The Providence news. (Providence [R.I.]) 1891-1906, 1906-02-08
REFEREE SPOKE
To BANK CLERKS
Explained Federal Bankruptcy
Law In Detail.
THIS IS A COMMERCIAL AGE
No Law Can Be Enacted Which viii Be
Perfect Or Make Dishonest
Men Honest
THIS is A COMMERCIAL AGE

Chester w Barrows, referee in bank
ruptcy. addressed the Providence chapter.
American Institute OF Bank Clerks last
night at a meeting OF the chapter held IN
Palestine hall. His subject was THE Ma
tlonal Bankruptcy Law Mr.. Barrows
gave a detailed account OF the commercial
necessities I'm the relations between deb
tors and creditors which made such law
necessary, and explained It's workings In
very comprehensive manner.
in opening he called attention to the
fact that this Is a commercial age and
that the United States IL commercial
nation. Credit plays" he said. "and
must continue to play a large part In all
our business transactions. The extent OF
credit is bounded only by the limits ot
this country. and often not even by that.
There will always oe failures as long as
credit Is given, and there must be some
system or lack OF system for the settle
ment OF our failures.
No law can be enacted which will be
perfect at the outset or which will make
a dishonest man honest. The most that
any system can do is TO provide proper
safeguards for all interested parties There
are certain fundamental principles on
which any law for adjusting. business
failures must be built.
SQUARE DEAL.
First. there must be a square deal for
both creditors and debtors. To the credi-
tors must be given all assets and the
opportunity of investigating what mas
become OF the assets and 10 the debtors
protection against undue bounding on the
part OF the creditors.
Second. the law must be backed by n
power strong enough 10 enforce the square
deal
Third, the law must be uniform in OPP
Grafton throughout the territory covered
by the business relations OF the parties.
h-tA administrative officer
must be responsible party and answer
able TO interested. without long delay or
litigation.
Fifth. there must be publicity. All
persons interested have right 10 have
access TO the record OF all the business
transactions OF the debtor who has failed.
sixth. there must be maximum re-
turn TO the creditors at a minimum ex-
pense.
Seventh. the laws should be perma-
nent and not constantly changing, so that
the business community can understand
what are its rights and remedies.
Eighth. the law should provide a re-
lease for the unfortunate but honest deb
tor
Bearing these fundamental principles
to the needs OF the United States today.
There are but three possible ways OF adj
tusting insolvent estates. The first Is by
compromise the second by a common law
assignment and the third By a system
OF bankruptcy controlled either by the
state or by the United States.
"Of these three methods the compro-
mise Is distinctly the best II II can be
operated Its difficulty lies In the fact
that there is most always sure TO be some
creditors who expect to get more than
their fair share or who from reasons OF
i'll will, refuse to release the debtors A
compromise without a release from all
creditors is worthless The experiences
OF lawyers who have tried 10 carry
through compromises will show that sue
cess is confined almost entirely TO cases
where the creditors are few and tho
amounts involved are small. AS prac-
tical working system that OF direct COM
promise must be discarded.
COMMON LAW SYSTEM.
THE common law system is one which
has been In vogue from the earliest time.
1t consists OF the transfer of the debtor $
property to some person selected by him
self 10 hold in trust for the beneht OF
creditors IL may be for the benefit of the
creditors equally or for the benefit OF
certain creditors, to the exclusion OF GER
tain others.
I'm the United States prior TO 1898, when
the national bankruptcy went INTO
effect there were 80 states In which as
signments could be made giving prfer-
ence 10 certain creditors TO the exclusion
OF certain others.
I'm the United States prior to 1893, when
the national bankruptcy law went into
effect there were 30 states in which as
signmcnts could be made giving prefer
ence 10 certain creditors. and these prefer
ences varied from proper ONES, like the
claims OF workmen, 10 improper ones.
such as arbitrary selections of the order
in which the creditors should be paid.
In the common law assignment the as
sisnee's responsibilities are only those OF
any trustee, and he is answerable only
through a bill in equity, which Is both an
exnensive and tedious method"
The speaker gave a history OF the ma
,ional bankruptcy law and explained thor
oughly its workings. AZ the END OF his
address be was rendered a unanimous vote
OF thanks. The address was followed by
entertainment furnished by William A.