the usual relation between creditor and debtor, inasmuch as it results not from an ordinary and voluntary contract, as between buyer and seller, but from a legislative exaction, which creates the debt without furnishing to the debtor an immediate, but only a contingent, equivalent. Let me endeavor to illustrate my meaning upon this point, confining the illustration to the case of duties secured by bonds. Immediately upon the arrival of a ship in port, before the cargo can be landed, the importer is required to execute his bond, with sureties, for the amount of duties on the goods consigned to him; and, from that moment, except that he is entitled to an allowance for damage ascertained to have been incurred during the voyage of importation, he is responsible to the Government for the amount of his bond, whatever losses he may incur in landing and storing the goods, or while they remain in store, before he has had an opportunity of disposing of them for consumption or export. Should the goods be exported, he is entitled to a drawback of the duty; if they are sold for consumption, the duty becomes an increment of value, and is received back by the importer in the price which the consumer pays; but while they remain in the warehouse of the importer, even, as in many cases, under the lock and key of the custom-house, the Government holds him responsible for the duties, against all risks; and, should the goods be destroyed or lost, will still exact the payment of his bond. Now, it is obviously of no advantage to the importer that a duty is thus levied upon his goods, and it is as obviously not the design of the revenue laws that he shall be a loser, by reason of his being held subject to the payment of the duty; but the design is, that the payment of the duty shall devolve ultimately upon the consumer, and the Government employs the importer as its agent for collecting the duty from the consumer. When the importer has sold the goods to the consumer, (though he is obliged to take upon himself the risk of bad debts, without any guarantee from the Government,) he has realized a consideration for his bond, and acquired the means of paying it; but, until that contingency has occurred, he remains in the situa tion of an agent who, upon the receipt of goods on consignment, has made an advance in cash, or given an acceptance to his principal, without being able to avail himself of the legal privilege of the agent in such cases, of recovering from the principal the amount of the advance or acceptance, if the goods should be lost or destroyed, in landing or in store, before they can be sold.

[FEB. 16, 1836.

ing into or delivery from the warehouse," the duty, "payable or paid," is remitted or returned. While the goods remain in the warehouse, sales may be made by one party to another, (the law prescribing a mode of transfer,) and the purchaser succeeds to all the privileges of the importer; or, rather, the privilege attaches to the goods, so long as they remain in the warehouse, whatever may be the changes of ownership in the meanwhile. It is not until they are about to pass into immediate consumption that the duty is payable; and thus the importer has the opportunity of collecting the duty from the consumer before he is required to pay it to the Govern ment; and it is only after the goods have passed into the consumer's hands that the Government is released from the risk of losing the duty, in consequence of any unavoidable accident (by fire or otherwise) that may befall the goods.

Such, Mr. Chairman, is the design of the English warehousing system; and the gentleman from South Carolina [Mr. PICKENS] will perceive that, in a case like the present, it would save harmless (in respect to liability for duties) most of the importers for whose partial and temporary relief this bill makes provision. Had the English system been in operation at New York, a large proportion of the imported goods destroyed by the fire would have been warehoused; the duty would not have accrued, and would not have been payable; and the Government could not have been a gainer by the ca lamity, as it now may be, since it has secured the duty upon all goods which, if not burned, would have been exported, and will derive an increase of revenue from the importation of goods required to supply the place of those (also burned) which were intended for consump

tion.

I regret, sir, that the warehousing system could not, long since, have been introduced here. As perfected in England, it affords innumerable advantages to the commerce of the country, and has not proved liable to abuse. I perceive no sufficient obstable to its introduc tion here. The principle was partially recognised in the sixtieth section of the act of Congress of the 2d of March, 1799, providing for the landing, storing, and relading, of the cargoes of ships ariving from foreign ports in distress, without requiring the consignee, in such cases, to enter the goods and secure the duty. The allowance of drawback upon goods imported is also a partial recognition of the principle; but it is only by adopting the system in its entire extent that we can se cure to our citizens the same advantages of foreign trade The disadvantage and injury to which the importer is that are now enjoyed in England, as well also as at most thus exposed may be attributed to a prominent defect of the principal ports of the continent of Europe. The in our revenue laws-the want of a warehousing system. fire at New York furnishes striking proofs of the injury In England, where that system, after many gradual and injustice to which merchants are exposed, from the efforts to establish it, has been in full operation since want of the system; and I shall consider it as the 1826, the evil does not exist. It is there provided that strongest indication of friendly regard for the mercan the importer, upon landing his goods, may deposite them, tile interest, whenever Congress shall see fit to enter. under the inspection of officers of the customs, in a tain a suitable proposition in reference to this object. "warehouse of special security," as it is termed, which I shall cheerfully vote for this bill, because I consider may be a private store or quay, duly licensed for the it founded in the most equitable principles, and because purpose, under prescribed regulations; and the goods it provides for a case of suffering of appalling magne are allowed to remain in such warehouse for a term of tude; and yet I am not unaware that it furnishes some three years, subject only to the standing bond of the foundation for the charge of partial legislation, inasmuch proprietor or occupier of the warehouse, or the special as there have been other cases, similar in all important bond of the importer, full duties of importation, or for the due exportation accident, have been subjected to the loss of goods upon "for the payment of the respects to this, in which importers, from unavoidable of the goods. If within three years the goods are which they had secured the duties, and have received no exported, the bond is discharged; if they are taken It is impossible to refer "for home use," the duties are payable in cash upon to any single case which exhibits an amount of loss at all delivery from the warehouse. While the goods are warehoused, the duty does not accrue; if they are lost but I am safe in saying that the aggregate of losses in approaching to what has been sustained at New York; or destroyed by unavoidable accident in the warehouse, such cases as the Government has failed to provide for, the duty is not held to be payable; or if they are lost or if it could be ascertained, would prove that importdestroyed "in landing or shipping," or "in the receiv- ers have been hitherto great sufferers from the unjust

relief from the Government.

operation of laws which are still in force, and from the want of a system which might easily be established.

[H. or R.

thereto, there is no legal provision so practicable, so simple, and certain in its operation, and so well adapted to exclude cases of special legislation, as a warehousing system.

drawn from that clause of the constitution which re-' quires duties to be "uniform," I submit to the gentleThe gentleman from South Carolina, [Mr. PICKENS,] man who has quoted it, [Mr. PICKENS,] whether it is not misapprehending, as I conceive, the relation between virtually a palpable disregard of uniformity to require the Government and the importer, upon which the pro- of the importer, whose goods perished in the fire on the visions of this bill are founded, has illustrated his view day of their landing, or on the day preceding that on by the assertion that the claim upon the Government is which (the outward entry, perhaps, having been lodged the same, or that there is equally no ground for a claim, at the custom-house) they were to have been exported, whether the sufferer by fire is an importer at New York, or on any intermediate day, so long as they remained in or a purchaser of imported goods at Cincinnati. The his hands undisposed of for consumption or export, the Government is clearly under no obligations to the deal- same duty which has been paid by another importer, er at Cincinnati. It has subjected him to no legislative who has received the duty from the consumer, and has exactions; it holds him under no peculiar responsibili- thereby been enabled to act, as the law intended he ties; it sustains towards him no other than the ordinary should act, merely as the agent of the Government in relation of Government to a citizen. It is, more espe- collecting the duty which is thus actually paid by the cially, in no sense his creditor; it has no demand against consumer? Upon a proper construction of the clause, him as a debtor; and, most of all, it cannot regard him however, I do not consider it as furnishing any argument as a debtor of whom it is requiring the payment of a applicable to this case; and I suppose it only designed debt for which it has given him no equivalent, and in to prescribe that the general revenue laws shall operate regard to whom the contingency, upon which alone de- equally and alike throughout the country, without repended the opportunity of his realizing an equivalent, straining the power of Congress to make suitable prothrough unavoidable accident, cannot occur. This, visions for extraordinary cases arising under those laws, then, is the distinction between the two cases, resulting as necessity, justice, or the public interest, may require. from the widely different relations which the supposed I will barely submit, in this connexion, that, to ensure sufferers sustain towards the Government. When the the most salutary effect to this and every part of the foreign goods pass from the importer to the consumer, constitution relating to the collection of revenue from (or to the consumer's agent, the purchaser for consump-imports, and to the regulation of commerce incident tion,) I agree that the duty becomes an increment of value; that the importer then realizes the equivalent for what he has paid or owes the Government; that from that time the importer can have no claim upon the Government, growing out of the peculiar relation which he had assumed; and that, of course, he cannot transfer to the consumer, or his agent, an equitable right which was peculiar to himself as an importer, and has ceased to exist. The purchaser for consumption buys the foreign goods of the importer, as he would buy any other goods, for a fair consideration, and afterwards holds them, as he would hold any other goods, at his own risk. His contract with the importer does not involve any assumption of responsibility to the Government; he cannot therefore prefer a claim against the Government, as resulting from that contract; and there is no other ground upon which he can rest a claim. Whenever the Government shall return to a system of which its experience has been too unfortunate again to recommend the adoption, and shall levy an excise upon whiskey before it has been removed from the vats, or, at least, from the warehouse of the distiller at Cincinnati; and when that distiller can state the fact to Congress, that, as one of the sufferers by an awful conflagration which has reduced to ashes an extensive section of the thriving emporium of the West, he has been deprived, by the destruction of his property, of the means of recovering from the consumer the amount of the excise which he has paid or owes the Government, there may be a case at Cincinnati resembling, in some of its features, and in its equitable claims to the consideration of Congress, the present case at New York.

It is my deliberate opinion, for the reasons which I have stated, that the importers of "dutiable" goods de stroyed by the fire, and upon which the bonds are in the course of collection, may justly claim a remission of duties. If the bonds have been collected, or if the duties were paid in cash, I hold, for the same reasons, that the amount of duty in such cases should be refunded. But, at this point, the gentleman from Pennsylvania [Mr. CHAMBERS] encounters a difficulty which, it appears to me, may be easily removed. Confining himself to the case of bonds which have been paid, he says, that as soon as they are paid, the relation of creditor and debtor ceases; and that thereupon the claim of the importer upon the Government expires. Allow me to suggest to him, that though the bond has been paid, if good cause shall subsequently appear why it should not have been paid; or if it can be shown that the consideration for which the bond was given has not been and could not be realized; or if, where the duty was paid in cash at the time of entry, the exportation of the goods has entitled the importer to drawback; that, in all these cases, the fact of payment has not settled the account; and that, it may be, the relation of creditor and debtor, instead of having ceased, has in effect been reversed-the Government having become the debtor for the amount paid, and the importer, as a creditor, being entitled to reclaim it. The English law, in the cases to which I have referred, authorizes the commissioners of customs to "remit or return" the duties "payable or paid;" and the gentleI have thus far confined myself to a statement of some man, in justice, must acknowledge that, when he can of the reasons which induce me to regard it as an act of agree that the duty cannot equitably be claimed by the justice, to make provision for those debtors of the Gov- Government, he should be equally ready to refund the ernment who have been immediate sufferers by the money if it has been paid, or to give up the bond if it fire--the first class designated in this bill. My convic-has been secured. He surely will not attempt to screen tions lead me to the conclusion that the most reasonable the Government from the obligation to do equal justice objection to the first section of the bill is, that it falls to two claimants, similarly situated in respect to the merit short of its proper object; and that it should have pro- of their claims, merely because one claimant had been vided, not simply for an extension of the time of pay- obliged or had chosen to advance the amount which he ment, but, under suitable regulations, to prevent fraud, claims in cash, and the other had been suffered to subfor the absolute remission of the duties upon all goods stitute his bond; or between two claimants similarly situsubject to duty which were destroyed by the fire. And, ated in all respects, except that both having given their sir, if any argument applicable to this case is to be bonds, the bond of one should happen to fall due the VOL. XII.-160

as eminent contributors to the national welfare, as indispensable agents in the accumulation and diffusion of the national wealth, and as worthy representatives of the national character in the wide extent of their commercial relations.

The

[H. OF R.

upon the list of bankruptcies, attributable to the fire, were those of one half of the fire insurance companies, who, perhaps, will not be able to pay upon an average above fifty per cent. of the demands against them, and may be compelled by the state of their affairs to postpone the payment of this meager dividend to a period too late to afford seasonable relief.

While it has burned their books, it has not finally balanced them. Their notes and bonds will still be produced against them, although they have lost the record of their amount. They had used every precaution to guard against such a calamity. Their buildings were properly The merchants of New York are and always have been secured--some supposed to be fire proof. Whatever the principal debtors of the Government, or its prin- was the origin of the fire, none of them, at most with cipal agents in the collection of its revenue. At the but one exception, are chargeable with carelessness; custom-house in that city, and from the bands of its and they had insured their property for its full value. merchants, there have already been collected between But the insurers were not insured! It is an incident of two and three hundred millions of dollars for the use of this case, which distinguishes it above all others in the the country; more than one half of the imposts regular-aggravation of misfortune, that the first names inscribed ly accrue there; and upon the ability and integrity of the merchants of New York, therefore, the Government must mainly depend for its available resources. facts which are upon the records of the Treasury Department attest that, while the Government has always been a strict, and sometimes an inexorable, creditor, it has sustained only the most inconsiderable loss from the insolvency or fraud of its debtors in New York. Hitherto, they have rarely as individuals, and never collectively, urged claims to its indulgence, but have promptly and scrupulously fulfilled their engagements; occasionally, too, during periods of serious embarrassments. Even now, when overwhelmed with distress, they adhere strictly to their obligations, and not a bond, except by the voluntary permission of the collector, remains unpaid. Since the fire, the collector, in the use of a sound discretion, although in the exercise of an authority not strictly conferred by law, has permitted bonds to lie over, conformably to a suggestion of the Secretary of the Treasury that some seasonable measure of relief might be expected from Congress. The present bill is designed to satisfy that expectation.

Having said thus much in justice to the city of New York, to the character of its merchants, and to their relation to the Government, I will ask the attention of the committee to some of the circumstances of the case which have determined my own judgment in regard to the expediency of the provision contained in the second section.

The fire laid waste a section of the city occupied by the merchants as a place of business. When I visited the scene a few days after the sad event, I beheld an area of fifty acres covered with smoking ruins, and strewed with fragments of damaged goods partially res cued from the flames. I perceived at once that the immense mass of buildings which had been thus laid prostrate consisted almost entirely of warehouses, the occupants of which I recollected to have been chiefly importing merchants, commission houses, or grocers, such as were always the holders of heavy stocks of goods, the aggregate value of which must have usually exceeded the largest estimate of the loss which is supposed to have been sustained. I was told that the work of destruction had been so rapid that, in addition to the loss of buildings and goods, many of the merchants had not been able to save their books, notes, and papers. Now, Mr. Chairman, viewing this fire as a commercial embarrassment, I wish to remark that no ordinary estimate of the value of buildings and goods destroyed can convey a sufficient idea of the actual suffering which has been produced, nor even of the positive pecuniary loss which has been and is yet to be sustained. These sufferers are almost exclusively merchants, who were holding a large amount of property, enjoying an extensive credit, and engaged in profitable business. In consequence of this fire, not only is their property destroyed, but, to a greater or less extent, their credit must be impaired, and their business, for a time at least, is stopped. All their previous engagements, nevertheless, remain to be fulfilled. The fire, while it has destroyed their property, has left the debts which they owe untouched.

Without going into further details, Mr. Chairman, I leave you to judge, from this strictly accurate description, of the actual condition of the merchants who were immediate sufferers by the fire. Estimate if you can the necessary effect of these combined causes of suffering: destruction of property, diminution of credit, suspension of business, overhanging debts, failure of insurancefollow them out in their remote consequences, and contingent results, and tell me what sum of money will suf ficiently denote the real extent of the deplorable calamity? Set down the loss of buildings and goods at $25,000,000, and consider this as only the first item in the account. Estimate the value of the credit which such a capital in the hands of merchants in active business would usually command, and make that the second item. Calculate the accruing profits of the business in which all these merchants were engaged, and also determine what the privilege is worth to so many merchants of being well established in business; let this be the third item. Conjecture (for it can only be conjectural) the amount of the sacrifices of property which the pressure of debts, under such circumstances, and the suspension of demands against insurers, must occasion; and stop here: what is the aggregate? Could the figures be cast and the sum stated, I think it would be sufficient to convince the most incredulous that the immediate sufferers are entitled, at least, to the scanty indulgence which the first section of the bill provides for them. I think it would also be a convincing and alarming proof that such an overwhelming calamity cannot be confined to the immediate sufferers, but must, in its consequences, extend far beyond them. I think it would satisfy the gentleman from Kentucky that such an amount of loss may have given "a shock" to the business and credit of the whole city; and I am sure it must compel him, if he will undertake to estimate it, to carry his conceptions far beyond his ordinary standard of magnitude in money matters, and quite as much beyond the range of his previous acquaintance with the nature and extent of commercial transactions.

When the ravages of the fire had ceased, and the inhabitants began to recover from the bewildering sensations of terror and alarm which at the instant overcame them, how did they regard their general situation? They saw, as they were collected on the spot, that though only a section of the city had been destroyed, the whole community was doomed to suffer by the calamity; that, though the wound was local, the stroke of the destroyer had been aimed at the heart; that, though it was an easy matter to complete the list of immediate sufferers, it was difficult to know where to begin or where to end in enumerating the many and many others who could not escape uninjured. The merchants, more especially, instantly perceived that not one of their number was a

H. OF R.]

Sufferers by Fire in New York.

[FEB. 16, 1836.

disinterested spectator of such a scene of ruin; but that, were men of business more unprepared for sudden re connected as they were by mutual interests, and bound verses and severe pressure, and yet never, perhaps, has together by reciprocal obligations, the consequences there been more signal occasion to apprehend both. which would result from such a destruction of property, The overtrading of the past year, the rage for wild spec. and a corresponding prostration of credit, and conse- ulation, the abused spirit of enterprise, have led, as it quent suspension of business, must affect them all. The would seem, to almost every conceivable misapplication dense cloud of smoke, ascending from the spot to which of capital, in whatever form it exists, and to an extension the fire was confined, had overshadowed the whole city, of the system of credit to so dangerous an extreme that intercepting for a time the bright beams of the returning it is difficult to imagine any mode of rescue from the sun; and these merchants felt that a heavier cloud of dis- evils which it must produce. The present state of the trust and embarrassment, produced by the misfortunes money market affords some indication of what may yet of the immediate sufferers, was fast gathering over them be expected; and let any member, who has the means of all, threatening to blast the gilded prospect of the near forming a correct judgment, turn his attention to the future, and the precursor of events which might involve general situation, at the present moment, of men of them all in temporary distress. They felt at once that business, and of the many who, in the use of the most it was their common duty to prepare for the worst. The unheard-of expedients, and under the impulse of the impulse of sympathy with their neighbors was blended maddest passion for adventure, have forced their pro with the instinct of self-preservation. In the manifesta-jeets and extended their transactions so vastly beyond tion of mutual confidence, in the readiness of each to the views and purposes of men of business, properly so sustain every other, in that spirit of accommodation to called; let him endeavor to form some idea of the uncircumstances which belongs to the mercantile charac- precedented financial demands of the coming year, of ter, they proceeded to provide for the emergency. To the engagements to be met, the contracts to be fulfilled, guard against the unavoidable scarcity of money, and the notes and bonds to be paid; let him consider the the consequent difficulty of meeting such of their debts strained condition of the State banks, and the necessary as were approaching maturity, they appealed to the effects of the approaching dissolution of the Bank of the banks to co-operate in all practicable measures of re- United States, unless, indeed, they are to be obviated by lief, and they imparted the force of public opinion to a modified resuscitation of that important institution; let the obligation of creditors to grant indulgence to their him anticipate the various vicissitudes which usually predebtors, by the extension of payments. They called cede and follow a diminution of the value of the leading upon the Bank of the United States to apply all the staples of the country and a general depreciation of real means within its disposal for their accommodation; they and personal property; let him notice the consequences called upon the city government to create stock which already experienced at New Orleans of a suspension of might be made available capital; they invoked the State the trade with Mexico; let him bear in mind the contin Government for its prompt and liberal interposition in gencies to which all branches of our foreign trade are various acts of legislation; and they appealed to the constantly liable; and then let him judge of the influ General Government to assume its just share of loss, to ence-the combined influence, as it may prove-of all postpone the collection of its superfluous revenue, and these causes of commercial embarrassment upon the to give such a direction to its finances that they might be straitened condition of the merchants of New York. Let rendered more contributory to their immediate benefit. him then decide whether the circumstances are not, of I am convinced, Mr. Chairman, that none who have may not be, such as to justify this Government in extendmade due inquiry into all the circumstances of their situ-ing to its debtors, and all its debtors, in that distressed ation can suppose that the merchants of New York have city, the same measure of indulgence which, amongst acted with a greater degree of foresight or vigor than themselves, no creditor is sufficiently regardless of his the occasion required. Fortunately for them the fire honor or his interest deliberately to refuse. Let him deoccurred at a season of the year which affords almost cide whether, when all their other applications for astheir only respite from the pressure of business, and sistance have been freely granted, their resort to the they were enabled to avail themselves of a brief leisure General Government shall be coldly, and sternly, and to concert and attempt to execute their plans. The ef- harshly repulsed. Let him consider whether, when the forts which they have made are memorable proofs of stroke which has fallen so heavily upon that city is unimanly fortitude and dauntless perseverance, which de-versally regarded as a national calamity, and when all serve, if they should not achieve, success. They illustrate that can be done for her relief must be alike regarded a public character which is entitled to universal admira- as a national benefit, he will assume the responsibility of tion. They indicate a determined purpose, which, if deciding that this Government may safely, and wisely, any thing can, will sustain them in their most unequal and honorably, postpone the claims of its debtors, and struggle with adversity, and enable them to start forward refuse to listen to the united and urgent appeals of so with redoubled energy upon a prosperous career. many of its citizens.

The crisis of their fate is still impending. The extent I have already noticed some of the objections that have of the calamity is not yet developed in its results, and a been urged against this bill: there are others which may be period is approaching which must put to the severest supposed to deserve consideration. The gentleman from test their ability to support themselves. Independently Kentucky, [Mr. HARDIN,] with his characteristic prompt of their own fruitful sources of embarrassment, the signs ness, commenced an attack upon the hill before, as it of the times indicate a fearful tendency of events to ag-proved, he had become acquainted with its provisions gravate and multiply the dangers of their situation. What is the state of things in the country at large? Greatly brightened, I delight to acknowledge, by the cheering intelligence which we have this day received, but still sufficiently perplexed to deserve anxious consideration. A year of unexampled prosperity has closed, and another year has commenced, of which they who survive its termination may be obliged to render a dif

ferent account. A has commenced with

and, in the use of his accustomed weapons of sarcasm and invective, endeavored to array against it the untimely influence of sectional and political prejudice. In glancing at his objections, let me respectfully suggest to him, that, if it be the misfortune of these debtors, it surely is I not their fault, that the city in which they reside has be profitable come the principal depository of the public revenue; and use of its funds which are there collected. If it be their results which must leave a durable impression upon the unisfortune, it surely is not their fault, that the State of political and financial condition of the country. Never which they are citizens possesses, under the constitution,

4