"Witness his excellency, &c.
"Governor, captain-general, commander-in-chief, and admiral in and over said State."
This, Sir, is the law, the spirit of which I commend to gentlemen. I will not speak of the appropriateness of these several allowances for the civil list. But the example is good, and I am of opinion that, until Congress shall perform its duty, by seeing that the country enjoys a good currency, the same medium which the people are obliged to use, whether it be skins or rags, is good enough for its own members.
[Footnote 1: The Secretary of the Treasury.]
A UNIFORM SYSTEM OF BANKRUPTCY.
FROM A SPEECH DELIVERED IN THE SENATE OF THE UNITED STATES, ON THE 18TH OF MAY, 1840, ON THE PROPOSED AMENDMENT TO THE BILL ESTABLISHING A UNIFORM SYSTEM OF BANKRUPTCY.
Let me remind you, then, in the first place, Sir, that, commercial as the country is, and having experienced as it has done, and experiencing as it now does, great vicissitudes of trade and business, it is almost forty years since any law has been in force by which any honest man, failing in business, could be effectually discharged from debt by surrendering his property. The former bankrupt law was repealed on the 19th of December, 1803. From that day to this, the condition of an insolvent, however honest and worthy, has been utterly hopeless, so far as he depended on any legal mode of relief. This state of things has arisen from the peculiar provisions of the Constitution of the United States, and from the omission by Congress to exercise this branch of its constitutional power. By the Constitution, the States are prohibited from passing laws impairing the obligation of contracts. Bankrupt laws impair the obligation of contracts, if they discharge the bankrupt from his debts without payment. The States, therefore, cannot pass such laws. The power, then, is taken from the States, and placed in our hands. It is true that it has been decided, that, in regard to contracts entered into after the passage of any State bankrupt law, between the citizens of the State having such law, and sued in the State courts, a State discharge may prevail. So far, effect has been given to State laws. I have great respect, habitually, for judicial decisions; but it has nevertheless, I must say, always appeared to me that the distinctions on which these decisions are founded are slender, and that they evade, without answering, the objections founded on the great political and commercial objects intended to be secured by this part of the Constitution. But these decisions, whether right or wrong, afford no effectual relief. The qualifications and limitations which I have stated render them useless, as to the purpose of a general discharge. So much of the concerns of every man of business is with citizens of other States than his own, and with foreigners, that the partial extent to which the validity of State discharges reaches is of little benefit.
The States, then, cannot pass effectual bankrupt laws; that is, effectual for the discharge of the debtor. There is no doubt that most, if not all, the States would now pass such laws, if they had the power; although their legislation would be various, interfering, and full of all the evils which the Constitution of the United States intended to provide against. But they have not the power; Congress, which has the power, does not exercise it. This is the peculiarity of our condition. The States would pass bankrupt laws, but they cannot; we can, but we will not. And between this want of power in the States and want of will in Congress, unfortunate insolvents are left to hopeless bondage. There are probably one or two hundred thousand debtors, honest, sober, and industrious, who drag out lives useless to themselves, useless to their families, and useless to their country, for no reason but that they cannot be legally discharged from debts in which misfortunes have involved them, and which there is no possibility of their ever paying. I repeat, again, that these cases have now been accumulating for a whole generation.
It is true they are not imprisoned; but there may be, and there are, restraint and bondage outside the walls of the jail, as well as in. Their power of earning is, in truth, taken away, their faculty of useful employment is paralyzed, and hope itself become extinguished. Creditors, generally, are not inhuman or unkind; but there will be found some who hold on, and the more a debtor struggles to free himself, the more they feel encouraged to hold on. The mode of reasoning is, that, the more honest the debtor may be, the more industrious, the more disposed to struggle and bear up against his misfortunes, the greater the chance is, that, in the end, especially if the humanity of others shall have led them to release him, their own debts may be finally recovered.
Now, in this state of our constitutional powers and duties, in this state of our laws, and with this actually existing condition of so many insolvents before us, it is not too serious to ask every member of the Senate to put it to his own conscience to say, whether we are not bound to exercise our constitutional duty. Can we abstain from exercising it? The States give to their own laws all the effect they can. This shows that they desire the power to be exercised. Several States have, in the most solemn manner, made known their earnest wishes to Congress. If we still refuse, what is to be done? Many of these insolvent persons are young men with young families. Like other men, they have capacities both for action and enjoyment. Are we to stifle all these for ever? Are we to suffer all these persons, many of them meritorious and respectable, to be pressed to the earth for ever, by a load of hopeless debt? The existing diversities and contradictions of State laws on the subject admirably illustrate the objects of this part of the Constitution, as stated by Mr. Madison; and they form that precise case for which the clause was inserted. The very evil intended to be provided against is before us, and around us, and pressing us on all sides. How can we, how dare we, make a perfect dead letter of this part of the Constitution, which we have sworn to support? The insolvent persons have not the power of locomotion. They cannot travel from State to State. They are prisoners. To my certain knowledge, there are many who cannot even come here to the seat of government, to present their petitions to Congress, so great is their fear that some creditor will dog their heels, and arrest them in some intervening State, or in this District, in the hope that friends will appear to save them, by payment of the debt, from imprisonment.