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debtor or his creditor. If there be any benefit to the creditor at all in the compulsory part, it must be in the mere power of declaring his debtor a bankrupt under certain circumstances, and of causing him, willing or unwilling, to go through the bankrupt process. Now, the difficulty is, that, though this power might sometimes be beneficial to the creditor, yet it is next to impossible so to describe the circumstances which shall constitute a just occasion for the exercise of the power, as not to leave it still, in a great measure, a voluntary matter with the debtor when he will subject himself to the provisions of the law. This has been found the difficulty in all systems; and most bankruptcies are, therefore, now substantially voluntary. Those acts which are in this bill called acts of bankruptcy, and which, if committed, shall enable a creditor to sue out a commission against his debtor, are nearly all of them voluntary acts, which the debtor may perform or not at his pleasure, and which, of course, he will not perform, if he wishes to avoid the process of bankruptcy.

These acts, as stated in the bill, are, secretly departing from the State with intent to defraud his creditors; fraudulently procuring himself to be arrested, or his lands and goods attached or taken in execution; removing or concealing his goods to prevent their being levied upon or taken by legal process; making any fraudulent conveyance of his lands or goods; lying in jail twenty days for want of bail, or escaping from jail, or not giving security according to law when his lands or effects shall be attached by process.

An insolvent may avoid the commission of most of these acts if he chooses, especially as there are now few instances of imprisonment for debt. The acts of bankruptcy, according to the British statute, are very much like those in this bill. But a trader may declare himself insolvent, and thereupon a commission may issue against him; and that is supposed to be now the common course. Creditors will seldom, if ever, use this power. A creditor desirous of proceeding against his debtor for payment or security, naturally acts for himself alone. He arrests his person, attaches his property, if the law allows that to be done, or gets security for his own debt the best way he can, leaving others to look out for themselves. Concert among creditors, in such cases, is not necessary, and is uncommon; and a single creditor, acting for himself only, is much more likely to

take other means for the security of his debt than that of putting his debtor into bankruptcy. Nevertheless, I admit there are possible cases in which the power might be useful. I admit it would be well if creditors could sometimes stop the career of their debtors; and if the honorable member from New York," or any other gentleman, can frame a clause for that purpose, at once efficient and safe, I shall vote for it. Even as these clauses now stand, I should prefer to have them in the bill; my original proposition having been, as is well known, that there should be both compulsory and voluntary bankruptcy; and I vote now to strike the provision out, only because others, I find, object to it, and because I do not think it of any great importance.

I proceed, Sir, to take some notice of the remarks of the honorable member from New York; and what I have first to say is, that his speech appeared to me to be a speech against the whole bill, rather than a speech in favor of retaining the compulsory clause. He pointed out the evils that might arise from the voluntary part of the bill; but every one of them might arise, too, under the other part. He spoke of the hardship to creditors in New York; that they should be obliged to take notice of the insolvency of their debtors in the Western States, and to go thither to prove their debts, or resist the discharge. But this hardship, certainly, is no greater when the Western debtor declares himself bankrupt, than when he commits an act of bankruptcy, on which some Western creditor sues out a commission against him.

All the other inconveniences, dangers, or hardships to creditors, which the honorable gentleman enumerated, were, in like manner, as far as I recollect, as likely to arise when a creditor puts the debtor into bankruptcy, as when he puts himself in. The gentleman's argument, therefore, is an argument against the whole bill. He thinks Eastern creditors of Western debtors will be endangered, because State legislatures, in States where debtors live, as well as commissioners, assignees, and so forth, will have all their sympathies on the side of the debtors. Why, Sir, State legislatures will have nothing to do with the matter, under this bill; and as to the rest, how is it now? Are not creditors now in the power of local administrations affected, in

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all respects, by these same sympathies? Are there no instances, indeed, and is there no danger, of laws staying process, embarrassing remedies, or otherwise interrupting the regular course of legal collection? For my own part, I cannot doubt that a New York merchant, learning that his debtor in the South or West is in insolvent or failing circumstances, would rather that his affairs should be settled in bankruptcy, in the courts of the United States, than that his debtor should settle them himself, paying whom he pleased, and disposing of his property according to his own will, or under the administration of the insolvent laws of the State.

The gentleman seemed to fear that, if Western traders may make themselves bankrupts, New York merchants will be shy of them, and that Western credit will be impaired or checked. Perhaps there would be no great harm if this should be so. A little more caution might not be unprofitable; but the answer to all such suggestions is, that the bill applies only to cases of insolvents, actual, real insolvents; and when traders are actually insolvent, the sooner it is known the better, nine times out of ten. Nor do I feel any alarm for our mercantile credit abroad, which has awakened the fears of the gentleman. What can foreign merchants suppose better for them than such an administration of the effects of debtors here, as that, if there be foreign creditors, they shall be sure of a just and equal dividend, without preference either to creditors at home or indorsers? It is not long since, in some of the States, (I hope it is not so anywhere now,) that creditors within the State had preference over creditors out of it. And, if we look to other countries, do we find that well-administered systems of bankruptcy enfeeble or impair mercantile credit? Is it so in regard to England, or to France?

The honorable member feels alarm, too, lest the banks should be great sufferers under the operation of this bill. He is apprehensive that, if it shall pass, very many debtors of the banks will become bankrupts, pay other creditors more or less, and pay the banks nothing. Sir, this is not according to my observation. Bank debts are usually preferred debts, because they are debts secured by indorsement. But, by mentioning the case of the banks, the gentleman has suggested ideas which I have long entertained, and which I am glad of this opportunity to express briefly, though I shall not dwell on them,

Sir, a great part of the credit of the country is bank credit. A great part of all indorsement and suretyship is bank indorsement and bank suretyship. I do not speak particularly of the great cities; I speak of the country generally. Now, indorsement, as I have already said, rests on the idea of preference. And if we take away preference, do we not diminish bank indorsement and bank accommodation? And do we not in this

way act directly on the quantity of bank paper issued for circulation? Do we not keep the issues of paper nearer to the real wants of society? This view of the case might be much pressed and amplified. There is much in it, if I am not mistaken. For the present, I only suggest it; but he who shall consider the subject longest and deepest will be most thoroughly convinced that in this respect, as well as others, the abolition of preference to indorsers will act beneficially to the public.

The immediate motion before the Senate, Mr. President, does not justify a further extension of my observations on this part of the case. My object has been to prove that this bill is not one-sided, is not a bill for debtors only, but is what it ought to be, a bill making just, honest, and reasonable provisions for the distribution of the effects of insolvents among their creditors; and that the voluntary part of the bill alone secures all these principal objects, because, in the great and overruling motives of obtaining a discharge, it holds out an inducement to debtors who know themselves to be insolvent to stop, to stop seasonably, to assign honestly, and to conform in good faith to all the provisions intended for the security of their debtors.

STATE OF THE FINANCES IN 1840.*

A MOTION was submitted in the Senate, on the 14th of December, 1840, to refer so much of the President's message at the beginning of the session as relates to the finances to the Standing Committee on Finance. This question coming up for discussion on the 16th, Mr. Webster addressed the Senate substantially as follows:

MR. PRESIDENT, -It has not been without great reluctance that I have risen to offer any remarks on the message of the President, especially at this early period of the session. I have no wish to cause, or to witness, a prolonged, and angry, and exciting discussion on the topics it contains. The message is, mainly, devoted to an elaborate and plausible defence of the course of the existing administration; it dwells on the subjects which have been so long discussed among us; on banks and banking, on the excess of commerce and speculation, on the State debts, and the dangers arising from them, on the Subtreasury, as it has been called, or the Independent Treasury, as others have denominated it. I propose now to deal with none of these points. So far as they may be supposed to affect the merits or character of the administration, they have, as I understand it, been passed upon by the country; and I have no disposition to reargue any of them. Nor do I wish to enter upon an inquiry as to what, in relation to all these things, is supposed to have been approved or disapproved by the people of the United States, by their decision in the late election. It appears, however, thus far, to be the disposition of the nation to change the administration of the government. All I propose at this

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*Remarks upon that part of the President's Message which relates to the Revenue and Finances, delivered in the Senate of the United States, on the 16th and 17th of December, 1840.

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