s or legal agents. But the appointment of trustees
under these acts, instead of being the spontaneous act of the creditors,
was frequently due to touting on the part of such agents themselves, or to
individual creditors whose interests were not always identical with those
of the general body. According to G. Y. Robson, the author of a standard
work on the subject, the arbitrary powers conferred by the act of 1861 "led
to great abuses, and in many cases creditors were forced to accept a
composition, the approval of which had been obtained by a secret
understanding between the debtor and favoured creditors, and not
unfrequently by the creation of fictitious debts." These evils [v.03
p.0323] were greatly aggravated by the decisions of the court relating to
proofs on bills of exchange, under which it was held that the holder of a
current bill could prove on the bankrupt estate of an indorser, although
the bill was not yet due, and the acceptor was perfectly solvent and able
to meet it at maturity. Thus in large mercantile failures, bankers and
other holders of first-class bills could prove and vote on the estates of
their customers, for whom the bills had been discounted, and thus control
the entire proceedings, although they had no ultimate interest in the
estate. But probably the greatest source of the abuses which arose under
the act of 1869 was the proxy system established by the act and by the
rules which were subsequently made to carry it out. The introduction of
proxies was no doubt intended to give absent creditors an opportunity of
expressing their opinions upon any question which might arise. But the
system was too often used for the purpose of stifling the views of those
who took an independent part in the proceedings. The form of proxy
prescribed by the rules contained no limitation of the powers of the
proxy-holder and no impression of the opinion of the creditor. It simply
appointed the person named in it as "my proxy," and these magic words gave
the holder power to act in the creditor's name on all questions that might
be raised at any time during the bankruptcy. Hence arose a practice of
canvassing for proxies, which were readily given under the influence of
plausible representations, such as the holding out of the prospect of a
large composition, but which, when once obtained, could be used for any
purpose whatsoever except the receipt of a dividend. Thus it frequently
happened that the entire proceedings were