Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1898-08-04
INTERESTED PERSONS GETTING
POSTED ON IT.
IN EFFECT AUGUST FIRST
Statutes Of the Various States On the
Subject All Superseded-No Una
nimity Of Opinion as to the Merit
of the Act-Dishonest Creditors
Sure to Find it a Convenience.

law, which was passed and became a
law July l, 1898, and went into effect
August L as to voluntary bankrupts,
and November l as to involuntary
bankrupts. The measure supersedes
all state laws relating to assignments
and insolvency proceedings, and vests
IN the federal courts exclusive juris-
diction of such matters. Referees
are appointed by the district Judges
in localities that will accommodate
the public. They have the power of
a court in the supervision and ad-
mlnistration Of the estate. The
creditors appoint a trustee who re-
duces the property to money and
makes a distribution as the referee
directs. The expense of the proceed
ing Is small and many safeguards are
thrown around the creditors and
property. A meeting of the creditors
is required to be held within thirty
days after the bankrupt is declared:
and thereafter from time to time as
may be necessary for the promotion
and best interests of the estate.
Within thirty days the debtor, if an
honest one, may be discharged from
all liability. Three or more creditors
OF a debtor whose claims exceed $500
may file petition to have the debtor
declared a bankrupt, The act. ac-
cording to those who believe in it. is
efficient for the prompt and econom-
lcal settlement of insolvent estates.
S3tpO11qr6c Crjuo11
well as the honest debtor, and like
wise an opportunity is given to pro-
tect a creditor of a dishonest debtor
and prosecute him as we'll as recover
and reach his property.
The law is expected TO compel cred
Itors to exercise great caution in max
ing loans or advancing goods. The
personal competency, liability and
standing Of the intending debtor or
Vendee will be subjected to rigid in
Vestlgation and only the best class
OF applicants will be accommodated.
The result ought to be a wedding out
of heavily obligated business men who
are a menace to the honest dealers of
every community. 1t is said that
business houses all over the country
are shortening up credit and will now
use more care in dealings. This ap-
plies especially to wholesale houses
doing business with smaller trades
men. ChatteI mortgages will be
taken by many houses on all goods
let out. The act will naturally slim
ulate bankers to look better to securi-
ties.
1t is by no means an isolated opin-
ion that the law will not cause much
good in it's initial results, that the up
shot will be that debtors will use the
law as a sand-bag to force creditors
to settlement. That is the dishon-
est debtors or others pinched for
money. Creditors will be able to
say, EITHER accept so cents On a dol
lar or l will file petition for bank
ruptcy," and someone will get the
worst of it. A discharge in bank
ruptcy will release the bankrupt from
all provable debts except such due as
taxes, judgments in action for fraud,
and debts created through embezzle-
ment. All debts not tainted
by fraud are finally eff
fected by a discharge under the law.
Another predicted result of enforce
ment of the law will be the abandon
ment of the judgment note The law
provides that "a lien created by or OBJ
tanned in or pursuit to any suit or pro-
ceeding at law Or in equity, including
an attachment upon mesne process or
a Judgment by confession, which was
begun against a person within four
months before the filing of a petition
in bankruptcy by Or against such per-
son, shall be dissolved by the adjudi-
cation of that person to be a bankrupt
if it appears that said lien was OBJ
tanned and permitted while the defen-
dant was insolvent, and that it's exist
ence and enforcement will work q pre-
ferment." The section embraces other
provisions, the effect of which is to
nullify all liens obtained through
fraud or with the intention to defeat
the purpose of the law by obtaining
preferences.
The referee is an ofr1cer Of the court.
His tenure is during the pleasure of
the appointing judge. AS many as
necessary will be appointed in such
described districts as shall be deemed
wise. The referee must be able to
handle the legal end of the business
while the duties Of the trustee ap-
pointed by the creditors are purely Of
a business nature. The trustee trans
acts the business of the estate and
reports to the referee who directs and
approves Of the trustees actions and
directs the distribution Of the div
1dends. The compensation of the ref
cree is SO for each case and one per
cent. Of the total amount Of the div
idends which the estate will pay.
The fee of the trustee is S. for each
case, and not to exceed three per
cent. of the dividends in cases in
volving $4,000 or less, and a lesser
graduated commission for larger es-
tates. Thus far only two referees
have been appointed in Wisconsin
and it is not probable that any more
will be in the absence of a panic
that may produce an epidemic OF
bankruptcy. H. NJ. Lewis of Madi-
sen is the deputy judge" for the
western district and D. Lloyd Jones
Of Milwaukee for the eastern.
The new bankruptcy raw is the
fourth in the history of the national
legislation. The first was passed in
1902, the second in 1910 and the last
in 1867. The first two acts were
short-lived and the third was re-
pealed after a trial Of eleven years.