Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1898-07-02
The New Bankruptcy Law.

After a long and bitter struggle
which was ended only when the spirit
of compromise was literally exercised.
the bankruptcy bill has passed the
House, this week, and gone to Pres-
dent Mckinley for his signature. BY
the enactment of this law the various
and conflicting state laws on bank
ruptcy will be done away with, and a
single law, aiming at honesty and
uniformity, will prevail throughout the
land. The constitution especially
authorizes national bankruptcy law,
yet for less than 20 years in our ma
tional existence have such statutes
means a perfect creation, and I'M
qualified success in its operation cam
not be expected of it. Compromises
have been numerous, as there We're
many conflicting elements and interests
in Congress to be reckoned with. yet
the new law must be regarded as
positive triumph for the strictest in
tesrity in American commerce and
banking, which has made so long ana
so able a fight for the right.
The chief difficulty hitherto has been
a failure to agree upon the most vital
sion for involuntary bankruptcy. The
stubborn opposition to this wholesome
protection of creditors came chiefly
from sections of the country which buy
largely on credit and sell largely for
cash. The representatives, of these
sec ;ions We're supported by forces
which sought to maintain those dis
honest local systems which have per-
mitted preferences in bankruptcy to near
relatives or made preferred claims OF
those contracted within the state. The
rank injustice to the general creditors
involved in such provisions was. Of
course, manifest in the strictest bust
ness Integrity, and they have served,
moreover, TO greatly hamper the eX-
tension of interstate dealings on credit.
The aim has been to remedy this and
other points in existing laws which
gave an advantage to dishonesty; to
protect debtor and creditor equally; to
supply Federal statute which SHOULD
encourage trade, which is largely
transacted on a credit basis, by remov-
ing, so far as possible, the inconsis-
tencies and instability surrounding tbs
conflicting state laws.
The fight now closed began actively
ir the Fifty-third Congress, and vari-
GUS bills We're fought to death. In its
latest phase the contest included the
Nelson bill in the Senate-which denied
to creditors the privilege of institutiny
proceedings for involuntary bank
ruptCy-and the Torrey-IIenderson
combination measure in the House.
which insisted upon this feature, while
providing against the possibility of
malicious persecution. Continued in
ability to agree led to conference
committee, and it is the compromise
report of this committee which has now
been accepted by both houses.
To insure the passage of the bill with
the involuntary feature retained
numerous concessions We're made to the
Southern and far Western men, who
fought that feature on the plea that it
was merely making the Federal courts
debt-collecting agency. Proceedings
in involuntary proceedings may now De
Instituted as follows: Where debtor
has transferred his property with in
tent to defraud. Where he has trans
ferred it to certain creditors with the
intent of making them preferred
Where he has given preference
through legal proceedings. Where n
has made a voluntary assignment for
the benefit Of his creditors generally
Where he admits in writing that he is
Il bankrupt.
persecution, inasmuch as he cannot be
made an involuntary bankrupt on
failure To meet his obligations, so long
as his property, on a fair valuation, IS
shown To be sufficient on realization. to
pay his debts. This provision is pecu-
larry essential in times of general
financial stress. when so many men be-
come temporarily embarrassed. An
other benefit is the creation of system
whereby insolvont estates Will not b.
exhausted By legal costs, to the detri-
ment of creditors. Criminal punish
ment of bankrupt, too, is reduced 70
perjury and cmbezzlement Of property,
and farmers and Wage-earners are
| made exempt from involuntary pro-
ceedings