CHIEF BARON POLLOCK ON CREDIT.
WE have long since expressed a conviction that the present law of debtor and creditor will have to be revised. The same opinion has been more recently expressed by others, who are anxious to obtain from the Legislature larger powers for more strinqent en- forcement; but possibly some thinking men who participate in that movement may be made to pause by the following letter from the Chief Baron of the Exchequer, published some time since ; but still germane to the labours of Parliament, as well as to the main question itself.
"Hatton. Hounslow, June 6, 1859.
"Sir—Accept my best thanks for your communication. My remarks at Bedford on charging the grand jury at the last assizes wore not at all direct- ed against the mode in which any county court judge had exercised his power, but against the power itself. It would have been cheaper in many instances, both for the Treasury and the county, to have paid the debts, for the expenses, which fell on the consolidated fund, and the charge on the county, would have been sufficient to pay many of them several times over. I alluded to no particular case as one of injustice and oppres- sion on the part of the judge, but as illustrating the folly and ab- surdity and the mischievous results of the system. Judges differ very much as to the cases in which they should exercise certain powers. I can imagine a county court judge to deem it his duty to send a man to prison twenty times if he owes aixpence and will not pay it ; and to punish him for his obstinacy as often as it is brought under his notice. The judge may be right or wrong, but the system is utterly bad which renders such smatter possible. I was once a member of the Common Law Commission, and we all thought that, instead of encouraging the system of credit (vrithre- ference to small transactions) by imprisonment for debt, it would be better to make ready-money dealing necessary by taking away all legal redress as to claims under a certain sum—as to the amount of which there was much difference of opinion. Credit is necessary in some cases—e.g., the wages of labour—the labour cannot be given instanter (like a loaf of bread), the la- bourer must trust the employer for his wages, or the employer must pay beforehand and give credit for the labour. But this is not the case with any claims for goods supplied, where the seller may insist on being paid before he parts with his goods. 1 believe, if the cases in the county courts were analysed, it would be found that, with reference to a large proportion, it would be better for the public that there should be no remedy for claims under a certain amount; and, in my opinion, such a system would (in the sed) produce more economy and more real good feeling than prevail at pre- sent. I have the honour to remain, yours faithfully, "A. Blundell, Esq., F.S.A., &e. Fann. l'ontocri Library, Law Institution, Loudon."
It is a fact important in itself that such a question was mooted at all in the Common Law Commission. In the subsequent inter-
val many events have happened which supply data to strengthen the opinion of the Commissioners. It has long been our belief
that the present system conduces to nuinufacture debts, not only by supplying a false reliance to the creditor, but in other ways. Apart from disputes as to matter of feet, no tradesman is likely to
come under the compulsion of the law who is at all in a sound condition. If he does not pay, on proper demand at the proper time, he forfeits his credit, and falls under a compulsion the very anticipation of which is more dreaded than that of County Court or Queen's Bench. It follows that the law is ohiefly available against persons who are not substantial tradesmen ; and it is chiefly useful in keeping the unsound in order. But of debts which are thus pressed, how many are actually paid ? We have frequently asked the gross amount of bankruptcy in England ; and we believe that the sum, fairly collected and stated, would astonish most men of business. But we may ask, further, if the trades- man had not this reliance upon the law,—which fails to enforce the debt in bankrupt cases,—would he have permitted the liability to aocrue ? In this view is not the gross amount of loss directly pro- duced by laws which profess to enforce debt and fail to do so ? What is " credit"? It is belief. It is the belief of the trades- man that the purchaser who asks to have goods in expectation of
future payment has the intention and will probably have the means, of redeeming his promise. in most cases, where the trade is not very "fast," the creditor has the opportunity of ascertain- ing whether the purchaser is a man of such character and means that he will most likely be able to fulfil his promise ; and if the man's prudence and honesty be ascertained, there is no reason why the credit should not be given. But here the compulsory form of the law really adds no assurance against untoward acci- dents which is not taken in the guarantee of known character and means.
There are, indeed, some cases where, under any improvement, the arbitration of the law may be necessary. Disputes as to fact may always happen, and we can well imagine the tradesman or purchaser referring a question of that kind to a jnry. There may be more formal contracts' and special interpretations of contract law may be in request. Above all, there are many kinds of fraud which, in any case would be justly punishable—such as false representations of facts which can be proved, false pretenoes, or fraudulent purposes in obtaining the goods. But these are, pro- perly speaking, criminal acts, and they are not acourately treated when they are handled as questions of debt. It is a matter of con- sideration how far classes of this kind could be separated from the class of simple debts, but we doubt whether there would be any great difficulty. Sir Frederick Pollock alludes particularly to the contract be- tween the employer and workman for the payment of wages on the performance of labour. This has always been considered a ques- tion distinct from that of goods supplied. The employer has in many ways been allowed a more summary and stringent power of coercion ; the labourer has been allowed a more summary ap- peal for the payment of wages ; both powers being granted on the assumption of necessity. It was assumed that the default of the labourer arrests the business of the employer; and that the de- fault of the employer cuts off the subsistence of the labourer. We believe that even this law could be revised with advantage ; al- ways providing that false representations were made an offence punishable' by fine or otherwise. If the present stringent law did not exist, the employer who treated his labourers badly would find that they would leave him; and the labourer who did not per- form his contract would fail to find employment. Men in a large way of business will say, we know, that they have not the time or means to inquire into the character and conduct of the multi- tudes they employ ; while the labourer will say that, living so much from hand to mouth, he must take what employment he can get, and can in too many cases trust only to the law as a pro- tection from tyranny; but both these answers touch only the sur- face of the question. Individuals of the labouring class might in the first instance suffer a little more by standing out for proper consideration from their employers ; but if they could so far act for the common interest, they must ultimately he repaid by better treatment. On the other hand, most persons who employ labour largely will confirm our opinion, that the kind and just employer generally has good labourers, and for the best of' reasons. You cannot limit °the nexus between man and mall simply to filthy lucre ; or, as soon as you have done so, the mere absence of kindly feeling between the two breeds something very like positive aversion ; and it is here that the answer of the em- ployer meets its refutation. If he picks his labourers out of the street, with too little regard to their character, as honest men, as labourers, and as persons proper to be introduced into the com- munity of his factory—if, in short, he peoples his working home, where the interests of each depends so much upon the conduct of all, with less care than the recruiting-sergeant uses in collecting the dregs of society to be shot for the good of their country, he pet forms his duty neither to his workpeople nor to himself. He compels his workpeople to consort with others of bad character ; and he introduces a certain poison into the industry of his estab- lishment, and must pay a fine in the shape of diminished returns. That kind of trading which appears to exempt the employer from the trouble of looking into the character of the men he employs, is almost the foolishest mistake of our industrial system. The manufacturer would not pay the same disregard to the quality of his material, or to the make of his machinery, and how can he find any advantage in establishing a monopoly of neglect for the
thinking part of his maohinery ? It is obvious from the simple facts that moral credit is after all the true staple of a right under- standing between employer and employed.
The Chief Baron mentions a difference of opinion as to the amount which should be the limit. From what we have said, it will be perceived that our own opinion points rather to the charac- ter of the transaction than to the amount in question. The law, we hold, properly interferes to determine questions of fact, to de- termine the contract, or to restrain fraud,—subjects which can all be separated from simple debt. The logic which relates to small sums is in strict reason equally applicable to large sums ; and in most cases of large money transactions means could be taken to introduce, what we may colloquially be pardoned for calling a cer- tain equitable jurisdiction in the law, still leaving the principles of trust and ready money available for the ordinary purposes of the market. We do not, however, allude to the subject now with any expectation of procuring an experiment, even within the range of small debts ; we only desire to record with emphasis this remarkable opinion from the Court of Exchequer, coupled with an earnest hope that the lawyers and judges in courts of law and bank- ruptcy, whom we know to be watching the question, will even in- crease their vigilance, with the certainty that the experience re- quired will one day be needed, and will then not be useless.
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