Fort Worth daily gazette. (Fort Worth, Tex.) 1882-1891, 1886-01-26
ARTICLE ".
NATIONAL BANKRUPTCY LAw-OP
POSITION IN THE SOUTH.
Increase ct Banhrupts Under state Laws
sample state Legisia,ion-N Necessity
Of a General Law.

power was exercised In 1902, in 1910, in
1867, and tits now proposed thatcongress
shall exercise it once more. On Decem-
Der s, 1885, Mr.. Iloar introduced In the
senate "a bin TO establish uniform sys-
TEN OF bankruptcy throughout the United
Statesn This * essentially the Lowell
bill, framed Ia $50, has been before the
country ever since and owes its existence
10 the fact that the bankrupt laws of the
states have utterly failed 10 meet the hon
est needs OF the commercial
part OF the community. The
purpose OF every such law,
whether state or national is first, an
equal division of the property OF insolvent
debtors among their creditors, and sec
ond, discharge Of the insolvent from his
debts. But II is impossible for a state TO
do either OF these two things Massachu-
sets has no jurisdiction In Ohio. She
cannot, therefore, discharge a debt owed
by one OF her citizens 10 a citizen of Ohio,
unless the Ohio creditor sees ct to come
and prove his debt in bankrupt court of
Massachusetts,. Nothing, therefore, but
a national bankrupt law can insure to an
honest bankrupt, having creditors in n
dozen different states, such a general dis.
charge from his debts as viii enable him
W ~ Nu M UuNluEENf HlNg iiNIUutcs IN@
trieve his misfortunes.
While lack of Jurisdiction prevents a
state from providing for d general dis
charge, seltishness and greed prevents IL
from providing for an equal division Of o
bankrupt's property, If any part OF it be
found ont OF the limits of that state.
When a citizen, say of New York, rs
creditor, seizos or attaches the property
of an insolvent debtor, the courts Of New
York give him precedence over an as
signee or trustee who claims under de-
cree in bankruptcy made in any other
state.
INCREASE or UNDISCHARGED DEBTORS
For these two reasons then 1t is quite
out OF the power of any one of our states
TO enact a truly efficient bankrupt law
Do what 1t may 1t can not hinder the
steady increase of undischarged debtors,
and it can not provide for an equal dis
tributlon 10 creditors of broken debtors
estate. Nevertheless the states can do
much, and this they have willfully and
shamefully refused to do. And their
laws on the subject of bankruptcy seem
TO have been most carefully framed to in
lure the creditor and protect fraud BY
preferences, by confessed judgments, by
mortgages, by transferring property to
children or wives, 1t is now in the power
OF dishonest debtors to get beyond their
creditors reach.
INJUSTICE OF CERTAIN STATE LAWS.
By the law of California debts due TO
citizens Of California take precedence of
debts due citizens Of other states Hence,
when a man fails in California his credit
ors within the state are paid, perhaps 10
full, and his creditors without the state
get nothing,
In New Jersey an assignment for the
benefit of creditors must be for the equal
benefit OF all. But the law may be, and
is constantly, avoided by executing
mortgage on the property or confessing
judgment before the assignment is made.
And for this fraud there is no remedy but
"a bill for discovery and relief, and such
bill can only be obtained by long and
costly proceedings in chancery.
In New York the law Is worse vet. II
allows any man who fails TO make his
friends preferred creditors to any amount
and for any reason whatever. Nor is the
New Hampshire law much better. Ala
bama eAempts $1,000 worth OF personal
property and $1,000 of real estate. Kan
sas eXempts homestead of 100 acres of
farm land, or an acre in an Incorporated
town with the dwelling, books, tools and
furniture it contains. Legislation of this
kind may seem wise and equitable to
those who enact it, but it is richly paid
for in the end by discrimination In favor
of OF against the various sections of our
country in proportion to the difficulty of
recovering debts
now STATES INJURE THEIR CITIZENS.
NO great knowledge of business is re-
CURED IN order to understand that no
man can buy on credit at the same price
as one who pays cash and that the terms
gwen to one who buys on credit are de.
termined by the risks the creditor runs.
When, therefore, state by bad bankrupt
law renders il all hut impossi-
BILE for nonresident creditor TO
have any share OF bank
ruprs property 1t simply increases the
risk. makes credit less secure, DESTROYS
all certainty OF payment and so puts up
the cost of goods its citizens buy else
where. Manufacturers are forced to make
two profits; one for the pay of labor and
capital; another to cover tie losses IN.
llicted by rogues protected by bankrupt
laws,
AVIATION AL LAW THE ONLY RELIEF.
From these manifold evils of the state
system there can be no relief save in a ma
Ilonal pahkfupt law. such a law should
DC brief, compact and understandable by
every business man. Proceedings under
II should be speedy and cheap. Ii should
discourage bankruptcies, annul prefer
ences made 90 defraud creditors, protect
honest and punish dishonest debtors and
secure the iarg ST possible distribution of |
assets. In the law now pending In con-
gress all these essentials are embodied
Under the State system it is common.
when the question Of conserving to a
composition or a discharge isup, fora few
greedy creditors to insist on being well
paid for doing what the rest are ready
and willing 10 do. BY the l02d section Of
the proposed law creditor so acting
may be fined and Imprisoned. Nothing
was SO odious in the law of 1867 as the
fee system, which in an cases most
shamefully wasted the assets, and in some
cases completely absorbed them. This is
numbered by replacing fees with salaries.
To follow up bankruptcy proceedings In
court now costs the creditor both time
and money. The proposed law provides
lsection l5) that there shall be il each
Judicial circuit supervisor whose busi.
mas Il..nN n. -