The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1868-06-23

The Bankrupt Law.
The United States Bankrupt lsv, which came
into effect March 1, 1867, virtually ceased TO
be a remedial measure on the LIST instant.
With the fifty per eentum clause, or thirty
third section Of the act, which is now the pFin-
cipal feature OF H. In operation, the whole
commercial and business community Of the
country is again left without the benefit or pro-
lection Of any efficient bankrupt Law, and
we may, therefore, expect to, see business
in all its branches cramped, retarded and al
most altogether paralysed by return TO the
vexatious and ruinous process of litigation
between creditor and debtor, or rather Of the
creditor against the debtor, In the State
courts. This thirty third section, to which we
some time ago called attention in the hope that
1t would be repealed before it should come 10
interpose as dead lock to the working Of the
law, presents q serious question affecting the
interests of debtors and creditors throughout
the whole country. This section provides that
in all proceedings In bankruptcy commenced
one year Immediately after the date Of the act
no discharge shall be granted to any debtor
whose assets will not pay City per centam Of
the claims against his estate. Here proviso
comes in-''unless he (the debtor) obtains the
assent in writing Of q majority Of bis creditors
who have proved their claims at or before the
time of application for such discharge" This
is the deadlock clause of the whole act, or
rather 1t is the whole act itself so far as any
remedy to be derived from it by the debtor
goes; for all proceedings in voluntary
bankruptcy are by its operation simply impos-
sible to the debtor who cannot pay the half Of
all his Indebtedness, or who fails to receive the
consent of the majority of his creditors, as
condition precedent to his obtaining the
benefit (?) of the act. The incongruity of such
q clause as this in bankrupt law has been
already represented to Congress. But the
opinions and recommendations of the district
judges to whom its administration has
been condded, the suggestions of eminent
counsel and the apparent absurdity of the lame
and impotent conclusion arrived at by the bun
glers at Washington, and which ought to have
been patent even to them-all these have
failed to call up the reconsideration of the law.
The cause Of this is easily assignable. The
majority of Congress have been for the last
four months in the labor throes Of impeach-
ment and had no time for healthy Legislation.
Hence the anomalous condition of the Bankrupt
act, with all its costly and cumbersome ma
chinery clogged, disarranged and rendered
utterly imperative and useless as relief for
the very class of men for whom all proper
honest and industrious man of business and
small trader whose venture, through unfore-
seen circumstances, has turned out improbable
or ruinous to himself and family. No active,
energetic business man would ever dream Of
having recourse to the act while he could pay
fifty cents on the dollar, and no sane creditor
would drive q customer Ito the wall"
while he had such ample assets to enable him
to continue his business and his dealings
and with the prospect Of payment in full before
him. Therefore for all practical purposes the
act is dead letter. But what is the result?
The honest debtor struggling against sudden
tide of adversely, having no bankrupt court to
appeal to, is again exposed to the oppression
of relentless creditor; to actions, suits, judg-
ments and sheriffs sales through the operation
of the State courts. The zone year" Bankrupt
act has had, however, one good effect-it has
proved the necessity that exists for it from the
numbers that have taken the benefits Of it's pro-
visions from March, 1867, to June, 1868. Let,
therefore, the act, before the obnoxious thirty
third clause came into operation, be once more
set in motion by the repeal of that clause and
the introduction of supplementary clause BY
which all voluntary petitions lodged with the
clerk since the first of June be brought within
the provisions of the law as 1t originally stood
before that thirty third section came into oper-
alton. This Is Q simple remedy, and one that
should be applied at once before the trade and
business relations existing between the whole
sale and retail dealer, and between creditor and
debtor, have become entirely unsettled and dis
arranged.
Tho Prcsident's Veto.