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Gisborne Standard and Cook County Gazette, Volume III, Issue 377, 14 November 1889, Page 2

COMMERCIAL MORALITY. A MEETING of creditors in the bankrupt estate of James Robert Scqtt takes place on Monday next, for the purpose of confirming or rejecting the debtor’s offer of a composition, which is estimated to give the creditors Is 6d in the pound. The question as to whether such a compos!tion should be accepted is one whichj affects more than the creditors, and it will be interesting, from a public point of view, to observe how the creditors act in the matter. In England a mere resolution of creditors might not have much weight with a Judge, but in the colonies things are conducted on a different basis. On the general subject of commercial morality there is a very good article in the last number of the Mercantile and Bankruptcy Gazette, and we leave our readers to draw their own conclusions from it, The article referred to is as follows :— The Courts in England are very jealous of permitting persons who have been guilty of offences against the Bankruptcy Laws an opportunity of repeating their tnal-practices by gran'ing them ordera of discharge as of course, or by sanctioning compromises with creditors. As to the latter proceeding they will often refuse their sanction even where a composition would bo for the benefit of the creditors. It is not enough that the great majority of the creditors consent, and that the terms of the proposed composition will be for their benefit, for if the bankrupt has been guilty of, for instance, hazardous speculations or reckless extravagance, the Court frequently dsollnes in the interest of commercial public morality to let loose the speculator or spendthrift to resume his career of commercial immorality. A case of 'his kind cams before the London Bankruptcy Court quite recently. An application was made to Mr Registrar Brougham to confirm a scheme of arrangement agreed by the creditors of A. Macclesfield Lawrence, Australian commission agent, trading as Lawrenoo, Son and Co. The failure fogk place in March last, the gross liabilities being returned at £20,313 us ffd, of which £14.630 apneared as unsecured, the assets being £O4-53 19s 7d. Qn behalf of the Official Receive,- it was stated that the creditors bad accepted a cash oemposition of 10s in the £, but the Official Receiver had reported a very serious offence against the debtor—uamely, speculations on the Stock Exchange, with a resulting loss of £5200 in the last twelve months, followed by this failure. The learned Registrar said that no doubt the scheme as ft stood, was r<beneficial one, Inasmuch as it provided for a pash composition of JOs in the £, notwithstanding the Besets disclosed m°re than that; but there was a vet",’ serious aspect of the case as disclosed in the report vf thp Official Receiver, viz , the gambling on the Siat-k Exchange, which had brought about the failure of this, an old established and good paying businessHe was sorry to say that Stock Exchange

gambling was becoming a public scandal, and was a matter of almost daily report against bankrupts, who in this way went outside their business to gamble with their creditors’ money. No doubt the scheme was a reasonable one, but in the interest of commercial morality he felt bound to refuse to confirm the scheme, having th B effect, as it would if he confirmed it, of making ths debtor a free man,

and sending him forth to the community pt large free to trade again, as one against whom no fault had been found Acting upon the decision of the Court Appeal in a recent case, he should refuse to confirm the scheme. The case referred to by the Registrar is believed to be in re Hester, reported 22Q8.D., 632, where it was held that in applications under the present Bankruptcy Ast for annulling adjudications or confirming schemes nf composition the Court will consider not euly Whether what is proposed is for the benefit pf the creditors, but also whether it is con. duolva or detrimental to commercial morality and to the interests of the public at large.