The Anderson intelligencer. [volume] (Anderson Court House, S.C.) 1860-1914, 1873-10-23
The Bankrupt Law.

In 1867 the Congress of the United States
passed an act providing for uniform system
of bankruptcy throughout the United States,
generally known as the bankrupt law. The
principal feature of this act was the granting
to the debtor free and full discharge from all
his debts except those of fiduciary character,
upon his surrendering to his creditors all his
property, to be administered through the bank
rupt court 1t was made the duty of the
BANKRUPT court to set off to the bank
rupt an amount not exceeding $500, and to dis
tribute the remainder of his estate amongst his
creditors according to law; and finally to
grant to the bankrupt discharge, which would
operate as legal bar to all debts contracted
previous to the filing of the petition for bank
ruptcy.
This act was passed before the reconstruction
of the Southern States, and without reference
to their interests; and yet, if it had been the
purpose of Congress to provide special relief
for the Southern people after the disastrous re-
suits of the war, nothing better than this law
could have been devised. Thousands of our
people found themselves suddenly reduced
from wealth to poverty, with debt upon their
shoulders which crushed out all hope of sue
cess for the future This law came to their re-
lief 1t stripped them of their property, it is
true but it wiped out all previous indebted
ness and gave them clear chart for the future
Many declined to avail themselves Of the beEe-
fit of this law because it required them to
abandon the exemptions allowed by our State
homestead law. At its last Session, however,
Congress amended this law, granting to the
bankrupt all the exemptions allowed by the
homestead law of the State in which the bank
rupt lived, and the original exemption of $500
in addition-so that discharge in bankruptcy
in this State, as the law now stands, gives the
bankrupt fee simple title to 900 worth Of
real estate and 1000 worth of personal
property.
Moreover, the Supreme Court of the United
States has recently decided that State can
not pass homestead law that can shield the
property of the debtor against debts contracted
previous to the passage Of such homestead law.
That decision rests upon the ground that the
Constitution of the United States forbids any
State to pass any law impairing the obligation
of contracts.
The Constitution, however, does not forbid
Congress to pass any relief law that 1t may
deem proper; and hence, although the State
homestead may, and probably will, fail as to
old debts it does not necessarily follow that
the exemptions allowed by Congress to bank
rupts will also fail. But on the contrary, the
Constitution gives the express authority to
Congress to pass bankrupt law, and as Judge
Rives says 'It is the essence of bankrupt
law to give exemptions and grant discharge.
Neither can be done without invading vested
rights, and destroying the obligations of con-
tracts"
Chief Justice Chase in delivering dissent
ing opinion in the legal tender case says: "It
is true that the Constitution grants authority
to pass bankrupt law; but our inference is
that in this way only can Congress discharge
the obligation of contracts. 1t may provide
for ascertaining the inability of debtors to per.
form their contracts, and upon the surrender of
all their property may discharge them," (12
Wallace 457. Justice Fields who also dissented
in the legal tender cases, uses similar language.
We think, therefore, if the question is ever
carried before the Supreme Court, the home
stead exemptions to bankrupts will be sus-
tained.
There will be /. strong effort made at the
next session of Congress to repeal this law,
and in all probability the effort will succeed.
1t will have served its end so far as the South
is concerned, and We see nothing to regret in
its early repeal Greet,uiNe Republican.