The differences in the State laws, so much complained of, are far from being a blemish in our institutions. Every State understands its interest, and will take care that its laws shall be calculated to promote it. To invite an efficient population; to encourage an influx of active capital, and to rival a neighbouring State, will be the objects of the local legislatures. The differences, therefore, in the institutions of States, are a constant source of instruction and competition. citizen of one State, in giving credit to one of another, very well understands that he must enforce his demand according to the laws of the State 3. This bill is particularly objectionable, as its where his debtor lives. There, the laws, it is to operations would be expensive, unequal and unjust. be presumed, will be wise, and not so much calcuThe power to establish uniform laws on the sub-lated to tempt runaway debtors, always a nuisance,

FEBRUARY, 1821.

The Bankrupt Bill.

SENATE.

This system is urged because the States have attempted and failed. And how does this reason bear upon the subject? If the States have tried and failed, what better prospect of success have you? You have learned nothing from experience. The State of Pennsylvania had a bankrupt system so long ago as 1785. That State is distinguished for its civilians and statesmen. It is the land of Penn and Franklin. The people are In the case to which I have just alluded, the proverbial for their simplicity and unvarnished court decide that a State insolvent law, which dismorality. And, yet, with all these talents and charges a debtor from a debt existing at the time virtues, and this experience, they have totally the law was passed is void, as being repugnant failed to devise any practicable way to discharge to that clause of the Constitution of the United a debtor on delivering up his effects. New York States which prohibits a State from passing any has been equally unfortunate; a State great, com- law "impairing the obligation of contracts." Almercial, enterprising, and ambitious; a State though I do not consider myself, as a legislator, which has furnished men who would have honored bound by judicial exposition of the Constitution Rome in her proudest days. But even New York, of the United States, and am by no means satiswith all these "appliances and means to boot," fied that this prohibition upon a State was ever has failed, totally failed, in a bankrupt system. intended to extend to insolvent laws, still, as it is Connecticut, too, which claims more morality and not necessary to my purpose, I am not disposed to religion than any other people ever did or will contest the doctrine. A State law then, dischargpossess, has met with no better success; and other ing a debtor from an existing contract, is unconStates, equally respectable, have been equally un-stitutional. This decision creates little or no nefortunate. Yet, in other branches of jurispru- cessity for us to legislate on the subject. Those dence, they are all pre-eminent. Political and States which have found it for their interest, have civil rights are well defined; fraud and oppression long since enacted such laws. In some of them prevented, and crimes punished. The judiciary these have existed thirty, and in none less than of some of them would not suffer by a comparison twelve or fifteen years. There are few contracts, with that of the United States or any other coun-existing at the time of their passage, which could try. And, yet, a law to divide an insolvent's ef- now be enforced against their statutes of limifects and discharge him from his debts, can be no tations. where equitably enforced. Sir, the reason is in the system itself. You increase the temptation to fraud, and attempt to prevent it by laws cruel in their character, unequal in their operation, and uncertain in their application. It savors of vanity to expect that, after so many unsuccessful attempts by the local authorities, with power to adapt their laws to their condition, we could invent a system that would remove all former obstacles, and equitably apply to so many different interests. Have you been, hitherto, very successful in enforcing laws against strong temptation? Let experience, during the non-intercourse, and embargo, and war, answer the question.

as to invite creditors and capitalists, whose wealth every State law that stands in the way of their and energies will promote the interest of the State. uniformity. But, until Congress shall have legisThe difference, too, as to the frequency and mag-lated on the subject, these powers remain dormant nitude of frauds, and the kind and degree of pun- and inoperative, and the States can exercise them. ishment arising out of the manners, habits, and They can neither be said to be exclusive nor conemployments of the people, would prevent the op- current, but alternate. When those of the United eration of any general law, but with partiality and States are exercised, those of the States must be injustice. suspended; and, when the former are suspended, the latter revive. This was yielded by the court in the celebrated case of Sturgis and Crowninshield; and, although I am not disposed to give implicit confidence to those decisions of the court which settle the limits of federal powers, yet, as this is an admission against the extension of those powers, I would regard it as the testimony of a witness who swears against his interest.

This grant of power to the United States is not exclusive. No federal power is exclusive, unless by expression or necessary implication. This grant is not expressly prohibited to the States, nor is it prohibited by necessary implication. Where Congress has power to pass uniform laws, in the exercise of this power, they can control the State laws on the same subject. They can make uniform rules of naturalization, a uniform standard of weights and measures, and uniform laws on the subject of bankruptcies. The rules, standard, and laws, when established, will control or modify

The States which have made no provision for a debtor's discharge, have deemed it inexpedient, and, consequently, have no wish that you should exercise a power which, until very lately, they had no doubt they possessed, and which they would have exercised had the interest of their people required it.

But, if a State law discharging a debtor from an existing debt, is void, for the single reason that it impairs the obligation of a contract, what right have you to pass such a law? Have you a power given in the Constitution of the United States to pass a law so odious and tyrannical? Will it be said that, because a State is expressly prohibited, and the United States are not, this power is consequently granted? I have not yet come to the conclusion, that every thing not prohibited in the Constitution is granted. The converse of the proposition is true, that whatever is not expressly granted, is prohibited. Do you suppose, sir, that, had there been no prohibition, Congress could have passed a bill of attainder or ex post facto law? Ör, because these are prohibited, and the prohibition to impair the obligation of contracts omitted, that Congress now possesses this power? If so, we might make a grant of land to-day to A, and to

morrow rescind it, and grant to B, and on through the alphabet, so long as we could find any one foolish enough to buy.

If the power is expressly granted, it is in the clause which authorizes us to pass uniform laws on the subject of bankruptcies. This power is, like every other to pass laws, prospective, but not to operate on acts already done. Congress can define and punish piracies, regulate commerce, and punish counterfeits; but the laws for these and all other purposes must be prospective. We have power to establish a system of bankruptcy which shall operate to discharge future contracts, but never to violate the faith of those existing at the times it was made. It is not essential, or incidental, to the exercise of this power more than any other, that it should be retrospective; and, as that to impair or violate existing contracts, is odious and tyrannical, it cannot be exercised by the Congress of the United States. It is then manifest that you have no more power than a State to pass a retrospective bankrupt law.

FEBRUARY, 1821.

law impairing the obligation of contracts;" all of which are retrospective, and therefore unjust.

Sir, what is the obligation of a contract? It is the law itself, in existence at the time the contract is made, and forms the basis of the contract. Without a law a contract could have no obligation. It is the tie which binds the parties, the power of enforcing a contract, which is its obligation. There may be contracts without obligation, that is, without a law to enforce them. It is preposterous and absurd to speak of a present obligation of a future contract. You may as well speak You of a quality without supposing a substance. may as well imagine the roundness of a ball, the smoothness of a surface, or the beauty of a woman, without the existence of those objects, as an obligation without a contract.

There can be no obligation until the contract is made, and then the existing law becomes its obligation, its basis, and the rule by which it is to be enforced and discharged. Take the clause in connexion, and its object admits of no doubt. It was The right of a State to pass a prospective bank- to prevent retrospective laws. You shall "pass no law of attainder." This is a legislative conrupt law has been no where exclusively surren-viction and judgment, and thereby retrospective. dered. Here I am aware that I shall be met by Nor any "ex post facto law." This makes that another decision of the Supreme Court, which act criminal which was innocent when done, or goes to clip the wings of States even in this par- increases its criminality. It is, therefore, retroticular, and to establish a principle which disrobes them of almost their last attribute of sovereignty.spective. Nor a " law impairing the obligation of In the case of McMillan vs. McNeil, from the a contract." This makes that contract bad which was good at its creation, and is therefore retroState of Louisiana, in a very defective and clumsy report, the court are made to say, that, whether the spective. But break down this line of distinction, and where will this prohibition end? It is essencontract existed at the time the law was enacted, tial to every well-regulated community that it or not, it made no difference. There must have should have power to control parties in the formabeen some mistake, for I deem it impossible that tion and execution of their contracts. To deny the court could ever have gone this length. But, to some an obligation or law to enforce their conwhether they made this decision or not, it is one to which I will never subscribe, or make the basis tracts is essential to the morals of the State; to of legislation, and against which I will forever be created is essential to its commerce; and to deprescribe to others the rule by which they are to most solemnly protest. fine the terms and condition of their discharge is no less important to prevent injustice and oppression. A law making gambling, wagering, or usurious contracts, void, would, so far as it should operate upon existing contracts, legally created, be repugnant to this clause in the Constitution. But no one, I presume, has yet pretended that such a law might not operate on all contracts thereafter made. A law which makes certain contracts voidable, by a less or different consideration from that agreed on, or on a contingency not stipulated. if retrospective, would be void, but not otherwise. That a State can prescribe that, if it is agreed to pay above a certain interest, the party promising may discharge himself by paying a lesser sum has hitherto, I believe, admitted of no doubt. The same may be said of those laws which extend an equity of redemption, or relieve from the penalty of a bond.

If this decision is to prevail, it indeed becomes Congress, and especially this Senate, the guardians of State rights, to look about them, gather up the fragments, and see if those that remain are worth preserving.

The grand objects of the framers of the Constitution were to form a more perfect union, estab'lish justice, insure domestic tranquillity, provide for the common defence, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity." To carry into effect these benevolent and patriotic purposes, they established the Federal Constitution, granting certain defined and specified powers; and, lest the States, in their sovereign capacity, should interpose to prevent the accomplishment of these purposes, certain restraints and prohibitions were imposed on them. That "a more perfect union," may be formed, the States were prohibited to enter into "any treaty, alliance, or confederacy." That the "peace, welfare, or defence" of the Union may not be impaired, they could not "declare war;" nor do acts leading to, or provoking it. That "justice" should be "established," they are to pass no bill of attainder, ez post facto law, nor

The plain reason of the distinction is this: Th law existing at the time the contract is made i the known rule which is to govern its discharge Why, then, I ask, if an insolvent law exists at th time the contract is made, by which the partie understand that, in case of insolvency, and a dis closure, and dividend, the contract is to be di

SENATE.

The Bankrupt Bill.

FEBRUARY, 1821.

tion. There seems to be in man an irresistible bottom. By this act you urge him into unknown propensity to speculation. The aversion to labor, regions, amid dangerous seas and tempestuous its slow returns, avarice, and the fascinations of skies; you give him a life boat by which he can chance, all conspire to lure us into its vortex. In preserve himself; but you expose his owners to this country are superadded the facilities of free-ruin, and his crew to destruction. dom, the prospect of success, and the ardor of a bold, daring, and restless population. Add, further, the ultimate safety which a bankrupt system affords, and you are at once overwhelmed with extravagance and prodigality.

The arch usurer is all this while cherishing this spirit, spreading his snare, and exhibiting the bait to lure the ardent and unsuspecting youth within his gripe. A victim to these temptations, the son of an honest farmer, bred to the plough, sets out with a fictitious capital, without skill and without experience. Provided he can trade, he thinks little of his pay. The allurements of long credit, cheap goods, and a new trader, soon exhaust his store. His debtors, when too late, have found the truth of the maxim, that if a man is tempted to buy what he don't want, he may soon want what he can't buy. His day of remittance has arrived; his goods are all out on credit; he becomes bankrupt. He is subjected to the order of the commissioners; the farce is played, and the gentleman bankrupt is discharged of all his debts, and ready to impose on some other people in some other village. But what is the fate of his debtors? Thousands of petty demands must be transferred to the lawyers, and each of them prosecuted in the Federal courts. Yes, sir, in the district or circuit courts, which alone can have jurisdiction under this act; and a debtor to the amount of five dollars may be summoned or attached to appear at the distance of two or three hundred miles, and eventually be compelled to take up his residence in a loathsome prison, while the gentleman bankrupt trader is at his liberty and his ease.

But

Is this all? Would to Heaven it were. dangers and difficulties increase as we proceed. Our way seems to lead through a dismal and dreary desert, where there is nothing to enliven, cheer, or exhilarate; where every step we take is attended with peril and disaster.

Sir, the Constitution is a charter of limited powers. Congress can do little, but by individual example, to improve the morals or religion of the community. Our business is to regulate the condition and instruct the understanding, but not to improve the heart. As we can do little to inculcate virtue, let us take care to do nothing to encourage vice. Is it not enough that you tempt man to become the sport of capricious fortune? Is it not enough that you delude him to rank speculation, which beggars him and his family? But will you superadd an irresistible inducement to perjury and fraud? "Lead us not into temptation," is an invocation prescribed by one who well knew the frailty and depravity of the human heart. And he illustrated the necessity of this invocation, by showing that one of his favorite disciples, in the face of a solemn admonition, and in spite of the most endearing attachments, in an hour, too, when his love seemed to be most needed, could deny his lord and master with an oath! We need not the aid of inspiration to perceive that man is inclined to evil as the sparks are to ascend, and that the hearts of very many are "deceitful above all things, and desperately wicked;" every day's experience proves the melancholy truth. Few of the best, perhaps, are proof against strong temptation. We have all a weak side a favorite propensity. Some love of wealth, power, or fame, or some other love, interposes to detach us from duty, and operates as a Syren to lure us upon the Scylla and the Charybdis while we navigate the dangerous channel of human life. The idol of the merchant is his love of speculation. This is so irresistible that even disaster and ruin will not abate, but rather increase it. And does not your bill add that these remarks are inapplicable. Take, then, to the temptation? If it does not, I admit freely two men, equally insolvent, equally moral, and having equal means to conceal property from the eye "Ill fares the land, to hastening ills a prey, of the creditor. One is subject to the existing laws, Where wealth accumulates, and men decay; and the other to your bankrupt law; and which Princes and Lords may flourish and may fade; has the strongest temptation? The concealment A breath can make them, as a breath has made; of the first must be perpetual. He must be always But a bold yeomanry, their country's pride, upon his guard; he constantly imagines that he If once destroyed, can never be supplied." is suspected or betrayed; his trustee or confidant This bill, sir, will provoke enterprise, even to may become false, or death may throw the deposite madness. A young, bold, adventurous American into other hands; and, last of all, the property can wants nothing to urge, but much to restrain him. never increase, but must constantly diminish, and He launches into the ocean of life; reason should he is forever debarred from indulging in his favorbe his helm, and experience his compass. His pas-ite employment. The other is subjected to a sesions are his sails, good or bad fortune, prosperous or adverse winds; and the wiles and delusions of an artful and treacherous world, are the rocks, shoals, and quicksands, which lie concealed at the

This is not all. This forced, unnatural state of things awakes the cupidity of the prudent, quicksighted, and avaricious, and, from the avails of these wrecks of extravagance and folly, immense fortunes will be accumulated. The economy of consumption will be impaired, and productive labor diminished, and in both ways will the revenues of the country be reduced. The few will be rich, and the many poor; wealth will accumulate, and population deteriorate. And here the economist and poet agree that—

verer ordeal; but the trial is short. In a few weeks, perhaps, he is discharged; the concealed treasure comes to the light; he proceeds with an effective capital. No one knows from whence it