However necessary this system might be in England, who owed almost the whole of her prosperity to trade, it became not a nation, the leading feature of whose character was agriculture, to tread in her footsteps; but, on the contrary, to avert rather than to hasten the period when such a system would be rendered necessary; that, in truth, the spirit of trade in this country was sufficiently vigorous, and only required the common protection given to all other occupations, to prosper to every beneficial purpose.
In the commercial world, the honest, though unfortunate merchant, had nothing to fear from his creditors. A long experience had shown that the mercantile world felt with sympathy and acted with magnanimity to the unfortunate. In addition to these objections, it was urged that the bankrupt law was injurious, as it enlarged the sphere of the Federal courts. The constitution was a system of compromise. Many powers were given without a view to their immediate exercise. It did not, therefore, follow that, because the power given to establish a uniform system of bankruptcy was given, it must now be exercised. The powers of the General Government, if not too great, were sufficiently great. It became Congress, therefore, neither to take from nor add to the powers of the State courts. To increase the powers of the Federal courts, through the operation of the bankrupt system, was to derogate from the powers of the State courts. The State tribunals were weak enough, without thus trenching upon them.
The authorities under this law not only went to enlarge the powers of the Federal Government generally, but particularly to the extension of executive power. The appointment of Commissioners of Bankruptcy was an additional weight thrown into the scale of executive patronage. The power of that department ought to be viewed with an eye of jealousy, and the House, however willing to allow to it the enjoyment of all fair and necessary power, ought vigilantly to guard against its undue increase. It might be answered that this evil might be removed by placing the appointment of the Commissioners in the hands of the courts. But this would not be the effect. The Judicial Department, in the aspect of its political weight, was not to be contemned. So long as it remains, as fixed by the constitution, it will rest for support somewhere—it will naturally ally itself to some other department of the Government, and the inducements to such alliance will be most naturally held out by the Executive; but however peculiar circumstances might at this time indicate otherwise, such a tendency was a kind of political gravity, which, however it might for a time be checked, would eventually exert its influence.
On the other hand, the opponents of the repeal observed that the silence of the public on the subject indicated neither hostility nor opposition to the present system of bankruptcy; if it indicated any prevailing sentiment, it was that of confidence in the judgment of their representatives. If the system really was so unpopular as some gentlemen had represented it to be, their tables would ere this have been covered with memorials for its repeal, whereas not a single petition to that effect had been presented during the session.
They contended that it would be true policy to suffer the act to expire by its own limitation. Little more than two years would elapse before the arrival of that period. This conduct was dictated by the undisputed fact that the present system had been adopted as an experiment. Hence the limitation of the act. This experiment was now in a fair course of trial. Little more than three years had elapsed since its commencement, and sufficient time had not yet passed to test the goodness or the badness of the principle it involved. It was a fact that the distresses of the commercial world called forth such a system when it was formed in the year 1800; it was a fact that it had done much good; and it might be that a system of bankruptcy, improved to the extent of which it was susceptible, would be of permanent utility. Amendments, radical amendments, the system certainly required; and should the House determine not to destroy it, the amendments could and doubtless would be made.
It was believed that the general sentiment of the nation concurred in the propriety of affording some relief to the distresses of the commercial world. On the form and extent of that relief great contrariety of opinion existed. It was the opinion of well-informed merchants and of the best writers, that a greater relief should be afforded to the misfortunes of men engaged in trade than in other occupations. To the argument that the proper relief to be extended should be left to the determination of the States, the objection that the laws of the different States were on this point various and contradictory, was conclusive. Trade, of all human occupations, embraced the widest range. Its operations were confined to no particular State or climate, but pervaded the whole world. It was of great importance then, if practicable, that laws in relation to it should be equally wide with this extensive range. Though this was utterly impracticable, yet it was practicable to make the same laws pervade a whole nation. Of this opinion were the venerable patriots of 1789, who framed the constitution; such was the spirit of the constitution itself; and such its language in speaking of uniform laws respecting imports, bankruptcies, and intercourse between the several States. Not that the power to pass such laws was imperative: but they manifested the sense of that body and the spirit of the instrument, that all laws on those subjects should be uniform throughout the United States.
To the argument, that the exoneration of property from the payment of just debts was a violation of justice, it was replied, that however correct the principle might be in ordinary cases, it did not hold in commercial concerns. In other employments an inability to comply with contracts was generally the result of idleness or imprudence; but so great and inevitable were the risks attendant on commerce, that no human prudence could guard against them.
Of trade, credit was the life; without it, it could not exist. In this country, too, it was the great source of revenue. How impolitic then was it, in a country where the whole of the revenue, and much of the wealth of its citizens, depended upon trade, to adopt regulations which would repress mercantile exertion and enterprise.
It was contended, that it was not true that the principle of a bankrupt law operated in favor of the debtor; the reverse was the case, and constituted one of the strongest arguments of its superiority to insolvent laws, under which the time of surrender was left to the option of the debtor; whereas, under a bankrupt law, the creditor, whenever he had reason to apprehend the fraud or failure of his debtor, could take out a commission under the bankrupt law; the creditor may arrest the prodigal or unjust career of the debtor; while, under the insolvent law, the debtor rarely surrenders his property, until he has squandered nearly the whole, or until he has made a fraudulent transfer of it. Such was the operation of the principle of a good bankrupt system; with regard to the present it was admitted that its provisions were unfair, and operated frequently the other way.
A leading argument in favor of a bankrupt system was that it multiplied checks against fraud; there would of course be less temptation to commit fraud, as the chances of concealing it diminished. In most countries the terrors of an awful punishment awaited the commission of fraud under this act, even the terrors of death. Though it might not be sound policy in this country to make punishments so terrible, yet it was always within the power of the Legislature to make transgressions so penal, as to guard against the apprehended evils.