Year: 1874

The recent action Of the Executive Committee


OF the Chicago Clearing House Association haV-


ing brought in question the solvency OF the


Me,chants' National Bank Of this city, it raises


also another question as to who ia responsible


for the 9250,0 Of bankrupt funds deposited


there, il Case the bank canuot pay in full. 1t
appears Elat while the Circuit and District
Courts OF this district have Of their own mo-
ton established monopoly Of the custody Of
bankrupt funds IN one or two banks in this city,
the banks thus designated are not required to
give any bond or other special security such
ing any other important public or trust
iunds. In erery other step Of proceedings
in bankruptcy, where individuals or corporations
exercise authority in the disposal Of the funds Of
q bankrupt estate, they are required to give
satisfactory bonds for the security Of the money
while under their control. At the request Of
any creditor, the Coult is required by the Bank
rupt law to direct that tho Assignee shall give
signs the checks of the Assignee ls required to
give bonds and even 8 suitor appealing from 3
decison Of the District Court is required to give
bonds. Thus III every case, except the last and
most important one Of holding the
funds Of tht. bankrupt pending their
distribution to the creditors, security required
OF every one having anything to do With them
1t will probably bt' argued that, in the designation
Of these special Repositories for bankrupt funds,
the Court becomts morally responsible for their
solyeucy. But we fail to see how this adds to
the security OF the creditors, since no pecuniary
responsibility gons with it, and, even it it were
otherwise, the Judge Is not usually man Of
sufficient property to stand in the position OF
bondsman for the bank he designates. But thele
is nothing in the Bankrupt law which compels
the Court to acce pt any responsibility, and GER
teinly nothing which warrants the Court i'll maxi
ing monopoly ct the keeping Of bankrupt funds
by designating only one or two banks, as is the
case in this city. There il rule Of the Supreme
Court Of the United States Which provides that
the Court mag designate "certain National
Banks " in the district aa Repositories OF bank
1u0Q9. DIV k49 1ulE lOES AOt say AUH AnaA43s
aud is open to the construction that separate
bank may be designated for every bankrupt
estate. In equity, the creditors should bo en-
titled to the samp choice in the SELECTION Of the
place where the mondy is to be deposited
rs they are in the choice Of An Assignee
II the Court Assumes to relieve the Assignee Of
responsibility in this most important ac5 Of his
Office, the object Of the creditors in selecting
him may be to 8 great extent defeated. The
authority given the Courts in the Bankrupt Inv
and in the rulings of the Supreme Court, to
appoint one or more banks as repositories Of
bankrupt funda is only permisslve, not compul-
SOFT. 1t is pkin proposition, however, that il
the Courts are to assume the risk of the safe
keeping Of bankrupt funds on behalf OF the
General Government, OF which they are a pars,
the money should te deposited in the United
States Treasury. If this is not done, let the
creditors, WHO are the. parties in interest, and
who really own themoney realized from bankrupt
estates, take the riak and responsibility them
selves.