Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1901-10-31
PREFERENCES AND BANKRUPTCY LAW

Harold Remington in Nov, Forum.]
In the case of recent estate. where
the assets distributed to creditors
amounted $4,000, and each creditor re-
ceived forty per cent of his claim, the
bankrupt's attorney openly stated that
had 1t not been for the prohibitions of
the bankruptcy act. not less than $40,-
900 or $4,000 of this sum would have
been given to Il few preferred creditors,
leaving a balance that would not have
sufficed to pay three or four per cent to
the remainder. From the point of view
OF public policy and the good of the
commercial community at large, we
may ask which was better that few
creditors should be paid In full and the
remaining three or four hundred receive
a mere ptttance. or that all the credit
ors alike should receive nearly the half
of their respective claims, and none be
paid in full? A law that produces the
latter result and prevents the former
has, at any rate, tendency to distrib-
ute the effects of financial failure. and
thereby to steady trade. Often. in my
own administration OF bankruptcy es-
tates, / found one or another creditor
pertinently asking. Is such and such a
creditor. who has been getting pay
ments right along on his debt up to the
eve of bankruptcy, going to share for
his unpaid balance the same rate of
dividend that get who have received
nothing? Thus, we see that there is an
other side to the preference question,
and that the advocates of an amends
ment to the act allowing creditors to
keep their innocent" preferences and
yet share with those who have re-
ceived nothing have not all the argu-
ments upon their side.
Indeed. it is my conviction that
wherever business man is found adj
vocating such an amendment, 1t will be
discovered either that he has not looked
at both sides OF the question or that he
belongs to one of the great mercantile
houses that used to thrive upon pref
erences. But 1t must not be forgotten
that the bankruptcy act was not ex-
pected to please those who thrive best
under regime of preferences. The
great body of merchants and business
men. those who have no organization
and who cannot afford to send eloquent
advocates to talk before congressional
committees, would by such a change
come to find the bankruptcy law no
longer the strong, just arm of the big
protecting brother that they now find
1t. Such change would throw the door
wide open again for the temperance
OF all the old-time pestiferous prefer
ences. 1t would, in addition, make an
unavoidable rule for the practical, swift
and economical administration of bank
rupt estates. For then every creditor
who had received preference would
insist en- lawsuit to determine wheth-
er or not he took the preference under
circumstances indicating knowledge OF
the debtors condition; and the result
would. in great measure, be lottery-a
premium upon falsehood, no matter how
able and impartial the court might be.
and an unbearable expense to bankrupt
estates. swapping them in litigation
over intentions and reasonable grounds
for belief. We should. indeed, strive to
keep as far as possible from questions
of intent in commercial law; their in
PRODUCTION always produces uncer-
tainty and litigation. Commercial law
is not concerned with punishment. AS