H. OF R. The Bankrupt Bill. FEBRUARY, 1822. he was convinced it would be found that the at-right that society should guaranty to the rich man tachment laws were totally insufficient to supply his wealth; to the successful merchant the enjoythe place of those uniform laws on the subject of ment of his good fortune, and not interpose to probankruptcy, contemplated by the framers of the tect the poor and unfortunate from oppression? Constitution, the operation of which it must have Can we say to the creditor, you shall have laws been intended should be, to prevent insolvents from to enforce your bonds and mortgages; we will give making fraudulent or partial dispositions of their you executions by which you may strip your debtor property, and to put all their creditors on an equal to the very rags that are left to cover him-and footing. yet, tell the honest and unfortunate debtor, morality forbids us to stay the hand of your oppressor? Society is not formed for the rich and prosperous alone. Poverty and misfortune have also their claims; and I do hope, Mr. Chairman, that, on this occasion, they will be heard. But, Mr. C. said, he would not suffer the gentleman from Vermont to give his vote against extending to the honest unfortunate debtor the relief contemplated by the bill now under consideration, without directing his attention to scenes which are exhibited in all our great mercantile cities. We are told that, though other countries may Let me point out to the gentleman a man living want bankrupt laws, they are unnecessary for us, in all the splendor and luxury of wealth; let him because we are not subject to the same vicissitudes look on the human being passing this rich man's that other nations experience; that we may caldoor with marks of poverty on his person, and culate on the enjoyment of peace, while their wretchedness in his face; and permit me to give laws must conform to prospects of war. Sir, is it the history of these two men. The rich man is a possible that we can be so far misled by cur vanity money dealer; the poor man is a merchant, uni- or folly as to legislate upon this principle? Can versally esteemed and respected; distinguished for we suffer ourselves for a moment to believe that his prudence as well as for his probity. He was we are exempt from the evils of human nature? engaged in commerce many years so prosperously If we could isolate ourselves, and disclaim all conthat he thought himself independent; he had de- nexion with the rest of mankind, even then such termined to withdraw a part of his fortune from pretensions would render us ridiculous. But, we his hazardous business and to invest it in real es- should remember that we have had, and must contate that might be some provision in the decline tinue to have, intimate connexions with the rest of his own life, and for a numerous family which of the world, and that it is changes in the relahe might leave. He purchased lands near the tions of foreign nations, and the measures of their city of New York; paid one half the price out of Governments, that most affect our merchants. Let the gains of his business, and borrowed the other us call to recollection the paper blockades, Orders half of the rich man, on bond and mortgage of in Council, Berlin and Milan Decrees of modern the property: times changed-the year 1816 came-times, and how many millions of the property of landed property fell so low that an acre, in some merchants were sacrificed under these violent acts instances, could not be sold for what a lot would of the nations with which we traded. once have brought. The rich man foreclosed his mortgage and obtained but a part of his debt. The merchant was ruined. The interest of his bond is more than he can pay; and he walks the streets at the mercy of his creditor. admit, could not much affect our merchants. But we have had, within the time I have mentioned, two wars, if no more, with the Barbary States; a war with France; and a war with England. All these were commercial wars; that is, wars which were induced by injuries done to our commerce. If we look at home, we shall find that our own Government has been driven to measures not less destructive to commerce and ruinous to merchants. I refer to our restrictions, non-intercourse, and embargo laws. And, even as to war, I believe we Let me also point out to the gentleman another, have had a full ordinary share since the adoption who lives in a palace, and is clothed in fine linen, of the Constitution. Within that time, besides and feeds sumptuously every day; and his neighbor one insurrection, we have had seven or eight wars who inhabits a tenement which shows that it is-several of them Indian wars, it is true, which, I the abode of poverty. This rich man and poor man were once merchants of equal standing; they both made large importations and large profits at the close of the late war. Their success encouraged to similar adventures, and they each ordered large importations. The rich man's ship was lost; he received the value of his goods and the profits he had contemplated from his insurers, The honorable member from Vermont has apand now there is no bounds to his wealth. The pealed to a petition on your table from certain citipoor man's vessel arrived and brought his mer-zens in Troy, in the State of New York, who are chandise to a market where they were then almost worthless. The consequence was his ruin; he is in poverty, with scarcely means to subsist himself and family, and even these means are yielded by the mercy of his creditors. Sir, these are not pictures of the imagination; they are scenes of real life. They are not singular, but are examples of thousands. Let me, Mr. Chairman appeal to the justice and humanity of gentlemen, and ask, whether it be averse to the passage of the bill, to prove that the operation of the attachment laws of Vermont, are more beneficial for creditors than are what he calls the bankrupt laws of New York. These petitioners represent that they have lost more money by bad debts in the State of New York than they have in Vermont. I need not say, Mr. Chairman, how many circumstances must be taken into calculation, before we could come to any just conclusion from these premises; we must know the extent of the trade of the two places with Troy; we must know the nature of the trade, and how far the one more than the other was necessarily on credit. But the very foundation of this argument fails, because New York never had a bankrupt law. She never had a law which did not want the principal and essential feature of a bankrupt law-that is, a power to take the property of one who should give evidence of failing circumstances, and to distribute equally among his creditors. It is for the want of such a law that the Trojans have suffered so much by their dealings with the citizens of their own State-and their sufferings in New York cannot be received as evidence that the bill now before us would not have a wholesome operation. H. of R. ments of our revenue system have we had, before we have been able to adapt it to the purposes for which it is intended? Again, look at the history of the statutes of frauds, and see how many thousand cases have been adjudged, how many volumes have been written, before the provisions of that statute have effected their design. Laws like these, and especially bankrupt laws, which are intended to meet and to check the craft and subtlety of the designing, cannot be made perfect in the first instance; and they can only be rendered so by the co-operation of courts and legislatures, in profiting by experience. I must again remind the Committee, that the friends of the bill do not anticipate that it will suppress all frauds, or that it can be so framed I had intended, sir, to make some observations as that it may not, in some instances, be perverted upon what has been said as to the bankrupt law of or evaded. They hope for nothing more than England; but on this part of the subject I have that it will remedy many of the evils of which, been anticipated by the honorable member who now, both debtors and creditors complain. If this immediately preceded me. I shall, therefore, only be the true question, the inquiry which has proremark that the testimony taken for the British duced the documents on your table, relative to the Parliament affords not the least evidence that there operation of the law of 1800, is a very insufficient was a man in the empire who thought that there and partial one. The gentlemen who instituted should be no bankrupt law. I have attentively this inquiry, ought also to have asked information looked over the volumes that have been appealed as to the operation of the State insolvent laws to on this occasion, and venture to say nothing after the repeal of the bankrupt law. Sir, if will be found but strong censures of the practices they had done so, I am persuaded the evidence that prevailed under their existing laws. Several would not have induced us to prefer the former. of the respectable witnesses examined by the com- It appears, that there were one hundred and sixtymittee have said these are disgraceful, and they six cases in the State of New York, in the three further state why they are so. It is because there years of the law's existence. Sir, I will venture are such abuses as these: the appointment of in- to say, without the least fear of being contradicted competent and interested commissioners. Indeed, by the facts, although I speak only from conjecture, it is stated that, in one instance, all the partners of founded on general observation, that in three years a firm were employed as officers or agents, under a since the repeal of the bankrupt law, there have commission against one of its own debtors. Enor-not been less in the State of New York-remark, mous expenses and endless delays. Such irrespon- sir, I speak of the whole State, than one thousand sibility and unaccountability in the assignees that discharges under the insolvent law, in each of the the funds remained a trading capital in their hands. years. And I do verily believe that I am greatly How could a law subject to such abuses be other-within the numbers the facts would warrant. I wise than disgraceful in its operation? But we must beg it to be observed, also, that I refer to a must not condemn the system on this account, nor particular three years of the period that I have suppose that, because the English bankrupt laws mentioned. If gentlemen say, under this bill admit such scandalous practices, that therefore, frauds may be committed; what frauds have been, they will follow the enactment of the bill on your and may be committed under the insolvent and table, after it shall have undergone such modifica-attachment laws of the States! What are the tions as may be approved by Congress. litigations and expenses under these laws! It is only by comparing these with what has or may take place under a bankrupt law that a just estimate of either can be made. The experience afforded in the short time that our own law of 1800 was in operation, has been very confidently appealed to, as affording the best, and most conclusive evidence of the little good, But, Mr. Chairman, if things could be left as and positive evils attending the operation of a they were before the decision of the Supreme bankrupt law. Many reasons why this should not Court, in the case of Sturges against Crowninbe considered as a fair or conclusive experiment shield, the insolvent laws of the States would be have been already offered. I shall be careful on very inadequate for a mercantile nation. They this, as I have been on every other point, not to all permit a failing debtor to transfer his property repeat any thing that has been already said. But, to a favorite creditor, or even to convert it into in recalling to the minds of the Committee, for money, that may be put out of the reach of the how short a time that law was unrepealed, I must law, down to the very moment of his making an ask them to reflect how many years, I might say application for a discharge. It is not uncommon ages, it has required to give the best laws the in- to execute an assignment to favored creditors, and tended effect. Take, for example, the revenue sign a petition for the benefit of an insolvent act, laws. Though we have profited by the centuries with the same pen full of ink. And to whom are of experience which England has had on this sub- these preferences given? To those, sir, who least ject; how many revisions, and how many amend-of all are entitled to them. To the friends of the insolvent, who have given him a false credit, and have thereby enabled him to assume appearances which have deceived others. And when we consider the mode in which the affairs of insolvents have been managed, with reference to foreign creditors, we must feel that a regard for our national character requires some interposition in favor of those who trust their property to the protection of our institutions. Nor could the State insolvent laws ever satisfy the just claims of an honest insolvent debtor, because they could not give effect to his discharge beyond the jurisdiction of the State in which it was granted, as to debts not contracted within its limits. No one State, I presume, would consent that the laws of another should discharge its contracts. Such considerations, no doubt, were among those which induced the framers of the Constitution to provide that Congress should establish uniform laws on the subject of bankruptcy, throughout the United States. I have said, sir, that the State laws would be totally inadequate, even if things remained as they were before the decision of the Supreme Court, which I have mentioned. But they cannot so remain; and if we do not adopt this law, or some similar law, we shall continue to be in a condition in which no other commercial people on earth now are. That is, without any law to guard against fraudulent failures, or to relieve honest but unfortunate traders. Mr. Chairman, I have trespassed so long upon the time of the Committee, that I shall but very briefly notice some of the objections which have been made to particular provisions of the bill under consideration. Sir, I do not by any means intend to say that they are all unexceptionable. Some of them I should myself wish to see modified. As, for instance, the provision respecting the arrest of the bankrupt, I think, might be amended. It might be made necessary to apply to the magistrates of the State in which he might be found to sanction his arrest, or he might be demanded of the Executive as we now are obliged to demand fugitives from justice. But let us get rid of the motion now before the Committee, and try how far we can agree on alterations of such of the features of the bill as are objected to. It will always be time enough to reject it when it is found its provisions cannot be made agreeable to a majority. FEBRUARY, 1822. debate of this nature the advocates of either side I forbear, sir, to be more particular in my observations on the objections which have been made to the particular features of the bill, because one of the gentlemen from Virginia who has spoken against it, after enumerating all the objections which I have before noticed, and a great many others, has given us an opportunity of estimating the value of the whole. He finally informed us that he had one objection which was ten times as strong as all the others. Now, if we Sir, it happens that the objections of some of the can duly estimate the power of this objection, it gentlemen are directly at variance with each other. will afford us the means of determining, by an One gentleman thought that a discharge would be arithmetical process, the value of all the rest. I obtained with too much facility. Another insisted confess, sir, I listened with some anxiety and apthat, to require three-fourths of the creditors to as-prehension for the developement of this potent sent to a discharge, and always to subject the validity of the discharge to a question of fraud, to be decided by a jury, was so rigorous as would render the law entirely fallacious as respected the relief of insolvents. One gentleman objected to the law because it secured a priority to debts due to the United States. Another objected because such priority was not given. I do not say, sir, that, because the objections are contradictory, that therefore they must both be wrong. I know very well that in a attack, but, having witnessed the explosion, I am happy to find that the advocates of the bill may yet stand their ground, and the bill itself appears untouched. The gentleman's last and greatest objection is, or rather his final objections, for he has mentioned two, are, that the law will create a corporation! and establish an aristocracy! He has said that, where a law applies only to a particular class of the community, that class becomes a corporation. But, sir, I think this won't do, for then the laws which apply only to importing merchants, or to auctioneers, or to distillers, &c., all constitute corporations. I had understood there could be no corporation where there was not an individuality given by law to a number of persons. But if this Bill becomes a law, who are to be the corporations? Not creditors, because, as it respects creditors, it applies to every member of the community, and it is hardly possible to suppose that the gentleman contemplates a corporation of bankrupt debtors. The same interrogatories will test the justness of the gentleman's fears that the law will create an aristocracy. Are we all to be aristocrats? Or will we have an aristocracy of broken merchants? Mr. Chairman, I have detained the Committee so much longer than I had any expectation I should do, that I will not ask their further indulgence. Being in favor of the bill, that is, with such modifications as I think the House will agree to, I shall vote against the motion under consideration, because I cannot doubt the Constitutional power of Congress to pass a bankrupt law, by which the creditor may be entirely absolved because I believe policy and expedience particularly demand it of us at this time. And, sir, I will not conceal that my feelings strongly concur with my judgment, when I say that this relief for honest and unfortunate debtors is required by justice and humanity. When Mr. C. had concluded Mr. MITCHELL, of South Carolina, rose and intimated his intention to speak on the question, but the usual hour of adjournment having passed, the Committee rose, reported progress, and obtained leave to sit again; and then the House adjourned. TUESDAY, February 12. Mr. SERGEANT, from the Committee on the Judiciary, reported a bill supplementary to "An act for the better organization of the courts of the United States within the State of New York;" which was read twice, and ordered to lie on the table. Mr. SERGEANT, from the same committee, also reported a bill for the relief of Edmund Kinsey and William Smiley; which was read twice, and committed to a Committee of the Whole. Mr. SERGEANT, from the same committee, to which was referred the bill from the Senate entitled "An act supplementary to an act entitled 'An act to alter the terms of the district court in Alabama," reported the same without amendment, and it was ordered to lie on the table. Mr. EUSTIS, from the Committee on Military Affairs, to whom was recommitted a bill to authorize the reconveyance of a certain tract of land to the city of New York, reported the bill with the following amendment: "That the President of the United States be, and he is hereby authorized, whenever he shall have determined that the tract of land, on and near the west head of the Battery, (so called,) in the city of New York, H. OF R. heretofore granted to the United States, by the Mayor and Corporation of said city, is no longer required as a military position for the defence of the harbor and city of New York, to cause the works erected thereon to be dismantled, and the materials thereof to be disposed of in such manner as in his judgment the public Mayor and Corporation the said tract of land, granted interests may require; and to reconvey to the said by them for the purposes aforesaid." In this amendment the House concurred; and the bill was ordered to be engrossed for a third reading. Mr. RICH, from the Committee of Claims, made a report on the petition of John Anderson, referred on the 20th of December last, accompanied by a bill for his relief; which bill was read twice, and committed to a Committee of the Whole. Mr. MCDUFFIE submitted the following resolution, viz: Resolved, That the Secretary of the Treasury be directed to lay before this House a statement of the balances of money in the Treasury, and of the amounts of appropriations unexpended at the end of each year, from the commencement of this Government to the 31st of December last; also, a statement of the amounts of the public moneys which had been received by the collectors and receivers, and not paid into the Treasury, on the 30th of September, and on the 31st December last, respectively; also a statement of the amounts of revenue bonds outstanding on the 30th of September last, showing, separately, the amount of those that are considered solvent, and of those that are considered insolvent, and a statement of the debentures outstanding at the same period; also, a statement of the amounts of outstanding revenue bonds, due on the 30th of September, and the 31st of December last, respectively, at each period, the amount that was in suit, the amount upon which indulgence had been given, and the extent of that indulgence; and a statement of the sums due for public lands on the 30th of September, 1820, and on the 30th of September last, respectively, deducting from each of those sums the amounts from which the der the act of the last Congress passed for their relief; purchasers of public lands may have been released unalso, a statement of duties secured in each quarter of the past year. The resolution was ordered to lie on the table one day. Mr. FLOYD submitted the following resolution, viz: Resolved, That the Secretary of the Department of War be required to lay before this House a statement of the goods and merchandise purchased for the different factories of the United States for supplying the Indian trade from the year 1811 until 1821, inclusive; designating the kind purchased each year, the amount, the place where procured, from whom, and by whom; also, a statement showing the amount of sales each year at each factory, distinguishing the sums received each year in cash, or in furs, peltries, or other articles, showing the exact amount of gain annually in the whole system. The resolution was ordered to lie on the table one day. The SPEAKER presented a communication from the War Department, transmitting a statement showing the appropriations for the year 1821; the amount unexpended for each specific object, and the balance remaining unexpended on the 31st of December, 1821; which, on motion of Mr. SMITH, of Maryland, was referred to the Committee of Ways and Means, and ordered to be printed. THERON RUDD. On motion of Mr. STERLING, of New York, Resolved, That the Committee on the Judiciary be instructed to inquire whether Theron Rudd, formerly a clerk of the district court of the southern district of New York, refused or neglected to pay over to his successor in office the amount of money deposited with him as clerk of said court, the same being the proceeds of sixty-eight head of cattle seized by Hart Massy, as collector of the district of Sackett's Harbor, and afterwards condemned under the law of the United States, passed the 4th day of February, 1815, prohibiting the transportation of provisions, cattle, &c. to the enemy during the late war between this country and Great Britain; and that they further inquire what means have been taken by the Treasury Department to collect the money from said Rudd, and to report to this House whether, if said money cannot be collected on account of the insolvency of said Rudd, the United States are not bound to pay to said collector his share of the forfeiture, as regulated by the act aforesaid; and, also, to indemnify said collector for his expenses in causing the seizure and condemnation of said cattle, and in defending himself against a prosecution in the State court on account of such seizure. FEBRUARY, 1822. Spanish ports in America, &c., a statement of Captain B. I. Shain, with accompanying documents, being, according to that report, all the information, to be found in the Department of State, embraced by that resolution; having duly considered the said statement and documents, report That, on the 25th of November, while the schooner Ajax was lying at a wharf in the port of Havana, and tonly and violently entered on board of that vessel, ready for sea, a lawless assemblage of Spaniards wanand there assaulted Captain B. I. Shain, the master, and Mr. Joynes, his chief mate, who were armed and resisted, and who are stated to have severally discharged a pistol, and shot one Spanish soldier and killed another. The mob then prevailed, beating, cutting, and stabbing the Captain, his chief mate, the steward of the ship Lucius, of Charleston, and a man belonging to the brig Cyno, of Philadelphia, and mortally wounding, with the cook's axe, the second mate of the Ajax. The mob then proceeded to plunder the vessel of her running rigging-the beef and pork in the harness tubs, fowls, cabin stores and furniture, and the clothes of officers and seamen. The Captain was also robbed of his watch while he lay wounded and helpless on deck. Don Francisco de Paula Hornillos, one of the consignees of the Ajax, who had been early sent for by Captain Shain, and who, alarmed by the threats of the mob to board the Ajax, had run to the Captain General and requested his interference to restore peace on the wharf, had scarcely time to state his request, when information was received that the mischief was already done. The Governor, then, at the request of Don Francisco, sent one of his adjutants to accom[On this resolution there took place some con- pany him to the wharf for the purpose of there delivversation between Messrs. WILLIAMS, of Northering to him the wounded person of Captain Shain. Carolina, SERGEANT, MCCOY, STERLING, of New York, CAMBRELENG, and others, on the merits of the case somewhat, and more on the proper comnittee to give it in charge to. It was at length agreed, without objection, to refer it to the Judiciary Committee. It appeared, in the course of the debate, that the actual amount of defalcation of Mr. Clerk Rudd, which made so much noise a year or two ago, is about one hundred and thirty thousand dollars, part of which was money belonging to the United States, and part belonging to individuals.] CASE OF CAPTAIN SHAIN. Mr. RUSSELL, from the Committee on Foreign Affairs, to whom was referred the message from the President, transmitting a report from the Secretary of State in the case of Captain Shain, of the Ajax, made a report, detailing the circumstances of his suffering from personal violence, in the port of Havana, and concluding with the recommendation that Congress take no further order thereon; which report was agreed to. It is as follows: The Committee on Foreign Affairs, to which was referred the Message of the President of the United States of the 30th ultimo, transmitting a report of the Secretary of State, of the same date, containing, in pursuance of a resolution of this House on the 16th ultimo, requesting information respecting any outrages and abuses committed upon the persons of the officers or crews of American vessels at the Havana, or other On their arrival at the wharf, the mob had dispersed, and only six or eight persons remained there, one of whom was Don Francisco Baro, Zelander de Mar, (an officer of the marine,) who had before made great exertions towards keeping the peace, and had much endeavored to pacify the first man that had objected to the vessel's leaving the wharf, and who, having found there that man, did arrest him and send him to jail. authority, to the hospital, where Don Francisco de Captain Shain had already been carried, by Spanish Paula Hornillos applied for him; but, as the surgeon was dressing his wounds, and it was considered dangerous then to move him, Don Francisco left him there that night. He took him out the next morning and sent him to a sick house, where Doctor Benjamin Huger, surgeon of the marine hospital in Charleston, was permitted to attend him. In the mean time, Mr. Joynes, the first mate, Mr. Watson, the second mate, of the Ajax, and the man belonging to the brig Cyno, had been sent to prison, where Mr. Watson, having been attended also by Dr. Huger, died of his wounds on the following Friday; and whence the other two were discharged on the following Saturday, being the first of December last. It also appears, by the documents submitted to your committee, that none of the officers or crew, who had belonged to the Ajax, previous to the outrage, were permitted to depart in her at that time. From this cause, it became necessary to ship others to navigate her home, and that Captain Shain and Mr. Joynes were forbidden, under a heavy penalty, to leave the place. In consequence of this prohibition, Captain Shain and Mr. Joynes believed themselves obliged to |