 
 was thrown out by a narrow Government majority in the Senate. The Act 
 was repealed in 1880, and from that day to this no fresh legislation by the 
 Dominion Parliament has been [)laced on the statute l>ook. During the 28 years 
 of the history of the Dominion of Canada, therefore, 17 or 18 years have passed 
 without any general insolvency law being in operation, and 10 to 11 years with 
 legislation of that character on the statute book. 
 
 The Act of 1869 [)rovidod for voluntary assignments, whereas the Act of 
 1875 provided for compulsory assignments. The experience of the latter is said 
 
not to have been satisfactorj'. The law wa.s enacted and came into operation 
 during a time of depression, accentuated by the adoption of a fiscal system, 
 itself detrimental to the growing commercial and industrial interests of the 
 country: Its unpopularity was probably rather due to the abuses of its ad- 
 ministration than to the principle it embodied. By a fraudulent use of the law 
 the beneficent intentions of the Act were thwarted, and it became frequently the 
 means of escape to the dishonest debtor, instead of solely a means of relief to the 
 hone"»t but unfortunate debtor, and it was held to have aided in demoralising 
 the trading community. There can be no doubt, however, that the system 
 of credit then obtaining in Canada was largely responsible for the abuses 
 referred to, the laxity and want of attention of creditors encouraging indirectly 
 over-trading by irresponsible and uniit persons to the injury and disadvantage 
 of legitimate trade and honest traders. Applying moreover to one class of the 
 community rather than to debtors generally, it incun-ed the opposition of the 
 other classes who condemned it for the abuses to which they saw in practice it 
 was open. The merchant and the banking classes, however, were to the last 
 opposed to the total repeal of the law, but as it was evident that there was little 
 hope for the passage by Parliament of amendments calculated to remedy the 
 defects of the law, the Act was allowed to go by the board, in the expectation of 
 the introduction of new legislation at an early date. In the interval there was 
 the existing local legislation dealing with the distribution of the estates of 
 insolvent debtors to fall back upon for the protection of creditors, notably in 
 Quebec, under the common law, and subsecjuently in Ontario, under special 
 legislation on the subject. In fact, it is now known that in 187U, the repeal 
 of the 1875 Act was purposelj' dela3^ed by the action of the Senate for one 
 year, to enable the provinces to adopt suitable legislation of Avhich Ontario 
 immediately gave notice and promptly carried into effect the following year. 
 
 The repeal of the Dominion Act had, at any rate, the salutary result of 
 effectively curtailing the loose credit system of the day, and of placing it on a 
 healthier basis, and the subsequent progress and stability of the tr.ade of 
 Canada has directed public attention from the necessity of a general insolvency 
 law, until the last year or two. The following statistical position will assist in 
 explaining this circumstance. 
 
 BrcuMreet gives the failures in (Canada, including Newfoundland, for the 
 period 1875-9 at over 26^ million dollars annually, wheioas, for the following 
 twelve years, 1880-91, the annual average was only 10 millions. Since that 
 period the failures in Canada— not including Newfoundland — have been as 
 follows:— 1892, Hi millions; 1893, 14| millions; 1894, 17| millions, or an 
 average of 14^ million dollars. 
 
 It is right to say that the provincial legislation of Ontario and Quebec, 
 though hardly far-reaching enough, has nevertheless been a most useful 
 substitute in these provinces, where the great controlling centres of the coii- 
 mercial and industrial activity of the Dominion are concentrated. Nevertheless, 
 the practical difficulties in preventing the giving of preferences, and making 
 preferential and fraudulent assignments have been great, e.«[)ecially in dealing 
 with insolvent debtors in those provinces which do not possess any insolvency 
 legislation. A further drawback in provincial legislation on this subject is that 
 it has no power to give a discharge to insolvent debtors, the result being a 
 continual addition to the already too numerous list of hojMslessly involved 
 bankrupts forced into a condition of business inactivity as undischarged 
 insolvent debtors. (Toronto Board of Trade, 1894.) 
 
6 
 
 There has also been an uncertainty in Ontario and Quebec as to the 
 legality of the insolvency legislation passed by the provinces, but this has been 
 recently (1894) set at rest by a decision of the Im[)erial Privy Council which 
 sustained the right of the provinces to pass such legislation in the absence of 
 the passage of a Dominion law. The inference to be drawn from the m ording 
 of the judgment is held to be that the (juestion of insolvency leeislation is one 
 which in tlie circumstances calls for Dominion action, which, oi' course, would 
 supersede any local legislation on the subject. 
 
 The pressure of the commercial community represented by the Boards of 
 Trade and the Bunks for the re-enactment of an Insolvent Act has never been 
 relaxed since 1880. The ({overnment, however, have felt it their duty to resist 
 any proposals of the kind until public opinion was ripe for such a measure. 
 Canada's development in the interval has been so much in advance of all expec- 
 tations that the need of an Insolvent Law has been gradually gaining ground, 
 and since 1893 has been once more regarded as within the sphere of 
 practical politics. The inconveniences arising out of the growth of a 
 mass of varying provincial legislation on the subject, from the Atlantic 
 to the Pacific, are patent, although some persons are disposed to hold 
 that local legislation is more calculated to meet the special needs of the 
 different provinces than a general Act. The recent decision of the, Privy 
 Council already referred to seems to have had the effect of stimula'ing 
 local legislation on insolvency. In the Maritime provinces which were until 
 the spring of the present year without any insolvent law. New Brunswick has 
 adopted an Act similar to that of Onttario. A similar measure introduced in 
 Nova Scotia was, however, rejected by the Legislative Council as having been 
 submitted too late in the session to receive the examination its importance 
 recjuired. 
 
 After considerable consultation with the leading interests the Dominion 
 Government brought in a Bill in 1894 which it is hoped will lay the 
 foundation of permanent legislation on this vexed and difficult question. It 
 was introduced into the Senate by Sir Mackenzie Bowell, the present 
 Premier, and was submitted to a most careful and exhaustive examination 
 before a Select Committee and by the whole House during some four or 
 five weeks. The Bill was admitted to provide very ellectively against 
 preferential and fraudulent assignments", but there Avas considerable difference 
 of opinion as to its applying to all classes of debtors as originally drafted, and 
 in this respect it was altered to include only persons of all classes who could be 
 held to have been engaged in trading within the meaning of the Act. Another 
 point was the fixation of the proportion of the assets to liabilities of an 
 insolvent estate at which the honest debtor should be entitled to a discharge. 
 The feeling in the Senate was generally quite favourable to the Bill, although 
 some felt that more time should be given to its consideration. The Bill after 
 passing the Senate was sent down to the Lower House, where it was 
 read a first time. The advanced period of the Session, and the desire 
 for more time for its adcfjuate discussion led to its abandonment on the 
 promise of Sir John Thom|)son to re-introduce the Bill in the session of 1895, 
 and also in order that the country might have an opportunity of pronouncing 
 more fully as to its wishes in regard thereto. The real inwardness of the delay 
 in proceeding with the Bill in the Commons may be traced to the lukewarmness, 
 not to eay antagonism, suddenly develoi)ed by the banking interest, which had 
 hitherto been its most strenuous advocate. The grounds of this opposition are 
 
6 
 
 instructively summarised by the Chairman of the Sub-Committee on Insolvency 
 Legislation of the Montreal Board of Trade in the annual report of 1S!)4. 
 Briefly, in regard to that i)ortion of the Bill which refers to the collocation of 
 claims and the valuation of security, the contention of the bankers was " that 
 they should be allowed to rank for dividends on the full .amount of all notes 
 held by them, and that no account should be recjuired by the liquidator until 
 such claim had been paid in full" (Montreal Bor\rd of Trade, 1H94, pp. 20 — I). 
 
 According to the promise made, the Bill was re-introduced by Sir Mackenzie 
 Bowell in the Senate during the last session, when it was allowed to dro[)in the 
 course of the second reading. The Senators from the Maritime Provinces 
 developed more opposition than previousl3', and even amongst its advocates 
 there nqw seemed to bo indecision as to its immediate adoption. The adoption 
 of legislation by New Brunswick in line with Ontario, and the evident intention 
 of Nova Scotia to follow in the same direction, were urged as meeting the more 
 immediate needs, and to promise the adoption of a more or less uniform local 
 law on insolvency ; that although it might be desirable to have a common law 
 affecting all the provinces alike, there should be no liuiTy, and that as it was 
 not a party question the matter might be delayed until a new Parliament had 
 met when the members fresh from the people would be able to deliberate and 
 decide upon its merits and demerits. Sir Mackenzie Bowell admitted that this 
 last view had great force, and that he would accede to it at once were the matter 
 likely to be a test question at the polls ; but that this, in his opinion, would 
 not be thought of unless it was considered in connection with the general 
 question of trade ; he thought it would be well therefore to decide now 
 whether the Bill should become law at the present moment or not. The Bill 
 did not come up again after the sitting of that day — May 29th. 
 
 It should perhaps be added that the practice of the United States in the 
 matter of insolvency legislation has not been Avithout its effect on the Canadian 
 pubPc. During the last century in the United States a general enactmenc has 
 only been passed on two occasions, which lasted a short time in each case. 
 Congress was discussing early this year a general bankruptcy law, and one to 
 confer on the different States the power to legislate in accordance with tlic 
 conditions and reijuirements of each particular State. It is not known if any 
 or what progress was made with these Bills. 
 
 Mr. Phillips (Dent, Allcroft& C'o.)said the letter from his firm having been 
 read, it was not necessary to refer to the points raised therein, but the League 
 thought the matter of such importance that they suggested a meeting miglrfc 
 be convened of the heads of the wholesale houses in his trade. He had the 
 honour of introducing the Secretary to those gentlemen, and nothing surprised 
 him more than the unanimity of the protest that was raised against the 
 existing state of things in respect to Canadian bad debts. Some gentlemen 
 were loudly vehement when the dormant recollections of past injuries were 
 aroused ; some hoped that the League might be of service, or at any rate 
 labour to expose the disabilities under which British traders suffered wlien 
 dealing with Canadian debtors, consequent upon the absence of a general 
 Canadian Bankruptcy Law. Sir Charles Tupper had told them in 
 his able review of the subject that no general law affecting bankruptcy 
 estates had existed in Canada for the past seventeen years; that period 
 was well within their recollection, and it abounded in instance upon 
 instance where preferential payments to favoured creditors had been made, 
 
where no dividends hnd ever been paid at all, and where they had had no 
 alternative but to take what m ns ottered without remedy or redress. It had 
 lately been annountted that Mr. Chamberlain was asking Colonial Governments 
 to lurnish him with information as to the extent of the displacement of British 
 imports by foreif:rn competition. They could tell Mr. Chamberlain where a 
 f^reat displacement of British imports existed, not from fear of forei<^n com- 
 petition, but from mistrust in Canada as a debtor. The trade which he had 
 the honour of re})resentin^ would be ^neatly ind':^bted to the League if they 
 would press this matter with eneigy, and to Sir Charles Tupper for services he 
 might be able to render. 
 
 Mr. Howes (Cook, Son & Co.) said he quite agreed with everything Mr. 
 Phillips had said with rej^ard to their particular trade. But there was one 
 subject which he had not touched upon. In taking bills to be discounted where 
 mention is made of the word Canadian, it ajipears to be received almost with 
 disgust. The Bank of England went even further, because they said if you 
 wanted a Canadian bill discounted you must get an endorsement of a London 
 house in addition to your own. Some years ago, before our present Bankruptcy 
 Act had been brought in, they went as a deputation to Sir John Macdonald, 
 and he very properly said, after politely listening to their remarks, "Adopt an 
 adequate Bankruptcy Act of your own, gentlemen, and then Canada will no 
 doubt follow suit." They now had an Act and he hoped Canada would follow suit. 
 
 Mr. Howard Williams (Hitchcock & Williams) endorsed all that had been 
 faid by the last speakers about the chaotic condition of the Bankruptcy laws in 
 Canada and of the dilliculty of discounting Canadian bills in the London 
 market. The Canadians sufi'ered almost as much as we did from the existing 
 state of the law, which encouraged dishonesty and fraud. A '^roper Dominion 
 bankruptcy law would raise the commercial status of every h st trader in the 
 country, and would improve the credit of the Dominion. Tw or three years 
 ago, a M'ell-known trade journal published in Canada statea that " business 
 molality seemed to be fa%t following political morality in its swift retreat from 
 this countiy," an expression of opinion wliich could not be called extravagant, 
 for statistics of fraudulent bankrujjtcies proved they were increasing by 
 leaps and bounds. In 1892 there were four times, and in 189,3 five times, as 
 many fraudulent bankruptcies in Canada, as compared with 1891. He would 
 like to draw their attention to one of the black spots in the present laws. He 
 referred to the validity of preferential claims and assignments. These had the 
 efl^'ect of a bill of sale in this country. They could be given without notice 
 to other creditors, without publication or registra "on, and were valid even if 
 given within three months of bankruptcy. 
 
 A warehouseman either in England or in Canada might have done business 
 with his Canadian customer for years and be satisfied of his standing in the 
 trade and ability to meet his engagements, but he could not be certain when 
 he sold him a parcel that before the time came to pay for the goods the 
 customer might not have given a preferential claim, or made a preferential 
 assignment covering the merchant's goods in payment of an old debt, or to his 
 bankers, or even to a relative, such claim or assignment being i)erfectly valid 
 according to the present laws ; and the merchant could not obtain payment for 
 his goods until the preferential creditor or creditors had received payment in 
 full. But this was not all. A preferential assignment might be u.sed as a means 
 of extorting unusual terms, or of evading the full payment of just debts. 
 
 After giving feome instances, he said it was satisfactory to know that the 
 
8 
 
 Canadians desirefl a new Act which should destroy many of the conditions 
 which influenced adversely the credit of the Dominion. He respectfully 
 suggested that a r "w bankiuptcy legislation for Canada to be satisfactory must 
 destroy the validity of preferential claims and assignments. 
 
 Mr. Takner (L. Hanson, Son & Barter) said : — A case had just come under 
 their notice which was a very good reason for their assisting to obtain a 
 Bankruptcy Act in Canada. They lately sent out a consignment of goods to a 
 Canadian firm. Within a short time of receipt of the goods they were assigned 
 to a third ])arty in security for a debt of some kind ; [)ractically, the goods 
 were pawned by the firm to whom they were sent, and who had turned out to 
 be insolvent, and he believed they had no remedy. They had the utmost 
 confidence in Sir Charles Tupper, and would be deeply indebted to him if he 
 would assist in removing these dUHculties. 
 
 Mr. John Lowlks, M.P., said he did not trade with Canada and had not the 
 same lament to make as to cases of Bankruptcy. He would not have risen 
 except for a statement made by one of the speakers, on the authority, apparently, 
 of a correspondent : " that commercial morality in Canada was fast disappearing 
 as political morality had done." He could not help thinking that any one 
 giving utterance to such a statement must be completely ignorant of Canadian 
 
 {jolitics and Canadian statesmen, during the last decade, at least. It had 
 )een his good fortune to pay several visits to the Dominion during the 
 past few years, and to mix freely with her leading statesmen, and he could 
 only say that the latter were as capable and upriglit, and as jealous of 
 their reputation as were the leading statesmen in the Mother Country. 
 No one could have read the Blue Book containing reports of tne jtroceedings 
 at the Ottawa Conference last year without being struck with the high 
 tone and the lofty aspirations of those distinguished men. Keenly desirous 
 as they were of drawing closer and closer the ties which bound them to the old 
 land, they might bo sure that they would readily respond to any reasonable 
 request which would help to do so. Certainly in so im[)Drtant a particular as 
 that of commercial credit they would surely be res[)on8ive. He rather thought, 
 however, that the previous speakers had, perhaps unwittingly, exaggerated the 
 extent of the evil. They had been hit here and there and had come to the con- 
 clusion that things were worse than they really were. In spite of tlie dismal 
 stories they had heard, he did not gather that the London houses had stopped 
 their Canadian business, so he supposed they made a profit somewhere. 
 It rather suggested to him the story of the old ap[)le woman, who, whilo she 
 declared she lost mone^' on every one she sold, yet thanked God she sold a great 
 many of them. He hoped he might be pardoned for having spoken for " the 
 other side," but he could not sit silent and hear the credit of the Dominion, 
 
 f»olitical and commercial, attacked without entering his protest and testifying 
 rom his personal knowledge, »f the high character of the men who M'ere in 
 power in the Dominion, t'^er close contiguity to the United States perhaps 
 accounted for some defects in Canadian commercial leg'slation, but when once 
 her statesmen realised the direction in which refo.-ms were needed, we might be 
 assured they would come. Meantime ho recommended the l^ondon export 
 houses to bo careful of their facts and to present their cjvse in such a woy as 
 would secure attention, but not for a single moment to suppose that the B tish 
 characteristics of sterling honesty and independence were one whit less a^ pre- 
 ciated in the Colonies than they were at home. 
 
 Mr. BiDDi.K (I'helps, Sidgwick & Biddle, solicitors) reinurked that the general 
 
9 
 
 value of bankruptcy legislation was that it afforded creditors a means of securint^ a 
 pro rata distribution of the estate amongst all creditors, of setting aside 
 voluntary preferences and fraudulent settlements, and of inflicting some sort 
 of punishment on a debtor whose conduct had deserved reprobation. It did not 
 follow that in every case, or even in the majority of cases, creditors would have 
 resort to the Bankrupty Court. An Act which enabled creditors to seek the 
 remedy if they thought lit, was, in fact, sufficient to restrain the majoriby of 
 debtors from committing such commercially immoral acts as had been referred 
 to. The majority of the insolvencies in this country were not administered 
 through the Bankruptcy Court. If the debtor's conduct had been satisfactory, 
 and he could account for bis deficiency, creditors had no desire to incur the 
 expense and trouble which proceedings in the Court involved. 
 
 Merchants in this country had been concerned as creditors from 
 time to time in a very large number of insolvencies in the Australian 
 Colonies. In Victoria, Queensland, and New South Wales, there were 
 insolvency statutes, but he did not think that one in ten Australian 
 insolvencies went into the Insolvency Courts there. The debtors 
 knew that the creditors here insisted on having a voice in the election of a 
 trustee, that they reciuired proper accounts to be presented to them 'xplaining 
 the deficiency, and that they would not submit to voluntary pretcrences or 
 fraudulent settlements, and that if any of those objectionable features were 
 present they would re([uire the case to be investigated in the Insolvency Courts, 
 The result was that debtors who naturally had no liking for Insolvency Courts 
 when they sust^ended payment, placed themselves voluntarily in the nands of 
 their creditors who were thus able to deal with the estate3 nmch more rapidly 
 and effectively than would otherwise be the case. This, he understood, was 
 what the meeting desired should be the case in Canada. At present there is no 
 Dominion Bankruptcy Legislation. It was true that in, he thouglit, three of 
 the Provinces there was legislation with reference to assignments, and in 
 Ontario, the Act relating to the assignment of estates had some very useful 
 clauses which enabled a creditor to sue for an assignment, also to examine a 
 debtor on oath before the proper official resi)ecting his estate, and for the 
 avoidance of voluntary assigmnents. But he submitted that this did not go 
 far enough. In the first place it threw on the individual creditor the 
 responsibility of taking those steps, and there was no power for the creditors to 
 a[)point a trustee who should undertake them. Ah things stood, the trustee of 
 the assignment was usually selected by the debtor or his friends, and he might 
 be a person far from impartial, and wholly unsuited to the position he occupied. 
 It should be possible for the creditors to say, *• We will not be parties to this 
 assignment, we disa|>provo of the trustee you have appointed, we insist on the 
 appointment of our own nominee who, when he has the estate in hand which is 
 available for the expense connected with anv investigation that may be 
 necessary, will t'o all that is proiwr in the intertPfcs of all concerned." He had 
 recently come across a case in which an English creditor sought to yet aside a 
 preference given by a flebtor in the province of Quobt^c immediately prior to 
 the execution of an assignment. The proceedings were commenced in March, 
 1892 ; judgment in favour of the creditora was not given until July, 1894. The 
 case was carried by the bank, who obtained the preference to the Court of 
 App al in .lanuary, 189'), and the judgment of tiie court below was there 
 uph« Id, and an account Mas directed to be taken of the amount received 
 by the bank in preference. That account was still in course of being 
 
la 
 
 taken. Now they would see what a grave responsibility such proceedinj^^ 
 as these must throw on the creditor, and how considerable an expense 
 he must necessarily be put to whatever the result of the litigation 
 might be. It was in cases such as these that the creditors had a right to say 
 " We ought to be able to appoint a trustee who will undertake these matters 
 instead of being compelled to acce])t a trustee appointed by the debtor," It 
 would be quite out of place, he thought, for anyone addressing that meeting to 
 suggest in any detail what the provisions of a Bankruptcy or Insolvency Law 
 in Canada ought to be. That was, of course, for the Canadian legislature, and 
 for them only, but, perhaps, one might be permitted to say that from the point 
 of view of British traders, it would be most desirable that any such legislation 
 should provide that the creditors alone should have a voice in the election of a 
 trustee, that there should be power for the Court to set aside voluntary 
 preferences and fraudulent settlements, that the debtor should be recjuired to 
 Hie adequate accounts, that he should explain how his deficiency arose, and 
 that in cases where debtors have traded recklessly or fraudulently, or with a 
 knowledge of insolvency, they should be liable to punishment. He ventured 
 to think that if the Bankruptcy Act contained these amongst such other 
 provisions as might be considered necessary, British traders would not liave 
 further ground for complaint under this head, and that the various questions 
 important in themselves with reference to realisations under assignments which 
 had been referred to at that meeting would practically settle themselves without 
 further difficulty. 
 
 After some further discussion it was eventually moved by Mr. Howes 
 (Cook, Sons & Co.) and seconded by Mr. Tanner (S. Hanson, Son & Barter), 
 and unanimously agreed, 
 
 1. That in the opinion of this meeting the fact that no legislation 
 exists a])plicable to all the Provinces of the Dominion of Canada providing for 
 the realisation, administration and distribution of insolvent estates, tends to 
 seriously restrict trade between the Dominion of Canafla and (Jreat Britain, 
 and that the confidence of British traders to export goods to the Dominion 
 would be increased if there existed Dominion legislation as to insolvent estates 
 providing for : — (a) A j)ro rata distribution of the proceeds amongst all creditors. 
 (It) The avoid.ance of preferential payments and voluntary settlements, (r) 
 The filing of ade(iuate accounts by the debtor showing his assets and 
 liabilities, and explaining the deficiency shown by such accounts, (i/) The 
 punishment of traders who trade recklessly, fraudulently and with a knowledge 
 of insolvency. 
 
 "2. That the executive committee of the League be reipiested to take such 
 steps as it may deem desirable to bring the resolution under the notice of 
 the Canadian Government. 
 
 Tho meeting then adjourned, after votes of thanks to 8ir Charles 
 Tapper and the chairman. 
 
 Printed and PuMithed IivThk "Commbrib" Pkintin(; and Puiii.ishino Company, Limited, 
 Anibvrley Huu^c, Norfolk Sired London, W.C. 
 
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