New national era. [volume] (Washington, D.C.) 1870-1874, 1873-02-13
THE bankrupt law,

: As our readers are aware, a bill has passet
the House of Representatives providing FOL
total repeal of the bankrupt law. In con
I versatiou with our merchants we find somC
! earnestly fayoring its repeal, whilst Others
are equally earnest in favor of its retention
( The business interests OF the American being
based on the cash system, we DO not have
fifty dollars per annurn involved in bank
rupts' estates, hence we have waited FIR
some indication Of the views of those more
directly interested. We have been assured
by several merchants that they have never
recovered a dollar Of claims from a hundred
| bankrupt estates, the proceeds being all used
up by lawyers fees and court charges, whilst
Others assert that it Is the lawyers who de-
sire the law repealed. A petition is circu-
lating among the merchants Of New York,
who are extensively signing it, against to-
tai repeal of the bankrupt law. As this is \
question more closely affecting merchants
than other classes, the following are the rea-
sons given:
FIRST. There Is no other mode by which
the assets OF large mercantile house, seat
tered through various States, can be dis
tributed. The only other mode possible is
an assignment for the benefit of creditors
But many Of the States have passed statutes
to regulate such instruments and in some
signnent made in another State could be
valid moreover, no lawyer is sufficiently ac-
qualnted with these various statutes to draw
an assignment to meet the requirements Of
al, consequently every assignment must be
void in some States. The failure of we'll
known firm in the city Of New York brought
out this advantage in the bankrupt law. An
assignment was first tried, but as this was
void in some of the States, attachments were
levied on property, and there was no relief
except In bankruptcy.
second. The requirements that an in
solvent debtor shall pay fifty per cent. of his
indebtedness, or obtain the consent of the
majority in number and value of his creditors
before he can obtain a discharge, has a sau-
tary effect upon mercantile men. In the first
place, it has fixed standard to which fall
ing debtors feel that they ought to conform,
and thus noulds public opinion. The ten
dency OF this limitation is to check reckless
trading, and compel failing men to stop bust
ness before their assets are all exhausted.
In the next place, it tends to prevent fraud,
Tor none hut honest men can get the consent
OF the majority Of their creditors to dis
charge. The rascals are thus left liable to
their creditors. Under the influence of these
SRo clauses combined there have been fewer
fraudulent failures, during the existence of
equal number Of years. The superiority of
the bankrupt law will be still more manifest
when it is remembered that assignments ex-
acting releases are held to be valid in Rhode
Island, Maryland, Virginia, and South Caro-
lima.
Third. The enactment Of a law prevent.
ing preferences has introduced the theory of
the equal rights of creditors into the COM
munity Under the prior laws the large or
vindictive creditor took everything. Now,
the minor creditors are protected. More
over, experience shows that fraud is usually
pcrpetrated under the guise of conveyance
TO a relative in consideration Of an alleged
prior indebtedness. Such frauds have nearly
disappeared, because the bankrupt law az
tords ready and certain remedy.
Fourth. The great benefits Of the bank
rupt law are not to be found in the bank
ruptcy courts, but in its silent influence upon
the conduct and opinions Of business men.
Its provisions for summary trial, thorough |
examination OF the debtor and all who have |
dealt with him, and the selection of an
assignee by the creditors, have a salutary |
effect in suppressing fraud and inducing hon
est conduct. Its great advantages are to be |
seen in the money that is saved without lti- |
cation, and not in the dividends declared in |
the few cases that actually get into court"
We are strongly Of the opinion that the |
abolition Of all laws for the collection Of |
debts would be the best preventive for bank
ruptcy. AL credit would be then basedupo |
the character of tho debtor. The cost of col |
Letting debts by law generally leaves but a |
small balance for the creditor. However, as
this Millennium IN trade cannot be looked for |
during the present generation, the best pos
sitle law should be enacted.