(2 of 2)
"One of the most squeamish situations in which one can find oneself is to be compelled to pass judgment on public officials who are members of one's own party, on the basis of a record which is none too glorious."
While Congress was thus worrying over "almost criminal" receiverships in Chicago, it was doing nothing to help Federal judges in New York keep bankruptcies clean and honest. Last week in conference, awaiting final passage by both Houses, was a new corporate bankruptcy act, seeded with possible scandal.
Five years ago the Federal judges of the southern district of New York, anxious to stop greedy Manhattan lawyers from bleeding bankrupt firms, decided to make Manhattan's Irving Trust Co. receiver in all bankruptcy cases. So well did the trust company handle this new business that it won nothing but praise from the Federal court and the public—and nothing but bitter condemnation from local attorneys who had lost a lucrative practice. Twice they carried a fight to the State Legislature to forbid Irving Trust acting as receiver; twice bills to that effect were passed and twice vetoed by the State Governor. Last week New York's lawyers, fresh from their second defeat in Albany (TIME, April 2), were pleased to have inserted in the new corporate bankruptcy bill in Washington this provision: "The District Court or any judge thereof shall, in its or his discretion, apportion appointments as receiver equitably among all persons, firms, or corporations within the district eligible thereto. . . ."