Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1889-07-13
a Bankrupt Law.

To tie Editor of0,e Dispatch:
see the subject of national bank
ruptcv law was discussed at the last meet
Ing Of the Chamber of Commerce, and
that honorable body went 50 far as to APP
point delegate To attend the National
Convention at Minneapolis, which meets
September next.
bankruptcy laws are, in their details,
too vast and complicated for ordinary men
TO study thoroughly, and about the most
we can do IS 20 look at their practical bear
ing on the business of the country.
Let rs see what It has been.
Mr.. Edwin James, the author of tho
notes and decisions upon the bankrupt
laws of 1867, says:
The bankrupt act of 1900 was substau-
tally for creditors only. The act of 1871
was. in fact. for the benefit of debtors
only. In the course of the discussion IN
Congress on the bill amendments were en-
grated upon 1t which were intended 10
secure and protect the interests of credl-
tors, but were found TO be lnthclent and
illusory." In regard 10 the act of 1867 he
saws: "This act is intended 10 accomplish
two objects-frst. the discharge of the
honest but unfortunate debtor upon the
cOmplete surrender of his property TO blS
creditors; second, the protection of the
creditors against the fraudulent practices
and dishonest conduct of the debtor. II
brings the failing debtor and his creditors
upon % ground of negotiation and ADJUST
ment equally beneficial"
This looks very well on paper, but what
was the political working of that law
So far from its being beneficial the expert
ence of the businessmen OF the country
goes TO prove that under the operation of
that law vast number of creditors got
absolutely nothing. When a creditor re-
ceived anything 1t was the exception (and
rare exception to the general rule.
Some time ago, In correspondence with
a prominent New York house, they sad
that out of one hundred claims IN bank
ruptcy they did not receive one cent IN
the way of dividends, the entire amounts
having been absorbed in the settlements;
the money going into the hands OF mar
shals, receivers, and other officials.
Ia one case in which the writer was In
terested the failing concern exhibited as
sets amounting to $4,000, liabilities
500. OOO and the dividend received was
one dollar the amount paid az fee for
proving the account. Ont of large num-
Der of other cases the only dividend ever
received was 10 per cent. from one firm,
and they offered 10 compromise at % per
cent. on the dollar cash before being thrown
into bankruptcy, q majority of the credl-
tors refusing to accept the compromise,
expecting to get $50 per cent. OF their
debts.
That was vast and expensive machine
of the Government, which, IN the language
of my New York correspondent, placed
the assets of an insOlvent III the hands OF
professional wreckers."
My object in this communication il TO
sound the alarm in the ears of my country
men and to warn them against advocating
the passage of new bankrupt law, the
practical effects of which, fear, will not
be any better than those in operation IN
former years.
have never carefully studied the Lowell
bill. II is too yoluminous, but III looking
over il do not see any great advantage
over the act Of 1867, which gave such uni
versal and widespread dissatisfaction
throughout the States.
Under the operation of our State laws
Cbad as they are1 we occasionally get some
thing. Under the operation of bankrupt
laws we viii get nothing, or next to
nothing. MERCHANT.