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office of the Tribunal of Commerce of the district, a declaration of suspension, with a true account of his conduct and of the state of his affairs, showing his assets, debts, profits and losses and personal expenses. On adjudication the Tribunal of Commerce appoints a person, called a syndic provisoire, to manage the bankrupt's estate, and a juge commissaire is also named to supervise the syndic. A bankruptcy terminates by an ordinary composition (concordat), a sale of the debtor's assets (union), or a composition by relinquishment of assets. It is a striking feature of the French system, and highly creditable to French commercial integrity, that a discharge in bankruptcy, even when accompanied by a declaration d'excusabilité, leaves the unpaid balance a debt of honour. At the time of the French Revolution the National Convention passed a resolution that any man who contracted a debt should never be free from liability to pay it. The spirit of this resolution still survives, for until a trader has paid every penny that he owes he is not rehabilitated and remains under the stigma of various disabilities: he has no political rights, he cannot hold any public office, or act as a stockbroker, or sit on a jury. Banqueroute simple is where the bankrupt has been guilty of grave faults in the conduct of his business, such as extravagance in living, hazardous speculation or preferring creditors. Banqueroute frauduleuse involves the worse delinquency of fraud. Both banqueroute simple and banqueroute frauduleuse are punishable,—the latter with penal servitude ranging from five to twenty years.

Germany.—Bankruptcy in Germany is governed by a code passed in 1877. Prior to this each state had its system and the law was "wholly chaotic." The same distinction is drawn in Germany as in France between mere commercial failure and bankruptcy, simple or fraudulent. Simple bankruptcy is established by such offences as gambling, dealing in "futures," disorderly book-keeping or extravagance in living: fraudulent bankruptcy, by offences of a deeper dye—the concealment of property, the falsifying of books, the manufacture of fictitious debts and the giving of illegal preferences. Both kinds of bankruptcy are punishable, fraudulent bankruptcy by penal servitude, or in case of mitigating circumstances, by imprisonment for not less than three months. Accessories in fraudulent bankruptcies are liable to penal servitude—for instance, a creditor who conspires with the debtor to secure an advantage to the prejudice of the other debtors. The creditors are called together within one month from the date of adjudication, and at their meeting they may appoint a committee of their number to advise with the trustee. It is the duty of the court to see that the trustee performs his functions. Estates are liquidated with great rapidity. In order that the creditors may receive dividends at the earliest moment, it is customary to sell the assets by auction. The creditors by a majority in number and three-fourths in value may accept a composition, but such an arrangement must have the approval of the court. The fees are very moderate: in an ordinary bankruptcy the attorney's fees do not, it is said, exceed £5.

Italy.—Bankruptcy in Italy is regulated by the Commercial Code of 1883 (Part III.). Only merchants can pass through the bankruptcy court. Merchants are defined by the code as those who, as an habitual profession, engage in commercial business. This definition includes merchant companies. Bankruptcy proceedings may be taken either by the debtor or by a creditor for a commercial debt, or may be ordered by the court. The amount of the debt is immaterial: a small sum will suffice, provided its non-payment is proof of insolvency. Bankruptcy can only be declared where there is insolvency. The judgment adjudicating a debtor bankrupt deprives the bankrupt of the right to administer his affairs, and nominates a trustee to realize the property under the superintendence of a judge and a commission of creditors. All the property of the bankrupt, movable and immovable, is sold by auction and distributed in dividends. This is one way of closing the bankruptcy, but it may also be closed by an arrangement. No minimum percentage is required for such arrangement, but it must have the assent of creditors representing three-fourths of the bankrupt's indebtedness. Composition before bankruptcy is not recognized by Italian law. Bankrupts are liable to criminal proceedings involving punishments more or less heavy for offences against the law, e.g. for not keeping books in the way prescribed by law.

United States.—After much fragmentary legislation the bankruptcy system of the United States is now embodied in the National Bankruptcy Act of 1898, as amended by the act of 1903. The acts of bankruptcy under the act may be summarized as follows: where a debtor (1) removes any of his property to hinder or delay his creditors; (2) being insolvent, transfers property with intent to prefer a creditor; (3) suffers any creditor to obtain a preference; (4) makes a general assignment for the benefit of his creditors; (5) "admits in writing his inability to pay his debts and his willingness to be adjudicated a bankrupt on that ground." These acts of bankruptcy do not include, it will be observed, non-payment by a debtor of his debts. A debtor can therefore only be adjudicated a bankrupt on the ground of indebtedness with his own consent in writing. Presumably the legislature thought that the desire to obtain the protection and privilege of bankruptcy would be a sufficient inducement to confess insolvency, where such insolvency, in fact, exists.

To constitute a fraudulent preference it is not necessary, as it is under English law, that the payment should be made "with a view to prefer" the favoured creditor. It is enough that the creditor is preferred. This avoids the nice questions of legal casuistry which have embarrassed the English courts, and it is the more rational rule, for creditors are not concerned with a debtor's intention. Any person, trader or non-trader, may avail himself of the act, but, in the case of a corporation, there is this peculiarity: it may be petitioned against but cannot petition.

Insolvency is construed in a practical sense; that is, a person is insolvent where the aggregate of his property, at a fair valuation, is insufficient to pay his debts; but he is not necessarily insolvent because his realized assets are insufficient to meet his liabilities.

Involuntary proceedings can only be taken against debtors owing $1000 or over, with certain exceptions. A petitioning creditor's debt must amount to $500.

The administration of the law of bankruptcy is entrusted to the district courts and is exercised through the medium of certain officers appointed by the courts and called referees. The creditors appoint a trustee or trustees of the estate.

So soon as his judicial examination is over the bankrupt may offer his creditors a composition, but to take effect the composition must be approved by the court after hearing objections.

The discharge is the key to the efficiency of every bankruptcy system. By the control which the court thus holds, it is enabled to bring its moral censorship to bear on a debtor's conduct and so maintain a high standard of commercial integrity. Under the United States system the judge is to investigate the merits of the application and to discharge the bankrupt, unless he has (1) committed an offence punishable by imprisonment; (2) with intent to conceal his financial condition, destroyed, concealed, or failed to keep books of account or records from which such condition might be ascertained; or (3) obtained property on credit from any person upon a materially false statement in writing made to such person for the purpose of obtaining such property on credit; or (4) at any time, subsequent to the first day of the four months immediately preceding the filing of the petition, transferred, removed, destroyed or concealed any of his property with intent to hinder, delay or defraud his creditors; or (5) in voluntary proceedings been granted a discharge in bankruptcy within six years; or (6) in the course of proceedings in bankruptcy refused to obey any lawful order of or to answer any material question approved by the court.

It is significant that the italicized qualifications were added to the act of 1898 by the experience of five years of its working.  (E. Ma.)