Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-11-21
BANKRUPTCY CURES
SOUGHT IN SURVEY
Department of Commerce
Aiding in Effort to Reduce
Insolvencies.
BY LOUIS Z. VAN NORMAN.


Surveys for the purpose OF ''isolat-
Ing the germ Of bankruptcy" indicat-
ing areas Of infection and prescribing
antidotes for business failures, are now
well under way In three cities Of the
country, the Department Of Commerce
announces today.
The series Of surveys being conducted
By the Merchandising Research Dr.
vision Of the department began last
Spring, In Newark, N. J. Later, Boston
was subjected to investigation. The
announcement made today indicates
that the principal activities at present
are centering in Boston and Chicago,
with preliminary work already begun
in st. Louis In connection with the
drug survey OF that city.
Many Cases Analysed.
More than one thousand cases have
already been analyzed and hundreds
more will be taken up before q report
Is compiled. However, it Is believed
that these four cities, Newark, Boston,
Chicago and st. Louis, will provide ex-
trial and financial centers 20 that In
ferences may be made and conclusions
drawn ~ to conditions through the
country.
Representatives Of the University of
Chicago and the Bureau Of Foreign and
Domestic Commerce are cooperating
In studying the common cause of fail
ure IN the Chicago area. More than
], 100 bankrupts have volunteered to tell
their experience to research men of
the two organizations. The investiga-
tors interviewed debtors Of every type,
approaching them immediately after
they had filed petitions at the bank
ruptcy courts. Data was also obtained
from creditors to serve - q check in
analyzing the results.
The questions asked concern the his
tory Of the bankrupt, his interests out
side his business ct the time Of failure,
the reason for entering the particular
enterprise and the extent Of his,
financial equipment when he became
insolyent. This information includes
assistance received from wholesalers,
1obbeFs and manufacturers who started
rowed from banks, loan companies, in
suranee policies and friends or
In Boston the Department Of Com
merce investigators are working in Coz
operation with the Institute Of Human
Relations Of the Law School Of Yale
University. To date e10 cases of
failure have been studied In this area,
Seeking Causes 81 Bankruptcy.
Newark reported more than 600
bankrupts. The report Of this, study
10 now being printed.
These studies In the field Of business
failures are part OF the longtime pro-
gram Of the Department of Commerce
to locate causes Of bankruptcies.
When 1t Is remembered that, from 1905
TO 1881, the number Of these business
failures In the United states have risen
from less than IL 900 cases to more than
sc, 900 the value Of such study is evil
dent. At the present time statistics
Of the Department Of Justice indicate
that there Is an annual loss Of nearly
billion dollars In Bankruptcies, most
OF which could be prevented II credi-
tors themselves were less lax In ex-
tending credit. During the past i've
years more than $4,000, 00O, 900 have
been lost in bankruptcy, and careful
calculations indicate that only little
over z per cent Of this amount Is SAL
Yaged for the creditors.
A bill for q new national bankruptcy
law viii be introduced In Congress when
1t meets next month.
(ConxFieht. Ioail