The daily gazette., 1878-09-02
Exit the bankrupt Law.
A DAY OF BITTER EXPERIENCE Fo
TOO CoNFIDING CREDITORS.

| A DAY OF BITTER EXPERIENCE Foh
TOO coNFIDING CREDITORS
From the N. Y. Herald OF Sunday.
The Bankrupt law expired yesterday,
after an existance Of over eleven years,
having gone into operation in 1867 and
been amended in 1874. Three hundred
and ninety-four petitions were filed yes
terday in this city, making the total num-
Der since the law was established $3.50.
These new cases and those which were
in process of settlement before the differ
ent registers in bankruptcy will require
at least two years. time before they can
be all wound up. An estimate of liza
bilities of the bankrupts based on calcu-
lations Of an average Indebtedness of $50, :
600, which the rate for the past two years
indicates, places the amount at $j75, ,0O0,-
600.
No estimate can be given OF the assets
as a rule they were very small, the great
majority of the petitioners having dispos-
ed OF their assets, either by assignments
TO the creditors or transfer to relatives
and friends, before they appeared n bank
ruptcy. In cases where there were small
assets the expenses generally swallowed
them up aud the creditors look in vain
for dividend. There were numerous
cases in which the creditors received only
one per cent dividend and in some the
dividend was as low AZ one-sixteenth of
one per cent. Twenty-Five per cent w8s
considered very large, fifty per ceut was
an exceptional case and when the assets
realized 100 cents on the dollar 1t was an
lso.ated instance. In one case, brought
10y Messrs. Chamberlain, Carter & Eaton
last wear, the creditors were paid in full
These figures do not refer to como l.
uon cases, where firms settled with their
creditors and continued in business: fhel q
were 400 composition cases entered on
the books, but some are still pending. A
great objection to the law was the heavy
expenses attached TO the proceedings,
which made IT impossible for "A really
poor debtor to take advantage of the
amounted to nearly 500 before n dis
charge was granted, and then the LAWYER
had 10 be paid his fees in addition to that
sum. The average cost of getting through
bankruptcy was thus about S4O0, which
would make the total cost in this city
since the law has been in vogue, to the
bankrupts, nearly So 100000.
Inc estimate does not include the ex-
penses attached to realizing upon the as
sets conveyed by the bankrupts for the
nenent of their creditors. One thousand
uoiitis was IL frequent lee 10 prominent
lawyers TO carry firm or indi vidual
through, and a prominent builder, who
has Just applied for relief, gave his attor-
ney check for 81 900 to cover all expen-
seS. In composition cases the firms usll-
ally based their calculations on an ex-
pense of $1,000, and in one prominent
case OF this kind, IL is currently reported
that the expenses of the proceedings
amounted to $1,000.
1t can therefore readily be understood
that lawyers who promised to get a deb
tor through from $50 TO S1O0 knowingly
deceived their clients. IL was freouen.
tly common practice to pay the first
lee OF sl5 80 In order 10 have the case
entered on file at once, and then let the
balance OF the deposit, amounting to $50
which goes to the register, to be charged
on account and to be paid as soon as thew
could raise the money. No notice was
taken Of case at the Offices of the var
lous registers until their fee of $50 was
paid: After tnat the expenses were
swelled up by the marshalps fees for
notices to creditors, advertisements of
meetings, &c, fee for the assignee, and
also the clerks fees on final discharge. all
of which Game out of the pocket of the
unfortunate debtor, that is If there was
any pocket left. A fee for every st+p
taken was apparently the purpose of the
law, and this was one main reason in
urging its repeal.