The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1874-06-19

bankrupt law passed in 1900 did nor make
1.-The omission to pay q debt an.act Of oank'
ruptcy. The present law, the law OF 100 ,
declares that the omission TO pay debt iol
fourteen days was an act OF bankruptcy
Butt the conference report amends that law
so as to allow a period of forty days 20 elapse
before merchant or trader who negiects 10
pay bis commercial paper is impe 10 oe
| thrown into bankruptcy. Your committee
regard that ss very material aileHlation VI
| the severity Of the present law
| The next important amendment Is III re-
gard TO the power of any one creaitor 10
| throw merchant or trader into the Dank-
r1,pt court The present wglves that rlgnt
To any one creditor or to any number OF
creditors who have debts amounting TO The
sum of two hundred and fifty dollars. Ihls
il the origin of great portion of the COM
nlaints made against the law, for if ninety
1--we per cent. in number and value Of the
creditors were unwilling to have the party
thrown into bankruptcy, single mercliesS
or malicious creditor would have lhat rlgnt.
| This is amended under the report OF the con-
ference committee on the amendments OF tne
Senate so as to require an assent OF one-ionrth
in number and one-third in value OF the
creditors before any man Is liable 10 De
thrown into bankruptcy. But in order to
meet the cases which may have arisen since
the 1st of December last, when we tlrst aSi-
tated the subject Of the repeal or amendment
of the bankrupt law, this section, requiring
opc.fourth in number and one-third in value
MS a condition of throwing into bankruptcy,
has been made to relate back to the COM
mencement of the session of Congress on the
1st day of December last. The object of this
il to prevent any oYer-reaching creditor VINO
intended to get ahead Of Congress from
taking anything by his motion.
And then there was no provision maze III
the present law for discontnulng the pro-
ceedings in bankruptcy, though the Dlnk-
rupt may have paid the debts on Which ne
was thrown into bankruptcy, and altnouSn
majority of the creditors may have de-
sired the proceedings to be discontinued.
| In this respect we have amended Inc oIit SO
as to provide that proceedings shall be dis
continued whenever the bankrupt pays those
secured debts which were the ground OF
throwing him into bankruptcy. or when
ever, with the consent of the court, he and
Il minority of the creditors shall ask for dis
continuance of the proceedings.
Then we have changed the time within
which contracts and transactions had with
bankrupt in making transfer OF property
or liens uponit may be set aside in case he
shall afterward be thrown into bankruptcy
by changing the time from four to two
months in one case, and from SIX months 10
three in another clse.
70 meet that large class of cases where q
person may take an assignment of property
or make an advance of money in good faith,
or where judgment may have been OBJ
tanned or lien acquired by the seizure OF his
property. in order to obyate the evils result
ing from conflicting decisions we have
adopted amendments declaring that in order
to set aside any such hypothecated pledges
or liens Oh the bankrupi's estate il must ap-
pear that the party dealing with the Dank-
rupt knew that be intended to perpetrate Il
fraud upon the bankrupt law, and that he
intended to go into bankruptcy. 1t Is not
enough that tue party had reason to suppose
that the bankrupt was iDsolycnt, but he must
also know that he was contemplating bank
ruptcy. If he was really struggling to re-
tricve his condition, and hoped and expected
to 90 through, the transaction would not DC
invaIidated by the bankrupt law.
And then we have Incorporated an af1r-
native provision in our report, that when-
ever bankrupt obtains Loan from TREND
III gOOu ldltD d., even iuSOlfShtt " hSiN'
the loan Is made and the security is taken in
GOOD faith, with the Intention OF aiding and
carving him through successfully, such Il
loan shall be considered us having actual
notbe YEsa,tdaIeds by the fkie Gn. upon IL shal
bankrupt court.
Then we have also chaas cd tho I.... - -.
gard to the conditions on which discharge
may be procured. Under the present law,
hnr I'm i.l rItynr
may pay either fifty per cent. or obtain the
consent of Il majority OF his creditors. Tbe
Senate report originally made this diStinc-
ton between voluntary and an involuntary
bankrupt. An involuntary bankrupt thrown
into bankruptcy and free from all fraud was
entitled to his discharge without regard to
the assent of bis creditors, or the amount his
estate paid while they proposed that the
voluntary bankrupt should pay either thirty
three per cent. Of his debts or obtain the
consent of majority of bis creditors. We
claimed there was no good reason for
such a distinction between the two
classes, and that the discrimination ought
not to be made against the voluntary bank
rupt, who surrendered all his property in
good faith and asked TO have the benefits Of
the law. The Senate managers, however,
claimed that there ought to be distinction
for the reason that where the requisite mum.
Der of creditors insisted on throwing him
into bankruptcy they treated him as ciyilly
dead, and should not be permitted to avail
themselves of his subsequent earnings in
payment of the debts. But they yield
ed so far to the views of the House
committee as to say that voluntary bank
rupt should have his discharge if the estate
paid thirty per cent. instead of fifty per
cent, as under the existing law, or provided
he obtained the same number Of his credi-
tors as is necessary to throw him into bank
ruptcy-that is, one-fourth in number and
oLe.third in value. Now, in regard to an
involuntary bankrupt, he can get his dis
charge if his conduct is free from all fraud
and he is innocent Of any violation or in
fringement of the provisions Of the bank
rupt act.
In this connection I may state that I have
seen q memorial sent on from New York
| which has an entirely erroneous idea as to
! the right of an involuntary bankrupt in re-
gard to his discharge. The memorialists
seem to assume that an involuntary bank
rupt will obtain his discharge although
| guilty of violations Of the existing law !;
whereas it is provided that before he can
get bis discharge he must be entitled to it
under existing law.
The thirty-ninth section of the existing law
declares that no discharge shall be granted,
or if granted shall be valid, if the bankrupt
is guilty of any one of the sixteen acts emu
merated covering almost every conceivable
case, and winds up by saying that he shall
not be entitled to it ii he be guilty Of any
| fraud of any kind in violation of the proyis-
ions of the bankrupt law. This shows that
they have labored under an entire msconcep-