Wage Earner Bankruptcies: State vs. Federal Control

Abstract

THE great increase in recent years of the number of non-commercial, as well as commercial, bankruptcies is doubtless one reason why public and official attention has been directed to bankruptcy reform. But reformers for the most part have assumed that the bankruptcy power in all respects should continue to be exercised by the Federal government and have neglected to appraise the functions which bankruptcy performs or might perform in our economic order. Bankruptcy, like other institutions, has a curious way of becoming sufficient unto itself. Its functions, the problems with which it deals, its purposes, the relationships between it and current economic and social conditions are lost sight of or assume a minor position. Attention, energy and resources are directed towards making the institution internally more efficient, so that its business may be expedited and its abuses eliminated. This is reflected in part by the not uncommon feeling that the pressing problem of bankruptcy is to remove ambiguities in various sections of the act so as to make bankruptcy a less confusing or less strenuous game. Or, again, the institution may be defended against all assault on the grounds that its heritage is so priceless, its age so venerable and its status so impregnable that nothing should be done to change its essential characteristics. This is reflected in the objection of the committee of the American Bar Association to recently proposed amendments to the bankruptcy act, that upon the present bankruptcy act,