The Washington union. [volume] (City of Washington [D.C.]) 1857-1859, 1858-06-20

v
amount of three hunksd u three hukod and any MIL
Hons OF dollars, oonsntly dzsw1g vssti and grsat
contest !. going On tori on 49, - stoelAodsr
the question between them h. who dali own IL prop
erys The stakeholder w. 10 every EXTENT an American
citizen, and ths bondhoder w. to The saane extent
egnsr This precious sehs Of tho President would have
procpitsted the CONTEST md matter Of course the
man who is in debt the stockholsr would have been
thrown into involuntary bankruptcy by tho bondhode
and his property would have pGped into. The hands
of the foreigner and ;acn your country would have
joyed under democratic rule and under TINS sss Of
President exactly these legitimate results Of tho legislation
which it has been my constant ondsavor to prevent
Now, we have turned over the leaves of the mes
sage with some care, and do mot find that there
is a word in the message to which these reflections
of Mr.. Marshall can apply. We do not find that the
President has recommended general bankrupt law
at ALL to be applied to railroad corporations and
the redoubtable champion Of protection from Ken
lucky has expended his structures upon totally
imaginary state of facts.
The President did recommend system of compu
sorry bankruptcy in regard TO the banks by which
the people the instant Of their failing to redeem
their notes, could force them into liquidation and
compel pro rata distribution Of their effects among
all their creditors. At present these institutions
may go into liquidation or not as they themselves
may choose, and may, by deeds of trust secure their
assets to q set of preferred creditors, leaving the
people at large in the vocAtive. Even the plainest
man can see that compulsory bankruptcy, securing
pro rata distribution of effects is much the better
system of dealing with the banks for the people at
large.
Mr.. Marshall, with ignorant simplicity, seems to
have been totally unconscious that like system of
bankruptcy applied to railroads. would be the only
means Of correcting the abuse he was endeayoring
to depict without understanding.
There are two systems of bankruptcy, the vol,,n-
tary and the compulsory systems. Under the first,
the debtor may go into bankruptcy if he chooses
under the second his creditors may force him into
bankruptcy and to pro rata distribution of his
assets, whether he chooses or not The first or
voluntary system, is in full blast all over the coun-
try, in the form Of deeds of mortgage, deeds of
trust and tho thousand and one contrvances of debt
ors by which they prefer one set of creditors over
another, eiching the preferred while cheating the
great bulk of their creditors. 1t had its elimination
in the abominable law of 1912, which allowed vo-
u'tary bankruptcy and cheating by wholesale turn
ing the debtor out upon society, after that to run
the same career of fraud and injustice The whole
country rose up in indignation against the system,
and blotted the obnoxious law from the statute
book.
Compulsory liquidation insolvency would be
quite different thing and would enable the creditors
at large of debtor to nip in the bud his deeds Of
trust and schemes for securing set of creditors
at the expense Of another 1t with this sort of
remedy that Mr.. Buchanan proposed to arm the peo-
pie against the banks but he did not propose it in
regard to railroads, although it might have been
wise for him to do ita
The issue in regard to railroad corporations, is
between compulsory bankruptcy securing a pro rata
distribution Of assets, and tho system Of protect
ing special creditors by deeds Of mortgage and trust
singlcd over tho property of tho railroad corpora
tons three or four deep The question is between
giving American creditors of these corporations q
pro rata share with tho foreign bondholders of the
assets of these corporations, or giving the foreign
bondholders all the assets There would be grave
practical difficulties IN the way Of applying sys-
tenn Of bankruptcy to railroad corporations, and
account of these should hesitate to espouse
the measure but if should espousc it, we should
expect to make speedy convert Of Mr.. Marshall to
the doctrine, the very grounds he has ignorantly
urged in the spirit Of objection, in the foregoing para
graphs.