The Dallas daily herald. [volume] (Dallas, Tex.) 1873-1887, 1881-01-08
ANatIonaI bankrupt Law

The comments of the able and expe-
rienced editor who controls the in
terror department of the Galveston
News, upon your recent article upon a
q general bankrupt law, leads me to crave
the favor of contributing something to the
controversy.
The trainers of the federal constitution
thought proper to clo!he congress with
power 'to establish uniform laws on the
subject of bankruptcies throughout tho Uni
ted States" Constitution, Sec. viii, PA.
That there existed at that time necessity
for such provision the experience of other
people engaged in commerce and trade
seemed TO suggest, that themercantile classes
everywhere require insolvent laws to-day, is
shown by the existence Of such laws in the
statutes of every state.
If such laws were as uniform as the gen.
eral laws governing mercantile transactions;
if the debtor and creditor in Maine or Texas
Florida or Oregon, respectively stood upon
the same footing as TO obligations, rights and
remedies, would not the commercial rela-
lions ofthe people north and south, east and
west, be upon q better footing?
When the constitutional provision referred
to was enacted, the merchant Of Boston and the
merchant of Charleston, were keeping
books under the same general system in Use
to-day. The main features of the laws which
govern commercial paper are older than the
thirteen colonies; in fact, the law-merchant
grew up with the trade of Venice and tho
Italian republics. "There is Lothing more
certain" says French law writer, than
that letters Of eXchi Bge were in use in the
fourteenth century" The English law re-
ports begin to show decisions upon questions
arising upon litteres Discharge ia the reign
of James the first.
According to the popular view in this
country, and it finds expression in the COM
ment of the News, bankrupt laws are enacted
for the benefit of the debtor. An examna-
ton of the act of March q 1867, will disclose,
however, that it is rather q statute for the re-
lief Of the creditor.
Mr.. Justice Miller, Of the supreme court
of the United States, took occasion to say
that the legislative intent in framing the
principal amendment of June 3d. 1874, was
"to mitigate in favor of the debtor the rigor
of the act of 1867 In re Scott Collins, DC,
10 n. b. r 70. This mitigation unquestion-
ably led to the repeal of the entire law in
1873.
According TO the New York Nation the
tendency Of public opinion with us has been
to extreme views; first in favor of the one
and then of the other class, and then, grow
ing disguised, we endeavor to get along
without any national law upon the subject
Meantime every state legislature has tried its
ingenuity a1d wisdom upon the problem,
with the results that might be expected from
narrow views and limiLe! information.
The rights and remedies of the debtor or
creditor in different states respectively have
less resemblance than the rights and reme-
dies Of similar classes in Great Britain and
France Prussia or Holland. In fact, the PEG.
pie of Europe have long since recognized the
existence Of Il necessity for bankrupt laws,
framed in accordance with the general feat
ures Of their respective forms of government,
but having general similarity. In England
and France the rigor of such laws has been
relaxed by modern legislation, without i'm
pairing or destroying the general system.
"The laws in force" with us "lo recover
debts" says the Economist, "are crude, ir-
regular and inefficient. They offer a pre-
mum for dishonesty, fraud and the illegal
preference of creditors. They are as differ
ent in their application as are the several
states Of the union, and uniformly lean in IA
vor of the debtor class, They under
mine confidence, seriously injure honest trad
ers, circumscribe business operations and
rob justice of its penalties"
There is another view to be taken of the
matter. 1t is q melancholy fact that more
than three-fourths Of oil who engage in trade
eventually prove unsuccessful, and it is not
pleasant reflection that charity to the fallen
is rarely exhibited.
1.-THE gallant horse fallen in front rank,
Lies there for pavement to the ahJect rear
Ger run and trampled en-
Conscious of these things the merchant
struggles to the very last to keep upon his
feet, and too often sacrifices his honor and
his friends rather than fall out of line.
When merchants paper goes to protest,
the questions generally asked are "Did he
lose his money in rash speculations or ex-
travagance ~ HAS he been gambling 7"
Other questions might, perhaps with great
propriely be asked: "Who pulled him
down "What shrinkage of real or perso-
nal property deprived him of his capital ?"
The history Of many failures in the past five
years might be illustrated as follows A has
capital or stock account Of say SIS, 900 for
business, this sum being the aggregate of
$4,000 in real estate, $4,000 in stocks, and
$4,000 in cash. With this he embarks in
trade. His purchases eventually reach the
amount of $4,000.
BY shrinkags of goods on his hands and
losses from bad debts his cash capital is
eaten up. He now begins to draw upon his
stocks, borrowing money at high rates and
besides paying discounts upon ex-
tended paper. The general business of
the country growing worse, the stocks
tumble, and he finds it necessary at
length to mortgage his real property. He
has now reached the third stage OF his down
ward career. He preserves an outward
che0rfulness but little by little his principal
is giving way Last of all to feel tho strn-
gency of untoward events, all real property
declines, or, perhaps, becomes absolutely un
sslable, and so at length, after much manipu
lation of assets, the day comes when hi'
paper.can no longer be honored. Protest aud
recognized failure ensus. You miss the un
fortunate merchant from the busy thorough
fare. When you meet him on the more re-
tired street his face and unhappy glance sug
gest consciousness of being one charged
with an offence Yet is there any proper
reason for discussing questions of fraud, gam
bling or extravaganza in order to understand
how his misfortunes came abouW
1t is the interest Of the creditor as well a
his failing debtor that he should stop before
such result is reached. The composition Law