Evening star. [volume] (Washington, D.C.) 1854-1972, 1878-05-07
The Repeal of the Bankrupt Law.


funct. The only questions about which there
is discussion, are first, concerning the most
suitable time for its abrOgatiOn, and secondly,
concerning the expediency of substituting an
improved law in its stead it is conceded that
the law in its present shape is doomed. The
theory of bankruptcy acts is good. Industry
is not to be compelled TO struggle through
whole life overwhelmed by the weight of debts
which may be the result of misfortune rather
than misdOing. The state cannot afford to
permit slave labor to be substituted for free
labor: and without bankrupt law the man
who from any cause becomes so indebted to
another that he is utterly unable to discharge
the obligation, is the lifelong slave of his cred
itOr. By such laws he is freed from a load and
given fresh vigor; if under these improved
auspices he prOspers sufficiently to be able to
discharge the debts from which he has been
released. he is morally, though not legally,
bound to do so. But ia practice it has
been found almost impossible to frame
a law which, while protecting the honest
debtor, will not permit his INSCRIPTIONS
brethren to defraud their creditors, and will
ST cure an equitable division of the debtors
estates without wasting them away by CON-
plicated legal proceedings, involving heavy
fees and disbursements. The present or third
bankrupt law of the United States, which was
passed in 1867, is very general in its scope.
Any person in this country owing 300 or up
wards can, on his own application, by showing
his inability to pay his debts in full, surrender
his property and be adjudged bankrupt. 81
any one who owes a specified amount can be
forced TO become bankrupt upon the applica-
ton o. his creditors if he has committed any
of certain offences or acts specified in the
statute. The law was first found To work III
iuriOusly to debtors, and in 1873 Improvements
were made in it which have since caused it to
be Objectionable TO creditors. As used by I'M
ScrupulOuS men, the law undoubtedly works
great evil. and has a tendency to destroy legiti-
mate mercantile industry. A man who pays
one hundred cents on the dollar cannot com
pete successfully in business life with one
who, from time to time, pays off all his
conditions at 20 cents on the dollar. without
even closing his doors. So great are the ex-
penses aud waste of the bankruptcy proceed
ings that creditors will compromise with
man on almost any terms, rather than permit
him to go into bankruptcy. Taking advantage
of this fact. business men of a certain stamp
have frequently enriched themselves at the
expense of their creditors by threatening
bankruptcy, though perfectly able to pay all
their obligations dollar for dollar. 1t is pro-
posed i'm the Senate that the repeal of the law
shall not go into effect until the first of Janu-
airy next. 1t is cOntended that this delay. with
the prospect of repeal ahead, will cause a sue
ceSsiOn of business failures up to the very last
moment, by those who wish to take the
l" beneft" of the bankrupt act with
as much advantage TO themselves as
possible The reason assigned for the pro-
posed poStpOnement is that the repeal of the
law, with nothing provided i'm its place and
with no time allowed the states to prepare for
the emergency, would cause most hurtful
confusion in regard to the rights of insolvent
debtors and their creditors 1t Is claimed
that in some states the laws which would revive
at the time of the repeal would cause wide
spread ruin and desOlatiOn; in almost all the
condition of affairs is unsatisfactory. Oaly
four states secure the application of the entire
amount of the inSOlvent PERSONS property to
the satisfaction of his just debts and obviate
the danger of fraudulent cOnveyances and
determinations between creditors. 1t is only
a small number that have anything that may
be properly called a bankrupt law. No bank
ruptcy proceedings were carried on in the
District OF Columbia for some time before 1867,
and the present repeal would leave Us practi-
cally without bankrupt law. If a simple
and efficient system of bankruptcy proceedings
can be devised by Congress, it will be well
coined as protection both against the evils
of the present law, and the anarchy and mis-
chief that would follow its immediate repeal.