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more than twice the number of civil suits of other character brought in the Federal courts during the same period. The great diversity between voluntary and involuntary cases may be attributed to the present era of business prosperity and the further fact that a large proportion of the former are cases of old insolvents against whom judgments have been kept alive in the faint hope that in some unknown way they might be paid. While, with hardly an exception, I most heartily concur in the suggested amendments to the Federal bankruptcy law as set forth in the able report of your committee, time forbids any extended discussion of the various amendments, but the position taken by the report that the involuntary features of the law need strengthening, is one that every thinking man should support. Upon this point it may not be amiss to repeat what I had occasion to present some months since to the Association of Creditmen of New York City, composed of men who, perhaps more than all others, are vitally interested in this matter, and which met with their unqualified approval.

"Any bankruptcy law, to be successful, must be just, and a system in which the interests of the debtor have been so carefully preserved and guarded, that the interests of the creditor have almost been forgotten, is not such a law as will meet the demand of the creditor class, who, after all, are the brain and brawn of the commercial world. It is they who furnish the means that give employment to the idle. They build the factories and start the machinery in motion. Accordingly they are to be considered as well as the debtors."

Let us therefore, as suggested by your committee, do all in our power to perfect the present law, and instead of aiding the dishonest debtor to defraud his creditors, let us place every possible obstacle in his way. He is entitled to no consideration at our hands and should receive none. The moment, however, the bankrupt comes into court with clean hands, and indicates a willingness to deal honestly with his creditors, then should he receive consideration in accordance with that wise and humane policy underlying a true bankruptcy law, and be

discharged from his past obligations and given an opportunity to start his business life anew.

John Morris, Jr., of Indiana:

I move as an amendment that the committee be instructed to urge upon Congress the amendments to the present bankruptcy law proposed by it, except that, for the amendment 57g suggested by the National Association of Referees in Bankruptcy, there shall be substituted the following:

57g. Creditors who have received preferences shall not participate in dividends so as to receive, by taking such preferences into consideration, a greater percentage of their claims. than other creditors of the same class.

I would like to say briefly that bankruptcy laws are framed upon the principle that equality among creditors is equity, and I believe that the present law provides the means for securing a better application of that principle than any law that we have heretofore had. This law defines a preference as being, among other things, a transfer of property by an insolvent debtor whereby one of his creditors receives a greater percentage of his claim than other creditors of the same class. It does not make a preference depend upon the knowledge or intention of either the debtor or the creditor. In this respect the law differs from all previous laws we have had upon this subject. Section 60b of the act provides that preferences may be avoided by the trustee when the creditor had reason to believe that a preference was intended to be given. This, while a wise provision, is practically of little effect. It is provided by section 57g that the claims of creditors who have received preferences shall not be allowed unless such creditors shall surrender their preferences. The object of that section is to secure an equal distribution of the bankrupt's estate; not the estate as it exists on the day of the adjudication, but the estate as it was at the time the insolvent's condition became such that he could be declared a bankrupt, which the law has fixed as any time within four months prior to the adjudication. Now, if creditors who have

received preferences shall, by taking such preferences into consideration, share equally with all other creditors in the distribution of the bankrupt's estate, the law will have accomplished its purpose. It is a little unfair that such creditors. should, in all cases, have to surrender what they have received, but if what they have received by way of preference is taken into consideration in making dividends, the law accomplishes its purpose and the reasoning in such cases as Columbus Electric Co. vs. Worden is fully sustained.

Walter S. Logan:

The

I do not think that that amendment is necessary. committee has only proposed that legislation shall be along those lines, and I think that the gentleman's amendment and the amendment proposed by the committee are along the same lines, although differing somewhat in their phraseology and effect. I do not think we are a deliberative convention where we can decide between the merits of the two proposed amendments. I hope the Association will adopt the report and resolutions as proposed, which give the committee abundant leeway to change the phraseology of any of those amend

ments.

The President:

Is there a second to the amendment?

Frederick F. Haskell, of Massachusetts:

I second it.

E. F. Bullard, of New York:

I think it would be better to leave the matter to the committee, to be dealt with in their final consideration.

The President:

Pending the motion to adopt the report it is moved that this clause in section 13 shall be stricken out and the amendment made by Mr. Morris inserted. Is the Association ready for the question on the amendment?

Robert S. Taylor, of Indiana:

I concur in the amendment proposed. I think it is an improvement upon the provision recommended by the com

mittee; and if our approval of the report is to be construed as giving a direction to the committee, then as between these two provisions, I should heartily support the amendment. But as the chairman of the committee states it, he seems to ask from the Association an endorsement of the report which shall not be construed as an instruction on the subject.

Walter S. Logan :

Not an instruction as to any particular form.

Robert S. Taylor:

This is a question of substance as to whether a creditor who has received a preference shall be compelled to surrender that preference before he shall receive any dividend, or whether his dividend shall be limited to the amount which he will receive on his claim, including his preference. The difference is not one of form at all; it is a difference of substance, as I take it. Upon the merits of the question I concur in the amendment proposed.

William H. Hotchkiss, of New York:

I would like to move an amendment, that this proposed amendment to the report of the committee be referred to the committee with power, so that they can take it up.

Amasa M. Eaton, of Rhode Island:

I second that amendment.

The President:

The Chair thinks it can hardly entertain that amendment. The present attitude of the question is that this report be amended, which is in the form of an instruction to the committee by the Association. So it would hardly be parliamentary, as the Chair thinks, to refer an instruction to the committee. It would permit the committee to usurp the power of the Association.

Godfrey Morse, of Massachusetts:

I consider the amendment offered by the gentleman from Indiana of a great deal of importance, but I am hardly prepared to vote intelligently upon it at this time. The report of

the committee which is before us has been sent to all members of the Association, and with it we are all familiar; with the amendment, or its bearing, we are not. I think a better mode of procedure would be to accept the report of the committee as it has been submitted. The committee has stated through its chairman that they do not consider the adoption of their report as a literal instruction as to their duties. If the report is accepted, I would suggest to the gentleman who has offered the amendment, that he withdraw it and offer a motion embodying his amendment, and let that motion be referred to the committee for consideration. That will give the report the full effect of being received by this Association, and will give the committee an opportunity of discussing the amendment and making such recommendations concerning it as they may think wise.

John Morris, Jr., of Indiana:

The committee recommends practically that section 57g and all the legislation we have had on the subject, be abolished, because it recommends that the law be changed to just what was in the law of 1857. It also practically abolishes section 60a, which defines preferences. Congress has spent a great deal of time over the question of what shall be a preference, and they practically omitted from the definition. of the term anything which would make it depend upon knowledge.

H. G. Newton, of Connecticut :

I suggest that the amendment, if passed, will not be binding in its words any more than the rest of the resolution. I understand they are all subject to an amendment by the committee, and if this is passed, it would stand just as all the rest of it-liable to be amended. I believe we are all agreed that the substance of it ought to be adopted and that the committee has the right to change the form of it.

Francis Forbes, of New York :

It seems to me that the Association should stop and consider a moment as to the effect of adopting a resolution on the

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