The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1899-10-12
TOO EASY TO BE GOOD
BANKRUPTCY ACT is FOUND TO BE
DEPLORABLE IN CERTAIN
RESPECTS
REPORT OF REFEREE DORIAN

REPORT OF REFEREE DORIAN
! The Record of His District Shows
That 100000 In Liabilities
Have Been Wiped Out, and the
Creditors Only Received $4,000
OF This Amount $4,000 Was
Paid by One Man.
In accordance with the requirements
of the new bankruptcy act and the reg
u!ations Of the department Of justice,
Michael Doran Jr., referee in bankruptcy
FOR Ramsey county, yesterday submitted
his official report concerning bankruptcy
matters conducted before him during the
six months ending Sept. 80, 1899. Ac-
| cording to his report there have been 1O7
petitions filed within the referee district
of Ramsey during that time, all Of
which have been voluntary, being cases
where the bankrupts themselves have
began proceedings, as opposed to volun-
tary, where the creditors take the in
itiative. OF these 107 cases. seventy-five
date reference, while the remainder have
been presided over in his absence by H.
T. Kyle, of Faribault Mimi, the other
referee for the third division of Mime
sofa.
In the cases conducted before Referee
Doran the total assets, as scheduled,
amount TO $249, 63454 and the total liza
bilities to 1920, 1926 With the assets and
liabilities in the cases conducted before
Referee Kyle added, the schedul d as
sets would approximate $275, Goo and the
| liabilities S.200, 900 But the liabilities
as contrasted with the assets are the
only figures that represent anything real
and indisputable. Bankrupts seldom
fail to schedule them with detailed ac-
curacy. But the assets are mainly WIS.,
ionary, as far as the creditors are con-
cerned. AS scheduled, they appear, at
times, most promising and as such APP
pear in the daily reports. But investi-
cation, some conversation with the bank
rupt, or the work of subsequent appraise-
ment, generally develop that tie sched-
uled assets are either exempt, of no
benefit in consequence to any one, eX-
cept the bankrupt or If real estate in
numbered beyond all hope of equity; or,
If promissory notes or other evidences
of indebtedness, beyond the hopes of the
bankrupt, the creditors and all laws,
However, the report requires referees to
schedule assets of every nature, and as
there seems to be a tendency to enter
real estate at boom prices and worth
less accounts and other evidences of
debt at their face value, the assets make
a very creditable showing as compared
with the liabilities.
AS a matter. of fact, out Of these 107
cases, the actual amount from which I'M
secured creditors received any benefits
wouId not reach $4,000. The showing
made by one estate, alone, a lasting credit
to the integrity of the bankrupt himself,
is responsible for four-fifths of this
marked contrast. That estate 'dey eloped
$4,000 liquidated assets, satisfied the Sc
cured creditors completely, and paid 40
Fer cent to the general creditors. But
this was a notable exception, and more
of q credit to the Individual than the
fault of the law.
The average cost of conducting these 107
cases approXlmates SIS, but here, again,
the estates which develop assets, con-
tribute most literally to this average.
In cases where chance finds some assets,
the estate is obliged to look after the
attorney charges for the bankrupt and
the trustee, and every possible expense
growing out of the bankruptcy proceed
irgs while in cases where there are no
assets, the expense to be borne by the
bankrupt seldom reaches $40 outside his
attorneys fee, and is the general average,
unaided by glowing exceptions.
1.-THE object Of former bankruptcy
laws Mr.. Doran says, Seemed to be the
relief of tradesmen, and the more sub
stantial class, on fairly good terms with
their creditors. The creditors were in a
measure able to dictate terms and pos
sessed a few rights. The effect of the
present law seems to extend the relief to
the more unsubstantial, on about what
ever terms they seem disposed when they
have comfortable salary to sustain
them, ana no assets to embarrass them,
and generous exemption laws to keep
them going. The provisions of the law
allow proceedings to be conducted so
cheap!y, and the exemption laws are SO
benign, that salaried people, owing few
hundred dollars of purely personal &C
counts, possessing exempt property, quite
equal to their obligations, worth infinitely
more in their salaried position than their
debts, find comfort in the law.
THE people affected by this class are not
the large business houses, but the small
retailers, who can i'll afford the loss, or
must as an alternative, endure some in
convenience or sacrifice to surmount it.
Nearly one-half of the petitioners are of
that class. They have good salaried po-
sitions; they possess exemption equal to
their debts, and yet they schedule their
personal obligations with an Indifference
and regularity that is simply cruel.
Three instances have come under my no
tice where the exemptions have exceeded
the liabilities; in nearly dozen have they
just fallen short. There is no gainsaying
that such an operation of the law is de-
plorable, and the wisdom of amendment
remains with our representatives in the
next congress.
1.-THE act has its simplicity of procedure
to recommend it. Within this past year
230 petitions have been filed, involving
more or less questions of Interpretation.
In none of these cases has there been a
serious hitch in the proceedings or the
necessity of an appeal from the holdings
of the referee. Such record is a grave
menace to litigation and of little assist
ance TO the development of the law, but
is the best commentary / have to offer
upon its merits