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MVB notes for Senate speech on the bankrupt bill, [c23 January 1827-6 February 1827]

A man may be a Bankrupt without being insolvent.

The first ^regular^ insolvent law was proposed in the reign of Charles the 2nd from which has been made the model for all that pertained and was adopted in the States. The Judges Courts at Guild Hall divide cases of insolvency in one room whilst those of Bankruptcy are divided by commissiones in the an other.

The states ^& colonies^ understood the distinction. Massachusetts in 1710 passed a Bankruptcy law which was repealed in 1817. All the States & most of the colonies had insolvent laws. At the time of the adoption of the Constitution no State had or had had since the Revolution a Bankrupt law except perhaps Pennsylvania. See Adams <speech>

The act of 1800 reclaimed a provision that the act should not be construed to repeal or annul the laws of any State now in force or which may hereafter be enacted. <illegible> If Congress that species of Insolvent whilst laws which discharged the contracts were confined exclusively to Congress. <illegible> could <illegible> a provision be constitutional.

Unless ^a^ Congress <market> to take from the State the power to pass Insolvent laws such as they were then & had been in the habit of passing it necessarily follows that the did not consider the terms impairing the obligation of consider the times impairing the obligation of contract as applicable to such discharges.

vide Reids Essays Vol 4 p. 183 for the origin of these words.

It is the inability of the debtor that by the laws of nature discharges the contract & not the insolvent laws. That only prescribes the means of escalating & adjudicating before it. The same rule applies in the law of nations to treaties which a nation is unable to fulfill

If it had been the intention of the framers of the constitution to take from the states the power of passing insolvent laws of the character they were then passing it would have said so directly & not by these obscure words.

The distinction that B. Laws discharge the contract & Merchant laws the person only is not sound. The B. Laws in Engd for 200 years did not discharge the debt or person & the first insolvent law in Charles the 2d. the model for our colonial laws did both. In 1755 we had such a law in Nyork. The marriage contract stands upon the same footing.

Bankrupt Bill

Source: DLC Library of Congress
Collection: MVB Papers (DLC)
Series: Series 5 (1 January 1825-3 March 1829)