The times. [volume] (Richmond, Va.) 1890-1903, 1897-12-05
A BANKRUPT LAW.

tdik suDsldeS ana we nave no more or
the matter for two or three years, It may
be. when another eruption comes TO the
surface. Who it is that makes this stir
we have never yet been able TO under
stand. II comes. nominally from the
mercantile bodies. and IL IT were a
movement for involuntary bankruptcy.
that is. a measure by which a creditor
could strip fraudulent debtor of all he
had by speedy methods. we could under
stand II as mercantile move. But IL al
ways contains provision for voluntary
bankruptcy. that is proceeding by
which a man who has got into debt may
rid himself OF his debts by applying to a
court for discharge from them. 1t can
not be for the interests OF merchants that
the measures that have been brought
forward in the name OF mercantile bodies
have all contained a provision for voIun-
tary bankruptcy. We repeat then that
we are puzzled TO know where the
periodic movement for bankruptcy legis-
lation has its origin.
Though 1t cannot be for the interest Of
merchants that the laws should provide
for voluntary bankruptcies. yet we do
know. nevertheless. from personal obser-
walton that there is a strong sentiment
in favor of a law providing for involun-
tary bankruptcy, amongst mercantile
communities. Nevertheless we doubt
very greatly whether merchants would
receive any benefit from such law.
Their argument for it is that in many
States debtors are allowed to make pre-
creditors of a broken concern should
stand upon an equal footing, and a bank
ruptcy law would distribute the debtors
assets ratably amongst all. But the ar
gument is specious and delusive. Not one
man in a hundred fails so long as he is
able TO keep afloat Occasionally of
course, a rascal makes an assignment to
practice fraud. but that is the excep-
ton. The business man who fails, is,
in the main. man who cannot keep
going. Further he does not fail until he
has played his last card.
He usually has very little to divide
when he does so to the wall. A bank
ruptcy court cannot create assets for a
bankrupt any more than the present
courts can. But it is inevitably incident
TO the administration OF bankruptcy
estate in bankrupt court that 1t will be
wasted and misappropriated
This country has had three bankruptcy
laws in the hundred years of its exist
ence and IL has repealed each of the
three after a few years experience with
each because Of the disgust inspired in
all men at the way the bankrupts' estate
is administered. This is incident TO the
nature Of the case and we do not believe
II possible to have bankrupt law in this
country that can be honestly enforced.
Nor are we so sure that falling debtors
should be deprived of the right to make
preferences. A merchant can no more
transact his business without the dis
counts Of his bank than man can live
without air to breathe. But the bank will
not grant him the discounts that are alb
solutely essential unless it feels sure that
IL can be protected If the merchant gets
into straits. The discounts are the mer-
chants life then and he cannot get them
unless he can make preferences. Is he
to be deprived OF this most important Of
all resources?
The real question that has always per-
picked us in regard to a bankrupt act is
whether or not it is wise to have one per-
hitting debtors overloaded with debt to
apply for and receive their discharge
from their debts. Uuon the one hand the
tendency is necessarily bad TO hold be-
fore man the prospect that he may in
cur obligations and then rid himself from
them at his pleasure without paying
them Sometimes we are Disposed TO
think anything is better than that. But
the arguments made upon the other side
OF the case affect our mind very strongly.
Senator Nelson, OF Minnesota, an opponent
Of an involuntary bankrupt act, but an ad
vocate of one for voluntary bankruptcy.
has recently stated the case for the deb
tors with great power. We make this ex-
tract from what he said:
In the West more than in the East and
in the older communities, where we have
been growing more rapidly where we
have been moving at a higher rate Of
speed, where young. bright and enter
prising men have started almost empty
handed and have done a large business
with limited capital but great energy,
these hard times and the contraction and
shrinkage incident thereto have ship
wrecked a lot of the brightest, most en-
terprising and most active men in the
These men are now loaded
down with an incubus OF debts. judg-
ments and mortgages. They are the most
active and enterprisng misunderstanding
and Iabor-giving men in the community
They cannot 90 TO work and do any bus
mess or start any enterprise because the
moment they start some creditor VIII
Jump upon them and seize and destroy
what little they may have. They
have either got to abstain altogether or
else they have got to do business by
and devious means, through
wife. sister, brother. or some other rela-
tive. 1t Is for our interest, 1t is for the
good OF society il is for the good OF all
of us that those men, those unfortunates,
should now be given a helping hand"
That IS more than an appeal to senti-
ment. 1t addresses the reason as wen.