New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1874-01-07
The Hon. Allen G.. Thurm'
THE PHILOSOPHY OF BANKRUPT LAWS.


A REPEAL NOT WHAT Is ACKNOWLEDGEMENTS oS
WHICH HE LAW SHOULD BE AMENDED
~. me razor o. Iae Irt0une
SIR: Many sciolist5 contend that it would be
better II all laws for the collection of debts were
abolished and trade carried simply on cash system
This proposition will AT glance. be seen to he erro-
neous. If all such laws repealed, that
would not terminate all transactions credit. Credit
Ia ompOsed two elementsa reliance on the protec-
ton afforded by the laws. and confidence in the personal
integrity of the debtor The latter would remain even
II the former Withdrawn. Consequently there
would continue to he credit transactions. II there were
no laws for the enforcement OF the obligation thus con
traced fraud and rascalty could be perpctrated with
impunty. But civilized community could tolerate
such a condition of affairs.
Credit confidence reposed By the creditor h inc
debtor. The credit is given upon the faith that the
debtor will strictly perform his obligations or IN case
OF inability from accident other cause Will do all that
usce roauIres to protect the interests OF the creditor
Every violation OF this faith fraud 1t is an abuse
of conf against which the law ought to afford
pie protection This is the design and object OF bank
rupt laws The earliest English bankrupt law estab-
llshed system Of involuntary bankruptcy Alone ana
quantity describes the persons who were the objects OF
lfs provisions as those who "craftily obtaining Into
their hands great substance or other mems goods DO
suddenly fee TO parts unknown or keep their houses
Ia those times bankrupt regarded as criminal.
u
Mating between misfortune and crime, that nsolvent
debtors have been treated with consideration, aud
bankrupt laws established upon broader and more
liberal principles In considering this subject. how
ever it should be remembered that the earliest laws es
tablished system of involuntary bankruptcy alone and
that this once seriously c0ntended that
power OF Congress was limited to the enactment OF
The design OF bankrupt laws ia to protect creditors
fraudulent failures aud TO provide mode for the
distribution of nSolyent estates They belong strictly
IA the eolle az
abolish such laws entirely. or even to repeal all in
solvent Laws Those who to rspsa the
nsOlyent laws. The question az issue 10 not whether
there shall be bankrupt law but whether there shall
That question can be more easily decided BY consider
ing the true relation between debtor and creditor.
When debtor is insoyent t is manifest that all his
property has been purchased with the money OF his
he peases morally and equitaby he mere trns-
tee holds the to dis
the purchase OF the property they are all entitled to
share in 1. alike IN proportion to their demands Their
debtor instead of being the legal owner, had been
propsy WITH nnds ali for that purpose
Hence the wrong and the immortality OF preferences
na n,S ao go %
principle OF bankrupt law TO distribute all the
be attained by insolvent law for that cannot
operate on Or prevent the attachment OF
l. the reason why the State nsovent laws have proved
80 Inefficient and have been rarely used.
As the debtor Ia trustee for theacreditors bene
IT. he ought 10 be removed from his trust he abuses
his power, forfeits their confidence. Hence the
necessity and justice OF system Of Involuntary
bankruptcy. IL been objected system It
Injuries the debtors credit but this objection
neous In fact The credit OF Jay Cooke Il Co. In
iured by the failure TO meet their paper and within
hours after that their suspension known all over
the United States. From that their credit
The telegraph hurt 1t. and not the bankrupt law
In the OF debtors OF less tho failure Is made
known through the mercantile agencies
The principle OF the equal rights OF creditors however,
shows defect Ia the present law As all have equal
rights is but just that the majority ia interest should
control the disposition OF the estate Under the law
It stands creditor thwart the wishes OF all
the others, IL composition Is deemed advantageous no
withhold his assent and demand payment ether IN
full larger than his due proportion as CONDITION lot
allowing settlement which 10 really Denencial 10 all
concerned such conduct Is an abuse that ought TO be
prevented Ii Is repugnaDt To the genius OF our nsttu
lions, which requires that tue majority snail RUE ana
IL leads TO waste and extravagance III
debtor Is honest and enjoys the confidence OF
his creditors lie Wind up his affairs bet
ter than any court any official Ho Is acquainted
with those who indebted ~ his estate ana FAMILIAR
with the best mode OF dsposng OF the goods belonging
to his particular trade. such arrangements have go0i
moral effect. They tend To promote friendly and con
ndentia feelings between debtors and creditors and
~ every debtor his Affairs Is 10 Do able
to effect "A composition.
what Is needed system Of involuntary bankruptcy
to creditors into compositions aud provision
making composition siyued Wy tho majority VI tue