The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-12-28
THE HOUSE BANKRUPTCY BILL.


THE HOUSE BANKRUPTCY BILL.
The bill which the House judiciary com
mittee has reported is what is known as the
Henderson bill. 1t has been substituted for
the Nelson bill which was hastily passed by
the Senate last session. The report of the
committee accompanying the bill is On ex-
tensive argument in favor of a bankruptcy
law and in advocacy of the present bill.
Years ago a large part of the couptry OPP
posed bankruptcy laws because it was as
summed that creditors were favored at the ex-
pense of debtors. The last bankruptcy law
was that repealed in 1878. 1t was unpopular
because the fees of officials were large and
the litigation so involved and tedious that
creditors regarded the law with disfavor,
and preferred to compromise with debtors
rather than to put them into bankruptcy.
So it came about that the law repealed in
1878 melted fraudulent compromises, to the
great injury of honest debtors and deserv-
ing creditors.
1t has been held for years by those who
have opposed national bankruptcy law
that such a measure is not needed To
this the House committee replies that be-
tween 1879 and 1895, inclusive the number
of failures was 1889 with liabilities ag-
gregating $2,e11 521 .7O4. Such an army of
crippled men, and such multitude of cred
itors should have remedy in national leg
islation which will do justice to both par
ties. AS our commerce is interstate it is
held that no state legislation can be effec-
tive in the sense of dealing fairly with all
creditors and giving the bankrupt the relief
man should have who turns over his as
sets to his creditors.
The aim of the House bill is to wind up
the affairs of those who are so unfortunate
as to become insolvent and unable to meet
matured obligations, and of debtors; who are
silly enough to act dishonesty. In the bill
are nine acts, for the commission of any
one of which the creditors of a debtor can
proceed against him in bankruptcy. These
all involve some sort of dishonesty or care
lessness which is equivalent to it. 1t pro-
vides for voluntary and involuntary bank
ruptcy. Any one can go into voluntary
bankruptcy except corporation, but these
may be forced into bankruptcy while they
cannot seek it. Wage earners, laborers and
farmers are exempt from involuntary bank
ruptcy, but all others are subject to it. As
a rule, the causes of involuntary bankrupt
cy are such as involve fraudulent conduct
on the part of the bankrupt. When an es-
tate is administered and no fraudulent con-
duct has been found, the bankrupt is. dis
charged from all, debts. The law creates
trrrcf
the latter receiving no fee until the estate
is closed and the referee receiving fee OF
$40 at the outset and a commission Of one
half of percent. when the estate is closed
Eleven specific species of fraud are pun
ishable by fine and Imprisonment. If the
offense is less serious. it affords Il reason
for refusing a discharge in bankruptcy.
Under the bankruptcy act repealed in 1873,
operatives, clerks and house servants were
allowed priority over other claims to the
amount of $50, but the pending bill gives
such claimants a priority to the amount OF
$500 each if the claim is for labor Under the
repealed act debtor to the amount OF $500
could be put into involuntary bankruptcy
but by this bill the amount of indebtedness
must be 81 COO Under the old law business
man who might have had property worth a
million dollars was adjudged bankrupt If
he could not assume the payment OF his
commercial paper in fourteen days, The
proposed law extends the time to thirty
days unless fraud is apparent. Under the
old law a person could not enter into vol
untary bankruptcy unless his liabilities ag-
gregated $780, but this bill removes all limit
as to amount and the debtor is exempted
from any expense if he files an affidavit to
the effect that he has no means with which
to pay for the filing.
What the discussion of this bill in the
House will develop remains to be seen, but
upon it's face it seems to be measure
most carefully drawn and designed to afford
relief to honorable bankrupts, to force dis
honest debtors to settle fairly, and to give
creditors all the advantages of an equitable
distribution of the assets of debtors without
excessive costs and tedious delays. For
such law there seems to be a demand,
limited TO no locality or class.