The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1841-07-24
THE MADISONIAN.
REPoRT UPON A BANKRUPT LAW.

Judiciary accomps MED the Bill reported by Mr. BAR
MAID ia the House OF Representatives on Wednes-
day last, for establishing uniform system OF Bank
ruptcy
The Committee on the judiciary, TO whom have
been referred the petitions and memorials presented TO
the House on the subject Of Bankrupt law, respect
fully report
ougb, 10 be passed BY Congress- without unnecessary
delay and they present bill for the consideration Of
the House.
This bill is essentially the same that matured in
the Senate ia the first session Of the last Congress,
after great deliberations and which finally pas. ed that
body. II was not then considered in the House for
want Of time.
The policy Of laws designed to afford remedy and
relief between creditors and their debtors who are
hopeIessly nsoyent has the sanction Of usage, 10 the
past and the present among nearly all highly civilized
and business communities. The leading idea upon
which these laws have proceeded has certainly not al
ways been the same il has varied with the general
state of the law, and with the progress OF society In
country where the creditor was by law, the undis-
puied arbite Of liberty and life TO his insovent debtor
The immediate motive for nterposton must have been
different from that which has prompted legislative IN
reference where the relation Of debtor and creditor
has been differently Understood
In England Bankrupt, laws had their origin appa-
reniy in the idea that debtors who did not pay were
merely unwilling, and not unable to pay. The FIRST
Bankrupt law passed IN the time Of Henry 9TH was
Of other men, and fled kept their houses not mind
ing TO pay their debts" Ii came in aid Of the law,
proceeding the idea Of ability and unwilling
ness which authorized imprisonment for debt-a thing
unknown to the common law. II a debt not
paid the credit itself was supposed 10 have been crati-
~ obtained the ability TO pay was presumed; the
debtor arrested and imprisoned I'LL he should be
made willing or, if he had fled or kept house, that
impossible his estate passed into the custo
dy OF the law for the liquidation of the Debt.
So long as this idea OF ability and unwillingness
prevailed and other admitted, the whole evil
far creditors considered supposed to be
adequately met 10y the punishment Of imprisonment
or confscation. When, hewever, it was found, as
industry and production to be increased by the
OF capital and credit that the Of debtors who
did not pay were only unable and not unwilling, II
became necessary to turn round and without disarm
ing the creditor threw a shield over the deeDceless
head of his honest and innocent debtor
The law in England on this subject, often varously
modified in matters of detail, is, and has hong been
in substance
First that where creditors invoke the punishment of
imprisonment their debtor the latter if willing but
unable TO pay, may regain his freedom upon yolun
tary and honest surrender Of his property, to be APP
piled towards liquidation.
And second that where creditors invoke the pun
ishment Of confscaton their debtor which
y be done where the debtor belongs to another
of certain specified classes the creditors shall take the
full benefit Of the proceeding by the application of the
property towards the payment of their debts prorided
in full, shall certain terms and conditions be for
discharged from all legal obligation pay the
and residue OF his debts.
Thus the law of Interposition and relief in Eng
land, as between creditors the hand and debt
who cannot pay their debts the other, stands,
and is administered in two distinct branches, and I'M
der two distinct systems In the system the debt
oIs are denomnated nsolvent; in the other they
called bankrupt In reI ort made 10 the Queen in
July, 1870 and signed by eight out of nine commits
APPOINTED tha subject lit as
strongly recommended to reduce these two branches
Of the law and systems Of administration to con-
sistent system, and make the whole law of the
more conformable TO and to right
The principal improvements in the law relating to
insolvency proposed by the commissioners these
To extend the benefits Of the discharge from debts
in case of bankruptcy, beyond the mercantile and
other specified classes, to which they chiefly
confned as to embrace i" all persons engaged in
business requiring capital and credit
To allow and encourage voluntary cession Of pro-
perry, on the part of insolvents at such period of
their difficulties will best equal justice TO all
their creditors"
To make the granting of certificate of discharge
Judicial act, which may be opposed by creditors
for cause but to which their shall not be
cessaIy.
The suggestion Of these improvements is sufficient
to indicate the great change which public sentiment
has undergone, or is undergoing, in England, in
gard to the proper basis which those laws ought to
rest that nterposc their special authority between
dlors and their insolvent debtors
At this day. and in this country if syste n Of laws
relating TO bankruptcies is to be established it is be-
eved that II is not difficult to perceive and state the
ground on which il ought to stand
Credits, or demands are property in which, not in
frequently the bulk of large individual estates
ssts, AS property, they under the protection of
the law much any other kind of property. All
the rights OF property attach to themhe right of pro-
lection and defence against all encroachments and in
jury, and the right Of recovery whom wrongfuy taken
away, or withheld They are private property, and
private property is sacred IL must be respected
And the law must be vgiIant and efficient in it's guar
danshlp of it. Failure this is failure in the high
est duty of civil society, and tends directly to disco
luton.
But the nature of credits, or demands, is such as
TO constitute them peculiar species of property
and before we can undertake to pronounce with GER
tainy on the whole duty Of society and the law in re-
gard to them, must consider attenivcly their ma
tire and peculiarities
lhey are held by peculiar tenure--a tenure
which implies and includes contingency The
foundation OF loan is trust, wherever securities are
not taken II is confidence il is credit--all terms
which IMPLY risk, and the possibility of failure The
FISK relates to the question of sovency insolvency
when the period comes for demanding payment This
kind Of property is held subject 10 this contingency
and the lender himself takes the risk he is his own
insurer If his debtor fails he loses if not he has
his own lie charges too for this risk in the shape
OF interest premium or commission. He parts with
The immediate possession of his property, expecting
II 10 come back to him, in proper time, with increase
he puts il aoat, and takes the hazard of the voyage
for a consideration. If whelmed in the turbulent
sea he expects TO sustain the loss He is content to
hold his property subject 10 this contingency
While his debtor remains solvent which is always
TO be presumed until the contrary appear the duty of
society and the law towards him and this property is
plain enough If he invoke the law in the case, il
will come efficiently TO his aid Ifhis debtor attempt
to eude his demand by flight fraud, il will arrest
him and restrain him of his liberty and otherwise,
will seize the unwilling debtors estate and make the
debt out of It for the creditor When the law by
these means has aided the creditor in the recovery of
his property has done all its duty against his sol
vent debtor.