the creditors alone. No interference with their discretion by anyone, Official Receiver or otherwise, ought to be allowed. Every creditor has a moral right to expect that no one shall be allowed to vote in competition with himself except such as stand in the same relation to the debtor as he does. It is a breach of Public Morality to allow the Official Receiver, who knows nothing about the matter except what the debtor may have told him, to out vote by his general proxies the real creditors. If proxies are to be allowed they should be rigidly confined to the employes of the creditors. The name of the Official Receiver which is now printed in the proxy papers, should

be struck out. It savours too much of the system of touting for proxies which was one of the banes of the old régime.

The official receiver might be allowed to act as Chairman at the first meeting, receiving proofs, adjudicating, pro tem., on the validity of proxies, and putting such resolutions as are proposed and seconded, but he should not, under any circumstances, be allowed to vote as the representative of any creditor or creditors, or on his own behalf. The question as to whether a resolution for composition or arrangement has been duly passed should go before the judge. He would decide on the validity of any proofs or proxies which had been objected to, would hear objections to the approval of the resolutions made on behalf of any of the parties interested, in which category the Official Receiver would have no place, and if in his absolute discretion he should consider that a public examination of the debtor should be held before giving his decision on the resolutions, he should have power to order it, and give directions as to which one or more of the objecting creditors should conduct it. Otherwise he should have power to approve the resolutions without any public examination at all being held.

If the creditors should resolve on the estate being wound up in bankruptcy, they could nominate a trustee and committee of inspection, in which case the Official Receiver should be ousted from any further interference, or they might be allowed to appoint the Official Receiver as Trustee with a committee of inspection, or they might leave the matter in the hands of the Official Receiver and the Board of Trade.

A public examination should be held in every bankruptcy court before the judge, the trustee, whoever he might be, and the creditors being the only persons who should be allowed to appear or be represented.

The only persons who should be allowed to apply to the Court in relation to discovery or the getting in, realising or distributing the estate should be the parties immediately interested, including the trustee.

As to the applications for discharges, the trustee alone should have power to make a report to the Court, but any creditor might lodge his objections, and upon hearing all that might be alleged and proved the judge should have the largest powers of granting, refusing, or suspending the order. In every case the right of appealing should be

allowed.

No reference has been made here to some questions of general bankruptcy law which many would be glad to see altered, but the writer may be permitted to suggest that the doctrine of reputed ownership under which the goods of people other than the bankrupt are made subject to his debts is in these days little more than a relic of deficient civilisation. Later Acts have considerably whittled down this doctrine, and it is submitted that no harm would be done if it was put an end to altogether.

E. COOPER WILLIS,

456

V. THE MONEY-LENDERS' ACT, 1900.

EFORE considering the scope of this statute and

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its effect upon money-lending transactions it may be desirable to give some brief account of the origin and history of usury and of the equitable doctrine upon which the present measure is so largely based.

In every society of which we have reliable records we find that usury has had precisely the same origin and has followed precisely the same course of development.

In primitive communities, whether in the family or tribal state, it was considered unfair and improper to stipulate for, or even expect a reward for, the loan of labour, or goods from a kinsman or a fellow-clansman.

A curious survival of the gratuitous loan of labour is found in the pomoch (help) of the Russian Mir. By this custom any householder of the Mir may invite his neighbour to assist him in any unusually heavy piece of work, such as the rebuilding of his house or the erection of farm buildings. The only immediate return consists of different kinds of refreshment offered to the guest-workers and this is purely complimentary. No one, indeed, is compelled to obey the summons, but on the other hand any one who has previously been benefited by the pomoch is bound in honour to attend.

So too in Kabylia, the loan of labour called touiza is purely gratuitous but it is a point of honour to repay the equivalent.

In the early British village communities labour was also a subject of gratuitous loan. So too were loans of boats, horses and ploughs and doubtless other primitive instruments of production, and cattle.

The first stage then, in the history of usury, is the gratuitous loan of labour or chattels, coupled with the expectation on the part of the lender of receiving back

some day a loan of a similar character, but not of an increased value, and without the slightest idea of any profit. And such return was expected to be made, not necessarily by the borrower, but by his family or tribe.

The second stage is reached when the lender expects to get back the loan with any natural increase which would have accrued if he had retained the chattel in his own hands. In primitive agricultural communities the capitalist was the man who had cattle to lend in the breeding season, or corn to spare at the time of sowing.

In Babylonia, Egypt and China alike, as elsewhere, the customary rate of interest was 33 per cent., and when this interest had been paid for three years the transaction came to an end. The explanation of this custom has been admirably stated by Miss Edith Simcox in the following passage:

Among the primitive progressive people who cultivated the wild wheat of Babylonia, we may feel sure that the primitive instincts of hospitality never sank so low as for one man to ask another to give him back with increase the corn borrowed and eaten in a day of need. But the case is quite different as regards corn to be used, not for food, but seed capable of bringing forth one hundred-fold. At such a time to lend a measure of corn is to give up the near and certain prospect of its natural increase, and the owner, without churlishness, may stipulate for a share in the increment of value contributed by earth and heaven. If one man gives the seed and another the labour, and the sun and the river an abundant harvest, a third part of the whole crop might not unnaturally seem a fair share for each of the partners in the adventure, while in three years the heaven-sent residue would pay off the loan."

A curious confirmation of this theory is found nearer home, in Ireland, under the Brehon laws. The principal

capital of the Irish chieftains consisted of cattle, which they loaned out to their tribesmen, under a custom known as "giving stock" one-third, or 33 per cent. being returned annually. In all these cases, however, there was no idea of usury in the proper sense of the term, although it formed the germ. The feeling that it was improper to charge a kinsman or fellow-clansman with interest, long survived the tribal stage of society. Even when inter-tribal commercial relations had been established, this feeling remained for centuries embedded in the popular mind. For instance, the Jews were thus enjoined in Exodus xxii. 25, "Thou shall not lend upon usury to thy brother; usury of money, usury of victuals, usury of anything that is lent : unto the stranger thou mayst lend upon usury." So too a Roman citizen was forbidden to lend at interest to a Roman citizen, although he might enter into money-lending transactions with a Latin or an ally without regard to the rate of interest. In the Middle Ages also a Christian was liable to heavy penalties if he lent money or property to a fellow Christian for reward.

Among the followers of Mahommed usury is absolutely forbidden, and consequently in Turkey we find moneylending in the hands of Greeks and Armenians. In India it was also illegal for the two superior castes of Hindoosthe Brahmins and the Kshattriyas to engage in such transactions, and even in the case of the two lower classes the Code declared "that the sum lent to a person in distress can give rise to no interest, because then such interest would be extortionate."

Thus usury was at first only tolerated when one of the parties to the transaction was a foreigner, the old feeling of unfairness or impropriety by reason of blood relationship not existing. Indeed, the connection was exactly the reverse. A foreigner was to be treated as an enemy, one to be killed, enslaved, plundered or cheated, as the case