Savannah morning news. [volume] (Savannah) 1868-1887, 1882-03-13
A New Bankruptcy Bill.

Inc senate JuQlClAIy SOHlHAAssSS A~'N
agreed on a general bankruptcy bill
which, in many respects, differs from
any similar measure yet brought for
ward in Congress. 1t proposes, for the
purpose Of simplifying bankruptcy pro-
ceedings. to do away with the old
machinery of registers, trustees and as
signees, and hands the whole subject
over to the courts. It puts the wind
ing up of estates IN the hands
of officers directly responsible to
the courts, leaving the regulation
Of all matters of practice to the judges,
and it also provides that any insolvent
may apply to the District Court of the
district in which he resides for an adju-
dication in bankruptcy. On being de-
clared a bankrupt the court is to appoint
a receiver, aud by him the estate is to
he wound up; and, unless fraud is
shown, the court is to grant the bank
rupt a discharge A similar proceeding
can be taken by any creditor to compel
4 debtor who commits an act of bank
ruptcy to surrender his property.
The third section Of this bill is the one
which attracts most attention, "a it con-
tains the most interesting and important
provisions of the entire measure. 1t
provides that ''the court shall have
power to grant extensions of time for
payment, and to reduce the amount of
Indebtedness pro rata, for the purpose Of
allowing the debtor to proceed with his
business if it shall seem best to do so !;
and any agreement between the debtor
and a majority in amount and number Of
his creditors may be carried into effect,
if approved by the court" The object
of this is to open the way for settle
ments on the majority plan, subject
to the approval Of the court.
Arrangements of this kind would,
perhaps, in majority of cases,
be approved, but it would probably hap
pen that in many instances minority
of the creditors would feel themselves
unjustly treated, and if they did, they
could, under this provision, be able to
invite the aid of the court to prevent the
consummation of any settlement likely
to iniure them.
The rest of the clause above quoted,
however. is not considered to be alto
gether Just. 1t is well reasoned that to
give the court power not only to grant
extension of time for payment, but also
''to reduce the amount of indebtedness
for the purpose of allowing the debtor to
proceed with his business, invests the
courts with too much power over the
rights Of creditors, and such power
which Judges inclined to favor the bank
rupt might seriously abuse. In Other
words, it gives the courts final control
over a matter in which the creditors are
mainly interested, and which they have q
right to determine. 1t is obvious that
they are the proper ones to be permitted
to say how much the amount OF
Indebtedness should be reduced, and it i:
pertinently argued, that with the power
to grant extensions and to reduce the
amount of Indebtedness pro rata, the
court would seem to be able not merely
to let the insOlvent continue his business,
but to make him solvent again. If this is 8
good thing, why not go still further, and
| empower the court, in the case of meri
torious bankruptcies, to discharge the
bankrupt without his paying anything
at all?" True, the District Judge
is to be summarily supervised by
the Circuit Judge, and the Associate
Justice of the Supreme Court assigned
to the Circuit, but even with the right Of
immediate appeal to them, the powers
conferred by this section seem extra
| ordinary.
The proposition to leave the reguls
ton of all matters of practice I'M
der the act to the decision of the
courts IS wise, for the judges are I'M
doubleday the best persons to decide
such matters. Congress cannot enact
rules of practice which will prove satis-
factory since it is impossible for any body
of men not actually engaged in the ad
ministration of justice to know in what
shape questions of practice will be pre-
sented. The giving this matter entirely
in the hands of the court will remove
much difficulty in the way of final settle
ments, and viii prevent litigation, since
with the courts empowered to decide
rules of practice there can be no excep
lions made and appeals taken as would
certainly result if this matter were left
to legislative regulation.
The bill under consideration seems to
be compromise measure between the
plan of regulating bankruptcy wholly by
the courts on one hand, and by the
creditors on the other. With the ex.
ception in regard to the third section
above mentioned, it is generally looked
upon as the best bill on this subject
which has ever yet been presented.