New-York tribune., 1900-04-16
THE BANKRUPTCY LAW.
FEATURES WHICH ARE REGARDED AS
NEEDING AMENDMENT
THOSE WHO HAVE WATCHED THE MEAS
URE'S WORKINGS GENERALLY FAVOR
THE RAY BILL TO REMEDY
EXISTING DEFECTS.

rec sived the Executive approval July 1898, has
now been in operation for nearly two years,
period long enough enable its merits to be fairly
tested and its chief defects brought out. That 1t
had defects was not questioned from the beginning
for the act was a compromise between the original
Senate bill a measure primarily designed for the
benefit the debtor class. and the House bill. out
lining system under which the rights of creditors
should be well guarded those Of debtors; and
no compromise measure is ideal In commenting
upon the bill the occasion of the Senates adop-
of the report in June, 1898. Senator
Hoar, who had contended long and earnestly for
National bankruptcy legislation. said;
The bin with many imperfeetons. is submitted to
the business men Of the country It will enable
from 10000 100000 bankrupts to get on their feet
again Ii will enable manufacturers and merchants
TO get fair division of their debtors property and
will prevent a great deal OF fraud embezzement
and wasteful dealing with property.
But the law has been found to contain dangerous
possibilities of fraud and the fact that dishonest
debtors have in many availed themselves OF
these possibilities yet have obtained their dis
charges in bankruptcy has led TO the growth of
general feeling among the business classes of the
country that the law should be amended so as to
provide much effective safeguards than exist
at present against fraud.
The aggregate amount Of indebtedness wiped out
through the granting of discharges in bankruptcy
since the present law has been in operation has
been enormous. Judge Brown OF the United States
District in this city recently said that that
court alone had In a than year granted
discharges representing about s70.OO0O00 Of debts.
and the total for the county during the same period
must have been much more than double that
amount 1t must be remembered that over
whelmingy large percentage Of this cancellation or
obligations represents old debts running back ten
or twenty years and beyond the possibility
of payment: the debts Of ''old dead beats" one
well known bank officer put II. II is also declared
that in the of bankruptcies occurring since the
enactment of the present National law the proba-
bility of bank business house sustaining
material losses varies inversey with the efficiency
of its credit department as rule
COURT FORCED TO GIVE DISCHARGE.
Nevertheless it is fact that under the law
Il now stands fraud IS practically no bar to bank
Iupt obtaining his discharge and many instances
have occurred in which fraud has been practised
and yet the court has, under the law, felt itself
obliged to grant the bankrupt his discharge
As James l. Bishop said. IN his recent address
on the Bankruptcy law before the Brooklyn In
stitute:
ed when properly applied for in due time unless the
his true financial condition and in contemplation
of bankruptcy. destroyed. concealed or failed to
keep books of account or records from which his
true condition might be ascertaned or has com
provided by the statute These offences are two
knowingly and fraudulently concealing from his
making Of false oath or account in or in relation
TO he fay T fng IN eeab IS THAT two of these
grounds Of objection TO the length of requiring
which is created by the statute and which must
Moro 9t a ag each So OF e f b
the language employed, can be committed only
be up concealment of assets 10 prevent
discharge unless it was committed by the debtor
while a bankrupt. An out-and-out transfer by the
debtor. however frauduiently made, before that
fl mas been held
Again. Mr.. Bishop says:
The statute excerpts certain debts from the opera
tion Of discharge e. and & it exceps judgments OBJ
by false pretences or false tions; but
ment or were contracted while the bankrupt was
acting as an officer or in fduciary capacity. they
Now, # often happens that the debtors the
themselves or from deliberate fraud are guilty Of
obtaining goods bg falls false nee The creditor
ours. and since the debtor may apply for his dis
sdsudicaon. the debt however @ crminay incurred t
may be discharged
SAFEGUARDS AGAINST FRAUD.
While # is felt that there various features in
which the National Bankruptcy law might be
amended in the interests Of justice the advocates
of amendment lay by far the stress upon the
necessity OF erecting additional safeguards against
commission of fraud by the bankrupt or in
tending bankrupt Here is one Of many exasper-
atng instances OF successful resort to fraud the
part a debtor. the incident being told by bank
officer of this city:
works I me ss sxs GG SS s n o Of of tho hSw ss os
man who opened a business in the neighborhood of
and t who bought goods to large g amount
when he referred the people from whom he bought
upon his credit After selling most Of the g goods
he withdrew his $4,000 from the bank. He was
sued by the manufacturers who supplied him, and
then he ran TO the protection Of the bankruptcy
When he asked in what had become of
the $500 he said ne placed the package of money
forgett,ng to pick it up when he alghted The
charge but the 0qs IS tH ea gVe that h1S Mae
plain case Of defrauding creditors.
Some Of the who believe that the National
act works injustice to creditors earnest In
their opposition 10 favor the abolition of the
law Their view is expressed by Edwin I4angdon,
president of the Central National Bank of this
city, who says
The results so far prove this TO be an iniouitous
bill IT appears TO put a premium dishonest
practices in business An honest but unfortunat te
debtor always obtain Indulgence and compro-
mise his debts: therefore there is no necessity for
the Bankrupt law.
The great majority those interested in the sub
5ect however, of opinion that the remedy for
the unquestioned abuses existent lies IN
amendment, rather than repeal the statute
A BANKERS VIEW.
John A Hiltner, vice president of the National
Shoe and Leather Bank expressed the view that
IL was necessary in the interest of the mercantile
world that some notifications should be imme-
diately made In the Bankruptcy law
The law, he said, -'as IT present offers
many loopholes for fraudulent practices Judg-
ments Of the courts practically worthless II q
man shield himself behind law which per
mits him TO swear that he has assets and then
give him discharge of his debts. 1t really allows
TO buy goods credit and then when paw
nent is demanded, gives him release from his obli-
cation upon practically his own unsupported state
TO his financial condition This Bank
ruptcy law hits the mercantile business harder than
IL does the banks but for all that am Of the opin-
ion that It should be radically modified Its pro-
visions should also be made clearer. From the de-