The Washington union. [volume] (City of Washington [D.C.]) 1857-1859, 1857-12-10

credit speedy adjustment OF the relations between
creditor and debtor by qudatiou and settlement s the
surest mode for the restoration Of the equilibrium
Wild and chinerica spscnations viii thus have their
termination industry win be better enabled 10 realize s
ober expectations and the substantial interests Of
cety being relieved from the noxions influence OF
element, oveaoon, and disorder, will resume their
cusomed energy in communicating hcalthf,l and Wig
activity TO the business Of the country The proper
agency of the government in such is to
whatever impedment may exist to the exetion Of the
native force OF society, and To extract from the expert
they have gained lessons to be mbodied in whole
and welcondcred laws to- prevent the recurrence
of the evil.
II is evident that the great moneyed corpoations
created under the laws of the States have had control
ling influence in the undue expansion of private credit
In many of the States the legislation IN respect To these
Is stringent and mbodes many Of tho safeguards that
experience has suggested for their regulation
But it will not be denied that this legislation has been
nugaory The State authorities have already manifested
eager disposition to relieve them from the penalties
they have incurred and to DISPENSE iar they
able, with the performance of the obligations they had
exacted from them when they organized This has
been done, in cases without inquiry into their
condition management, their capacity 10 resume
their position solvent institutions TO protect
the community from deprecated paper currency
In my Judgment the period has arrived for Congress to
employ the powers conferred by the constitution upon il
to mitigate the present evil and to prevent catastrophe
Of similar kind in future and for this purpose
pulsoy bankrupt law, to include two classes Of corpora
tons and companies, is necessary II should be law
for the protection Of creditors, not the relief of debtors
to prevent improper credit not TO pay improydent debts
compulsory not voluntary. The effect of such law
would be felt in its restraining influence than in its
practical execution. fe
/ do not recommend law similar to either of those
which have heretofore existed and abandoned after
short and unsatisfactory experience. The first
adopted the 4th April, lS00 and repealed the 18th
December, 1903 1t provided fora compulsory process
of bankruptcy against those merchants and commission
agents at the suit of creditors whose insolvency had
become manifest by certain overt acts Of fraud detail
cation and effected collection and distribution of the
estate of the bankrupt through the judicial tribunals of
the United States whchwas followed by his discharge
from the debts his estate had not satisfied The second
act passed 18th August 1s41 and repealed the
Sd March, 1913 This act besides the compulsory sys
TEN of the act Of 1890 contained system Of bankrupt
ey to be applied the petition of insolvent debtor
If any class profession and to result in his relief from
his debts and engagements, upon the surrender of his
property and compliance with other conditions of the act
There grave objections to the present adoption of
the systems developed in these statutes The voluntary
feature of the act OF 1871 is rejected unwse, unjust
and unnecessary 1t this provision which rendered
that law 50 justly odious in the public mind Nor do
propose to extend tho provisions OF compulsory
bankrupt law to the numerous covered by the act Of
IS4l 1t is better to leave to the operation Of the in
solvent and bankrupt laws Of the several States all
which do not from their magnitude and Importance, at
feet the general commercial and business interests of the
country 1t believed that the power Of the States
ample to meet such cases and the proprety and policy OF
exercising such powers WILL sooner or later be developed
by the lessons Of bitter experiences,
The two cases which it is now proposed to bring under
the operation of compulsory bankrupt law banks
and railroad corporations The imulense capital en-
ployed by these companies their controlling power and
influence in the commercial and business operations of the
country their disposition to expand and enlarge their
credit and the ruinous effects produced by their opera
tons when carried beyond legitimate bounds impose upon
the government The duty Of providing by every constitu
onal means In their power for the SAFE proper and e
gitimate conduct OF such corporations The facts which
presented in other portions OF this report developing
the condition and operations Of these two classes of
poratons will fully Justify the policy recommended
The object is not to inure them but protect the
muny. The effect will be to restrain their operations
within proper limits and thereby insure to the country all
the benefits they capable of oonferring without the
accompanying hazards Of Wild speculatons aud rninous
| revusiops,
In closing my observations this subject it is proper
to state that these recommendations not formed in
any spirit of hostility to these corporations and compa
nes, nsensblc Of their vast Importance in the
commercial system of the United States Nor have any
disposition to denounce any punishment, to subject
them to any loss in the present conjunction of their af-
fairs My object is to place them in subsection to whole
some laws that while the benefits they yield to the
community may be preserved, their
will be counteraced OF prevented,
The details Of any act formed on the principle have
suggested should be adopted after enlarged inquiry
into their condition. and should imbody the liberal
provisions for the security of the rights Of the persons
interested in them unreasonable time should also be
allowed to the corporations which in default to
recstabsh themselves before this act becomes operative
During this financial crisis and general arrangement of
the currency the collection and disbursement of the pub
lie revenue have proceeded without loss embarrassment
The operations Of the independent treasury system
binary times had been found by experience eminenty
successful The danger of loss from mfahful and ne-
cient officers, the expense Of conducting its operations
without the intervention of bank agencies its delctcrios
effects upon commercial progress and the general bust
of the countrya Of which apprehcnde by the
opponents Of the at the time of its adoption
have been demonstrated TO be unfounded. 1t only
manned to encounter commercial crisis like the present
vincate the Justice and wisdom Of the policy against
all of complaint osapprehenson brief coinpar-
son of the operations Of the Treasury Department during
the suspension of 1887 and the present time will place the
subject before the public mind in the most satisfactory
manner.
On the 3Oth Of June, 1897, Immediately after the gem
eal suspension, the depostc banks held to the credit of
the Treasurer Of tie United Statcs aud subject his
draft the of S24, ,994 1873 37a larger amount in
proportion to the receipts and expenditures of the gov
enment than there in the treasury at the time Of
the suspension by the banks the present year The funds
Of the being then uuder the control Of the
banks, and they either unwilling unable 10 pay the
government placed in the anomalous condition of
having overowng treasury which it was seeking to
deplete by distribution depoes with the States and
vet unable meet its most ordinary obligations II had
either make its payments and depostcs in the depreci
atcd currency which suspended banks forced upon tho
country postpone their payments until from its credit
other ordinary resources it could command the
! for that purpose. II Is unnecessary to detail the
cxpedients to which the government was forced to
| upon this state Of things will be remembered by
will be realized by every from this brief presentation
| Of; aaffnt t,ft ~