Mr. Buchanan, Mr. Wright, Mr. Woodbury, were the principal speakers against the bill in the Senate. Mr. Benton addressed himself mainly to Mr. Webster's position, confounding insolvency and bankruptcy, as taken at the previous session; and delivered a speech of some research in opposition to that assumption—of which some extracts are given in the next chapter.
[CHAPTER LXVII.]
BANKRUPT BILL: MR. BENTON'S SPEECH: EXTRACTS.
The great ground which we occupy in relation to the character of this bill (said Mr. B.) is this: that it is not a bankrupt system, but an insolvent law, perverted to a discharge from debts, instead of a discharge from imprisonment. As such, it was denounced from the moment it made its appearance in this chamber, at the last session, and I am now ready to prove it to be such. I have discovered its origin, and hold the evidence in my hand. It is framed upon the English insolvent debtor's act of the 1st of George IV., improved and extended by the act of the 7th of George IV., and by the 1st of Victoria. From these three insolvent acts our famous bankrupt system of 1841 is compiled; and it follows its originals with great fidelity, except in a few particulars, until it arrives at the conclusion, where a vast and terrible alteration is introduced! Instead of discharging the debtor from imprisonment, as the English acts do, our American copy discharges him from his debts! But this is a thing rather to be proved than told; and here is the proof. I have a copy of the British statutes on my table, containing the three acts which I have mentioned, and shall quote from the first one, in the first year of the reign of George IV., and is entitled "An act for the relief of insolvent debtors in England." The preamble recites that it is expedient to make permanent provision for the relief of insolvent debtors in England confined in jail, and who shall be willing to surrender their property to their creditors, and thereby obtain a discharge from imprisonment. For this purpose the act creates a new court, to be called the insolvent debtor's court, which was to sit in London, and send commissioners into the counties. The first sections are taken up with the organization of the court. Then come its powers and duties, its modes of proceeding, and the rights of insolvents in it: and in these enactments, as in a mirror, and with a few exceptions (the effect of design, of accident, or of necessity, from the difference of the two forms of government), we perceive the original of our bankrupt act. I quote partly from the body of the statute, but chiefly from the marginal notes, as being a sufficient index to the contents of the sections. (Here the speaker quoted eighteen separate clauses in which the bill followed the English act, constituting the whole essence of the bill, and its mode of proceeding.)
This is the bill which we call bankrupt—a mere parody and perversion of the English insolvent debtor's act. And now, how came such a bill to be introduced? Sir, it grew out of the contentions of party; was brought forward, as a party measure; and was one of the bitter fruits of the election of 1840. The bill was brought forward in the spring of that year, passed in the Senate, and lost in the House. It was contested in both Houses as a party measure, and was taken up as a party topic in the presidential canvass. The debtor class—those irretrievably in debt, and estimated by the most moderate at a hundred thousand men—entered most zealously into the canvass, and on the side of the party which favored the act. The elections were carried by that party—the Congress as well as the presidential. All power is in the hands of that party; and an extra session of the legislature was impatiently called to realize the benefits of the victory. But the opening of the session did not appear to be auspicious to the wishes of the bankrupts. The President's message recommended no bankrupt bill; and the list of subjects enumerated for the action of Congress, and designated in a paper drawn by Mr. Clay, and placed on our journal for our guidance, was equally silent upon that subject. To all appearance, the bankrupt bill was not to come before us at the extra session. It was evidently a deferred subject. The friends and expectants of the measure took the alarm—flocked to Congress—beset the President and the members—obtained from him a special message recommending a bankrupt law; and prevailed on members to bring in the bill. It was brought into the Senate—the same which had been defeated in 1840—and it was soon seen that its passage was not to depend upon its own merits; that its fate was indissolubly connected with another bill; and that one must carry the other.
This is an insolvent bill: it is so proved, and so admitted: and to defend it the argument is, that insolvency and bankruptcy are the same—a mere inability or failure to pay debts. This is the corner stone of the argument for the bill, and has been firmly planted as such, by its ablest supporter (Mr. Webster). He says:
"Bankruptcies, in the general use and acceptation of the term, mean no more than failures. A bankruptcy is a fact. It is an occurrence in the life and fortunes of an individual. When a man cannot pay his debts, we say that he has become bankrupt, or has failed. Bankruptcy is not merely the condition of a man who is insolvent, and on whom a bankrupt law is already acting. This would be quite too technical an interpretation. According to this, there never could be bankrupt laws; because every law, if this were the meaning, would suppose the existence of a previous law. Whenever a man's means are insufficient to meet his engagements and pay his debts, the fact of bankruptcy has taken place—a case of bankruptcy has arisen, whether there be a law providing for it or not. A learned judge has said, that a law on the subject of bankruptcies is a law making provision for cases of persons failing to pay their debts. Over the whole subject of these failures, or these bankruptcies, the power of Congress, as it stands on the face of the constitution, is full and complete."
This is an entire mistake. There is no foundation for confounding bankruptcy and insolvency. A debtor may be rich, and yet be a bankrupt. Inability to pay does not even enter as an ingredient into bankruptcy. The whole system is founded on ability and fraud. The bankrupt is defined in Blackstone's commentaries—a work just issued and known to all our statesmen at the time of our Revolution—"to be a trader, who secretes himself, or does certain other acts to defraud his creditors." So far from making insolvency a test of bankruptcy the whole system supposes ability and fraud—ability to pay part or all, and a fraudulent intent to evade payment. And every British act upon the subject directs the surplus to be restored to the debtor if his effects sell for more than pays the debts—a proof that insolvency was no ingredient in the acts.
The eminent advocate of the bill, in confounding insolvency and bankruptcy, has gone to the continent of Europe, and to Scotland, to quote the cessio bonorum of the civil law, and to confound it with bankruptcy. He says: "That bankrupt laws, properly so called, or laws providing for the cessio bonorum, on the continent of Europe and Scotland, were never confined to traders." That is true. This cessio was never confined to traders: it applied to debtors who could not pay. It was the cession, or surrender of his property by the debtor for the purpose of obtaining freedom for his person—leaving the debt in full force—and all future acquisitions bound for it. I deal in authority, and read from Professor Bell's Commentaries upon the Laws of Scotland—an elegant an instructive work, which has made the reading of Scottish law almost as agreeable to the law reader as the writings of Scott have made Scottish history and manners to the general reader. Mr. Bell treats of the cessio and of bankruptcy, and treats of them under distinct heads; and here is what he says of them: