The Scranton tribune. [volume] (Scranton, Pa.) 1891-1910, 1896-05-12
The New Bankruptcy Bill.


inous measure containing 5000 words
there are eight acts for which debtor
can be forced into involuntary bank
ruptcy. They are if he % has conceal
ed himself with intent to defeat his
creditors for fOrty-cight hours; ca
failed for thirty days, while insolvent,
to secure the release of any property
levied upon for $500 or over: go made a
transfer Of any OF his property with
intent To defeat his creditors. "a made
an assignment for the benefit Of his
creditors; co made while insulvcnt. II
transfer Of any Of his property for the
purpose of giving Il preference: 90 pro-
cured or suffered Il judgment to he en-
tered against himself with intent to
defeat his creditors, and suffered same
to remain unpaid ten days; 90 secrctca
any of his property to avoid its being
levied upon under legal process against
himself; go suffered. while insOlvent.
an execution for $500 or over to be re-
turned on property.
Strong objection is raised in the west
to this hill, particularly to the fifth
feature forbiddlng a failing merchant
from showing preference among cred-
itois. The Salt Lake Tribune states its
objection by using an illustration.
Eastern houses" il says, send their
commercial men west to sell goods.
They pay no rent, no taxes. they con-
tribute nothing to the support of the
state they remain in a town perhaps
a week in the spring and another in
the autumn. The small retail traders
buy of them certain lots, but they de-
pend principally on the wholesale stores
near them. There comes a period Of
depression. or there come losses from
unexpected sources, or collections may
be slow, when in either case the local
merchant needs, to save himself, credit
at the bank. He makes the applca-
tion and tells the banker that he has
no security except his stock Of goods
and his word of honor that in case he
shall be- forced to suspend he will pro-
tect the banker first. 1t will not DO
for him to give the banker a chattel
mortgage, as the knowledge that he
had would precipitate every other cred
itor 20 demand and to try to enforce
cOllectiont By obtaining the accom-
mediation, nineteen out of every twenty
merchants pull through. when without
it they would be stranded. When a
failure must come" the Salt Lake pa
per wants to know. "who says the
local banker should not he first rcmem-
bered?' II argues that should this fea
| ture prevail banks would make no more
such loans ana all merchandising would
| be relegated to the hands of heavy cap
italists.
Another feature to which our Salt
Lake contemporary enters protest is
| that section which enables a creditor to
| force debtor into involuntary bank
| ruptcy. For instance" it says, "a
man may be doing business on 100000
| invested capital. AS he invests and eX-
| tends credit he may have $4,000 due
him. 1t may all be good, too But, in
! the mean time, being obliged to borrow
| money in order to keep on his feet until
| he can make collections, he does bOr-
row and give notes from time
| to time until he owes in that
way $4,000. To pay it he has
| outstanding accounts of $4,000 and
his stock in trade. Now, if the debtor
We're to permit one of his notes to run
! two or three days after maturity, the
| holder of the nNe could, under the
| bill, force him into involuntary bank
| ruptcy, and it is easy enough to under
| stand that before it was over the debtor
| would have nothing left"
Interviews had by the Times Herald
with prominent Chicago business men
reveal much hostility to the present bill.
| II. n. Higinbotham, of Marshall Field
4; Co., is circulating a petition praying
| the senate to defeat the measure. He
| says:
II believe. for many reasons. that there
should be no bankruptcy law of any klnd
first, because there are not enough OF tho
debtor class who desire ii, and If they 90
| not the creditor class certainly should not
want one. The passage of such an act
would restrict the granting of credit. The
| condition OF the western country gen
orally is such that the passage of such Il
| law would prevent our granting credits lib
| orally, as demanded by present. circum
| stances. The law, as formulated by the
| house, does not provide for the abroga-
| ton of existing state laws with reference
| to homstrads and exemptions. for the state
| laws are not uniform. In Iowa, for in
| stance, man may retain a half acre in
| the city with all the wealth that can be
| put ON it, or forty acres in the country.
| and still 20 through bankruptcy and gel
| his discharge. In Wisconsin he may re
! tain a quarter acre i'll q city, or forty
| acres in the country. IN other states the
amount exempted varies from $500 to $500
| The bankruptcy law is for the fraudulent
| debtor always, and it can't be made other
| wise. The honest man doesn't need it, for
| we can always compromise with an hon
| est man. man passing through bank
| ruptcy loses his commercial reputation.
| whereas if he arrangcs with his creditors
| amiCably he does not. When an estate
| goes into bankruptcy the business is man
| aged by the court, which does not appre-
| ciate the Importance of prompt action. our
| experience of twelve years under the old
| bankruptcy law was that we realized on
| the estates adjudcated - per cent. of our
| claims and in the twelve years succeed
| ing its repeal we realized on such estates
So per cent. \ bankruptcy law should be
| for the benefit of that class of creditors
| who have fallen behind in the race for
| wealth and desire to be released from old
| obligations: but there are not enough of
| that class to warrant the passage of a
bill"
These objections in the main un-
doubtedly have some justice behind
them. But it seems to us that they
could be removed in the senate by
amendment without necessitating the
bills defeat. The need of uniform bank
ruptcy laws approximately fair-to both
l
opportunity than at present exists for
the defrauding of creditors in cases
| where debtors are deliberate cheats, is
thoroughly established, and it would
| seem that the senate ought to ba able