months after the time of sale; (3) the purchaser, five days before the sale, must notify all creditors of the proposed sale, the cost price of the goods to be sold and the price to be paid for them; (4) five days before sale the seller must answer all questions in writing truthfully, and a failure to do so or a failure to make complete and true answers will be treated as a misdemeanor and be dealt with accordingly. A failure to carry out the above provisions makes the sale fraudulent and void as against the creditors. Bulk sales are made frequently as low as 40 or 50 per cent. of the real value of goods, and consequently the sale is made with intent to defraud and the purchaser is practically in collusion with the seller. In compelling an inventory to be made giving the cost price of the goods to be sold and the proposed selling price the real purpose and nature of the transaction is made obvious. The purchaser is compelled to give these facts several days before the sale to the creditors of the seller, and if the latter is attempting to sacrifice the goods with fraudulent intent his efforts may be thwarted by those concerned. The time limit required of purchasers to notify creditors prior to the sale varies in the state laws, but in no instance is it less than five or more than ten days.

In all but two states, Ohio and Utah, the laws have been declared constitutional. In these cases it is held that they infringe the common law being in restraint of trade. This is the objection most frequently urged against the laws in all the states when they stand upon their passage and also when their constitutionality is questioned. The Supreme Court of Ohio held that the law of that state which contained the usual provisions was unconstitutional on several accounts. The law was to go into effect on its passage. It was held to be objectionable on account of its impracticability. That all creditors should be informed when the debtor might not know who all his creditors. were and that an inventory stating the cost price of all the goods to be sold should be made to creditors when the books of the dealer might not reveal these facts were requirements in the law which could not in many cases be met. "Applying the familiar and unquestioned rule that the validity of an act is to be determined by its practical operation and not by its title or declared purpose, this act, under the guise of preventing fraud in such. sales, prohibits them altogether, and thus places upon the enjoy

ment of property an important restriction which no public interest requires and which the Constitution therefore forbids." It was held that this act practically forbids the sales of stocks of merchandise in bulk. It was further held that the Act discriminated unwarrantedly among debtors and creditors. "The act applies to all the creditors of a seller, it applies only to those who are creditors of the owner of a stock of merchandise, and thus an unreasonable burden is imposed upon a limited class of debtors for the supposed benefit of a limited class who are their creditors." A merchant might owe sums to men who had not sold him goods, and they would under this law have the same rights of action against him as those who sold him merchandise, and a right against him which they would not have against any other class of debtors.

In one respect the Ohio law was different from the laws of most of the states. It held the purchaser of goods as well as the seller criminally liable. The practical objections to these laws are that they give a right to sellers of merchandise against their debtors not enjoyed by other groups of sellers. It is claimed that these laws have not been placed on the statute books in obedience to a popular demand for them, but result from the organized activity of a group of creditors to secure legislation in their own interests and not in that of the public interest. It can be maintained that there are reasons for protecting this group of creditors by legislative means not needed by other classes of creditors, and the decisions of the courts of most of the states indicate that laws can be passed which will encounter no constitutional objections. From present tendencies it would seem that this sort of legislation will spread to other states so that it will become nearly uniform.

When the Lodge Bill concerning the consular service was before Congress the legislative committee of the National Association labored in its interest. The association at its June meeting passed a resolution favoring its passage or another law containing some of its provisions. The prominent provisions advocated were an improved classification and grading, the substitution of salaries for fees, an increase of salaries, the application of the merit system, efficiency as a test for continuance in office, the * Supreme Court of Ohio, Rice vs. Crawford, Laws regulating sales of stocks of goods in bulk, p. 62, Decision of Judge Shauck.

† Page 63, Judge Shauck.

Americanization of the service, and the requirement that consuls must be familiar with either the French, German, Spanish, or Chinese languages, and "possess a knowledge of the natural, industrial, and commercial resources of the United States.” *

The variations in the provisions of the Homestead and Exemption laws of the various states have caused an endless amount of confusion and annoyance to commercial interests. The National Association at its meeting in 1905 resolved to engage in a campaign of education to make possible more uniform laws. It was recommended that the state associations make this subject a feature of special interest in the following year. The National Association through the Legislative Committee began an investigation of these laws with a view to printing them to show their lack of uniformity.

Other matters which engaged the attention of the legislative committee were, (1) the making criminal the mailing of a fraudulent statement concerning one's financial condition with intent to defraud by securing through it goods or money, etc., and (2) the enactment of laws designed to regulate the carrying on of business under an assumed or fictitious name.

Nearly all the laws of recent years providing for better relations between creditors and debtors may be traced to credit men's associations. In a number of notable instances these organizations have failed to accomplish their objects. However, their power is growing. Statements made by ex-President Fessenden of the New York Credit Men's Association in an address before that organization in 1899 are very significant for that date. "To-day, we are recognized," said he, "in the city and in the state through the legislature as a factor to be consulted in all proposed laws affecting merchandise credits." "With all due modesty, yet with full confidence in what I declare, I say to you that we have it in our power to-day to dictate what bills introduced into state legislatures shall or shall not become laws, in so far as they affect us credit men."

The Committee on Investigation went under the name until the annual convention of 1898, when it was changed to the Committee on Investigation and Prosecution. Nearly all the local associations have similar committees, and as a rule they work in coöperation with the national committee. Cases of insolvency are investigated, and when evidence exists to show that there has

* Resolution of National Association, 1904. Bulletin, June, 1905.

been a fraudulent conversion of assets, the evidence is put in possession of a prosecuting attorney and the merchant is prosecuted. The purpose of the Committee is not to make collections but to prosecute the guilty.

At the meeting of 1898 a series of resolutions was passed which provided for the employment of attorneys to investigate and prosecute frauds. Provision was also made for urging the local associations to report all cases of failures, whether fraudulent or not, to the Investigation Committee of the National Association. It was made the duty of this committee to investigate the debtor's commercial record, present affairs, character, and capacity, so as to make recommendations to the involved creditors as to a reasonable compromise if the debtor was honest, and the extension of such aid as would enable the debtor to continue in business.

In 1899 after the National Bankruptcy law was passed a plan was submitted by the National Secretary to the local associations for discussion at their meetings. The plan provided for the submission of all offers for the compromise of indebtedness to the Investigation Committee of the State and National Associations, and creditors were pledged to refuse offers of compromise until the investigation by the constituted authorities should take place. The spirit, if not the letter, of this plan was later carried out. fund was voted to be used in the investigation and prosecution of fraud, and individual creditors were pledged not to accept compromise offers of settlement.

The difficulties involved in carrying on the work of investigation and prosecution by the National Association were seen to be almost insurmountable, and the Board of Directors of the National Association at their meeting in 1903 decided to abandon operation under the investigation and prosecution funds as far as new cases were concerned. The National Association, however, the following year instructed the directors to reorganize the Investigation and Prosecution Bureau as an adjunct to the national work, and recommended "that a trust fund of $50,000 be raised with which to equip and maintain the bureau."*

The secretary-treasurer immediately sent out communications to the local associations to obtain opinions on the proposed plan with reference to the collection of the fund. The plan suggested *Resolution of National Association 1904. Bulletin June, 1905.

did not meet with approval of the local associations, and the Board of Directors, at its next meeting, decided to abandon the project. They recommended that the work be taken up by the local associations in their respective districts, and that the costs of investigation and prosecution be borne by the association or associations interested. This seems to have been the best way of disposing of the matter, as the local associations can organize much more effectively to investigate and prosecute cases in their own district than a committee or bureau of the National Association could handle the cases arising in all parts of the country and where they were naturally but little familiar.

The Committee on Credit Coöperation was organized in 1904. It was not thought advisable to establish a credit exchange bureau, but desired that there be a greater interchange of ledger experience among members of the association. The committee appointed limited itself to advocating a large degree of interchange of information and this committee was retained for 1905. Many local associations have credit exchange bureaus, and the following trades are organized for credit exchange: Jewelers' National Board of Trade, the National Association of Clothiers, the Electric Trade Association of the Pacific Coast, the Merchants' Credit Association of California, the Stationers' Board of Trade of New York, the Hardware Board of Trade of New York, the Crockery Board of Trade of New York, the Lumbermen's Trade Association, the Glass Dealers' Protective Association, the Manufacturers' and Dealers' Protective Association, dealing with plumber materials, and the New York Paint and Allied Trade Association.*

The Committee on Fire Insurance recently installed as a working body of the National Association of Credit Men is limiting itself to devising means of learning of debtors who have not adequate life insurance with a view of urging upon them the necessity of insuring.

*Monthly Bulletin Nat. Assoc. Credit Men, June, 1905, p.83.