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they know what to expect, and the binding nature of the report becomes generally known.

At present the Committee on Credit Department Methods furnishes two classes of forms (1) on the exchange of credit experience and (2) property statement. These are sold to members and others. Of the first class, the exchange of credit experience, but one form was handled in 1904-1905, and the total sale amounted to 213,600.* Several forms were furnished on property statement, and the total sales of these were 44,500. The forms now used are the result of experiment since the association was organized.

It soon became apparent that in order to have uniformity in bankruptcy legislation, it was necessary to secure the passage of a national law instead of trying to bring about uniformity through the coöperation of the various state legislatures. No matter with what skill state laws would be drafted, state legislatures could always be relied upon to modify the laws sufficiently to make the legislation of the various states diverse. On this account the National Association of Credit Men, as well as most of the local associations, vigorously supported the Torrey bill when it was before Congress, and later the present Bankruptcy Law. Since the law has been in operation, the Legislative Committee has been very aggressive in proposing amendments, with a view of removing the worst features. During this time, however, the interest of the Legislative Committee has never lapsed in procuring reforms in state legislation.

The National Committee usually works in coöperation with the state associations to secure local legislation. In all cases where bad laws are on the statute books cases are introduced to test their constitutionality. In 1896 the New Orleans Association, with the consent of the National Association, took charge of all legislative questions in Alabama, Arkansas, Texas, Georgia, the Carolinas, Mississippi, Florida, and Louisiana. Two laws were passed by the Louisiana legislature in 1896. The laws introduced in Alabama and Arkansas were passed in 1899. The chief reform in Louisiana prevented preferences. The preference abuse had attained enormous proportions. Out of the 334 failures which occurred between January and September, 304 were deeds of trust. This was manifestly a discrimination in favor of the resident jobber. In 1899 laws were passed to prevent merchants selling goods in bulk in the states of Oregon, Minnesota, and Maryland. The local credit men's associations were responsible for the law in Oregon, the retail grocers in Minnesota, and the Baltimore association was responsible for the Maryland law. In Ohio the Cincinnati Credit Men's Association secured the introduction and passage of a law preventing preferences of all kinds. As soon as the law was passed five thousand dollars was voted by the association to prosecute men who failed fraudulently.

* Monthly Bulletin Nat. Assoc. Credit Men, June, 1905, pages 35-36.

Several years ago the National Association of Credit Men began a crusade in favor of laws regulating the sale of goods in bulk. From the beginning this sort of legislation has been opposed by the class of traders who occasionally operate bulk sales. The lawyers opposed it because they did not believe in regulating by statute the method by which goods should be sold in bulk. The legislative committees labored persistently, and at present laws regulating bulk sales have been passed by twentyfive states.* In the absence of such legislation it was held that practices exist which are injurious to trade. Credit is granted because of the necessity of paying debts from the proceeds of goods purchased. It is granted under this assumption that the customary methods of trade will be followed by the retailer. When goods are sold in bulk, the customary methods of the merchant are abandoned, the seller needs to make no provision to liquidate the liabilities, and the creditor has no claim whatever against the stock.

To correct these abuses the National Association of Credit Men has proposed a specific law, the chief provisions of which have been incorporated in all the laws of the states which have restricted sales in bulk. The important provisions of this law are the following: Five days before the sale, the seller and purchaser must make a detailed inventory showing the quantity and as far as possible the cost price of each article to be sold; (2) five days before the sale the purchaser must make an inquiry as to names, places of residence or of business of all creditors of seller and amount owing each creditor. A written answer to these inquiries must be secured from the seller and retained six 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.

*Louisiana, Oregon, Minnesota, Maryland, Indiana, Washington, Tennessee, Wisconsin, Ohio, New York, Colorado, California, Idaho, Utah, Oklahoma, Virginia, Massachusetts, Connecticut, Georgia,': Kentucky, Illinois, Maine, Pennsylvania, District of Columbia.

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 enjoyment 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 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.” *

*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.

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.

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