The Washington union. [volume] (City of Washington [D.C.]) 1857-1859, 1858-12-15

this subect more careful consideration than the dis
tnguished senator from California and we only re-
greet that it is not in power to hay before the
readers of the Union his entire remarks. We have
endeavored to present the leading points of his ar
gument ; and, as they go far to yindicate the bill
before the country the Senate, who listened to the
whole speech, we have no doubt, will find it exceed
ingly difficult 10 Justify itself in refusing to sanction
some reasonable and efficient plan by which a rail
road to the Pacific shall be constructed
6sFHya watf iesttsstr
COMPULSORY BANKRUPTCY AGAINST INsoLvENT
BANKS.
Some of the opposition journals confound, or af-
feet to confound, the policy of compulsory bank
rupt law for banks with that of the general voun-
tary bankrupt law of 1912 ; and, as the President
recommends a law of the first kind in his message
accuse him of great dereiicon if he had rec
commended partial revival of the odous statute of
1912.
The head and front Of the Presidents offending in
this matter, hath this extent no more that he would
place tho power in the hands of the people--the
creditors of bank-to force it into pro rata qui-
dalton of its debts after protest of its notes or OBJ
legations. This is PROFESSIONALLY charged against
the President as gross departure from democratic
principlel At present where local laws do not pre-
vent, bank in failing circumstances may pledge all
of its assets, or make all its effects to trustees
for the protection of favored creditors and leave its
notehcdcrs and the public at large to secure their
claims against it as they may. Through the machin
cry of deeds Of trust, mortgages, and pledges now
in vogue, and under the provisions OF most of our
existing bank charters which relieve their stockhod
from liability for corporate obligations beyond the
amount Of their capital stock these institutions can
at any time go into bankruptcy at their discre-
ton, precisely as all debtors were permitted to do
under the law Of 1912. In fact, under the present
system Of laws in force, banks and corporations are
in precisely the condition, as to privilege and i'm.
muniy from the just payment of their obligations in
which debtors were placed by the abominable law
of 1912; with this single exception, that, whereas
the debtors under the law of 1912 were obliged to
pay pro rata all their debts as far as their assets
would extend, incorporated debtors at present have
the privilege Of going voluntarily into bankruptcy,
and at the same time of discriminating at pleasure
between their creditors paying in full, over
paying few and under-paying or not paying at all
the many. 6, r ya.
Thus the men who assail the Presidents recon-
mendaton as proposal to return to the abomi-
nable policy of 1912 unwttingly, in so doing
themselves defending that very same policy in
even a more aggravated form. Tho President so
far from recommending even partial return to the
policy of 1912, in fact proposes to abolish that pol
icy so far it remains still in force for the benefit
Of banking institutions 1t is strange that assaults
abn L. 4. i 80. -vl1.-
ton by any who profess adherence of the law of
Az Such assault from such quarter argues either
great want of candor, or deporable want of in
teligence upon the subject.
The chief objection to the bankrupt law of 1912
was its voluntary feature, which let it at the debtor
option to go into bankruptcy not In this respect
the law differed essentially from the bankrupt law
of England which has been for generations in be-
necent operation there and is one Of the most popu
lar statutes Of tho realm for that law does not leave
the resort to bankruptcy optional with the debtor,
but makes it compulsory upon him. the option being
reposed with his creditors to force him into bank
ruptcy, subject to sautary restrictions the enforce
ment of which is ntrusted to the courts The fun
dameltal principle Of the English law is, that as
creditors permitted to force failing debtor into
bankruptcy, and to sell his whole effects for the sat
isfaction of their claims it is but fair that after la
king his all he should be allowed to commence the
world anew, released from their demands Our law
of 1912 was founded upon such principle Of nat
ural equity but enabled the debtor, at his own
instance, to betake himself to bankruptcy, and by
his voluntary act at stroke to wipe out his
entire Indebtedness to the world.
The bankrupt law Of 1912 has been repealed but
is any one ignorant enough to believe that the sys
tenn of voluntary bankruptcy has vanished with il 2
II So he is most grevously mistaken 1t is still vir-
tuay in full blast in almost every State in the Union
BY an outrageous perversion of the machinery of
mortgages and deeds Of trust from their legitimate
purposes the system in its main features has become
almost universal. The system of voluntary bank |
ruptcy, evasion Of debts established in ls42 had
at least the merit of securing of the property sur
rendered pro rata distribution among creditors
Under the system of voluntary bankruptcy or eva
sion of debts, now practised under deeds of trust
and mortgages debtors habitually surrender their
property for the benefit of only few creditors and
cut off the many with shilling
The exercise Of this unjust and arbitrary privilege
by banking institutions is attended by peculiar hard
ships upon the people. The man who trusts pri-