New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1881-12-19
A NATIONAL BANKRUPT LAW.

| rupt law, made on Saturday before the Sub
Committee of the Senate Judiciary Committee
| by Morris S. Wise, representing the New
| York commercial bodies, and A. +. Pills
bury, on behalf of the Boston Boards
of Trade, are published below. The
former opposed the bills already framed
and presented to Congress- and all equity or
chancery schemes. He said that New-York
merchants look upon an honest, equitable and
inexpensive bankrupt law as a National neces-
sity. The latter after pointing out the de-
fects in various proposed schemes, strongly
advocated the Lowell bill, though admitting
that it might be improved by amendments.
THE ARGUMENTS AT LENGTH.
WASHINGTON, Dec. 1S.-FoIlowing is the
argument made yesterday by Morris S. Wise, coun-
sci for New-York Commercial Associations before
the Subcommittee of the Senate Judiciary Com.
mitee on the subject of National Bankrupt
law:
The commercial bodies of the city Of NewYork organ
aed the convention held at the Fifth Avenue Hotel in
sad city, the Goth day Of November 1884, respect
fully present the following suggestions the question
of the enactment by Congress of National Bankrupt
law which they deem important for proper cOnsidera
tiOn Of the subject
NATUrr OF THE PROPOSED LAW.
should avoid the nequites and deficiencies Of tho
OF 1867 in thorough protection OF the rights
of the creditor, coupled with comprehensive provision
for the prevention and punishment of fraud;
SecoRd-rhe system 10 be adopted should be definite,
| special system OF bankruptcy.
Ihbd-It is respectfully represented that the adoption
OF any scheme Of procedure whereby the settlement OF
nsoven estates is relocated 10 the district courts OF the
United States sitting courts of equity courts OF
chanccry, and 10 be governed by the ordinary equity
practice controlling those forms OF actions known ss
creditors bills, would be merely experimental aud GER
tainly very questionable in its practical results.
The following points are offered in support Of the fore
! going propositions:
We earnestly contend that the primary consideration
which should underlie all bankruptcy legislation is he
protection of commerce. by the protection Of the ored
| tor Holm Stuart Mil, in his principles
! OF Political Economy" truly says, that good
nsolyent laws important, because the economical
wclLbeing OF people and OF mankind depends in
pecia manner upon their being able TO trust each Others
engagements and because OF the risks expenses OF
the industrial operations Is the risk expense OF what
commonly called bad debts, ana every saving which
can be effected in this liability is dminuon OF cost OF
therefore urged that the best interest Of the cred
or class VIII be best subserved by allowing me creditors
every thereof We therefore ask that not alone
should the right Of the creditors to select their own
sglce be preserved to Them that the plan OF per-
hitting tie selection OF creditors supervisory COM
mittee committee OF direction IL an admirable onei
! and is measure which should be Incorporated
| in any law which may be enacted. And We
| urge this the more earnestly because Of the fact
that the so-caed equity scheme Of bankruptcy, which
has been presented contains sweeping provision re-
moving all control of the creditors over the assets OF an
usolyeut estate, by prohibiting the appointment OF as
sgnoes ana vosins the functions previously exercised
creditors comm assignee in official OF the
court 1t is rcEpectfulty represented thai such pro-
vision if adopted, would meet with the unqualified con-
demnaion OF the entire commercial interests OF the
country.
H.
The honest debtor should be protected; the dis
honest one should he punished unsparngly. The penal
features Of any law on subject should be therefore
we'll considered. The act OF 1867 was extremely def
Client this respect and became Of little value in con-
While not recommending the extreme rigor of the
French insOvent laws in this particular I'm France Of
fences committed by who Is termed simple bank
rpt are punishable by imprisonment for term Of from
| one month 10 two years. A fraudulent bankrupt Is
liable 20 be shed by the highest punishment excepe
the death penalty known in France terra OF years In
the gacys Fraudulent bankrlptces ore IN consequences
tain punishment meted out 70 the commercial swiudler
win prove highly efcacious in the protection OF tho
credit system -
requirement which should be contained in proper
bnnkrunt law ia the one compelling traders TO make
annual Inventory, and TO record the same at large In
their books of account This should be deemed as neees
sgrv as the keeping OF cash account for one or tho
most nsupeTabe obstacles To the discovery OF the real
condition OF bankrurt estate or OF me trans
actions, has been found by experience 70 lie I'D tne
fact the debtors omission 10 make proper inventories
c1rred in the southern District OF NewYor in 1876.
the bankrups books of account failed to sboYthe max
T6 business transacted by the bankrupt amounted
over half a million annually. An expert invcstigation
/
| years prior 10 his failure. Had he taken an
inventory annually he would have known his real con-
diton two years before he faled We believe this sue
gesiOn be very important bearing on the practical
nature of the law.
The composition feature OF the act OF 1867 very
important one. although not satisfactory In It's opera
ous by reason imperfect construction We believe
that any law which fails TO contain judcious provision
the adjustment of 6anP affairs by arrangemens
and necessary part of sound bankruptcy legislation t
pl
| mercia dishonesty 100 easy I method De
arrangement and consequently the question OF the nc,
ceptance or rejection of proffered composition should
be thoroughly and explicitly provided for in manner
similar To- the composition section Of the Lowell bill
CONSCIENTIOUS court il vested with the proper authority,
BI6 E gnde Choate of the southern District of New
York refused to confirm an unsecdred m & G
number and amount in value OF the creditors required Dy
law.I
We are aware Of the that the question Of e1cmp-
tious is very delicate We believe that it is the
duty of each provide suitable relief for the un
fortunate citizen, by allowing him reasonable ex-
emption. IL certainly should be the policy
of every Government to prevent the pauPerEauon
OF its subjects but also believe that IN 30 far as the
trader Is concerned, uniform exemption, irrespective Oh
state laws is imperative necessity. This exemption
yuIne is uniform throughout the country.
Congress can certainly in its dseretlGn and with
ma o this uniform exemption high as Justice demands
it should be made. But, high or low, it should,
when applied TO the nsolyent tFadesmen, twe
do not refer 10 the agricultural Interest," be
uniform throughout the country, etherwlse gross
inrouV and unjust discrimination VIII be shown 10 the
ins6yen debtors varying according To locality. "A re-
tail dealer in Richmond Va, went into Dankrp.cy IN
is9 owing about So 900. His assets consisted OF mer-
cbondisc worth about 50 600. He claimed and was en-
titIed TO- a stock exemption OF 5000 Inc eredtors
oid have received nothing had not settlement been
eGected BY the debtor at nominal percen'ase.l
VI.
The new system should be inexpensive. The mosd
tent and truthful objection against the act of 1867
was the one the fees and expenses OF bankruptcy
nroceedng swallowed up the small estates and deomat-
e the large ones We believe that the fee system should
be abolished with the exception of reasonable pers
centa calculated upon the actual assets OF each esate
fnnH