New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1882-03-08
TIE NATIONAL BANKRUPTCY BILL.

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TIE N1TIONAL BANKRUPTCY BILL.
When the Judiciary Committee were author
lied by the Senate to prepare new Bankruptcy
bill two courses were open to them. Ihey
might have submitted q bill similar In charac-
ter, if not in its provisions, to the Lowell draft
constituting a code both of principles AMI pro-
cedure. Such measure would necessarily
have been voluminous. Would it have been
successful7 All experience answers IN the
negative. The experiment has been trleu
twice here, and three times IN England by the
acts of 1919, 1861 and 1869, but has always
failed. Rules and orders spring up round all
bankruptcy acts until the original meaning Is
lost in a maze Of intricacy. The Committee
have adopted the only other course open to
them. They have formulated q bill which in
dictates in simple and ineligible language the
scope and intention of the act, but they leave
to the District Courts the preparation OF the
rules under which it Is to be administered.
The act is so simple that its purpOrt may he
stated in few sentences. Any person VINO
has contracted debts exceeding 5000 without
fraud NAV petition the District Court OF the
United States for an adjudication in bank
ruptcv. Thereupon on good cause shown the
Court shall adjudicate him bankrupt and APP
point O receiver Of his estate. Where a debtor
has committed an act of bankruptcy any cred
itor may petition for an involuntary adJudlca-
ton. II the debtor can show that In contract
ing his debts or in the circumstances OF his tall-
IRE there is no fraud, the Court is TO grant HIM
his discharge Then follow provisions as to
granting extended time to pay power TO ap-
nrOve agreements between the debtor ana MS
creditors; to stay actions, set aside 1raudu-
lent preferences, etc, and to make rules. The
scope of the act is thus at once official ana
elastic. The adjudication, the appointment oil
the receiver and the discharge of the bankrupt
rest wholly with the Court. There are no
ossienees. trustees committee of inspection, or
other quasi officers, and the liquidation will
rest entirely in the hands Of the receiver sub
iect to the supervision of the Court OF lrSt IN
stance, with an appeal to the Circuit Judge and
the Associate Judge of the Supreme court
Tho clause containing these provisions Will no
doubt excite considerable hostile cn'lciSlh'
Yet it Is easier to point out the faults OF the
proposed system than to suggest better. Inc
English act Of 1869, which adopted the I'M
official system, leaving the estate entirely IN
the hands of the creditors, after thirteen years
experience, and repeated amendments, has been
0iven up as an acknowledged failure. To have
adopted the principles of the Lowell draft
yvould have been to put aside the experience OF
the old country and adopt their failure as our
experiment. The effect of the new bill Is to
create Jurisdiction, to promulgate the prln-
ciples on which it shall proceed, but to allow
the widest latitude to the Court as to the man
ner in which the law shall be administered.
AS TIE TRIBUNE has pointed out, this Is the
only wav in which that uniformity of law on
the subject of bankruptcies" which the Con-
stitution requires can be attained. II 1t had
been nossible to create one jurisdiction for the
great centres and another for less densely pop
Mated districts, the task of the committee
would have been much easier. Were New
York and Boston, for instance, all that had to
be provided for, complex system would
ne required, but such a system would be
much more unsuited to the agricultural dis
tricts than would the proposed measure to the
wants Of New-York. Much OF the hostlilty
which the bill will evoke will be due to the fact
that each district will be favorable only to
measure suited to its own wants.
The Committee deserve credit for some sug-
eestions entirely new. Where q debtor can
with an abatement of his liabilities success
fully continue his business, he may apply to
the Court, who after examination may make an
order reducing his Indebtedness pro rata. The
Court may also In its discretion confirm any
agreement entered into between majority or
the creditors and the debtor. This provision
will have the same effect as the private ar
rangement clauses of the English acts, while
preventing the abuse of them by fraudulent
collision between the debtor and section of
his creditors. On the whole, the bill seems
fair and equitable compromise between conflict
ing views and parties, and deserves careful
consideration and discussion.