But there were certain special incidents of the law and branches of its administration upon which the committee made recommendations. One was the prosecution and punishment of debtors who had committed fraud on their creditors or caused loss to them by improper and reckless trading. The existing procedure was complained of as being dilatory, cumbersome and expensive, and the committee were of an opinion that where a debtor had committed an offence for which he could and ought to be prosecuted, prosecution and conviction, with adequate punishment, ought to follow speedily and decisively, and the chief recommendation of the committee was that, while the existing procedure should be left untouched, offences ought also to be punishable on summary conviction before magistrates and justices, and the provisions of the Summary Jurisdiction Acts applied to them, and that where an order for a prosecution is made on an application by the official receiver of a bankruptcy court and based on his report, that court should have power to order the official receiver to conduct the prosecution before the court of summary jurisdiction.
The committee also reported that numerous delinquencies by insolvent debtors in the conduct of their affairs, or which had contributed to the losses sustained by their creditors, were not punishable or even cognizable by courts having bankruptcy jurisdiction unless or until a debtor who had a receiving order against him, or became a bankrupt, applied for an order sanctioning a composition or scheme of arrangement with his creditors, or for an order discharging him from his debts. The most prominent of these delinquencies which were brought to the notice of the committee were - failure by a debtor to keep any books or any proper or adequate books of account in his business; trading with knowledge of insolvency; gambling and speculation leading to, or contributing to, the debtor's insolvency or bankruptcy; failure properly to account for any substantial deficiency of assets. The committee received a large body of evidence in favour of making delinquencies such as have been described punishable by imprisonment.
Evidence was also given as to the laws in force in Germany, France and Scotland, from which it appeared that such delinquencies, especially that of keeping no books of account, can be severely dealt with as criminal offences.
After carefully weighing the evidence on both sides the committee recommended that the failure or omission by a debtor who becomes bankrupt to have kept any books of account, or proper books of account, within two years next preceding his bankruptcy, in a trade or business carried on by him, if without excuse, should be made by law an offence punishable on summary conviction by imprisonment, subject to four important limitations, namely, that the law should define what books of account a person carrying on a trade or business must keep, following in this respect the law in force in France and Germany; that failure or omission by a debtor to have kept the required books should only be punishable in the event of a debtor becoming bankrupt and of the liquidated debts proved in the bankruptcy exceeding £200 in amount; that no prosecution of a debtor for failure or omission to keep books of account should take place before the lapse of two years from the passing of the law; that a debtor should not be punished if he could show that his failure or omission to keep proper books was honest and excusable and did not contribute to his insolvency, and that no prosecution should be instituted for the offence except by order of the bankruptcy court.
The committee made recommendations of much the same character with regard to punishing some of the other delinquencies mentioned above. There were also recommendations by the committee as to trading by undischarged bankrupts, as to the realization of estate on bankruptcy, as to the operation of the law of relation back of a bankruptcy trustee's title, as to the law relating to the after-acquired property of an undischarged bankrupt, and dealings with such property, and with respect to married women and their liabilities under bankruptcy law. The committee also reported on the law and practice relating to voluntary deeds of arrangement between a debtor and his creditors and on the compulsory regulation of assignments of book debts, and of agreements for the hire and purchase of chattels.
In addition to this report the annual reports of the Board of Results of legislation. Trade, which are accompanied by elaborate tables of statistics, and by copious illustrations both of the working of the system and of the characteristic features and causes of current insolvency, are published as parliamentary papers, and may be usefully consulted by those interested in the subject. It appears from these reports that the total number of insolvencies dealt with under the bankruptcy acts during the ten years ending 31st December 1905, was 43,141, involving estimated liabilities amounting to £61,685,678, and estimated assets amounting to £26,001,417. It may also be pointed out that according to the official figures, the cost of bankruptcy administration under the present system has very considerably decreased as compared with that under the act of 1869. Estates are also closed at much shorter intervals, and, what is more important from a public point of view, it appears 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.