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one uniform rule, which he can readily understand, and the changes of which he can easily observe, must look to the statute books of twenty-nine state and territorial legislatures, to understand the laws by which his debts may be enforced or their obligation discharged. And he is not only to understand the rules to-day, but to understand them to-morrow, as they may be changed by the fluctuations of caprice and experiment.
This was an evil which had been sorely felt under the confederation, and which was well understood, and designed to be remedied when the constitution was framed and adopted. It will thus be seen that the evil to be remedied, was a fluctuating rule for the enforcement and discharge of pecuniary obligations. Do bankruptcies affect the relations of debtor and creditor? So do insolvencies equally affect those relations. What reason, then, is there for distinguishing between bankrupts and insolvents, and including the power to reach the former, and excluding the power to reach the latter, from the constitution 1 Does not the distinction show a narrow and quibbling mind? Is it not unworthy the enlarged and comprehensive intellect of the jurist and statesman?
The term used, and the object to be accomplished, are both sufficiently comprehensive to establish the power of congress over the whole subject of bankruptcies and insolvencies beyond all question.
But we have not only the force of general reasoning against this distinction. Legislative and judicial authority are equally against it. Congress, in passing a bankrupt law in 1800, did not recognise the distinction. The Supreme Court of the United States, in the case of Sturges vs. Crowninshield, declared that it was impossible to distinguish between bankrupt and insolvent laws.
Chancellor Kent, a most distinguished authority, says, "It is difficult to discriminate with accuracy between bankrupt and insolvent laws; and therefore a bankrupt law may contain those regulations which are generally found in insolvent laws, and an insolvent law may contain those which are common to a bankrupt law." Chancellor Kent cites the opinion of Chief Justice Marshall to the same effect.
Another most erudite jurist, Mr. Justice Story, says, (3 Com. on Const, p. 10,) "What laws are to be deemed bankrupt laws within the meaning of the constitution, has been a matter of much forensic discussion and argument. Attempts have been made to distinguish between bankrupt laws and insolvent laws. For example, it has been said, that laws which merely liberate the person of the debtor, are insolvent laws, and those which discharge the contract, are bankrupt laws. But it would be very difficult to sustain this distinction by any uniformity of laws at home or abroad. In some of the states, laws known as insolvent laws, discharge the person only; in others, they discharge the contract. And if congress were to pass a bankrupt act, which should discharge the person only of the bankrupt, and leave his future acquisitions liable to his creditors, there would be great difficulty in saying that such an act was not, in the sense of the constitution, a bankrupt act, and so within the powers of congress. Again, it has been said, that insolvent laws act on imprisoned debtors only at their own instance; and bankrupt laws only at the instance of creditors. But, however true this may have been in past time, as the actual course of English legislation, it is not true, and never was true, as a distinction in colonial legislation. In England it was an accident in the system, and not a material ground to discriminate who were to be deemed in a legal sense insolvents or bankrupts. And if an act of congress should be passed which should authorize a commission of bankruptcy to issue at the instance of the debtor, no court would on this account be warranted in saying, that the act was unconstitutional, and the commission a nullity. It is believed that no laws ever were passed in America by the colonies or states, which had the technical denomination of " bankrupt laws." But insolvent laws, quite coextensive with the English bankrupt system in their operations and objects, have not been unfrequent in colonial and state legislation. No distinction was ever practically, or even theoretically attempted to be made between bankruptcies and insolvencies. And an historical review of the colonial and state legislation will abundantly show, that a bankrupt law may contain those regulations which are generally found in insolvent laws, and that an insolvent law may contain those which are common to bankrupt laws."
We think the power of congress over the whole subject abundantly established, both by general reasoning and authority.
Is it expedient to pass a general bankrupt law immediately t
It has already been stated that the incorporation of the clause into the constitution, giving congress power to pass bankrupt laws, produced no discussion; that its necessity was obvious and generally conceded.
One of the reasons for such necessity was stated to be the conflicting legislation of the states. The soundness of that reason has been approved by experience. The evil apprehended was not a temporary evil. It existed then, it exists now, and it will continue to exist as long as commercial intercourse between the states continues, or until congress exercises the power with which it is clothed by the constitution.
If the reasons for conferring the power upon congress were obvious, the reasons for exercising that power seem to be equally obvious.
Some powers, from their very nature, such asxleclaring war and making treaties, for example, are only to be exercised occasionally. Other powers, such as belong to peace, and concern the daily affairs and pursuits of a people, are to be exercised constantly. Or, to speak more accurately, those regulations which concern the daily intercourse and relations of men, must be permanent and not temporary or occasional. Commercial regulations, especially, are expected to be continuing. Bankrupt laws concern the relations of debtor and creditor; and so long as those relations continue, the necessity for such laws must exist. Wherever the constitution sees an evil, and confers a power to remedy that evil, the exercise of that power should be co-extensive with the evil to be remedied. The evils to remedy which the power to pass uniform bankrupt laws was conferred, have continued to exist, in different degrees, ever since the adoption of the constitution; and yet, with a brief exception, that power has laid dormant from that day to this. Does the federal government discharge its duties to the states and the people of the Union, while it thus continues to neglect the exercise of this important power?
The omission of congress to exercise this power, is one of the most ex* traordinary and inexplicable circumstances in the history of federal legislation.
In 1800, a bankrupt law was passed, limited in duration to the period of five years; but two years before it had expired by its own limitation, it was repealed. Judge Story, in his commentaries on the constitution, speaking of this law, uses the following emphatic language: "The excellent system, then put into operation, was repealed before it had any fair trial, upon grounds generally believed to be wholly beside its merits, and from causes more easily understood than deliberately vindicated."
Since the repeal of this first and only bankrupt law ever passed by congress, repeated but unsuccessful attempts have been made to induce congress to exercise its constitutional power over the subject. Such an attempt was made in 1818, and Mr. Hopkinson, in supporting the bill reported, said, that he considered the bankruptcy clause in the constitution "as a declaration of the will of the people, that congress should act on this subject at least so far as to establish an uniform rule. It binds us to no system, it is true, but it does enjoin on us most impressively to provide some one which shall be uniform in its operations on the different states, giving a certain known rule, and preventing those numerous and obvious evils that must arise from various and conflicting systems in the different states, by which the relation between debtor and creditor, so interesting to all classes of our citizens, must forever be changing, be imperfectly understood, and be daily producing inequality and injustice between the creditors and debtors residing in the different states. Mr. H. insisted that when the several states parted with this power, it was only to attain that uniformity of system, which could be established only by the general government; and that the states, having surrendered the power for this purpose, had a fair claim on the general government not to disappoint this expectation; but to apply the power to the uses intended by the grant of it."
Mr. Mills, on the same occasion, said, " It is enough for me to find the power 'to establish uniform laws on the subject of bankruptcies throughout the United States,' expressly delegated to congress by that instrument, and to satisfy myself that the exigencies of the country require its exercise, to appreciate the weight of this obligation. Too long, already, has this delegation of authority remained a mere dead letter in that compact; and too long have those for whose benefit it was introduced, called upon you to give it life, and energy, and action."
In 1826, another ineffectual attempt was made in congress to pass a bankrupt law. The lamented Hayne supported the bill reported to congress in a speech of commanding ability. He said, "The first question which presents itself for consideration, is, the necessity of a bankrupt law. It is asked 'whether the laws of the states, on this subject, are not adequate to the object V I answer, decidedly and unequivocally, that there exists the most pressing necessity for now establishing 'uniform laws on the subject of bankruptcies throughout the United Statesand that the laws of the states, on this subject, are inefficient, unjust, and ruinous in their operation. There now exists, in the several states of this Union, upwards of twenty distinct systems of bankruptcy, or insolvency, each differing from all the rest, in almost every provision intended to give security to the creditor, or relief to the debtor; differing in every thing which touches the rights and remedies of the one, or the duties and liabilities of the other.
"By the laws of some of the states, debtors cannot be arrested, either on mesne or final process; by others, personal property may be held in defiance of creditors; while, by others, real estate cannot be touched. In some instances, executions are suspended; in others, the courts of justice are closed, or, which is the same thing, delays are sanctioned which amount to a denial of justice. In some states a few creditors in the immediate neighborhood are suffered, by attachment or othei 4egal proceedings, (often the result of collusion with the debtor,) to secure to themselves the whole estate of an insolvent. In several states, persons arrested for debt are permitted to swear out, as it is called, after a notice of a few days; while, in other states, they are required to lay in jail three or four months.
"In some instances the relief extended is confined to the discharge of the debtor from arrest, in the particular suit; in others, from arrest in all suits; and in some few cases the attempt has been made to release him from all future liability on existing contracts.
"These various systems, unequal and inconsistent as they must be admitted to be, are rendered still more objectionable by being perpetually fluctuating. It was the opinion of one of the ablest judges that ever sat on the English bench, or any other bench, that it was better for the community 'that a rule should be certain, than that it should be justfor the obvious reason that we can shape our conduct or our contracts, in reference to any known and settled rule, so as to avoid its injurious effects; but when the rule is uncertain, we cannot avoid falling under its operation.
"We are told that it was felt as a grievance by the Roman people, that the tyrant should write his laws 'in a small character, and hang them upon high pillars,' so that it was difficult to read them; but that grievance would have been rendered still more intolerable, if the inscriptions had been varied with the rising and setting of the sun.
"Not a year, hardly a month, passes by, which does not witness numerous, and, in many instances, radical changes in the insolvent systems of the several states. It is found utterly impracticable to conform to them, or to guard against them. It defies the wisdom of the bench, or the learning of the bar, to give certainty or consistency to a system of laws, upon which twenty-four different legislatures are constantly acting, and almost daily innovating, a system which changes with a rapidity which deceives the mental vision, and leaves us in the grossest ignorance.
"Sir, this whole country is filled with unfortunate debtors, who owe their failure to such causes. I have no hesitation in declaring it to be my firm belief and settled conviction, founded on some personal knowledge, and information derived from those well acquainted with the subject, and worthy of entire confidence, that, from these causes, there is a mass of talent, industry—aye, sir, and virtue too—in our country, idle and useless; and that their number is daily and rapidly increasing. Thousands of individuals, who, in the commercial vicissitudes of the last twenty years, have become bankrupt—sometimes from fraud, oftener from imprudence, but more frequently from misfortune—are now struggling out a miserable existence, a burden to their friends and to their country. They live without hope, and will die without regret.
"I confess I felt my confidence in the wisdom of this provision of the constitution strengthened and confirmed, when I discovered that it had been introduced by John Rutledge, and had received the unequivocal sanction of James Madison. In a number of the 'Federalist,' written by that distinguished statesman, speaking of this particular provision of the constitution, he says, 'Uniform laws on the subject of bankruptcy will prevent so many frauds, that the expediency of it seems not likely to be called in question.' Sir, we are wiser than our ancestors; that which they designed to 'prevent frauds,' we pronounce to be the most fruitful source of frauds. A proposition which seemed to them so clear, that it was 'not likely to be called in question,' we have for twenty years rejected as unworthy even of a trial. It may be, Mr. President, that I am bigoted in my reverence for the authors of this constitution; but I am free to confess that I distrust my own judgment when I find it leading me to discard their precepts, or to reject their injunctions." /
Mr. Justice Story says, in his Commentaries, "It cannot but be matter of regret that a power so salutary should have hitherto remained a mere dead letter. It is extraordinary, that a commercial nation, spreading its enterprise through the whole world, and possessing such an infinitely varied internal trade, reaching almost to every cottage in the most distant states, should voluntarily surrender up a system which has elsewhere enjoyed such general favor, as the best security of creditors against fraud, and the best protection of debtors against oppression."
We have thus quoted, somewhat at large, the views of distinguished men, both in and out of congress, to show that the policy of bankrupt laws is not trivial or temporary. The reasons which at different periods have been urged, in favor of the action of congress on this vitally important subject, have lost none of their force; the duty of the general government, none of its sacred and imperative obligation; and the evils caused by the omission of congress to act, none of their malignity.
The omission of congress to perform its constitutional duty on this subject, is fraught with ruinous consequences to both debtor and creditor.
To the creditor, because of the uncertainty, delay, and expense of his remedies against his debtors; the obstacle thrown in his way both by the individual and the law; and the unjust preferences frequently given to classes of debts, and to resident over non-resident or foreign creditors, and again to foreign over resident creditors.
To the debtor, because his discharge is limited, however great the misfortunes which have pressed him down, and however full and honest the surrender of all his property to his creditors. At most, he can only be discharged from the debts contracted in the state where he resides; and his person and his future acquisitions cease to be exempt from liability, the moment he passes the boundary of the state under whose limited law he obtained his discharge.
The policy, on the part of the state, of enforcing pecuniary obligations, is undoubted; and the measure of the policy is the measure of the duty. The common weal in this, as in every other respect, is the end of the social state; and the laws which regulate the relations of debtor and creditor must be moulded by the exigencies of that common weal.
The principle upon which political society enforces pecuniary obligations is this: individuals have surrendered the right to enforce these obligations for themselves, upon the implied undertaking of society to enforce them. Hence the political duty to enforce these obligations is imperative, and limited only by considerations relating to the general good. It will be seen that the duty is not unqualified. One broad exception to the general rule is, that society does not enforce mere moral obligations to pay money, a.though the individuals might have enforced such obligations in a state of nature. There are numerous other exceptions; for example, the contracts of married women, and minors, and contracts not evidenced by writing,