The Madison daily leader. [volume] (Madison, S.D.) 1890-current, 1896-08-20
Address of President MOOrfield
Storey of the American Bar
Association.
Scores the Practice of Courts in
the Matter of Railroad
Receiverships.
Debtor Practically Dictates in
All Matters-- Creditors Dare
Not Oppose.

SARATOGA, n. Y, Aug 2O.-The
American Bar association held its open
ing session in Convention hail. There
was large attendance, including prom
inent> attorneys from all sections OF the
country, as well as some distinguished
klembers of the British bar, including
Lord Russell. The principal interest OF
the opening session was the address of
the president, Mr. Moorield Storey OF
Boston.
The address Of the president was
upon THE Most Noteworthy Changes
in Statute Laws on Points of General
Interest Made in the Several States and
by Congress During the Preceding
Year as required by the constitution.
He pointed out that the legislation in
different states, though widely separated
and representing both the Oldest and
newest civilization, strongly showed
the essential unity of this country in
dealing with the same problems that
confront all the states. He pointed
out that while the past year has been
marked by much discomfort among the
people that the laws show only profound
peace and general prosperity. Discon-
tent does not affect legislation.
Another noticeable point is the rapid
growth Of disposition to assert the
general interests of the community at
the expense of individual freedom
The underlying principle of socialism,
that everything that man owns he
L. .xl. =. Il md
more frequently. The statutes Of every
state contain laws that would have
seemed unwarrantable invasions of
private rights not many years ago. Such
legislation is the collateral inheritance
tax, the graduated income tax, the
graduated tax on the estates Of de-
ceased persons when adopted, and the
character and number of uses for which
money is now raised by taxation.
On Railway Reorganization.
The most important and longest part
of the address is devoted to railway re-
organization.
The address points out that the great
railway systems of this country nave
been built up and equipped with bor-
rowed capital. Many of the securities
represent investments of more than
their face value. Capital stock has been
frequently issued without payment A;
often as bonus to 60 with the bonds.
In this way the money of the creditors
has been invested and the control of
the property retained by the debtor-the
railway company.
Ma,auars Vpftad Creditors Scatteve6
The failure of the railroad company
finds the managers united and fully
prepared for the emergency which they
inevitably have foreseen, while it finds
the creditors scattered, ignorant, fright.
ened and entirely unready to act.
What has happened in practice? We
have seen the managers, while stoutly
denying up to the last moment that any
such step was contemplated or that the
property was in any way embarrassed
secretly prepare bill in equity, and
without any notice to any one inter
ested, file it in court of the United
States, asking for the appointment Of g
receiver AS matter of fact in every
case the efforts have been collusive
The managers of the insolvent company
have controlled
Both Sides of the Lit CATION.
The selection of receivers is matter
- of great concern to a great many per
sons. There should be no undue hast.
in the choice of such officers. A re
straining order will hold everythin,
until after notice and hearing, leavin,
the property meanwhile to be managed
by its officers as before. Every bank
rupt or insolvent law that we hav,
known has left the choice Of assignee t,
the creditors, and no reason exists TO
not applying this rule to railway re
ceiverships.
The former officers are interested il
maintaining the system which the,
have brought together, they hold lu
crative positions which they do no
wish to lose, they are deeply intereste
parties. Such men, of all others, shOul
be disqualified to hold the scale
between conflicting interests, nor
there any practical reason for their Sc
lection. The receiver can employ then
as the corporation employed them, all
thus get the benefit of their skill an
experience.
Yet with scarcely al exception
whenever a great railway has passe
into the control Of the court, the cree
itors have first learned the fact throug
the newspapers.
Do Not Dare to Refuse.
After long snd expensive contes
the self-constituted reorganization con
mittee appears and bondholders al
offered their choice between q contes
conducted at great disadvantage an
exrense, ard the scce. tsnce of sue