THE BANKRUPT ACT: WHAT IT WAS: AND HOW IT WAS PASSED.
It has been seen in Mr. Tyler's message that, as a measure of
his own administration, he would not have convened Congress in
extraordinary session; but this having been done by his predecessor,
he would not revoke his act. It was known that the call had been
made at the urgent instance of Mr. Clay. That ardent statesman
had so long seen his favorite measures baffled by a majority
opposition to them in one House or the other, and by the twelve
years presidency of General Jackson and Mr. Van Buren, that he
was naturally now impatient to avail himself of the advantage of
having all the branches of the government in their favor. He did
so without delay. Mr. Tyler had delivered his message recommending
the measures which he deemed proper for the consideration of
Congress: Mr. Clay did the same--that is to say, recommend his list
of measures to Congress also, not in the shape of a message, but
in the form of a resolve, submitted to the Senate; and which has
been given. A bankrupt act was not in his programme, nor in the
President's message; and it was well known, and that by evidence
less equivocal than its designed exclusion from his list of
measures, that Mr. Clay was opposed to such a bill. But parties were
so nearly balanced in the Senate, a deduction of two or three from
the one side and added to the other would operate the life or death
of most important measures, in the event that a few members should
make the passage of a favorite measure the indispensable condition
of their vote for some others which could not be carried without it.
This was the case with the bank bill, and the distribution bill. A
bank was the leading measure of Mr. Clay's policy--the corner stone
of his legislative edifice. It was number two in his list: it was
number one in his affections and in his parliamentary movement. He
obtained a select committee on the second day of the session, to
take into consideration the part of the President's message which
related to the currency and the fiscal agent for the management of
the finances; but before that select committee could report a bill,
Mr. Henderson, of Mississippi, taking the shortest road to get at
his object, asked and obtained leave to bring in a bill to establish
a system of bankruptcy. This measure, then, which had no place in
the President's message, or in Mr. Clay's schedule, and to which he
was averse, took precedence on the calendar of the vital measure
for which the extra session was chiefly called; and Mr. Henderson
being determinedly supported by his colleague, Mr. Walker, and a few
other resolute senators with whom the bankrupt act was an overruling
consideration, he was enabled to keep it ahead, and coerce support
from as many averse to it as would turn the scale in its favor. It
passed the Senate, July 24th, by a close vote, 26 to 23. The yeas
were:
"Messrs. Barrow, Bates, Berrien, Choate, Clay of Kentucky,
Clayton, Dixon, Evans, Henderson, Huntington, Kerr, Merrick,
Miller, Morehead, Mouton, Phelps, Porter, Simmons, Smith
of Indiana, Southard, Tallmadge, Walker, White, Williams,
Woodbridge, Young.
"NAYS--Messrs. Allen, Archer, Bayard, Benton, Buchanan,
Calhoun, Clay of Alabama, Cuthbert, Fulton, Graham, King, Linn,
McRoberts, Nicholson, Pierce, Prentiss, Rives, Sevier, Smith of
Connecticut, Sturgeon, Tappan, Woodbury, Wright."
The distribution bill was a leading measure in Mr. Clay's policy:
it ranked next after the national bank. He had also taken it into
his own care, and had introduced a bill on leave for the purpose at
an early day. A similar bill was also introduced in the House of
Representatives. There was no willing majority for the bankrupt bill
in either House; but the bank bill and the land bill were made to
pass it. The ardent friends of the bankrupt bill embargoed both the
others until their favorite measure was secure. They were able to
defeat the other two, and determined to do so if they did not get
their own measure; and they did get it--presenting the spectacle
of a bill, which had no majority in either House, forcing its
own passage, and controlling the fate of two others--all of them
measures of great national concern.
The bankrupt bill had passed the Senate ahead of the bank bill,
and also of the distribution bill, and went to the House of
Representatives, where the majority was against it. It seemed doomed
in that House. The same bill had originated in that body; but lay
upon the table without consideration. The President, beset by a mass
of debtors who had repaired to Washington to promote the passage
of the bill, sent in a special message in its favor; but without
effect. The House bill slept on the table: the Senate bill arrived
there, and was soon put to rest upon the same table. Mr. Underwood,
of Kentucky, a friend of Mr. Clay, had moved to lay it on the table;
and the motion prevailed by a good majority--110 to 97. Information
of this vote instantly flew to the Senate. One of the senators,
intent upon the passage of the bill, left his seat and went down to
the House; and when he returned he informed the writer of this View
that the bill would pass--that it would be taken off the table, and
put through immediately: and such was the fact. The next day the
bill was taken up and passed--the meagre majority of only six for
it. The way in which this was done was made known to the writer of
this View by the senator who went down to attend to the case when
the bill was laid on the table: it was simply to let the friends of
the bank and distribution bills know that these measures would be
defeated if the bankrupt bill was not passed--that there were enough
determined on that point to make sure: and, for the security of the
bankrupt bill, it was required to be passed first.
The bill had passed the House with an amendment, postponing the
commencement of its operation from November to February; and
this amendment required to be communicated to the Senate for its
concurrence--which was immediately done. This amendment was a
salvo to the consciences of members for their forced votes: it was
intended to give Congress an opportunity of repealing the act before
it took effect; but the friends of the bill were willing to take
it that way--confident that they could baffle the repeal for some
months, and until those most interested, had obtained the relief
they wanted.
At the time that this amendment was coming up to the Senate that
body was engaged on the distribution bill, the debate on the bank
veto message having been postponed by the friends of the bank to
make way for it. August the 18th had been fixed for that day--12
o'clock the hour. The day and the hour, had come; and with them an
immense crowd, and an excited expectation. For it was known that Mr.
Clay was to speak--and to speak according to his feelings--which
were known to be highly excited against Mr. Tyler. In the midst
of this expectation and crowd, and to the disappointment of every
body, Mr. Berrien rose and said that--"Under a sense of duty, he
was induced to move that the consideration of the executive veto
message on the fiscal bank bill be postponed until to-morrow, 12
o'clock."--Mr. Calhoun objected to this postponement. "The day,
he said, had been fixed by the friends of the bank bill. The
President's message containing his objections to it had now been
in possession of the Senate, and on the tables of members for two
days. Surely there had been sufficient time to reflect upon it:
yet now it was proposed still longer to defer action upon it. He
asked the senator from Georgia, who had made the motion, to assign
some reason for the proposed delay." The request of Mr. Calhoun
for a reason, was entirely parliamentary and proper; and in
fact should have been anticipated by giving the reason with the
motion--as it was not deferential to the Senate to ask it to do a
thing without a reason, especially when the thing to be done was
contrary to an expressed resolve of the Senate, and took members
by surprise who came prepared to attend to the appointed business,
and not prepared to attend to another subject. Mr. Berrien declined
to give a reason, and said that--"When the senator from South
Carolina expressed his personal conviction that time enough had
been allowed for reflection on the message, he expressed what would
no doubt regulate his personal conduct; but when he himself stated
that, under a sense of duty, he had asked for further time, he had
stated his own conviction in regard to the course which ought to be
pursued. Senators would decide for themselves which opinion was to
prevail."--Mr. Calhoun rejoined in a way to show his belief that
there was a secret and sinister cause for this reserve, so novel
and extraordinary in legislative proceedings. He said--"Were the
motives such as could not be publicly looked at? were they founded
on movements external to that chamber? It was certainly due to the
Senate that a reason should be given. It was quite novel to refuse
it. Some reason was always given for a postponement. He had never
known it to be otherwise."--Mr. Berrien remained unmoved by this
cogent appeal, and rejoined--"The senator from South Carolina was
at liberty to suggest whatever he might think proper; but that he
should not conclude him (Mr. Berrien), as having made a motion here
for reasons which he could not disclose."--Mr. Calhoun then said
that, "this was a very extraordinary motion, the votes of senators
upon it ought to be recorded: he would therefore move for the yeas
and nays,"--which were ordered, and stood thus: Yeas: Messrs.
Archer, Barrow, Bates, Bayard, Berrien, Choate, Clay of Kentucky,
Clayton (Thomas of Delaware), Dixon, Evans, Graham, Henderson,
Huntingdon, Kerr, Mangum, Merrick, Miller, Morehead, Phelps, Porter,
Prentiss, Preston, Rives, Simmons, Smith of Indiana, Southard,
Tallmadge, White, and Woodbridge, 29--the supporters of the bank all
voting for the postponement, their numbers swelled a little beyond
their actual strength by the votes of Mr. Rives, and a few other
whigs. The nays were: Messrs. Allen, Benton, Buchanan, Calhoun,
Clay of Alabama, Cuthbert, Fulton, King, Linn, McRoberts, Mouton,
A. O. P. Nicholson, Pierce, Sevier, Sturgeon, Tappan, Walker,
Williams, Woodbury, Wright, and Young--21. It was now apparent that
the postponement of the bank question was a concerted measure of the
whig party--that Mr. Berrien was its organ in making the motion--and
that the reason for it was a party secret which he was not at
liberty to disclose. Events, however, were in progress to make the
disclosure.
The distribution bill was next in order, and during its
consideration Mr. White, of Indiana, made a remark which attracted
the attention of Mr. Benton. Deprecating further debate, as a
useless waste of time, Mr. White wished discussion to cease, and
the vote be taken--"as he hoped, as well as believed, that the bill
would pass, and not alone, but be accompanied by other measures."
This remark from Mr. White gave Mr. Benton something to go upon; and
he immediately let out what was on his mind.
He thanked the senator from Indiana for his avowal; it was a
confirmation of what he well knew before--that measures, at this
extraordinary session, were not passed or rejected upon their
merits, but made to depend one upon another, and the whole upon a
third! It was all bargain and sale. All was conglomerated into one
mass, and must go together or fall together. This was the decree out
of doors. When the sun dips below the horizon, a private Congress
is held, the fate of the measure is decided; a bundle are tied
together; and while one goes ahead as a bait, another is held back
as a rod.
Mr. Linn, of Missouri, still more frank than his colleague,
stigmatized the motive for postponement, and the means that were put
in practice to pass momentous bills which could not pass on their
own merits; and spoke out without disguise:
"These artifices grow out of the system adopted for carrying
through measures that never could be carried through other than
by trick and art. The majority which by force, not by argument,
have to carry their measures, must meet in secret--concoct their
measures in conclave--and then hold every member of the party
bound to support what is thus agreed upon--a master spirit
leading all the while. There had been enough of falsehood,
misrepresentation and delusion. The presidential election
had contained enough of it, without adding to the mass at
this session. The country was awake to these impositions,
and required only to be informed of the movements of the
wire-workers to know how to appreciate their measures. And the
people should be informed. As far as it was possible for him
and his friends to lay that information before the country, it
should be done. Every man in the community must be told how this
bank bill, which was intended to rule the country with a moneyed
despotism for years to come, had been passed--how a national
debt was entailed upon the country--how this bankrupt bill was
forced through, as he (Mr. LINN) now understood it was, by a
majority of five votes, in the other end of the Capitol, many of
its whig opponents dodging behind the columns; and how this land
distribution bill was now in the course of being passed, and the
tricks resorted to to effect its passage. It was all part and
parcel of the same system which was concocted in Harrisburg,
wrought with such blind zeal at the presidential election, and
perfected by being compressed into a congressional caucus, at an
extraordinary called, but uncalled-for, session."
The distribution bill had been under debate for an hour, and Mr.
King, of Alabama, was on the floor speaking to it, when the clerk
of the House of Representatives appeared at the door of the Senate
Chamber with the bankrupt bill, and the amendments made by the
House--and asking the concurrence of the Senate. Still standing on
his feet, but dropping the line of his argument, Mr. King exclaimed:
"That, sir, is the bill. There it is sir. That is the bill which
is to hurry this land distribution bill to its final passage,
without either amendments or debate. Did not the senator know
that yesterday, when the bankrupt bill was laid on the table by
a decided vote in the other House, the distribution bill could
not, by any possibility then existing, be passed in this House?
But now the case was altered. A reconsideration of the vote of
yesterday had taken place in the other House, and the bankrupt
bill was now returned to the Senate for concurrence; after which
it would want but the signature of the Executive to become a
law. But how had this change been so suddenly brought about?
How, but by putting on the screws? Gentlemen whose States cried
aloud for the relief of a bankrupt law, were told they could
not have it unless they would pay the price--they must pass the
distribution bill, or they should have no bankrupt bill. One
part of the bargain was already fulfilled: the bankrupt bill was
passed. The other part of the bargain is now to be consummated:
the distribution bill can pass now without further delay. He
(Mr. KING) had had the honor of a seat in this chamber for many
years, but never during that time had he seen legislation so
openly and shamefully disgraced by a system of bargain and sale.
This extra session of Congress would be long remembered for
the open and undisguised extent to which this system had been
carried."
Incontinently the distribution bill was laid upon the table, and the
bankrupt bill was taken up. This was done upon the motion of Mr.
Walker, who gave his reasons, thus:
"He rose not to prolong the debate on the distribution bill,
but to ask that it might be laid on the table, that the bill to
establish a general bankrupt law, which had just been received
from the House, might be taken up, and the amendment, which was
unimportant, might be concurred in by the Senate. He expressed
his ardent joy at the passage of this bill by this House, which
was so imperiously demanded as a measure of great relief to a
suffering community, which he desired should not be held in
suspense another night; but that they should immediately take up
the amendments, and act on them. For this purpose he moved to
lay the distribution bill on the table."
Mr. Linn asked for the yeas and nays, that it might be seen how
senators voted in this rigadoon legislation, in which movements
were so rapid, so complicated, and so perfectly performed. They
were ordered, and stood: Yeas--Messrs. Archer, Barrow, Bates,
Bayard, Berrien, Choate, Clay of Kentucky, Dixon, Evans, Henderson,
Huntington, Kerr, Mangum, Merrick, Miller, Morehead, Phelps, Porter,
Preston, Simmons, Smith of Indiana, Southard, Tallmadge, Walker,
White, and Woodbridge--26. Nays--Messrs. Allen, Benton, Buchanan,
Calhoun, Clay of Alabama, Clayton, Cuthbert, Fulton, Graham, King,
Linn, McRoberts, Mouton, Pierce, Sevier, Sturgeon, Tappan, Williams,
Woodbury, Wright, and Young--21. So that the whole body of the
friends to the distribution bill, voted to lay it down to take up
the bankrupt bill, as they had just voted to lay down the bank bill
to take up the distribution. The three measures thus travelled in
company, but bankrupt in the lead--for the reason, as one of its
supporters told Mr. Benton, that they were afraid it would not get
through at all if the other measures got through before it. The
bankrupt bill having thus superseded the distribution bill, as
itself had superseded the bank bill, Mr. Walker moved a concurrence
in the amendment. Mr. Buchanan intimated to Mr. Walker that he was
taken in--that the postponement was to enable Congress to repeal
the bill before it took effect; and, speaking in this sense, said:
"From the tone of the letters he had received from politicians
differing with him, he should advise his friend from Mississippi
[Mr. WALKER], not to be quite so soft as, in his eagerness to
pass this bill, to agree to this amendment, postponing the time
for it to take effect to February, as it would be repealed
before its operation commenced; although it was now made a price
of the passage of the distribution bill. He felt not a particle
of doubt but there would be a violent attempt to repeal it next
session."
Mr. Walker did not defend the amendment, but took it rather than,
by a non-concurrence, to send the bill back to the House, where its
friends could not trust it again. He said--"When his friend from
Pennsylvania spoke of his being 'soft,' he did not know whether he
referred to his head or his heart; but he could assure him he was
not soft enough to run the chance of defeating the bill by sending
it back to the House."--Mr. Calhoun did not concur with his friend
from Pennsylvania, that there would be any effort to repeal this
bill. It would be exceedingly popular at its first "go off," and if
this bill passed, he hoped that none of his friends would attempt to
repeal it. It would, if permitted to work, produce its legitimate
effects; and was enough to destroy any administration. He saw that
this was a doomed administration. It would not only destroy them,
but blow them "sky high."
This was the only instance in which Mr. Calhoun was known to express
a willingness that a bad measure should stand because it would be
the destruction of its authors; and on this occasion it was merely
the ebullition of an excited feeling, as proved when the question of
repeal came on at the next session--in which he cordially gave his
assistance. The amendment was concurred in without a division, the
adversaries of the bill being for the postponement in good faith,
and its friends agreeing to it for fear of something worse. There
had been an agreement that the three measures were to pass, and upon
that agreement the bank bill was allowed to go down to the House
before the bankrupt bill was out of it; but the laying that bill on
the table raised an alarm, and the friends of the bankrupt required
the others to be stopped until their cherished measure was finished:
and that was _one_ of the reasons for postponing the debate on the
bank veto message which could not be disclosed to the Senate. The
amendment of the House being agreed to, there was no further vote
to be taken on the bill; but a motion was made to suppress it by
laying it on the table. That motion brought out a clean vote for and
against the bill--23 to 26. The next day it received the approval of
the President, and became a law.
The act was not a bankrupt law, but practically an insolvent law for
the abolition of debts at the will of the debtor. It applied to all
persons in debt--allowed them to commence their proceedings in the
district of their own residence, no matter how lately removed to
it--allowed constructive notice to creditors in newspapers--declared
the abolition of the debt where effects were surrendered and fraud
not proved. It broke down the line between the jurisdiction of the
federal courts and the State courts in the whole department of
debtors and creditors; and bringing all local debts and dealings
into the federal courts, at the will of the debtor, to be settled
by a federal jurisdiction, with every advantage on the side of
the debtor. It took away from the State courts the trials between
debtor and creditor in the same State--a thing which under the
constitution can only be done between citizens of different States.
Jurisdiction over bankruptcies did not include the mass of debtors,
but only that class known to legislative and judicial proceedings
as bankrupts. To go beyond, and take in all debtors who could
not pay their debts, and bring them into the federal courts, was
to break down the line between federal and State jurisdictions,
and subject all persons--all neighbors--to have their dealings
settled in the federal courts. It violated the principle of all
bankrupt systems--that of a proceeding on the part of the creditors
for their own benefit--and made it entirely a proceeding for the
benefit of the debtor, at his own will. It was framed upon the
model of the English insolvent debtor's act of George the Fourth;
and after closely paraphrasing eighteen provisions out of that act,
most flagrantly departed from its remedy in the conclusion, in
substituting a release from the _debt_ instead of a release from
_imprisonment_. In that feature, and in applying to all debts, and
in giving the initiative to the debtor, and subjecting the whole
proceeding to be carried on at his will, it ceased to be a bankrupt
act, and became an insolvent act; but with a remedy which no
insolvent act, or bankrupt system, had ever contained before--that
of a total abolition of the debt by the act of the debtor alone,
unless the creditor could prove fraud; which the sort of trial
allowed would render impossible, even where it actually existed. It
was the same bill which had been introduced at the previous session,
and supported by Mr. Webster in an argument which confounded
insolvency with bankruptcy, and assumed every failure to pay a debt
to be a bankruptcy. The pressure for the passing of the act was
immense. The long disorders of the currency, with the expansions,
contractions, suspensions, and breaking of banks had filled the
country with men of ruined fortunes, who looked to the extinction
of their debts by law as the only means of getting rid of their
incumbrances, and commencing business anew. This unfortunate class
was estimated by the most moderate observers at an hundred thousand
men. They had become a power in the State. Their numbers and zeal
gave them weight: their common interest gave them unity: the stake
at issue gave them energy. They worked in a body in the presidential
election, and on the side of the whigs: and now attended Congress,
and looked to that party for the legislative relief for which
they had assisted in the election. Nor did they look in vain.
They got all they asked--but most unwillingly, and under a moral
duresse--and as the price of passing two other momentous bills. Such
is legislation in high party times! selfish and sinistrous, when
the people believe it to be honest and patriotic! people at home,
whose eyes should be opened to the truth, if they wish to preserve
the purity of their government. Here was a measure which, of itself,
could not have got through either House of Congress: combined with
others, it carried itself, and licensed the passing of two more!
And all this was done--so nicely were parties balanced--by the zeal
and activity (more than the numbers) of a single State, and that a
small one, and among the most indebted. In brief, the bankrupt act
was passed, and the passage of the bank and distribution bills were
licensed by the State of Mississippi, dominated by the condition of
its population.
Mr. Buchanan, Mr. Wright, Mr. Woodbury, were the principal speakers
against the bill in the Senate. Mr. Benton addressed himself mainly
to Mr. Webster's position, confounding insolvency and bankruptcy,
as taken at the previous session; and delivered a speech of some
research in opposition to that assumption--of which some extracts
are given in the next chapter.