Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1903-02-06
BANKRUPTCY LAW is CHANGED.

4 The president, late Thursday after
noon, signed bill which amends thu
present bankruptcy law in many i'm
portant particulars. Ever since the
passage of the original act there ha:
been a great deal of complaint on tn:
part of mercantile interests that tnt
j law was used merely as refuge fol
/ dead beats, who sought to avoid pay
ment of their bills, and many volum,
nous petition has been forwarded tt
congressman demanding the total re-
neal of the law. Its original purpose
was to enable men who had failed II
business to wipe off the slate and com
mence anew, which was unquestionabla
a wise provision, but when unscrupu-
lous merchants take advantage OF I
and have their relatives file claims t.
beat the legitimate creditors, ana wher
4 salaried men living ahead of their In
come go into bankruptcy for the sois
| purpose of beating their store bills, 1t Is
=
eral dislike the law. Without bank
ruptcy act, successful merchants en-
| ployed credit men of rare judgment
and often carried weak custome,
along in business by controlling his
purchases who would otherwise have
! ruined himself. Under the bankruptcy
law no establishment can afford to dc
this, because reckless competitor can
come in any time, overload the weak
customer with goods. throw him into
bankruptcy, and the cautious concern
| that could have saved him, is compelled
to prorate its losses with all other
creditors. However, as general clear
! ing up and rejuvenating process, the
bankruptcy act Is favored and congress
/ has preferred to amend it rather than
repeal 1t.
The first change made is of great re-
| lief to jobbing houses whose customers
carry an open account. Under the eN-
! listing law creditors who had received
payments from q person who had soon
afterward been declared bankrupt,
could not have other claims passed up
on without surrendering the amount
thus paid. This provision is modified
so as to allow the creditor to retain the
money received unless the previous
| payment was fraudulent. Heretofore ii
has often happened that jobbing
house has been compelled to return to
the bankrupt customers estate all the
money he had paid on his account since
the first order, and file the whole claim
before it could recover anything on the
balance In many cases the loss of this
turning the money already received and
taking pot-luck chances upon divi-
dend with all creditors. With the
change in the law the unpaid balance
on an open account becomes claim Of
itself.
Another amendment provides four OBJ
jections to discharge intended 10 pre-
vent persons from going thru bank
ruptcy, the most important of which
are the giving of a false mercantile
statement and the making of fraud
ulent transfer of property. The bill al
so provides that ii shall be an objection
| to a discharge If voluntary bankrupt
seeks to go thru bankruptcy more than
once in six years. This is intended TO
| shut out the chronics and frauds ana
| is an improvement, altho not so impor-
| tant as others because of the difficulty
in proving the fraudulency of the lists.
| A very important change remedies a
conflict between the federal bankruptcy
| law and state laws bearing upon bust
ness failures by voluntary assignments
An amendment provides that the APP
| pointment of receiver for a corpora
| ton which is insolvent is an act OF
/ bankruptcy, emitting the creditors to
| choose their own trustee. Often there
/ has been trouble and litigation as the
result of the two laws, as appeared in
| the case of the Rhoades- Carmean fail
ure in Marshalltown. There the credit
ors agreed upon receiver, to whom the
property was voluntarily assigned I'M
| der the state law for the benefit of the
] creditors. A lawyer seeking litigation
and fees gathered a few minor credit
ors together and forced the concern into
bankruptcy under the federal statutes
and the trustee had to be selected agai,
in a referees court. The amended Law
virtually makes the state and fedora
law one and the same thing, which Wi
end all conflict and much litigation
Another change then gives the fedora
court concurrent jurisdiction of suits t.
recover property which has been fraud
ulently earned. These changes are al
of great Importance to business men
and remove many of the objections 4
the national bankruptcy act.
IOWA OPINIONS AND NOTES.
OF Congressman Rumple's death from
/ cancer, the Washington Press says
The noble, genial, whole-souled fellow
made a brave long fight but the hide.
Gus dragon ate him up. He was one O
the best men we ever knew"