Thirty Years' View (Vol. II of 2)

Having read this section, Mr. B. said it was explicit, and precluded argument. The voluntary action of the debtor, which it authorized, was limited to the mere filing of the declaration of insolvency. It went no further; and it was confined to traders – to the trading classes – who, alone, were subject to the laws of bankruptcy.

Mr. B. said that the English had, as we all know, an insolvent system, as well as a bankrupt system. They had an insolvent debtors' court, as well as a bankrupt court; and both these were kept separate, although there were no States in England to be trodden under foot by treading down the insolvent laws. Not so with us. Our insolvent laws, though belonging to States called sovereign, are all trampled under foot! There would be a time to go into this. At present, Mr. B. would only say that, in England, bankruptcy and insolvency were still kept distinct; and no insolvent trader was allowed to proceed as a bankrupt. On the contrary, an insolvent, applying in the insolvent debtors' court for the release of his person, could not proceed one step beyond filing his declaration. At that point the creditors took up the declaration, if they pleased, transferred the case to the bankrupt court, and prosecuted the case in that court. This is done by virtue of the 13th section of the insolvent debtors' act of 7th George IV. (1827). Mr. B. read the section, as follows:

"Insolvent debtors' act of 7th year of George IV. (1827).

"Sec. 13. And be it further enacted, That the filing of the petition of every person in actual custody, who shall be subject to the laws concerning bankrupts, and who shall apply by petition to the said court for his or her discharge from custody, according to this act, shall be accounted and adjudged an act of bankruptcy from the time of filing such petition; and that any commission issuing against such person, and under which he or she shall be declared bankrupt before the time appointed by the said court, and advertised in the London Gazette, for hearing the matters of such petition, or at any time within two calendar months from the time of filing such petition, shall have effect to avoid any conveyance and assignment of the estate and effects of such person, which shall have been made in pursuance of the provisions of this act: Provided, always, That the filing of such petition shall not be deemed an act of bankruptcy, unless such person be so declared bankrupt before the time so advertised as aforesaid, or within such two calendar months as aforesaid; but that every such conveyance and assignment shall be good and valid, notwithstanding any commission of bankruptcy under which such person shall be declared bankrupt after the time so advertised as aforesaid, and after the expiration of such two calendar months as aforesaid."

This (said Mr. B.) accords with the section of the year before in the bankrupt act. The two sections are accordant, and identical in their provisions. They keep up the great distinction between insolvency and bankruptcy, which some of our judges have undertaken to abrogate; they keep up, also, the great distinction between the proper subjects of bankruptcy – to wit: traders, and those who are not traders; and they keep up the distinction between the release of the person (which is the object of insolvent laws) and the extinction of the debt with the consent of creditors, which is the object of bankrupt systems. By this section, if the "person" in custody who files a declaration of insolvency shall be a trader, subject to the laws of bankruptcy, it only operates as an act of bankruptcy – upon which the creditors may proceed, or not, as they please. If they proceed, it is done by suing out a commission of bankruptcy; which carries the case to the bankrupt court. If the creditors do not proceed, the petition of the insolvent trader only releases his person. Being subject to bankruptcy, his creditors may call him into the bankrupt court, if they please; if they do not, he cannot take it there, nor claim the benefit of bankruptcy in the insolvent court: he can only get his person released. This is clear from the section; and our bill of 1841 committed something worse than a folly in not copying this section. That bill creates two sorts of bankruptcy – voluntary and involuntary – and, by a singular folly, makes them convertible! so that all may be volunteers, if they please. It makes merchants, traders, bankers, and some others of the trading classes, subject to involuntary bankruptcy: then it gives all persons whatever the right to proceed voluntarily. Thus the involuntary subjects of bankruptcy may become volunteers; and the distinction becomes ridiculous and null. Our bill, which is compiled from the English Insolvent Debtors' Act, and is itself nothing but an insolvent law perverted to the abolition of debts at the will of the debtor, should have copied the 13th section of the English insolvent law: for want of copying this, it annihilated involuntary bankruptcy – made all persons, traders or not, volunteers who chose to be so – released all debts, at the will of the debtor, without the consent of a single creditor; and committed the most daring legislative outrage upon the rights of property, which the world ever beheld!

CHAPTER LXVIII.

DISTRIBUTION OF THE PUBLIC LAND REVENUE AND ASSUMPTION OF THE STATE DEBTS

About two hundred millions of dollars were due from States and corporations to creditors in Europe. These debts were in stocks, much depreciated by the failure in many instances to pay the accruing interest – in some instances, failure to provide for the principal. These creditors became uneasy, and wished the federal government to assume their debts. As early as the year 1838 this wish began to be manifested: in the year 1839 it was openly expressed: in the year 1840, it became a regular question, mixing itself up in our presidential election; and openly engaging the active exertions of foreigners. Direct assumption was not urged: indirect, by giving the public land revenue to the States, was the mode pursued, and the one recommended by Mr. Tyler. In his first regular message, he recommended this disposition of the public lands, and with the expressed view of enabling the States to pay their debts, and also to raise the value of the stock. It was a vicious recommendation, and a flagrant and pernicious violation of the constitution. It was the duty of Congress to provide for the payment of the federal debts: that was declared in the constitution. There was no prohibition upon the payment of the State debts: that was a departure from the objects of the Union too gross to require prohibition: and the absence of any authority to do so was a prohibition as absolute as if expressed in the eyes of all those who held to the limitations of the constitution, and considered a power, not granted, as a power denied. Mr. Calhoun spoke with force and clearness, and with more than usual animation, against this proposed breach in the constitution. He said:

"If the bill should become a law, it would make a wider breach in the constitution, and be followed by changes more disastrous, than any other measure which has ever been adopted. It would, in its violation of the constitution, go far beyond the general welfare doctrine of former days, which stretched the power of the government as far as it was then supposed was possible by construction, however bold. But as wide as were the limits which it assigned to the powers of the government, it admitted by implication that there were limits; while this bill, as I shall show, rests on principles which, if admitted, would supersede all limits. According to the general welfare doctrine, Congress had power to raise money and appropriate it to all objects which might seem calculated to promote the general welfare – that is, the prosperity of the States, regarded in their aggregate character as members of the Union: or, to express it more briefly, and in language once so common, to national objects: thus excluding, by necessary implication, all that were not national, as falling within the sphere of the separate States. It takes in what is excluded under the general welfare doctrine, and assumes for Congress the right to raise money, to give by distribution to the States: that is, to be applied by them to those very local State objects to which that doctrine, by necessary implication, denied that Congress had a right to appropriate money; and thus superseding all the limits of the constitution – as far, at least, as the money power is concerned. Such, and so overwhelming, are the constitutional difficulties which beset this measure. No one who can overcome them – who can bring himself to vote for this bill – need trouble himself about constitutional scruples hereafter. He may swallow without hesitation bank, tariff, and every other unconstitutional measure which has ever been adopted or proposed. Yes; it would be easier to make a plausible argument for the constitutionality of the measures proposed by the abolitionists – for abolition itself – than for this detestable bill. And yet we find senators from slaveholding States, the very safety of whose constituents depends upon a strict construction of the constitution, recording their names in favor of a measure from which they have nothing to hope, and every thing to fear. To what is a course so blind to be attributed, but to that fanaticism of party zeal, openly avowed on this floor, which regards the preservation of the power of the whig party as the paramount consideration? It has staked its existence on the passage of this, and the other measures for which this extraordinary session was called; and when it is brought to the alternative of their defeat or success, in their anxiety to avoid the one and secure the other, constituents, constitution, duty, country, – all are forgotten."

Clearly unconstitutional, the measure itself was brought forward at the most inauspicious time – when the Treasury was empty, a loan bill, and a tax bill actually depending; and measures going on to raise money from the customs, not only to support the government, but to supply the place of this very land money proposed to be given to the States. Mr. Benton exposed this aggravation in some pointed remarks:

What a time to choose for squandering this patrimony! We are just in the midst of loans, and taxes, and new and extravagant expenditures, and scraping high and low to find money to support the government. Congress was called together to provide revenue; and we begin with throwing away what we have. We have just passed a bill to borrow twelve millions, which will cost the people sixteen millions to pay. We have a bill on the calendar – the next one in order – to tax every thing now free, and to raise every tax now low, to raise eight or ten millions for the government, at the cost of eighteen or twenty to the people. Sixteen millions of deficit salute the commencement of the ensuing year. A new loan of twelve millions is announced for the next session. All the articles of consumption which escape taxation now, are to be caught and taxed then. Such are the revelations of the chairman of the Finance Committee; and they correspond with our own calculations of their conduct. In addition to all this, we have just commenced the national defences – neglected when we had forty millions of surplus, now obliged to be attended to when we have nothing: these defences are to cost above a hundred millions to create them, and above ten millions annually to sustain them. A new and frightful extravagance has broken out in the Indian Department. Treaties which cannot be named, are to cost millions upon millions. Wild savages, who cannot count a hundred except by counting their fingers ten times over, are to have millions; and the customs to pay all; for the lands are no longer to pay for themselves, or to discharge the heavy annuities which have grown out of their acquisition. The chances of a war ahead: the ordinary expenses of the government, under the new administration, not thirteen millions as was promised, but above thirty, as this session proves. To crown all, the federal party in power! that party whose instinct is debt and tax – whose passion is waste and squander – whose cry is that of the horse-leech, give! give! give! – whose call is that of the grave, more! more! more! In such circumstances, and with such prospects ahead, we are called upon to throw away the land revenue, and turn our whole attention to taxing and borrowing. The custom-house duties – that is to say, foreign commerce, founded upon the labor of the South and West, is to pay all. The farmers and planters of the South and West are to take the chief load, and to carry it. Well may the senator from Kentucky [Mr. Clay] announce the forthcoming of new loans and taxes – the recapture of the tea and coffee tax, if they escape us now – and the increase and perpetuity of the salt tax. All this must come, and more too, if federalism rules a few years longer. A few years more under federal sway, at the rate things have gone on at this session – this sweet little session called to relieve the people – and our poor America would be ripe for the picture for which England now sits, and which has been so powerfully drawn in the Edinburgh Review. Listen to it, and hear what federalism would soon bring us to, if not stopped in its mad career:

"Taxes upon every article which enters into the mouth, or covers the back, or is placed under the foot. Taxes upon every thing which it is pleasant to see, hear, feel, smell, or taste. Taxes upon warmth, light, and locomotion. Taxes on every thing on earth, and the waters under the earth; on every thing that comes from abroad, or is grown at home. Taxes on the raw material; taxes on every fresh value that is added to it by the industry of man. Taxes on the sauce which pampers a man's appetite, and the drug that restores him to health; on the ermine which decorates the judge, and the rope which hangs the criminal; on the brass nails of the coffin, and the ribbons of the bride. At bed or board, couchant or levant, we must pay. The schoolboy whips his taxed top; the beardless youth manages his taxed horse with a taxed bridle, on a taxed road. The dying Englishman pours his medicine, which has paid seven per cent., into a spoon that has paid fifteen per cent.; flings himself back upon his chintz bed, which has paid twenty-two per cent.; makes his will on an eight-pound stamp, and expires in the arms of an apothecary, who has paid a license of a hundred pounds for the privilege of putting him to death. His whole property is then immediately taxed from two to ten per cent. Besides the probate, large fees are demanded for burying him in the chancel; his virtues handed down to posterity on taxed marble, and he is then gathered to his fathers, to be taxed no more."

This is the way the English are now taxed, and so it would be with us if the federalists should remain a few years in power.

Execrable as this bill is in itself, and for its objects, and for the consequences which it draws after it, it is still more abominable for the time and manner in which it is driven through Congress, and the contingencies on which its passage is to depend. What is the time? – when the new States are just ready to double their representation, and to present a front which would command respect for their rights, and secure the grant of all their just demands. They are pounced upon in this nick of time, before the arrival of their full representation under the new census, to be manacled and fettered by a law which assumes to be a perpetual settlement of the land question, and to bind their interests for ever. This is the time! what is the manner? – gagged through the House of Representatives by the previous question, and by new rules fabricated from day to day, to stifle discussion, prevent amendments, suppress yeas and nays, and hide the deeds which shunned the light. This was the manner! What was the contingency on which its passage was to depend? – the passage of the bankrupt bill! So that this execrable bill, baited as it was with douceurs to old States, and bribes to the new ones, and pressed under the gag, and in the absence of the new representation, was still unable to get through without a bargain for passing the bankrupt bill at the same time. Can such legislation stand? Can God, or man, respect such work?

But a circumstance which distinguished the passage of this bill from all others – which up to that day was without a precedent – was the open exertion of a foreign interest to influence our legislation. This interest had already exerted itself in our presidential election: it now appeared in our legislation. Victorious in the election, they attended Congress to see that their expectations were not disappointed. The lobbies of the House contained them: the boarding-houses of the whig members were their resort: the democracy kept aloof, though under other circumstances they would have been glad to have paid honor to respectable strangers, only avoided now on account of interest and exertions in our elections and legislation. Mr. Fernando Wood of New York brought this scandal to the full notice of the House. "In connection with this point I will add that, at the time this cheat was in preparation – the merchants' petition being drawn up by the brokers and speculators for the congressional market – there were conspicuous bankers in Wall street, anxious observers, if not co-laborers in the movement. Among them might be named Mr. Bates, partner of the celebrated house of Baring, Brothers & Company; Mr. Cryder, of the equally celebrated house of Morrison, Cryder & Company; Mr. Palmer, junior, son of Mr. Horsley Palmer, now, or lately, the governor of the Bank of England. Nor were these 'allies' seen only in Wall street. Their visits were extended to the capitol; and since the commencement of the debate upon this bill in the other House, they have been in the lobbies, attentive, and apparently interested listeners. I make no comment. Comment is unnecessary. I state facts – undeniable facts: and it is with feelings akin to humiliation and shame that I stand up here and state them." These respectable visitors had a twofold object in their attention to our legislation – the getting a national bank established, as well as the State debts provided for. Mr. Benton also pointed out this outrage upon our legislation:

He then took a rapid view of the bill – its origin, character, and effects; and showed it to be federal in its origin, associated with all the federal measures of the present and past sessions; with bank, tariff, assumption of State debts, dependent upon the bankrupt bill for its passage; violative of the constitution and the compacts with the new States; and crowning all its titles to infamy by drawing capitalists from London to attend this extra session of Congress, to promote the passage of this bill for their own benefit. He read a paragraph from the money article in a New York paper, reciting the names and attendance, on account of this bill, of the foreign capitalists at Washington. The passage was in these words:

"At the commencement of the session, almost every foreign house had a representative here. Wilson, Palmer, Cryder, Bates, Willinck, Hope, Jaudon, and a host of others, came over on various pretences; all were in attendance at Washington, and all seeking to forward the proposed measures. The land bill was to give them three millions per annum from the public Treasury, or thirty millions in ten years, and to raise the value of the stock at least thirty millions more. The revenue bill was to have supplied the deficiency in the Treasury. The loan bill was to have been the basis of an increase of importations and of exchange operations; and the new bank was the instrument of putting the whole in operation."

This Mr. Benton accompanied by an article from a London paper, showing that the capitalists in that city were counting upon the success of their emissaries at Washington, and that the passage of this land bill was the first and most anxious wish of their hearts – that they considered it equivalent to the assumption of the State debts – and that the benefit of the bill would go to themselves. This established the character of the bill, and showed that it had been the means of bringing upon the national legislation the degrading and corrupting influences of a foreign interference. For the first time in the history of our government, foreigners have attended our Congress, to promote the passage of laws for their own benefit. For the first time we have had London capitalists for lobby members; and, mortifying to be told, instead of being repulsed by defeat, they have been encouraged by success; and their future attendance may now be looked for as a matter of course, at our future sessions of Congress, when they have debts to secure, stocks to enhance, or a national bank to establish.

Mr. Benton also denounced the bill for its unconstitutionality, its demagogue character, its demoralizing tendencies, its bid for popularity, and its undaunted attempt to debauch the people with their own money.

The gentleman from Virginia [Mr. Archer], to whose speech I am now replying, in allusion to the frequent cry of breach of the constitution, when there is no breach, says he is sick and weary of the cry, wolf! wolf! when there is no wolf. I say so too. The constitution should not be trifled with – should not be invoked on every petty occasion – should not be proclaimed in danger when there is no danger. Granting that this has been done sometimes – that too often, and with too little consideration, the grave question of constitutionality has been pressed into trivial discussions, and violation proclaimed where there was none: granting this, I must yet be permitted to say that such is not the case now. It is not now a cry of wolf! when there is no wolf. It is no false or sham cry now. The boy cries in earnest this time. The wolf has come! Long, lank, gaunt, hungry, voracious, and ferocious, the beast is here! howling, for its prey, and determined to have it at the expense of the life of the shepherd. The political stockjobbers and gamblers raven for the public lands, and tear the constitution to pieces to get at them. They seize, pillage, and plunder the lands. It is not a case of misconstruction, but of violation. It is not a case of misunderstanding the constitution, but of assault and battery – of maim and murder – of homicide and assassination – committed upon it. Never has such a daring outrage been perpetrated – never such a contravention of the object of a confederation – never such a total perversion, and barefaced departure, from all the purposes for which a community of States bound themselves together for the defence, and not for the plunder of each other. No, sir! no! The constitution was not made to divide money. This confederacy was not framed for a distribution among its members of lands, money, property, or effects of any kind. It contains rules and directions for raising money – for levying duties equally, which the new tariff will violate; and for raising direct taxes in proportion to federal population; but it contains no rule for dividing money; and the distributors have to make one as they go, and the rule they make is precisely the one that is necessary to carry the bill; and that varies with the varying strength of the distributing party. In 1836, in the deposit act, it was the federal representation in the two Houses of Congress: in this bill, as it came from the House of Representatives, it was the federal numbers. We have put in representation: it will come back to us with numbers; and numbers will prevail; for it is a mere case of plunder – the plunder of the young States by the old ones – of the weak by the strong. Sir, it is sixteen years since these schemes of distribution were brought into this chamber, and I have viewed them all in the same light, and given them all the same indignant opposition. I have opposed all these schemes as unconstitutional, immoral, fatal to the Union, degrading to the people, debauching to the States; and inevitably tending to centralism on one hand or to disruption on the other. I have opposed the whole, beginning with the first proposition of a senator from New Jersey [Mr. Dickerson], to divide five millions of the sinking fund, and following the baneful scheme through all its modifications for the distribution of surplus revenue, and finally of land revenue. I have opposed the whole, adhering to the constitution, and to the objects of the confederacy, and scorning the ephemeral popularity which a venal system of plunder could purchase from the victims, or the dupes of a false and sordid policy.