Vermont watchman and State journal. [volume] (Montpelier, Vt.) 1836-1883, 1878-05-22
The Bankrupt Law.



Messrs. Editors Your suggestion Of the neces-
sty Of national bankrupt law to facilitate equt-
able adjustments Of the affairs Of insolvent mer-
chants has point in theory But tho experience
OF our people, for ten or eleven years, under the
existing law, has convinced them that the law
has almost uniformly operated against the inter
est Of the unfortunate creditors.
In the first place, II has demoralized CONNER
cial credits; and in nine cases out OF ten II has
produced the very condition to which the law is
supposed to be applicable.
The liability OF merchants to be forced into |
bankruptcy and to realize by forced sales not one
half Of what their available assets practically
worth, has induced feverish distrust and panic |
in our commercial communities. The manufac- |
turer and wholesale merchant may Judge the
jobber sound from their knowledge OF the value
OF his stock and would be willing to carry him
through any emergency. But what does this
avail, with ANY sx-by-eight correspondent of the
jobber ready to institute bankrupt proceedings
against him2 The bankrupt law in its operation
in our cities has, by its Influence, broken down
the small trader and RENTED the bulk OF the
trade to the A. T. Stewards, Clahins and such like
establishments. It is like the grab-game attach
ment laws Of Vermont which authorize A, before
he has established the legality of a claim. to seize
the goods OF his neighbor b, for fear b should
prove dishonest, and put his property out Of his
hands before A can get his judgment. And this
without requiring to give any indemnity or
security to b in case As claim should turn ont
to be fraudulent and void. There IL no state on
earth where such discrimination Is made in favor
of the creditor-class in their use Of violent law
against alleged debtors as in Vermont cred
tor must be honest, par excellence, while the law
treats any debtor a. n fraud
| While Vermont has unlimited water power, ex-
tensve railroad facilities, and location and de-
velopment the most healthy, and resources scarcely
to be estimated, why is it that the population, the
true indication Of progress has scarcely increased
| for the last twenty years Few young men, with
but hard hands and energetic spirits to start in the
world, will remain where the laws regard every
debtor as as a rogue and your sx-byeight little
satrap, who lends money on shave, the peculiarly
| honorable man. But not to make so fine point,
| observe generally that no manufacturing, or
| commercial mechanical enterprise, can live
where exposure to the obtrusion Of the sheriff Is
a perpetual fear.
| There IL no reason in the world why Vermont
should not have million Of people within its
borders to-day. She can count that number Of
her children scattered through the land, but too
many have been forced to the conviction of
Stephen A. Douglas " that Vermont is an excel
lent state to be born in, provided one emigrates
when quite young" II Vermont wishes her sons
to stay at home she must hold ont something bet
ter to them than the teeth of her attachment laws
So in the matter of the bankrupt law; its ex-
istence is the bane of commercial confidence.
| a rat ivi of q
bankrupt's effects What does that avail when
the very fact Of the adjudication in bankruptcy
annihilates one-half the commercial value of the
assets, and the rest chargeable with the enor-
nous expenses of the administration of the law.
The matter of preferences in the settlement Of in
sovences is prevented under the bankrupt law.
But whether that be good or bad feature Of the
law depends on the character of the debts pre-
ferred There is principle in commercial affairs
that justifies preferences assignments, or the
prior payment of confidential debts before distri
button among general creditors. sea captain in
a foreign port is authorized to bond his vessel fol
repairs or salvage, and thereby to bind and super
cede every other lien upon it, for the reason thai
the money raised on the bond was necessary fol
the safe return of the vessel to her port whereby
the interest of owners and mortgages would b.
equally served. The case Of commercial hous'
in financial embarrassment is something like tina
of ship disabled by the storm, needing money
to be advanced in the interest of the general cred
itor to save the house from failure; and in cast
the emergency is so tided over enabling the gen
eral creditor to get dollar for dollar where other
wise he might get ten cents
There il no doubt but thousands OF merchant
have been able to borrow money in emergencies
that has saved them from bankruptcy, on tn
long established custom of our merchants, to al
low sucii loans TO have preference IN case the.
failed Of their purpose of preventing failure
But the bankrupt law says no. that all such pref
erences are frauds and rather to be punished thar
favored.
Again, the bankrupt law says any transactions
, within four months preceding the bankruptc
. may be inquired into, and IL they operate to Civ
, a preference they may be set aside; though tn
act constituting the bankruptcy may have tran
spired within fifteen days then last past
We have n set of shysters among MS who max
their chief business in hunting up constructiv
frauds against bankrupts and getting them pu
in prison. Judge Blatchford released one Of thes
victims the other day, holding in effect tina
, transactions before the fact of bankruptcy coul
not be construed as criminal. There are few her
who will not rejoice at the end OF this bank
rnpt law 1t is true, many are just now seek
. ing discharge under it before its repeal. Blu
this bankrupt law, in its influence, has made ther
poor, and why should they not seek some benef
by way of compensation before it expires.
All provisions OF laws relating to debtor an,
creditor are liable to be made covers for frand
But it does not follow that the law is to treat a
men as frauds. Your debtor under the Vernon
grab laws get his sister his brother to lev
/, the first attachment on his property, and by din
=, of hard swearing repudate his honest debts an
defy his creditors, Our merchant may with tn
. same facility prefer fraudulent claims held by hi
: relations. But all honest men and their al
fairs to suffer, because there swindlers in tn
land? II there is intelligence in our law-maker
or the courts it should adapt our laws and juris
prudence to the public interests in fostering hon
. esty and Furnishing fraud, JONI NJ. STEARNs,
|