Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1911-09-20
DEMANDS REPEAL
Of FEDERAL LAW
ON BANK RUPTCY
Frank Walsh Declares II Has
Long 0utlived It's Use-
fulness.
Is NOW MERELY CLOAK
FOR MASS OF ABUSES
Its Provisions Taken Advan-
tage of by ScOundrels,"
He Asserts.

Encouraged by the vigorous and sue
cessful fight which the STAR made
against the granting of exorbitant fees
demanded by the trustee and his at
torney in the case of the bankrupt
American Vacuum Cleaner Company.
one prominent Newark merchant
comes forward with a strong plea for
the repeal of the present Federal bank
ruptcy law.
Frank Walsh, secretary and treas
urer of Wilkinson, Gaddis & Co., de-
clares that the Federal bankruptcy
law has outlived its usefulness and Is
now merely "a cloak for a mass of
abuses.
when this law was passed" said
Mr. Walsh "it was intended to benefit
those honest bankrupts who had for
q long time been debarred from going
into business again by the old laws.
All of these men have had ample time
to avail themselves of the benefit of
this law, which at the present time is
being taken advantage of by scoun-
drels who cannot be punished. l would
no more think of endeavoring to follow
bankrupt through the mazes of the
bankruptcy law on criminal charge
than l would of flying.
Nowadays" continued Mr. Walsh.
"a merchant throws up his hands and
charges all that is owed him to profit
and loss when debtor Is forced into
bankruptcy. 1t is my regular custom
to mark such accounts in that manner,
because bitter experience has taught
me to expect nothing when debtor
goes through Federal bankruptcy pro-
ceedings. When a debtor makes an as
signment in the State courts, on the
contrary l figure on getting 30 per
cent of our claim. The Federal law
supersedes the State law, however, and
it is, or seems, always possible to throw
a man who Is trying to settle with MS
creditors into bankruptcy.
Held as Threat.
why, things have reached such
pass." exclaimed Mr.. Walsh, that
bankruptcy proceedings for debtor
are held over the merchants head as
a threat. A lawyer for the bankrupt,
for instance, comes to me and offers to
settle his clients claim for twenty
cents on the dollar. If / am not dis
posed TO make such a settlement he Is
likely to say to me: All right. Wen
throw him into bankruptcy and you
won't get cent and / know he can
do Just as he says he Will. 1t is only
as a matter of conscience that we file
our claims after debtor has been
forced into bankruptcy. So far as
practical results are concerned we
might better save the time and not
file them.
Take a case In point: A merchant
in a Jersey town owed us consider
able amount and got into difficulties.
We received a notice to the effect that
there would be a meeting of the credit
ors in the Singer building. Within the
last day or two we learned that the
merchant had been forced into bank
ruptcy. or rather that a petition in
bankruptcy had been filed against him.
/ honestly believe he would have been
able to settle at 100 cents on the dol
lar. Now, as usual, shall expect moth
ing"
Cites Recent Case.
Mr.. Walsh cited q recent case where
man failed owing Wilkinson, Gaddis
& Company more than 5000. This debt
had been acquired during the last
month the merchant was In business.
Had he made an assignment under
the State law" said Mr.. Walsh, 81
could easily have sent him to prisoo,
but as It was, a consideration of a.
criminal charge against him was out
of the question. The notice for a meet
ing of creditors signed by Referee in
Bankruptcy Adams in this particular
case which Mr. Walsh received is ILL
teresting. 1t reads:
Z" Notice is hereby given that the
trustee Of the said bankrupt has made
a final account and report showing
$3.50 in his hands liable for payment
of costs of administration, debts en-
titled to priority and dividends, and
that a meeting of the creditors of said
bankrupt will be held at the bank
ruptcy court room, Essex county, Clln-
ton and Beaver streets, in the city of
Newark, on the for the pur-
pose Of examining and passing upon
said account and declaring and direct
ing the payment of a first and final
dividend, IL any"
First and final dividend, If any,
is good and sums up the regular situ-
alton admirably" said Mr.. Walsh. II
see no relief in sight through any
measure short of the repeal of the
Federal bankruptcy law, and 1 know
a great many merchants feel just as
do about it."
/-E1nr AHT rznESATHEr nnUuOrD