ON A GENERAL BANKRUPT LAW.
IN THE SENATE OF THE UNITED STATES, JANUARY 17, 1842.
[THE subject of a general bankrupt law, after the repeal of the law of 1800, which took place in 1805, had been frequently agitated in congress. Bills were at different periods introduced and discussed, some of which passed the senate, but were lost in the house of representatives. In 1837, president Van Buren recommended to congress the passage of a bankrupt law, exclusively applicable to banks, and other corporations; but the proposition met with very little favor at the time. The pecuniary distress prevailing throughout the country, during the administration of that president, caused many memorials to be presented to congress, praying for a general bankrupt law for the relief of the people, and, on the twenty-third of March, 1840, on presenting a memorial from a large number of the citizens of New York, asking the passage of a uniform bankrupt law, Mr. Clay took occasion to say, that he had been at all times favorable to such a measure, and was then ready to support such a bill, when found suitable in its details, for the exigencies required. In April, three different bills were introduced in the senate, one of which was taken up and discussed. On motion of a senator from Alabama, (an administration man,) sustained by Mr. Clay, of Kentucky, among others, the clause subjecting banks to the operation of the bill was stricken out, by a vote of twenty-eight to sixteen; Mr. Clay, on a subsequent occasion, (February twenty-sixth, 1841,) denying the constitutionality, as well as the expediency, of including corporations in such a law. In June, 1840, Mr. Clay moved to strike out the compulsory provisions in the bill, which was negatived, (seventeen to twenty-five.) He had previously said, (April twenty-second,) ‘that it was not to be denied that the voluntary class of bankruptcies would comprehend a vast majority of all the cases, and hence the bill of the majority of the judiciary committee, would be likely to afford the largest share of relief, in the present embarrassed and deranged state of business.’
The compulsory clause being thus retained, the bill was ordered to be engrossed, on the twenty-fourth of June, by a vote of twenty-four to twenty-three, Mr. Clay in the affirmative. It finally passed the senate on the twenty-fifth, twenty-one to nineteen; but was laid on the table in the house of representatives, on the seventh of July, by a vote of one hundred and one to eighty-nine.
At the extra session of congress in 1841, after the election of president Harrison, the whigs having a majority in both branches, a bankrupt hill was introduced, and after considerable debate, passed the senate July twenty-fourth, 1841, by a vote of twenty-six to twenty-three, and the house of representatives on the eighteenth of August, one hundred and ten to one hundred and six. Mr. Clay supported this bill, declaring that ‘he considered it as part of a system of relief for the country.’
Mr. Walker, of Mississippi, a Van Buren senator, said: ‘the refusal of the late administration to act upon the subject, had done more than any thing else to cause their defeat.’
During the next session of the same congress, the most strenuous efforts were made to repeal the bankrupt law, before the time in which it was to go into operation, which was fixed for the first of February, 1842; and the repeal was carried in the house of representatives, one hundred and twenty-six to ninety-four, on the seventeenth of January, but defeated in the senate on the twenty-eighth, by a vote of twenty-two to twenty-three. While the question was pending, numerous petitions from the people, remonstrating against the repeal of the law, were presented to congress. Mr. Clay, on presenting some of these petitions, on the seventeenth of January, made the following remarks on the subject.]
MR. CLAY said, that he was charged with the presentation of a great many memorials, all remonstrating against any repeal or postponement of the bankrupt law. He would not trouble the senate with having them read. There were a great many from the state of New York; two from the state of Maryland; one from Pennsylvania; one from Newark, New Jersey; one from Boston, signed by hundreds of persons; a city which, from its mercantile character, must be supposed to have knowledge on the subject, in which were mingled the names of those both able and unable to pay their debts; also, three from his own state, (Kentucky,) one from the capital of the state, in which were the proceedings of a meeting, strongly remonstrating against interference with the law, going into arguments to show why it should not be repealed or postponed. To this there were four hundred signatures, all of which, the secretaries informed him, were voluntarily made.
Mr. Clay referred to an opinion, which had been thrown out under the sanction of some high commercial authority in New York, that the bankrupt bill, if it should become a law, would operate to throw one hundred millions worth of property into the market to be sacrificed. Such a remark, coming from that source, might be likely to have some weight. But it must be remembered that the estimate of one hundred millions, was mere assumption and random conjecture, for no man could tell, with any thing like accuracy, what the amount would be; it might just as well have been set down at two hundred millions, as at one. But be the amount what it might, in estimating the weight of the statement, as an argument against the bill, it should be inquired, on the other hand, what would be done with this property, should the bill not go into effect? Would it be kept out of the market? Not at all. On the contrary, it would be thrown into the market, to be sold under the hammer, by sheriffs and other officers executing the process of the courts, and that without competition to raise the price. For when the property of a debtor was seized by one of his creditors, what motive could his other creditors have to enhance its avails, by competition at the sale? None in the world. On the contrary, should the law remain undisturbed, what would be the course of action under it? According to his understanding of the act, it would produce a distribution of the goods of the debtor among all his creditors, pro rata; of course, when his property should be set up to sale, it would be the interest of them all to make as much out of it as possible. They would bid it up, instead of suffering it to be sacrificed for a song. He considered, that whatever might be the exact form of legal proceedings in carrying out the law, the result in practice would be, that, under the benignant operation of the act, there would be a distribution of the debtor’s effects, not only among all his creditors, but at the highest price they could be made to command.
Mr. Clay went on to say that it was not his purpose to go, at this time, into a discussion of the subject generally. He had thought of the bankrupt act as a measure, which came recommended to congress, not only by all considerations of justice, of humanity, and benevolence, but recommended no less by the appalling condition of the country. If, among all the other distresses, discontents, and disorders, which every where prevailed to so alarming an extent, this legislature should now slam the door in the faces of those unfortunate men, who had at length hoped to be liberated from irretrievable embarrassment, by the beneficent operations of this law, it would produce such a state of excitement, distress, disorder, and despair, from one end of the land to the other, that no man could foresee, or even conjecture, the consequences.
But he could not terminate the brief remarks with which he had deemed it proper to accompany the presentation of these petitions and memorials, without adverting, for a moment, to a circumstance which had a personal relation to himself. The senate would do him the justice to admit, that he rarely introduced any thing of that description on their notice; never, indeed, unless under a sense of unavoidable necessity. An intimation had recently appeared in some of the public prints of the day, that the movement now in progress in the other wing of the capitol, towards a repeal of the bankrupt law, had originated with him, (Mr. Clay.) He disdained to enter upon any thing like a defence, against a charge so base and dishonorable, and one so entirely contrary to the entire tenor of his whole public life. It might, with equal probability, or evidence, have been asserted that he was the author or prompter of the proposal of a gentleman near him, to repeal the distribution law. He held the insinuation in profound contempt and scorn.
A single remark he must be permitted, in reference to the delegation in the other house, from his own state. At the last session, every member of that delegation, with one solitary exception, had voted against the passage of the bankrupt bill; and even that single advocate of the bill, on his return to his own district, found so great and general a dissatisfaction with the provisions of the bill, that he had, on the present occasion, felt it his duty to give such a vote, as he presumed it would appear that he had this day given in that body, on the question of repeal. But it seemed, notwithstanding these known facts, that Mr. Clay was to be held responsible for the votes of all the representatives in the other house, from his state, on that question. But those who imagined that Kentuckians were made of so supple, servile stuff, as to take their public course in legislation, from the dictation of any man, had yet to learn their true character. Those gentlemen had as good a right to dictate Mr. Clay’s course, as he had to dictatetheirs. The representatives from Kentucky, in either house of congress, had enough of manly independence, to judge and to act for themselves, and to vote as their own individual views of duty should prompt them. But this accusation, base and despicable as it was in itself, had, notwithstanding, assumed such a shape as to render it Mr. Clay’s duty to bring it to the notice of the senate; and he felt very sure that it was only necessary for him to bring it home to the bosom of every senator, to have it promptly, instantaneously rejected and repelled, as utterly groundless. For whatever might have been their difference of sentiment—and no man regretted more than he did, that it should have been his misfortune to differ in opinion from any portion of the gentlemen of that chamber—he was satisfied that all, both friends and foes, would, with one voice, do him the justice to say, that, whatever might have been the errors of his head, he had, at least, sought to live, as he hoped to die, an HONEST MAN—honest in his public, as in his private life.