Weekly Chillicothe crisis., 1884-12-25
BANKRUPTCY LAWS.
Brief Review of the Origin and Course
Of Insolvency Legislation.
Debtor and Creditor in Ancient Times
The First English Bank
ruptcy Act.
BANKRUPTCY LAWS.

The First English Bank
ruptcy Act.
The Three American Periods.
The origin of the word bankrupt is
somewhat doubtful, though some phi
lologists have sought to establish it in
custom of the traders OF Venice,
when that city was in her palmy days.
1t is said that those of them who be-
longed to the organized guild of mcr-
chants had each n seat or bench on the
Rialto or whatever other public place
served the purpose of an exchange,
and that when one failed to meet his
obligations he was expelled, and the
bench (baucUS), seated on which he
had been accustomed TO transact his
business, was broken (rltnS) in token
of his disgrace. But, whatever the
etymology of the word may be, the
mention OF Venice in this connection
can not fail to call to mind the story
that Shakespeare has made use of in
the construction of one of his greatest
works, and with it, the savage penal
ties that creditors were formerly per-
mitted to inflict upon unfortunate
debtors. The Christian prayer, For
give us our debts as we forgive our
debtors" had n terrible significance at
the period when it was first uttered,
when the cruel provisions of the law
Of the twelve tables gOvc the miscr-
able being who had failed to meet his
promises to pay completely into the
power Of whomsOcvcr suffered loss TO
be enslaved, beaten, starved, put to
the torture, or even, where the unfor-
tunate, through age or disease, was
incapable of profitable labor, to be
slain, with any accompanying degree
of atrocity that might suggest itself to
a cruel Imagination in an are of cru
city.
The earliest attempt TO modify the
severity of these ancient laws, which
in themselves were but the reflex of
the customs of the then civilized world,
appears to have been in the Julian
code, under which the ccssO bonOrum,
or surrender of the entire estate of the
debtor for distribution among his
,reditors, being taken as 4 satisfaction
Of all claims, appears first to have been
formally recognized. But this legal
recognition OF the principle which lies
at the root of all modern systems Of
bankruptcy, had but very limited
operation, so far as bringing about
any serious amcliOratiOn of the Condi-
ton of the unfortunate, and for more
than 800 years the miserable men
who traded themselves into Insolvency,
or in any otherwise became hopelcSsly
indebted, had to endure tormcnts,
compared with which the scycrcst
punishment known to modern crimi-
nal law are but exhibitions of heavenly
mercy.
In discussing the subject of bank
ruptcy Blackstone says Il bankrupt
was defined under the Cd law as ~
trader who sccretcs himself and does
certain other acts tending to deiraud
his creditors. lnthe preamble to the
first bankruptcy act passed in England
in 1912 under Henry Will, of much
married memory, the same principle
is expressed, probably furnishing the
foundation for the remark Of the great
commentator. This preamble shows
that the act in question, while it pro-
vided some remedial measures in the
way of distributing whatever Of the
bankrupt's estate could be- laid hold
of, was more especially intended to de-
ter the fraudulent Y inclined by terror
of punishment. The preamble states
that it had become the custom among
certain sorts Of people to buy goods on
credit, mot mindingto to pay for them, "
and then either to llcc the country or
remain within their houses and defy
their creditors. 1t is here worthy Of
note that this was the first time that
the ccSao bOnOrlm principle was recog-
nizcd in English law, and that, at the
same time, there was enacted legal
distinction between 4 trader and an
ordinary debtor, Il distinction which
was maintained in every subsequent
bankruptcy act up to 1861. a similar
distinction was recognized in the Uni
ted States in the first and short-liyCd
bankrupt acts.
The subsequent history of bankrupt
cy in England presents Il confused
mass of legislation down to 1925, when
all the multitudinous acts were sus-
pended by the bankruptcy consolida-
tion act, in which was embodied all
that the learning and wisdom of Sir
Samuel Romily could support. In
this act the principle of the "composi-
ton contract borrowed from the
Scotch law, was for the first time made
an element of English commercial ju-
risprudcnce. 1t is curious here to OBJ
serve that up to that date the entire
object of English bankrupt laws ap.
pears to have been the protection OF
the interests of creditors, those of the
honest but unfortunate debtor evil
IDENTIFY being considerable considered
at alias hardly worthy of legal care,
But in the adoption of the composition
clause an entire revolution took place
in this respect, and the prudent and
upright trader who, thenccforward
should be driven by unforeseen calam'
ity into bankruptcy, became, theoret'
ically at least, as much an object OF
solicitudo as the whole mass of hi,
creditors. 1t is true that prior to this
time bankrupts could and did occa
sionally obtain legal discharge from
their liabilities and consequent leave
to begin the world anew with a clean
sheet. But such events were rather
the incidents than one of the objects Of
the law, moreover, the legal machin
cry was so cumbersome and expensive
that their number was but very small
In the vast majority Of cases the un
fortunate against whom docket was
once stricken languishod away hope
less existence in the creditless and i'm
potent insolvency, if, indeed, he was
fortunate enough to escape the life
long misery of a debtors prison.
Under the act of 1881, Lord Broug
hams, the system of official assignees
was created. These officers of the
court simply performed the work OF
distribution, the collecting of the as
sets devolving on an assignee, one Of
the creditors usually chosen by the
whole body of the creditors. In 1S4E
the amendments had grown so numer'
GUS that a new consolidation act was
passed, and another again in 1861. il
was at this latter date that insolvent
non-traders were admitted to such cold
comfort as can be afforded by certiIi.
cate of discharge in bankruptcy,
Storins Of tho Elnnt tho Mnrsh a son