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omists denominate a cujimercial crisis, and for this deeper causes are sought than mere indi\'idual misconduct. By fortuitous causes which could not have been foreseen the most skilful calculations may fail; demand for particular kinds of goods may lag behind a supply which has become ex- cessive because of mistakes of the "captains of industn.'" as to extent of future demand. And there results a disarrangement of the relation be- tween production and consumption, a disturbance of equilibrium, so that commercial settlements become impossible and a crisis ensues. Notable crises of modern times were: the crisis of Hamburg in 1799, when 82 failures occurred; the English crisis of 1S14, when 240 banks suspended; in the I'nited States, the "wild-cat" crisis of 1837, when all the banks closed, the crisis of 1857, when there occurred 7,200 failures, and the crisis of 1873. To economists, conditions of this kind, resulting from the causes just mentioned, have seemed to denote the necessity for the establishment of a new equilibrmm. And it has been suggested that the ■Je\xish jubilee was a means to that end, and an ordinance somewhat in the character of an insol- vency or bankruptcy law.

A political community may fail, as may an in- dividual, in meeting financial engagements. There may thus occur what has been termed state, or pubhc, bankruptcy. Of this an ancient instance was the action of the Roman Senate in reducing the weight of the As after the first Punic War. And similar instances of governmental dishonesty oc- curred during the Middle Ages. In later times State bankruptcy has often taken the form of enforced conversion, involving partial repudiation, ol the State debt. At the close of the reign of Louis XIV of France, the State was bankrupt, and to the celebrated John Law was vainly en- trusted its financial rescue. The government set up by the French Revolution became not only bank- rupt "itself, but by its contest with Austria drove the latter empire into the bankruptcy of 1811. And the bankruptcy of Austria has even been said to have become permanent. Turkey, Spain, and some Spanish-American republics may be men- tioned as States becoming bankrupt through re- pudiation. The same remark may be made con- cerning some of the States of the I'nited States.

Murray, A'nc Etiglish Dictionary (Oxford and New York, ISSSV. WH.1RTOX, Law Lexicon (10th ed.. London. 1902); Stephen, A^fU' Commentaries on the Laws of England (14th ed., London, 1903), II, 190. 215, 220 ; L.\RorssE, Grand Diction- naire unifersd du XIX' siccle (Paris. 1S67), s.v. Banqiuroute; La Grande EncycL (Paris), s. v. BanqueroiUe; The Statutes a(Lar9e(Cambridge. 1763-04), V, 132; ^•I. 271; VII, 288; VIII, 128; XI, 162; XII, 308; XVI, 340; The Statutes at Large (London, 1769), IV, 525; Statutes of the United Kingdom (Lon- don, 1813), 375; Coke, The Fourth Part of the Institutes of the Laws of England (London, 1797). 277; P.tRsoxs. The Lau- of Contracts (8th ed.). Ill, 379, 383, 384. 385; Story, Com- ■mentaries on the Constitution of the United States (4th ed., Boston, 1873), II. §1113; ibid., note 2, §1100; Whe.^tox, Reports: Supreme Court of the United States (Xew York, 1819), IV, 208, and (New York, 1827), XII, 213; Kent, Commentaries on American Lau; II, 389; United States Statutes at Large (Boston, 1848), II. 19 and 248; ibid.. V, 440 and 614; ibid. (Boston, 1868). XIV, 517, and (Washington. 1879) XX, 99; Uriiled Stales Compiled Statutes, 1901 (St. Paul, 1902). Ill, 3418; ibid. (St. Paul, 1905, Supplement. 1905), 683; Br.ixdex- byrg. The Law of Bankruptcy (2d ed., Chicago, 1901), 66; Bell, Dictionary and Digest of the Law of Scotland (7th ed., Edinburgh, 1890), s. w. Bankruptcy. Cessio bonorum; Brodie- Innes. Comparative Principles of the Laws of England and Scotland (Edinburgh, 1903\ 25, 26; Willums, The Law and Practice of Bankruptcy (Stb ed., London. 1904); Mnj,, Prin- ciples of Political Economy (New York, 1881), Bk. V, ix. § 8; RoscHER, tr, L.\LOR, Principles of Political Ecortomy (New York, 1878). Bk. IV. i, §215; Mulh.ill, The Dictionary of Statistics (London, 1899). s. v. Bankruptcy; Gibbixs, Industry in Eng- land (2d ed.. New York. 1898) §§ 259-260; Cr.ibb, English Synonyms (New York, 1879). s. v. Insolvency, etc.

Charles W. Sloaxe. Banlmiptcy, Moral Aspect of. — Bankruptcy must be consiticred not only from the legal but also from the moral point of ^^ew; for sound mo-

raUty prescribes that debts must be paid. But a man who becomes bankrupt proclaims his ina- bihty to pay his debts in full as they become due. Such an acknowledgment does not now entail the penalty of slaverj- or of imprisonment as of old; the law takes possession of his property and di- ^•ides it among his creditors. If it suffices after aU to pay his creditors in full, there is an end of the matter, justice and conscience are satisfied. If, however, as is usually the case, the creditors only receive a portion of what is due to them, they have suffered loss through the action of the bankrupt, and if he is the voluntary cause of that loss, he is morally to blame as the cause of injustice to his neighbour. There is no moral blame attributable to a man who through misforttme and by no fault of his own has become bankrupt and unable to pay his debts. But if bankruptcy has been brought about by the debtor's own fault, he must be con- demned in the court of morals, even if he escape without punishment in a court of law. Bankruptcy may be the result of one's own fault in a great variety of ways. Li\'ing beyond one's means, neghgence or imprudence in the conduct of busi- ness, spending in betting and gambling money which is due to creditors are frequent causes of debtors appearing in the bankruptcy court. All such causes are accompanied with more or less of moral guilt, in proportion to the bankrupt's ad- vertence to their probable consequences, and the voluntariness of his action.

Breaches of the moral law are also committed in a great variety of ways in connexion with the bankruptcy itself. The benefit of the law is ex- tended to the bankrupt debtor if he faithfully complies with all its just requirements. To do this then is a matter of conscience. He is bound to make a full disclosure of all his property, and to surrender it all for the benefit of his creditors. He may indeed retain what the law allows him to re- tain, but nothing else, tmless the law makes no proWsion at all for him, and the result of surrendering even.Thing would be to reduce himself and those dependent on him to destitution. Such a result, however, must not be readily presumed in the case of modern bankruptcy law which is humane in its treatment of the unfortimate debtor and makes what pro\'ision is neeessarj- for him. It is ob\-ious that it is against the rights of creditors and against justice for an insolvent debtor to trans- fer some of his property to his wife or to a friend, who will keep it for him till the storm blows over, so that the creditors cannot get at it. In the same way a debtor is guilty of dishonesty and fraud if he hide or remove some of his property, or if he allow a fictitious debt to be proved against the estate.

Loss is caused the creditors and injustice is com- mitted by an insolvent debtor who continues to trade after the time when he fully recognizes that he is insolvent, and that there is no reasonable hope of recovering himself. He may continue to pay what debts he can as they become due if paj-ment is demanded by his creditors, and he may make current pa^mients for value received. But if in contemplation of bankruptcy he pays some creditor in ftill with a \-iew to giving that creditor a preference over the others, he becomes guilty of a fraudulent preference. Bankruptcy law indeed prescribes that certain pri\nleged debts should be paid in full, but it lays down that the rest must be paid rateably among the creditors without favour to any. If a bankrupt through favour pays a creditor in full, while the others have in consequence to be satisfied ^^-ith less than their just share, he is gtiilty of fraud. This is not only the case if such pajonent is made after the petition in bankruptcy