The herald., 1897-04-24
The Bankruptcy Bill

To the Editor Of the Los Angeles Herald
will ask pardon for taking issue with you
editorial of recent date on 1.-The Bank
ruptcy Bill' now under consideration in thu
United States senate.
In the commercial world neither debtor
nor creditor would or could be benefited
by having enacted into law this bill as In
troduced into the senate March 23d BY
Mr.. Lindsay nor the bill as introduced into
the house of representatives Of the lasf
congress by Hon. John J. Horner and
named the "Torrey Bankruptcy bill.
which, by the way, passed the house. went
10 the senate but died there March 4th last
There are several good reasons. in my
Judgment, for having reached this conciu
sion after a very careful study of both Mr.
Horner's house bill and, Mr., Lindsay
senate bill. both of which are much SINH
lar in construction.
Section No. so, in regard to preferences,
would work an extremely uncalled-for
hardship upon the creditor. 1t would bring
into question every business transaction
he may have had with the debtor during
the four months before the filing of his
petition. OF course this section claims
that no transfer of property or money
paid must be made with intent to de-
feat any portion of this act; but. never
theless, there would always be creditors
who would question any transaction made
or money paid to the "diligent creditor
when the bankruptcy petition had been
filed and contentious should arise over such
transactions.
Another reason is that federal court pro-
ceedings are, for obvious reasons, extreme
ly expensive. One federal circuit court
having to cover much judicial territory,
the expense required to get the business
into court would absorb the entire estate
Another objection is that in neither of
the bills referred to is there any time or
limit set for the winding up of an estate.
All merchants know that there are some
estates composed entirely of commercial
or mercantile interests that require much
longer time and more diligent management
to properly settle for the best interests OF
all than others, consequently time and
limit of time should be an object.
Take it all together. If either bill. as now
standing, were enacted into law 1t would,
in my opinion, be bad law.
am forcibly of the opinion that the best
thing would be something in the nature of
a national trustee law" a trustee to be
appointed by the United States circuit
debtors property, both real and personal.
Severe laws should be made looking
toward the debtors returning a complete
inventory of his estates, making a COM
plete transfer Of all his real and personal
property putting the trustee under bonds
commensurate with the value of the es-
tate involved, allowing said trustee to use
his own discretion in the management OF
+b etota oil bax ~ fx,,o
up claims from all sections of all the states
and territories of the United States. He
should be obliged to settle the estate in
a certain length of time-say business of
one years standing or duration to be ad-
Indicated and fully settled within six
months after his appointment; a business
of three years standing or less to be adju-
dicated and fully settled within six months
after his appointment as trustee; business
of three to five years standing OF over TO
be adjudicated and settlede within two
years after his appointment.
OF course, congressional legislation
would have to arrange for the appoint
ment of the trustee by the United States
circuit court in each district, and have said
trustee give sufficient bonds for the value
of the estate involved; fix and arrange all
fees. allowing the trustee to make applica-
tion to said circuit court for the bringing
back into the state from any of the several
states and territories of the union any abb
sconding debtor and forcing him to turn
over all property real or personal. to said
trustee for the benefit of creditors. The
trustee should act absolutely for the in
terests Of creditors who have their claims
proved up, said creditors to be from any
Of nr nf a xi in
obligatory upon the trustee to wind up and
aGjudicate the estate somewhat in the line
Of different times and dates and according
to the lengths of time the business has
been established. as outlined above. Leg.
islation should arrange for certain numbers
of creditors having specified amounts Of in.
debtedness to apply to the federal circuit
court of the jurisdiction in which the debt.
or lives, asking for the appointment of g
trustee, or allowing the debtor to apply
to the circuit court in his residence jurs
diction. asking for the appointment of a
own benefit, when convinced of his ina.
bility to meet his obligations.
This would be very simple law. very
easily understood, and, in my opinion
would give good satisfaction.
The above as a state law here In CalifQr.
mia would be far better than our presen.
insolvency laws. whereby uncalled for at.
tachments are made frequently and grea,
hardships are worked upon both debtor and
creditor. If good for state 1t would be
equally as good for all states as ''nationa
law"
For instance, l would refer you to the
affairs of prominent merchant whose en-
tire business is in the hands of the sheriff,
under heavy costs and still far from settle
ment The outlook now is that the estate
will be absorbed in expenses, the mer-
chant bankrupted and the creditors get
nothing to return for their accounts.
Had he been able to place his entire es-
tate in the hands of a trustee, under suf-
ficient bonds to guarantee faithful per-
formance of duty. the business, in my
opinion, would today be running. the cred
itors have some show for getting reasona-
BILE dividend on their accounts and the
debtor, perhaps, not entirely bankrupted
Would like to ask that you give this
question thought through your columns
and call for a thorough discussion of its
merits. E. e. CRANDALL.
Los Angeles, April 21st.