The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1840-05-30

brace the banks In this bill and II we see no insupera
bic or greatly formidable practical objections. then
think we ought to include them, and to include them
all, without any power Of escape.
Suppose the bill should be made uniform, then, and
TO include all banks have the power, and Is il ex
Pedeni, to pass d in that shape
On the motion Cor committee, made some time ago
| by the member from Pennsylvania, to which have
already referred suggested the opinions which en-
terrain one branch Of the power Of Congress
nected with this subject The constitutional point
now arisng,l do not mean TO treat, 70 decide
= open 70 Others and viii doubt he discussed BY
them. But upon the cxpcdency or pF0priety of in
GLIDING banks and other corporations in this bill will
say few words. This State with which am
nected can have ~ little objection to include banks
~ the bankuPt ball as any other State Many per-
formed, in favor of the measure. But il appears
70 me they have well considered the practical diff
hcnties Let US look at what is proposed to be done
| There are eight hundred thousand State banks,
It's duties, and enjoining penalties. They banks
OF depositc banks Of discount and banks Of crcula
ton is now generally admitted that they are law
fully created Their legal existence is estabished
They comprise, ! suppose, two hundred millions Of
capital Some Of them founded entirely private
ownership while in others the States creating
them are psoprietors and In some Others again the
States are sole proprietors Some ofthcn have right
TO suspend Nor limited time, others have not this
right the charter of each being its constitution
Such being the general state Of things, Il is now
proposed to subject an these banks to the operation of
a bankrupt law so that when they stop payment for
day or an ioer, their property and effects may be
seized for distribution among theircredors, end their
operations broken up It Is proposed TO do this, al
though the charters Of the banks may expressly autho
rizs them to do that very thing, which is act of
bankruptcy under this bill, and for which their pro-
pcrty is to be thus seized Here is certainly direct
collision between State authority and the authority of
the United States, which ought TO be avoided when
ever i can be. The act Of Congress in this case
would be made to repeal annu pro tanfo the law Of
| the State do not say that this can In be
done but say that all such collisions ought to be
avoided If possible
II is proposed that Congress shall prescribe duties
to the banks not prescribed by their charters and
for the violation othose duties thus prescribed by Con-
gress it is proposed to proceed against them bank
rupts to scquestraie their effects and virtually annul
their franchises Ifths be DONE should be done,
without clear and cogent necessity Without wish
ing TO represent the proposition as extrasagan or
speaking of with disrespect it to me to be bold,
If not rash, until of absolute necessity is made
out. What would become of the bank stock in case
Of such seizure and sequestration What extent Of
| depression and fuctuation would attach TO IT. when
| such law should be passed What would become
of the entire circulation of the country if general
suspension should happen and all the banks should
be thus seixed1 What would become Of the country,
creditors and debtors and Of all its business If ge
should be placed in the hands Of the Federal Courts
their paper entirely disQraccd and immediate col
lection Of all their debts attempted TO be enforced ~
| What would become Of some of the States who own
j the banks and Of others who derive revenues from
them Z And how could such immense affairs be adj
ministered by the Of the United States These
difficulties appear to me TO be startling IT, indeed we
were quite confident that such provision would here
after prevent all general suspensions, we might ven
| turc upon the measure. We might expect TO be able
to deal with here and there individual But
this provision not certain to prevent general suspen
sion in great emergencies or great commercial revolu-
| tions. Twice, within few years, the banks have
suspended Notwithstanding the penalties Of their own
charters and the laws of their States The real
truth is that in the absence Of all regulation
troll by Congress- the banks have attempted and do
attempt, regulation by their own concert of action
They make a law for themselves.
! general suspension is the result Of general
concurrence ofa general conviction of the neccsa
ty of suspension the part of all the banks or many
of them This has happened and in the present state
of affairs may happen again, notwithstanding bank
rupt law In my opinion indeed 1t is certain to hap
pen Notwithstanding all the bankrupt laws can
pass, until Congress shall do its duty, by enactng
prospective and preventive remedies; and if it should
happen, one or two things must ensue, either Con-
gress would be called together to repeal the law,
utter and dead stop would take place the payment Of
debts in the concerns Of commerce and indeed, in all
! the business Of life.
In addition 10 the charters it is TO be remembered
that several of the States have provisions Of their own
founded their statutes for proceeding against
| failing banks. Such banks put into commission
or under sequestraon, by the State courts and ju
dical administration and settlement of their affairs
take place. Is our bankrupt law expected TO super
sede these State bankrupt laws Are our courts to
dispossess the State courts
Sir, will not pursue this subject further. ! repeat
that in the part of the country to which belong,
believe there is pretty strong disposition to include
the banks in the bankrupt law. The people in that
quarter apprehend from il no danger to themselves
their own institutions, and they wish to banks
elsewhere coerced, by the most eectua means, to
and to maintain specie payments need not say
that they among the greatest sufferers by the pre-
| sent most runous state of things. They pay, and
others do not pay them They cannot long stand the
present state of the currency, and like them, ] am
ready take any practical measure any thing short Of
convulsive shocks, between State authority and the
| authority of the United States, TO relieve it. But
confess that for myself to say nothing Of the const
tutona points, formidable difficulties in subject
inc State banks to forfeiture and destruction by act
Of bankruptcy At any rate, If the banks are to be
dealt with in bankruptcy at all their case would re-
quire obviously, very many peculiar provisions, and
thew should constitute the subject Of bill by them
selves Such bill should be prospective, the COM
mencement of its operation deferred the act Of bank
ruptcy clearly determined, provisions made to
avoid as far as possible, collision with State authori
tics and provisions also for superseding the commits
/ sion, on resumption Of payment, or security given
| Various provisions of this kind, it seems to me-
| would be essentially necessary
Leaving this very important part 1.-THE case another
question arises upon the proposed amendment shall
the bankrupt act in its application to individuals, be
voluntary only, or both voluntary and compulsory
II is well known that prefer it should be both.
think all insolvcnt and failing persons should have
lower to come in under its provisions, and be voun
AIRY bankrupts and think, too, that, as to those
who are strictly merchants and traders, creditors
ought to have right to proceed against them in the
commission of the usual acts of bankruptcy and sub
ject them to the provisions of the act But the COM
mittec think otherwise. They find many objections
IF and caDeCtaIlv
| from the West In country extensive, with
people so various with such different ideas and habits