Evening star. [volume] (Washington, D.C.) 1854-1972, 1871-04-07
The Present Condftfon OF the Rank.
rupt law.

mere Is an impression prevailing among per-
sons not well instructed in such matters that the
bankrupt act has been repealed or has expired
by limitation. This Is not the case. IL is still in
effective operation and has become probably
like similar Law in England, a permanent
branch OF the Jurisprudence of the country
Several sections Of the act have been amended
since its passage in March, 1861, but it Is still
substantially the same.
Since January, 1869, when the fifty per cent
clause took effect, the applications of debtors
for its benefits have considerably diminished,
while on the other hand the involuntary cases
have been steadily increasing, and will probably
continue to, as the commercial community and
the bar, come to q better understanding of the
involuntary provisions of the act, and find that
IL furnishes q very short and not expensive
method OF collecting claims against failing
debtors.
AL persons applying now for the benefits OF
the bankrupt law must, IN order to obtain
discharge, schedule assets equal to fifty Per
cent OF their debts on which they are liable a.
principals, or, failing in showing this amount,
they must obtain the consent of . majority In
value and number of their creditors who have
proved their claims. Under this latter pro-
vision many insolvept persons who have the
sympsthy and confidence OF their creditors are
able 70 go through without opposition. There
seems TO be q general disposition amongst cred
itOrs to give honest men q fair chance TO COM
mence life anew, after having surrendered their
entire estates for the payment of their debts.
The involuntary clause of the act should be bet
ter understood by traders And commercial men
generally, for il involves, as interpreted by the
courts, some very important principles. for
the consideration of the business community at
large.
1t is generally held by the bankrupt court.
that trader who Is not able to pay all his debts
in the usual and ordinary course OF business, as
persons carrying on trade usually do, is insol-
vent within the meaning of the bankrupt law;
and If such insolvent commits what is known in
the law as An act OF bankruptcy, such as dis
posing Of his property by gift, sale, transfer,
so a. to hinder or delay his creditors, or BY
giving preference in payment security to
one or more OF them, or to suspend and not re-
sumo payment of his commercial paper within
period of fourteen days, he may be adJudged
bankrupt on petition OF one or more of his
creditors.
There has been a general tendency in the
courts furthermore toward q liberal construc
ton ofthe exemption law. in eases snkruptcy,
and against the policy of stripping the debtor of
verything IN his possession, and turning him
and his family out destitute upon the world.
and delaying him in resuming business and
earning an honest living until complicated
insolvent estate is settled. They hold that pub
lie policy as well as humanity forbids that
mans creditors should be permitted to reduce
him TO state Of pauperism or compel him to be
idle; that the unfortunate debtor who honestly
surrenders sll he has towards the payment of
his debts at the demand of his creditors Is enti-
tied to protection from those who would punish
him for his misfortunes. The law L. compare
lively new in this country and one OF much
Importance TO the business community, for
whose information We have written what Is here
said, and TO contradict the impression that there
Is been any suspension of the act or material
change in its provisions.