The Fight Over Who Gets Paid First
Seattle merchants scramble to block legislation that would favor out-of-state creditors over local ones during bankruptcies.
The Merchants' and Manufacturers' Exchange last night uttered a vigorous protest against Senate Bill No. 111, relating to attachments and garnishments. The bill had already passed the senate unanimously, catching local businesses off guard. Members of the exchange argued that the current law allowed local creditors a fair chance when a debtor failed, but the new bill would change the law so that an assignment of assets would no longer dissolve an attachment. They feared this would allow 'foreign' (out-of-state) creditors to jump in and seize assets before local merchants could work out a settlement with an honest but struggling debtor. The exchange appointed a committee to rush to Olympia and lobby the house judiciary committee to kill the bill or secure significant amendments.
“If a small dealer became unable to pay, he might be honest and his home creditors would give him a chance to work out the claim; but meantime some foreign creditor... could jump in with an attachment to the detriment of the home creditor.”
This 1893 legislative battle over debt collection and creditor rights mirrors contemporary concerns about the impact of national corporations on local economies. Just as these merchants feared out-of-state 'foreign' creditors would override local stability, modern small business owners often struggle against legal and economic frameworks skewed toward larger, outside entities.
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