The Houston daily post. [volume] (Houston, Tex.) 1886-1903, 1896-12-19
TEXAS CREDITS.

| idea that merchants anu Canitslsts Wub VI
let them have credit without regard to the
| chances of ultimate collection, and there
fore laws facilitating the collection OF
debts would be distinctly adverse to their
| interests What they have suprosed they
could do was to get credit and then pay
or not as they found II convenient They
are beginning to iud their credits cut
down. which is a plain manifestation oil
the hostility of the money power. whereat
they howl in disgust. Some of them recog-
niae the cause of the trouble and urge
| remedy IN making II possible for creditor.
even an Eastern creditor. to collect what
is due him. but Texan pride is hardly
ready to abase itself to the rlutocracy TO
| such an extent.
Texas has two laws for the extinction Of
creditors and the humiliation OF tina; money
power which have no superiors for the pur
poses designed One OF these Is a home
stead law under which n palace or n bust
ness block worth millions is exempt from
attachm ent II the owner sleeps in It, Nalu-
able properties are In fact withheld from
creditors by this device There is no limit
to the value of the home" which is exempt
under the homestead law
The Texas deed Of trust enables a man
to defraud his creditors in whole or In
part, pro rata or seriatlm, in any degree
that suits his fancy. In recent notable
failure the debtors deed OF trust put Ill
the creditors In two classes, STIMULATING
tia, ,l,s, In class should be paid in
full seriatim and whatever remained OF
the estate should be divided pro rata among
tho creditors in class H. The assets would
not pay all the claims In class A. and of
course (. ere %o'ild be nothing for class u.
Sixty thousand dollars of claims in the
hands Of members of the debtors family
and the claims OF local creditors were put
high up in class A, where they would be
paid in full and for the rest there would
be nothing. Fraudulent claims nay be
fought on their merits by the creditors.
but the deed of trust can not be set asiiD
as to any class II single claim In that
class is valid. The local banks that were
taken care OF by being placed well up in
class a had only few months before ccr-
tilted to the debtors having assets a good
deal more than half a million dollars over
his Liabilities. and upon this certiicatiun
hu debi',r got credits from merchants IL
the East who were assigned to class q.
where they could have the satisfaction Of
pio iutiHs d MINUS VlsHtlty among tNen-
selves. In this particular case the credito'a
who were unsecuIed and not preferred paid
all the preferences. took the assets and
managed TO save something for themselves.
The result OF the homestead and deed OF
trust laws is that a great many non resi-
dent merchants who formerly did business
in Texas have withdrawn from the State.
Reformatory measures are pending before
the Legislature but the opponents of them
say that II non resident merchants do not
like :he credit laws OF Texas they can sell
for cash. But great many of the resident
merchants wish more credit instead of less
and they do not like 10 have the jobbcrs
Of other States refuse to DO business in
Texas or only sell for cash On the other
hand the local jobbers and the local banks
and the attorneys who are Oh the ground
like the present system for they can pretty
generally get preferences and they can
also get the business that would have been
given to non residents were the latter
not afraid OF being dcfrauded. The New
Orleans Credit Mems association was sue
cesstul last year in securing the repeal by
the Louisiana legislature of some legisla-
tton inimical to the interests OF creditors
and of honest debtors. and 1t is now pro-
posing to undertake to secure legal re-
forms in Arkansas. Alabama and Texas.
and is seeking the support Of Eastern mer-
chants in its campaign. Tho proposal has
uttH iHdue III tHlS part OF Tue country that
Texas should be boycotted TIL 1t reforms
its laws. Even II this were justinablc it
could not he brought about because some
Eastern banks and jobhers can protect
themselves by taking collaterals or prefer
ence5; but If the business men of Texas
can not secure an improvement In their
laws it is quite certain that they will find
their banking and mercantile credits re-
s(rict5d to such as thcy can insure against
any possible loss 1t may take tho peOOic
OF the State some time to learn that the
encouragement OF fraudulent bankruptcy
is a bad thing for the State and decided
disadvantage to the honest merchants of
the State. But they will learn II cventu-
ally.