length the case, suggesting that in view of the plea of guilty he should have a rather milder sentence than he otherwise would receive. The case interested the Judges and they asked me many questions which made me warm up and tell the story in all its details. At my conclusion Judge Taft asked me, 'Let me see, Mr. District Attorney, do I understand that you are pleading for the prisoner or against him' and to my consternation stated that he felt that in view of my plea, the sentence which he had previously made up his mind to impose would be too light and

that he should give the man a considerably longer one. However he did not do so but gave him a very fair sentence." I have but one comment to add to these rambling notes. Judge Taft's experience as a criminal judge gave him a particular interest in the administration of the criminal law. At a later time some of his comments on the defense of criminals seem severe. As a matter of fact, no judge on the bench ever gave closer attention to the preservation of the rights of the defendant. He was most intolerant of any attempt of a prosecutor to avail himself of information

obtained, as he thought, improperly. He went to the extreme in this respect and would reverse a conviction if either in the slipping in of evidence or in the excessive zeal of a prosecutor's address any matter not strictly pertinent should get before the jury. It was the prosecutor's duty to present and sum up the evidence, not to give his opinion. In his early manhood he was chosen to make the statement of facts for the prosecution in a celebrated disbarment case and in nothing that he ever wrote in after life was his wonderful power of dispassionate statement, free from any insinuation or innuendo better exemplified. He was at all times the very embodiment of fairness and justice and broad humanitarianism.

I will not obtrude to speak of Justice Sanford at this time. We were in college together and I knew him for forty-five years and was associated with him at a number of times in various functions. He was an able judge, a learned man, a delightful companion and a true friend. The passing of two such men within five hours of each other, not only was a great shock to the nation, but a personal grief to those that knew them.

A privilege of years is garrulity; I trust that my exercise of the privilege will be forgiven.

DISTRICT CONFERENCES

The third annual conference of the Referees in Bankruptcy of the Northern District of California was held in San Francisco February 15, at which there were present the eleven Referees in that District, being a 100% attendance. Among them was Referee Richard A. Belcher, of Marysville, a veteran appointee. The meeting opened with a noon luncheon. A number of matters of interest to Ref

erees were discussed, particularly how best to improve and make more uniform the practice in bankruptcy proceedings in the District. Co-operation with this Association was considered and arrangements made that the District be represented at the 1930 Conference. Referee Stephen N. Blewett, Stockton, was selected as president and Referee Evan J. Hughes, Sacramento, as secretary. All of the Referees in this District, with two exceptions, are members of this Association.

estates, the collecting of interest on bankruptcy deposits and the payment of penalty on taxes were considered. Judge Cant was a guest at the noon lucheon. During the afternoon various matters were discussed and it was decided, among other things, to recommend the adoption of a rule by the District Court limiting the time in which petitions for review may be filed. During the evening the visiting Referees were the guests of the Eleventh Judicial District Bar Association at which a "bankruptcy clinic" was conducted. Rollo F. Hunt, Duluth, president of that Association, presided, and after business items were disposed of, Referee Bierce addressed the lawyers present, discussing the subject of bankruptcy from its historical side and considering present conditions. Referee McCune related several interesting experiences in the administration of bankruptcy estates. Many present took part in the discussion which ensued.

JUDGE HENNING RETIRES

The retirement of United States District Judge Edward J. Henning of the Southern District of California, Los Angeles, effective December 31, 1929, has been announced. Judge Henning returns east and has resumed the practice of law in New York City as special counsel for a group of special clients. Judge Henning was born in Iron Ridge, Wisconsin, in 1868, and received his law education in George Washington (then Columbian) University, Washington. He has practiced law in Milwaukee, Wisconsin, and San Diego, California, and for a time served as United States Attorney and later as Assistant Secretary of Labor. He was appointed Judge in May, 1925.

In speaking of the work of this Association, Judge Henning recently wrote:

The January number is a wonderful publication and I have read it with great interest. At this time I want to thank you, and through you, the other Referees throughout the Nation for the splendid work you all have been doing and the wonderful assistance I have received as a Judge from those of you with whom I transacted official business. I wish you all good luck and continued success, both as individuals and as an organization.

Five of the eight Referees of the District of Minnesota met at Duluth, March 3rd. These were Referees Alexander McCune, Minneapolis, Herbert M. Bierce, Winona, Horace W. Roberts, Mankato, John P. Galbraith, St. Paul, and Alexander G. McKnight, Duluth, who acted as host. Owing to other engagements two veteran Referees, Ole J. Vaule, Crookston, and Ernest W. Campbell, Litchfield, were unable to attend, and Referee N. F. Field, Fergus Falls, was absent, making an extended Pacific Coast trip. Referee McCune presided and Referee Bierce acted as secretary.

The morning session was spent in conference with senior United States District Judge William A. Cant, in which matters pertaining to the administration of bankruptcy

"PLAIN DEALER” COMPLIMENTS FRIEBOLIN In commenting editorially upon the reappointment of Referee Carl D. Friebolin, Cleveland, "The Plain Dealer and Daily Leader" said:

JUDGE FRIEBOLIN'S GOOD RECORD

Carl D. Friebolin, Referee in Bankruptcy, has made a record in office that attracts favorable comment outside as well as inside this federal district. He has made bankruptcy law a special study years and become an expert. Added to his knowledge in this field of legal administration, he possesses the sense of fairness and the perfect integrity that insures a square deal to every litigant in his court.

On March 22nd the report of the investigation conducted under the intervention of the Association of the Bar of the City of New York, the New York County Lawyers' Association and the Bronx County Bar Association, in the United States District Court for the Southern District of New York, was filed with then United States District Judge Thomas D. Thacher, (now Solicitor-General) who ordered the same to be filed, together with a memorandum prepared by him, one year subsequent to the granting of intervention by that Court. This inquiry was conducted by Colonel William J. Donovan, former assistant AttorneyGeneral, and a staff of associate attorneys, including Messrs. George S. Leisure, Edmund N. Toland, Lloyd K. Garrison, C. D. Williams, J. Edward Lumbard, Jr., and Sidney Krause. As the inquiry progressed other attorneys were added to this staff. The expense was met by a fund raised by joint committees of the associated Bar organizations under the leadership of Charles C. Burlingham, president of the Association of the Bar of the City of New York, William Nelson Cromwell, president of the New York County Lawyers' Association, and Bernard S. Deutsch, president of the Bronx County Bar Association, Henry W. Taft acting as treasurer. Funds were also contributed by the New York Credit Men's Association to meet the cost of certain studies of bankruptcy conditions, including a survey of the Canadian system. Assistance was rendered by the bankruptcy committees of the New York Credit Men's Association, as well as of the National Association of Credit Men, and acknowledgment is made of the valuable suggestions from W. Randolph Montgomery, their counsel. Other studies were conducted under the auspices of the Yale Law School and a staff headed by Professor William O. Douglas. Inquiries on matters of practice and procedure were directed to Federal Judges, Referees in Bankruptcy, and attorneys throughout the United States and numerous responses received and used in the formulation of the report. Mr. Leisure acted as chief assistant and had charge of administration and the presentation of cases to the court. Mr. Toland was chief of the investigation group, and investigated complaints and prepared cases for presentation and Mr. Garrison was chief of the research group. Judge Thacher himself visited England to make a study of the English system.

This investigation was the outgrowth of disclosures made to a federal grand jury in connection with facts arising

from the administration of the bankruptcy law in that District. The Bar associations were prompted to intervene and proffer their services because they felt that the abuses disclosed had impaired public confidence in the standards of professional conduct of the Bar thereby lessening respect for the courts and the administration of justice, and they asked that the examination be extended to cover all abuses in connection with the administration of the bankruptcy law. Generally speaking it may be said that the investigation was conducted under two heads. One had to do immediately with conditions in the Southern

District of New York, and the other with the administration of the law generally throughout the federal districts of the country. During the pendency of the inquiry, United States Attorney Charles H. Tuttle withheld further investigation by the federal grand jury but actively cooperated and assisted in the inquiry. Public hearings were conducted from the opening of the inquiry June 27th, 1929, until September 13th, 1929, after which private hearings were held. Over 1,000 court files of cases and about 4,000 witnesses were examined. In addition to these examinations, careful investigation and study of methods of liquidating the estates of insolvents as conducted throughout the United States, as well as in Canada, were made. In this investigation it was disclosed that the bulk of the bankruptcy practice in New York City was concentrated in the hands of approximately twenty-one law firms and competition for business was keen. As a consequence, various abuses arose incident to the directing of business into the offices of certain lawyers and the splitting of fees earned with various parties in interest, including official employees, as well as incident to the filing of petitions in behalf of creditors on very scant authority and in some instances without authority. Some receivers and trustees were found delinquent in their accounts and often receivers were mere figureheads. As a result, twelve attorneys were indicted, one absconded and committed suicide, four resigned from the bar of the Federal Court, four others were disbarred, another was censured and other proceedings are pending.

From the inquiry which was made throughout the country and from the information obtained the report declares that the "fundamental defects in administration are not restricted to New York but exist generally throughout the country. Administration has become not only a burden to the courts but legalistic, long drawn out, expensive and uncoordinated. It has developed on the part of business men an attitude toward the bankruptcy system of distrust and even disgust." As a consequence other methods of liquidating insolvent assets are being tried out. The report gives as the reasons the following:

First, the slow moving procedural machinery laid down by the Act.

Second, the theory upon which the whole administrative structure rests, that the creditors in each particular case will control, supervise and successfully manage the administration.

Although the Act was passed as long ago as 1898 procedure has not been changed in accord with modern methods so that every important step in administration is subject to delay. The report further declares that the Act contemplates in ordinary cases that administration should be conducted by creditors acting in meetings and working through a trustee so that the court functions would be almost completely judicial and that attorneys would play a minor part in administration, believing that the enforcement of the criminal and discharge provisions could safely

Among the abuses incident to the employment of attorneys the report mentions indiscriminate selection of counsel, conflicts of interest, prevalence and ease of effecting "friendly" proceedings, improper methods of securing business and laxity, inefficiency and opportunity for corruption. Considerable emphasis is placed upon the danger arising from the custom of retaining attorneys for petitioning creditors as the attorneys for the receiver or trustee.

In discussing the enforcement of the criminal and discharge provisions, the committee report considers that "these provisions are vastly more lenient than the corresponding provisions in the Canadian and English Acts," calling attention the fact that in those Acts "where the bankrupt's assets are less than half his unsecured debts, it it usual to suspend the bankrupt's discharge for a year or so. During the suspension the trustee is entitled to all assets of the bankrupt as they are acquired."

Criticism is offered to the present Act because the bankrupt is given a year within which to apply for his discharge with a possible six months extension and says:

The result is that the bankrupt may postpone his application until the case has been closed up and the interests of creditors has entirely disappeared. Under the English and Canadian acts there is no time limit within which the bankrupt must apply, but until he gets his discharge all property which he acquires belongs to the trustee.

The report advocates the shortening of the time in which the application for a discharge could be made and urges that the trustee be authorized to object on his own initiative. Attention is also called to the fact that on its criminal side the English Act defines some twenty-seven offenses for which bankrupts may be published whereas in this country there are but two, perjury and various concealments of property. As a result, the convictions for violation of the Act are exceedingly few and in small and no-asset cases investigations are rare. The report states:

The central purpose of the English Act was to make bankruptcy a difficult and disagreeable process and so far as possible to weed out from the business community the corrupt and incompetent trader. The aim was not so much to give creditors the largest possible return in each individual case as to prevent the occurence of dishonest failures generally.

As the Act contemplates that creditor control presumably would be effective no particular provision for governmental supervision is provided. The Attorney-general annually collects bankruptcy statistics and Referees and trustees are subject to periodical examinations. There is no adequate agency for the study of the whole field of insolvency, liquidations and settlements including equity receiverships, bankruptcies, state court receiverships and statutory or common law assignments or trust deeds.

In discussing the general subject of procedural delays, the report emphasizes the lost motion incident to the necessity of creditors meetings and the ten days' notices required therefor, believing that in many instances shorter notices will prove effective and that on other occasions. no meeting of creditors is essential. In its summary of

recommendations under the title of "Amendments Designed to Correct the Inefficiency and Abuse Resulting from the Breakdown of the Theory of Unlimited Creditor Control" the report recommends the creation of a Federal Bankruptcy Commissioner with supervisory authority as well as with the specific duty of licensing trustees, making administrative rules, investigating abuses, compiling statistics, and supervising examinations of bankrupts especially in no-asset cases. That the trustee should be selected as promptly after adjudication as possible and should be continued unless the interests of creditors call for a substitution. There should be an increase in compensation to trustees especially with a minimum allowance in cases with small assets. At creditors meetings a quorum provision of 25% in number should be required and nominations for substitute trustees should be included in the notices. Safeguards incident to the solicitation of proxies and their voting should be established, including the furnishing of blank proofs of claim by Referees with the call. for the first meeting. A committee of "Inspectors" should be permitted to be chosen by creditors at the first meeting who should supervise the administrative features of the trustee. The report says:

This system has been thoroughly tested in England and in Canada and has proved satisfactory. It gives the creditors through their elective representatives a direct participation in administration. It is a simple, flexible and businesslike method of procedure, the trustee being an analogous to the president of a corporation and the inspectors to its board of directors . . . It would eliminate the mass of petitions, orders, affidavits, reports and other papers which now clutter up administration. It would eliminate the necessity of employing attorneys except for purely legal work. .

Other suggested amendments designed to correct procedural delays consider reducing the time within which claims may be filed to three months with a saving clause, and the payment of dividends as well as filing of schedules, action on compositions, selling assets and ancillary proceedings.

The report which totals, with the appendix, 361 pages, devotes 59 pages to the consideration of the subject matter and its recommendations. The balance is devoted to the appendix which is an analysis of the answers made by Federal Judges, Referees and attorneys to the questions submitted to them on the various subjects considered. Acknowledgment is made of the action taken by the National Association of Referees in Bankruptcy especially with reference to suggested amendments. Recommendations for changes in the rules of the Southern District of New York are also made. Thorough reports upon bankruptcy administration in Canada as prepared by Robert H. Thayer, and in England as prepared by David Teitelbaum, are included.

In this connection a report of the Committee on Bankruptcy of the New York Credit Men's Association was made to supplement the report of the Donovan Committee. This report summarizes the results and recommendation of the Donovan Committee report and is presented to the Credit Men's Association for their action.