Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-02-27
BANKRUPTCY CURB
URGED BY TEACHER
Solicitor General Calls Atten-
ton to Growing List
of lnSoIvencieS.
BY EDWARD C. STONE.


Howard Wolfe, cashier of the Philadel-
phia National Bank, OF the highlights
developed at the two-day session, the
second Central States Bank Manage
ment Conference adjourned at the Will
lard Hotel shortly after noon today
About LOO bankers were present at
the closing session.
Much more rigid legislation to curb
bankruptcies was urged by Thomas D.
Thatcher Solicitor General of the
United States, who told the conference
that the present statutes facilitate reck-
lessness, gambling and fraud. In his
address late yesterday, he reported on
the bankruptcy survey undertaken last
July at President Hoover's suggestion,
some of his findings being decidedly
startling.
About 81 ,000, 100000 was lost last year
due to bankruptcies. A QUESTIONABLE
sent out by the American Bankers As
ISOLATION showed that the losses in six
years following 1920 quadrupled. In
the last five years the number of mo
asset cases has more than quadrupled,
and the average settlement is only 3
cents on the dollar. The Solicitor Gen
eral continued:
Many Bankrupt Wage-Earners.
1.-THE number {: wage learners in
bankruptcy has steadily risen from
about % per cent of the total NUMBER
of bankrupts in 1910 to nearly one-haH
in the last fiscal year. In these wage
Garner cases the only real assets are
represented by the earning power OF
the debtors. but under the bankruptcy
law the creditors cannot reach earnings
or any property acquired after pank-
ruptcy. 1t is not surprising, therefore
that in practically all OF the wage
Garner bankruptcies there Is notnlIle
Tn
closed last year in "a widely assorted
districts. the assets realized in over 20
per cent of the wage-earner cases
amounted either to nothing or to less
than 500. Yet in these cases the oeptS
averaged over S4, 400 per case:
I'm one of the largest districts Wnlch
we have recently studied the wage
Garner debts per case averaged oEei
S11 600. and we have found scattered
+hrouoho,1t the country a number OF
cases in which the dabts-unsecureo
debts of wage-earners-ran up into tne
hundreds of thousands with no assets
"The losses in these cases fall prin-
cipally on retailers-the butcher, tIte
baker. the doctor, the department. sCote,
the grocer and SO on. Wage-earIlel
hankrIInts are not by any means con-
fined to a single class such as Gay
laborers On the contrary the most va
ried kinds of occupation are preSenUeu.
Hero are a few samples selected at
random from the referees reports:
"A railroad switchman, polceniah'
a stoneworker. carpenter a garage
man. a fireman, a radio salesman d
H.otcbnnan the manager of a restau-
rant a barber the. foreman OF ma
chine plant, a janitor, the principal Oh
a school. highway commissioner,
bookkeeper, the mail clerk OF hoteI ana
so on.
Discharges Freely Granted.
"Turning to the mercantile bank
runfcies. we find in the "a districts
studied that in two-thirds OF the cases
the assets bafure deductihg any ADMIN
istraticn expenses ran from Sl,oOO GOWN
to nothing. The debts averaged over
$4,000 per case.
an the face of the mounting losses
which have described one mignI ha.e
expected to find that discharges IN
bankruptcy would be less readily
granted, and that debtors who came
into bankruptcy with little or no assets
left and with large debts would not gen
orally be permitted to go scot-tree. Inc
contrary is the case. From 1898 10 l9Oo
(the only years for which discharge ng-
ures were available prior to our. stud
ies) over SO per cent OF the bankrupts
who applied for a discharge were
Granted this relief. In the two and
one-half years ending March l, 1879,
figures furnished to us by the clerks
covering the entire country show that
about SO per cent Of all bankrupts VINO
applied were given discharge.
was placed by the solicitor general upon
loose and careless credit systems, in
stallment selling, and "a desire to ex-
pand sales at any cost.
Millions Lost to Business.
ssThere Is evidence also" he said,
shat at least some installment sellers
of luxuries stimulate persons 10 buy be-
yond their means, and collect ahead OF
other creditors because of superior COL
lection methods, so that when the buy
ers end in bankruptcy, they owe debts
for the luXuries of life and have moth
ing on hand except heavily mortgaged
Injuries"
BY far the majority Of bank-upts, he
continued, now go scotfree, while losses
running INTO the billions are absorbed
by business and professional men, due
TO a failure Of the law to provide thor
ough examination of the affairs of all
bankruptS.
In reply to a question by the chair
man, Robert v. Fleming Mr.. Thatcher
stated that the bankruptcy laws are
IIlDiC 4tiilElAL IA l4AAo NOAlAbAy bAAoAA
elsewhere. England remedied defects
in its bankruptcy laws so years
ago. which are now troubling the United
States.
Stephenson Urges Investment Care.
In his address before the convention,
Rome c. Stephenson, president Of the
American Bankers Association. urged
greater and greater caution on the
part of banks in the selection Of in
yeStments. Investing is becoming a
greater and greater science every year,
making more research and study con-
stantly necessary.
President Stephenson stressed this
point as particularly vital to banks doing
big trust business. He spoke on the
subject, Our New Responsibilities" and
gave an intensely interesting analysis of
many other present-day problems which
face the banking profession. Much of
his address was Of a highly technical
nature OF interest only 70 fnanciers.
John J. Driscoll, jr., Of Philadelphia
presented a splendid paper on "Analy-
sis Essential to Profitable Banking" He
went into most careful details regard
ing the ways in which banks may make
money, may easily lose money and the
different moves which can be made
that will save large sums over a period
of years. He showed how many banks
lose profits that might just as well come
into their tills and stay there.
Poole Discusses Loan Rates.
1.-THE Selling Price Of Bank Credit in
Relation TO Its Quality was discussed
In a most able manner by John Poole,
president Of the Federal American Bank
of this city and a member of the Fed
eral Reserve Advisory Board. Mr.. Poole
declared that friend and profit must
be made out Of every bank transaction
The bank cannot get along without
friends or without profits