Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-09-15
Move to Amend
Bankruptcy Laws
BY HARDEN COLFAX.

Congress Is to be asked to put an end
to the nonstop flight of bankruptcy
administration and order alterations in
its machinery so 1t may proceed in
safety at a much lower altitude.
Having plugged up some of the holes
three years ago in an effort to protect
creditors against high-flying criminals,
the law makers this Winter will be Pc
titioned to enact amendments to save
some of the 500, 900 900 which 1t is es-
timated is the annual cost Of operating
the law.
The heavy cost Of administering
bankrupt estates is an indirect tax upon
business that is distributed among the
consumers OF the country, as all such
burdens must be borne ultimately. The
problem. therefore. is one Of general con-
Germ rather than a more or less abstract
case interesting only to manufacturers
and wholesale and retail merchants.
Scandals arising in bankruptcy cases
In New York last Winter have served to
focus the attention of bench and bar,
commerce and industry, on phases of
the whole problem. The three bar as
sociations of Greater New York engaged
Col. William j. Donovan, formerly as
sistant to the Attorney General. to con-
duct an inquiry Of broad scope in the
Federal Court there. Most of the testi-
mony has dealt with suggestions for
simplification Of administration rather
than with the huge frauds committed
under the bankruptcy act by CONNER
cial criminals, q matter so serious in
itself that the National Association of
Credit Men is expanding hundreds of
thousands Of dollars, subscribed by its
members, in o special drive against
illegal practices.
-
Appearing at this inquiry in New
York last week, Charles II. futile,
United States district attorney for the
southern district Of New York, who has
blazed the way for the prosecution of
bankruptcy buccaneers and has given
close study to the situation for several
years, presented his view that the three
fundamental principles underlying the
Federal bankruptcy act have been
broken down. These are administra-
ton OF bankruptcy estates by the court.
reliance upon active participation by
creditors in liquidation Of the estate
and separate administration for each
estate, Administration, he believes, is
essentially not a judicial function, but
one Tor an executive branch of govern
ment; many creditors are reluctant to
SEND good money after bad and hence
take little interest in foundations or
pass their claims to an attorney: and,
as to the third point, the district attor-
ney feels that It is costly and wasteful
to have each bankrupt estate bear full
overhead.
What various organizations or credit
men, trade associations and bar as
sociations will ask Congress to do with
Il bankruptcy act, without attempt
ing to define details, or to discriminate
among conflicts Of interests which will
rise, viii include these points:
!. Provisions for uniformity Of prac-
tice in all Federal jurisdictions.
2. Establishment of simplified ma
chinery Of administration with a single
court representative in control instead
of costly multiplicity of receivers.
trustees appraisers, custodians, etc,
this single agent to be on salary
basis, preferably
3. All bankrupt estates to be handled
by the same person in any single juris-
diction.
4. General administrative provisions
which will view bankruptcy as a busi-
ness rather than legal problem: with
the suggestion to come from some Of
those interested that the real admins.
tration be under nths Department OF