The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1878-07-20
BAaaRUPTcY BUSINESS.
Eject of tho Repeal Of the Act by Con-
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VIEWS OF. JUDGE ROBERT w. HUGHES
GIVEN In IAN INTERy1Ew-HE IS GLAD
THE LAW WAS REPEALED-cAUsEs OF
SMALL DIVIDENDS AND TIE NECESSITY
. FOR A NEW. BANKRUPTCY LAW-THE
HOMESTEAD AND HOW IT IS EFFECTED-A
NATIONAL EXEMPTION PRoyIsIoN-THE
SUREsT NURSERY OF CIVIC VIRTUE.
Our reporter. called on Judge Hughes yes
terday in the United States Court rooms, in
the custom-house, and asked for talk on
the bankruptcy law.
The Judge: It is stale subject; but 60
ahead.
Reporter: suppose you are glad OF the
repeal, and at the prospect OF relief from
good deal OF work?
The Judge: don't think relies will come
very soon. The work which grows out OF
new cases will OF course cease; but it will
REQUIRE three or four years to wind up the
cases still. unended. Of the $500 that have
been filed in this district. Consider how
troublesome it often is to bring to final
end cases OF administration in the State
courts, especially when half a dozen chan
Gerry suits are incidental to it. We have
many such cases here. | see Register
Ketchum, in New York, thinks ALI OF his
cases can't be brought to an end for 1--WE or
six years. 1t is a tedious process. am
glad the law is repealed, not for any rellef
from work it may give me, but because the
repeal was right and necessary.
BUSINESS FAILURES.
Reporter: see it stated that there were
more failures in the United States in the last
six months than ever were known before in
the same length OF time; and that the fall
ures were heavier. There is, Of course,
more bankruptcy than ever. How, then,
can you say that the repeal OF the bank
ruptcy law was right and necessary
The Judge: Because the present law was
incurably defective. There was but one
possible way Of dealing with it, and that
was by repeating 1t.
Reporter: What was the matter with the
law?
The Judge: It's machinery was too elabo-
rate, artificial, cumbrous, and expensive.
There were too many officers. There were
too many fees. The fees were higher than
they should have been. There was but one
way OF getting rid OF all this, and that was
by an out-and-out repeal. The Judges could
do little towards correcting the evil oil en-
cessivc costs. Bills OF costs were often
brought to me lin cases which had run out
to many proceedings presenting aggregate
costs which were perfectly appalling, but
would find myself helpless; the fees charged
were allowed by law, and l could do no
thing with the bills Of costs but pass them,
because allowed by law.
SMALL DIVIDENDS.
Reporter: Was this the reason why cred
itors rot SO few and so small dividends out
OF bankrupts' estates?
The Judge: Oh, no. 1t was one reason,
but not the principal one. Insolyent men
would always exhaust their estates, while
they held them. OF everything out OF which
dollar could be raised; and in general it
was not until they had sucked the orange
dry that they would throw the peel into the
court OF bankruptcy. IL the proverb is
true that s:you cannot get blood out OF 4
turniD," then it has always been unreasona-
BILE for the public to expect courts OF bank
ruptcy to get more than minimum dlvi-
dends out of bankrupts' estates. Moreo-
yer, very large proportion OF the persons
who went into bankruptcy in the early
period had been in chronic condition OF
insolvency and impecuniosity for years be-
fore filing their petitions; and they took
this course in the hope OF getting fresh
start in life. They brought nothing into
court but long schedules OF debt and blank
schedules OF assets. The original eases were
OF this sort. Creditors expected nothing
ont of them, and so they got into the way
of expecting nothing from any case. 1t Is
also to be admitted that good many OF the
old asSigneeS squandered what pittances OF
assets they received. AS a general rule,
these assignees were elected by the credit
ofs, and the creditors have themselves to
blame for the misconduct OF their own ap-
poiEtees. The lawyers, too, in not few
cases, got full share OF what the bankrupts'
estates produced-much more, think, IN
some instances, than fell to the officers
of the courts, or probably even to the credi-
tors-and the lawyers who got most were
generally the ones who most abused the
law. The system under the
law of 1867 was thus barDacled with defects
and abuses which were beyond the reach OF
the courts; and the best treatment for the
case was, repeat, absolute repeal.
NEW BANKRUPTCY LAW.
Reporter: What will be the result? Will
q new bankruptcy law be enacted?
The Judge: think it may sooner or later
be necessary to pass one. The larger pro-
portion of the men who have recently failed
have failed through misfortune. Their
failure has come from the long-continued
and universal shrinkage OF values which
has been steadily going on for ten years.
All values have shrunk. All men who have
been engaged in business have lost. The
alone have made money.
The most prudent men OF business have
lost as well as the adventurous. 1t IS
merchants, manufacturers, and traders who
have got ruined, not capitalists. This is
the kind Of evil which insolvency and bank
Now such has been the effect OF railroads
and telegraphs in multiplying transactions
between distant localities and different
States that State Insolvency laws do not
meet the case OF merchants who have done
business even on moderate scale and
failed,
A State insolvency law cannot give per-
re lief to the inSolvent; cannot re-
lieve from the obligation Of contracts; he
remains liable for life. Whatever relief the
State law gives is only temporary and local;
a relief from only the legal remedy against
him in the State OF his residence. 1t has
force nowhere else, and the insolvent is at
the mercy OF creditors in all other States;
may be even arrested and imprisoned there
for debt, until he relieves himself by strict
with the insolyent laws Of that
locality. So that merchant or any man of
enterprise once insolvent must remain in
solvent forever, if getting on his feet again
depends upon the leniency Of State laws.
The advantage Of bankrupt law is that.
being enacted by Congress, it relieves the
debtor from the obligation Of his contracts
it relieves not in his State alone, but
throughout the Union. So that discharge
by the bankruptcy court is a good plea in