[THE subject of a general bankrupt law, after the repeal of
the law of 1800, which took place in 1805, had been frequently
agitated in congress. Bills were at different periods introduced
and discussed, some of which passed the senate, but were
lost in the house of representatives. In 1837, president Van
Buren recommended to congress the passage of a bankrupt law,
exclusively applicable to banks, and other corporations; but
the proposition met with very little favor at the time. The
pecuniary distress prevailing throughout the country, during
the administration of that president, caused many memorials
to be presented to congress, praying for a general bankrupt
law for the relief of the people, and, on the twenty-third
of March, 1840, on presenting a memorial from a large number
of the citizens of New York, asking the passage of a uniform
bankrupt law, Mr. Clay took occasion to say, that he had been
at all times favorable to such a measure, and was then ready
to support such a bill, when found suitable in its details,
for the exigencies required. In April, three different bills
were introduced in the senate, one of which was taken up
and discussed. On motion of a senator from Alabama, (an
administration man,) sustained by Mr. Clay, of Kentucky, among
others, the clause subjecting banks to the operation of the bill
was stricken out, by a vote of twenty-eight to sixteen; Mr. Clay,
on a subsequent occasion, (February twenty-sixth, 1841,) denying
the constitutionality, as well as the expediency, of including
corporations in such a law. In June, 1840, Mr. Clay moved to
strike out the compulsory provisions in the bill, which was
negatived, (seventeen to twenty-five.) He had previously said,
(April twenty-second,) ‘that it was not to be denied that the
voluntary class of bankruptcies would comprehend a vast majority
of all the cases, and hence the bill of the majority of the
judiciary committee, would be likely to afford the largest share
of relief, in the present embarrassed and deranged state of
business.’
The compulsory clause being thus retained, the bill was
ordered to be engrossed, on the twenty-fourth of June, by a vote
of twenty-four to twenty-three, Mr. Clay in the affirmative.
It finally passed the senate on the twenty-fifth, twenty-one
to nineteen; but was laid on the table in the house of
representatives, on the seventh of July, by a vote of one
hundred and one to eighty-nine.
At the extra session of congress in 1841, after the election
of president Harrison, the whigs having a majority in both
branches, a bankrupt hill was introduced, and after considerable
debate, passed the senate July twenty-fourth, 1841, by a vote of
twenty-six to twenty-three, and the house of representatives on
the eighteenth of August, one hundred and ten to one hundred and
six. Mr. Clay supported this bill, declaring that ‘he considered
it as part of a system of relief for the country.’
Mr. Walker, of Mississippi, a Van Buren senator, said: ‘the
refusal of the late administration to act upon the subject, had
done more than any thing else to cause their defeat.’
During the next session of the same congress, the most strenuous
efforts were made to repeal the bankrupt law, before the time in
which it was to go into operation, which was fixed for the first
of February, 1842; and the repeal was carried in the house of
representatives, one hundred and twenty-six to ninety-four, on
the seventeenth of January, but defeated in the senate on the
twenty-eighth, by a vote of twenty-two to twenty-three. While
the question was pending, numerous petitions from the people,
remonstrating against the repeal of the law, were presented to
congress. Mr. Clay, on presenting some of these petitions, on
the seventeenth of January, made the following remarks on the
subject.]
MR. CLAY said, that he was charged with the presentation of a great
many memorials, all remonstrating against any repeal or postponement
of the bankrupt law. He would not trouble the senate with having them
read. There were a great many from the state of New York; two from the
state of Maryland; one from Pennsylvania; one from Newark, New Jersey;
one from Boston, signed by hundreds of persons; a city which, from its
mercantile character, must be supposed to have knowledge on the subject,
in which were mingled the names of those both able and unable to pay
their debts; also, three from his own state, (Kentucky,) one from
the capital of the state, in which were the proceedings of a meeting,
strongly remonstrating against interference with the law, going into
arguments to show why it should not be repealed or postponed. To this
there were four hundred signatures, all of which, the secretaries
informed him, were voluntarily made.
Mr. Clay referred to an opinion, which had been thrown out under
the sanction of some high commercial authority in New York, that the
bankrupt bill, if it should become a law, would operate to throw one
hundred millions worth of property into the market to be sacrificed.
Such a remark, coming from that source, might be likely to have some
weight. But it must be remembered that the estimate of one hundred
millions, was mere assumption and random conjecture, for no man could
tell, with any thing like accuracy, what the amount would be; it might
just as well have been set down at two hundred millions, as at one. But
be the amount what it might, in estimating the weight of the statement,
as an argument against the bill, it should be inquired, on the other
hand, what would be done with this property, should the bill not go
into effect? Would it be kept _out_ of the market? Not at all. On the
contrary, it would be thrown into the market, to be sold under the
hammer, by sheriffs and other officers executing the process of the
courts, and that without competition to raise the price. For when the
property of a debtor was seized by one of his creditors, what motive
could his other creditors have to enhance its avails, by competition
at the sale? None in the world. On the contrary, should the law remain
undisturbed, what would be the course of action under it? According to
his understanding of the act, it would produce a distribution of the
goods of the debtor among all his creditors, _pro rata_; of course,
when his property should be set up to sale, it would be the interest
of them all to make as much out of it as possible. They would bid it
up, instead of suffering it to be sacrificed for a song. He considered,
that whatever might be the exact form of legal proceedings in carrying
out the law, the result in practice would be, that, under the benignant
operation of the act, there would be a distribution of the debtor’s
effects, not only among all his creditors, but at the highest price
they could be made to command.
Mr. Clay went on to say that it was not his purpose to go, at this
time, into a discussion of the subject generally. He had thought of
the bankrupt act as a measure, which came recommended to congress, not
only by all considerations of justice, of humanity, and benevolence,
but recommended no less by the appalling condition of the country.
If, among all the other distresses, discontents, and disorders, which
every where prevailed to so alarming an extent, this legislature should
now slam the door in the faces of those unfortunate men, who had at
length hoped to be liberated from irretrievable embarrassment, by
the beneficent operations of this law, it would produce such a state
of excitement, distress, disorder, and despair, from one end of the
land to the other, that no man could foresee, or even conjecture, the
consequences.
But he could not terminate the brief remarks with which he had
deemed it proper to accompany the presentation of these petitions and
memorials, without adverting, for a moment, to a circumstance which had
a personal relation to himself. The senate would do him the justice to
admit, that he rarely introduced any thing of that description on their
notice; never, indeed, unless under a sense of unavoidable necessity.
An intimation had recently appeared in some of the public prints of the
day, that the movement now in progress in the other wing of the capitol,
towards a repeal of the bankrupt law, had originated with him, (Mr.
Clay.) He disdained to enter upon any thing like a defence, against a
charge so base and dishonorable, and one so entirely contrary to the
entire tenor of his whole public life. It might, with equal probability,
or evidence, have been asserted that he was the author or prompter of
the proposal of a gentleman near him, to repeal the distribution law.
He held the insinuation in profound contempt and scorn.
A single remark he must be permitted, in reference to the delegation
in the other house, from his own state. At the last session, every
member of that delegation, with one solitary exception, had voted
against the passage of the bankrupt bill; and even that single advocate
of the bill, on his return to his own district, found so great and
general a dissatisfaction with the provisions of the bill, that he
had, on the present occasion, felt it his duty to give such a vote, as
he presumed it would appear that he had this day given in that body,
on the question of repeal. But it seemed, notwithstanding these known
facts, that Mr. Clay was to be held responsible for the votes of
all the representatives in the other house, from his state, on that
question. But those who imagined that Kentuckians were made of so
supple, servile stuff, as to take their public course in legislation,
from the dictation of any man, had yet to learn their true character.
Those gentlemen had as good a right to dictate Mr. Clay’s course, as
he had to dictate theirs. The representatives from Kentucky, in either
house of congress, had enough of manly independence, to judge and to
act for themselves, and to vote as their own individual views of duty
should prompt them. But this accusation, base and despicable as it was
in itself, had, notwithstanding, assumed such a shape as to render it
Mr. Clay’s duty to bring it to the notice of the senate; and he felt
very sure that it was only necessary for him to bring it home to the
bosom of every senator, to have it promptly, instantaneously rejected
and repelled, as utterly groundless. For whatever might have been their
difference of sentiment――and no man regretted more than he did, that it
should have been his misfortune to differ in opinion from any portion
of the gentlemen of that chamber――he was satisfied that all, both
friends and foes, would, with one voice, do him the justice to say,
that, whatever might have been the errors of his head, he had, at least,
sought to live, as he hoped to die, an HONEST MAN――honest in his public,
as in his private life.