is the source of much of the calamity and misconduct which attend an insolvency. It is confessed and regretted too late. But when the struggle is at an end, when the failure is admitted and announced, in this state of his affairs, what will a just and conscientious man believe to be his duty? The true answer to this question will present itself, without hesitation, to an ingenuous mind, uncorrupted by sophistical opinions, and untrammelled by corrupt customs. The answer must be, "I will surrender to my creditors my property, of every description, (for in truth it is theirs,) to be distributed among them in proportion to their respective debts, untrammelled by any conditions for my own advantage, unimpaired by any disposition or incumbrance made with a view to my insolvency; and I will depend upon their liberality and my own industry, guarded by more caution and economy, for my future fortune and support." Such a man would come again into business entitled to public confidence, and he would not fail to receive it; he would come chastened and instructed in the school of misfortune, and, by the upright prudence of his second course, would redeem the errors of the first. How widely different the course generally taken is from this, has already been more than intimated. The practice, in disposing of the effects of a bankrupt merchant, by which almost always the greater part, and sometimes his entire property, is given to preferred creditors, so called, among whom endorsers usually take precedence, has been reprobated by many good men, and, it is believed, cannot be justified on any principle of right or good conscience. What is the superior claim of an endorser to indemnity and payment? He was fully aware of the hazard when he made the engagement; it was as much an ordinary risk of trade as the sale of merchandise. took the risk upon himself, without asking any other security than the solvency and good faith of the drawer. The vendor of goods does the same. On this security, the one gives his name, and the other his property; the latter expects nothing but the payment of his debt, while, in nine cases out of ten, the former receives the like favor in exchange for his own. And yet this endorser is to be preferred to the man who has delivered his goods, his labor, or his money, on the faith, probably, of the false credit, of the unsubstantial display of wealth, made by the aid of the endorser, whose name and promise have thus been the instruments of deception, the lures to entice the unsuspecting into a gulf of ruin, against which the endorser expects to be protected by the virtue of an assignment. And the case is greatly aggravated, it becomes, in truth, a case of unqualified plunder, when this endorser, after putting his preference into his pocket, never pays the engagement for which it was given, but settles with his creditors in the same way. Can we imagine any thing more shocking to every sense of justice and morality, than that an honest merchant, who, but a few days before the failure of his debtor, had delivered to him goods, at a fair price, should be called to witness his bales of merchandise, his barrels of flour, handed over, just as they were received from him, to some preferred, some favorite creditor, under the pretence that he was an endorser, or under some pretence equally iniquitous. Yet it is affirmed, that such things have happened among our merchants, and that neither shame nor dishonor has overwhelmed the perpetrator of them.* This usage, this system of preferences, its injustice, its impolicy, its pernicious effects on fair trading, might be more fully exposed; and it might be shown, that, while it is countenanced, it is vain to expect a healthy state of commercial credit, a conscientious caution in contracting debts, or an honest endeavour to discharge them. The only case of preference entitled to favor seems to be, where money, or other property is deposited in trust. This case is peculiar, and the trust should be held sacred. It has nothing to do with the trustee's business or trade; it never, in any just acceptation, became a part of the property of the trustee, assignable by him as such. It never was, morally, at his disposal for any other uses or purposes, than such as were designated by the terms of the trust. The usual system of endorsing, too, which prevails among merchants, the well-known facility of obtaining credit on the faith of mere names, is another part of commercial morality which has been severely animadverted on. † An endorsement purports to be a surety for the payment of the note; an additional security # Hopkinson's Lecture on Commercial Integrity, p. 19. Idem, pp. 12, 13. 357 to the responsibility of the drawer. How seldom is it so in fact? Experience has taught every one, that the drawer and endorser are so linked in with each other, so equally bound in mutual responsibilities, that the failure of one is the failure of the other, and that the security of both is no better than that of either. Excessive credit is the fatal bane of commercial honor and honesty. The transactions of business, so called, are, to an immense extent, little better than fictions. Goods are sold without being paid for, and a note is taken for them which will never be paid. This is followed by forced sales and ruinous sacrifices of property for immediate relief, temporary relief, and the whole winds up with an assignment, when there is nothing of any value to assign. This, assuredly, is an unwholesome state of trade, and corrupts and undermines the whole commercial community. Moreover, money so easily obtained is as lightly spent, and this brings us to another dark and deep stain on our commercial reputation. The proud splendor, the heedless extravagance, the unbounded luxury, in which these ephemeral princes indulge themselves, during their transit, are always immoral, shockingly so, when, at the conclusion of the farce, it appears that it was showed off at the expense, perhaps on the ruin, of creditors. Magnificent mansions in town and country, gorgeous furniture, shining equipages, costly entertainments, in short, a style of living, an exuberance of expenditure, which would be unwise, in this country, in any affluence of fortune, and is absolutely criminal in the actual circumstances of the spendthrift. And, when the blow falls, that prostrates all this grandeur, what artifices are practised upon the good nature of the creditors, to retain as much as possible of these gaudy trappings for the family, instead of casting them away as the ensigns and testimonies of fraud and dishonor. Little consciousness is shown for the injuries and losses of those who have fed, with their substance, the splendid folly of the delinquent, little regard to public opinion, or sense of decorum or shame; but every thing is hurried to a conclusion, that he may resume what he calls his business, and be * Hopkinson's Lecture on Commercial Integrity, p. 14. tray again. And here arises a reflection, domestic, it is true, but of infinite concern to a heart that has not extinguished the sensibilities and duties of nature, as well as the obligations of justice. If the splendid impostor should not live to make his arrangements with his creditors, but be cut off before he has run his course of dissipation, in the very midst of his enjoyments; what a scene of desolation and distress begins in his family. The charm is broken, and realities take the place of delusive visions of happiness and wealth. Every thing is torn away to satisfy abused and irritated creditors; scarcely a comfort is left, where, but just now, all was abundance and luxury. His afflicted wife and children, accustomed to the most delicate and costly indulgences, with every wish anticipated, every sense of pleasure gratified; so protected, that "the winds of heaven might not visit them too roughly;" unconscious of danger; in a moment, without a warning, find themselves without money, without help, and without hope. This is no fiction; it is a tragedy, which has been too often acted on the commercial stage of this country. These evils have been ascribed to two causes, the defects of the law, and the too frequent want of a suitable commercial education and training among our merchants.* Too much seems to have been done by our legislators to favor the debtor without regard to his honesty; to weaken the rights of creditors, to put them at the mercy of the debtor to receive from him just so much justice as he may choose to accord to them; and to deny to them a reasonable and satisfactory account from the man who first defrauds and then defies them. A bankrupt law is wanted, by which a power may be given to competent persons to examine closely and particularly, in what manner and for what purposes the debts of the bankrupt were contracted; whether in the fair and regular pursuit of his business, or in the indulgence of flagrant immoralities and vices; to search deeply, and with the means of forcing out the truth, into the ways by which his property has been lost or disposed of; to foil every attempt at concealment, to lay all his transactions bare, and to insist upon explicit and satisfactory explanations of all that is doubtful; and, when this purifying process is completed, to distribute all the effects obtained by it, honestly and equally among the creditors, Hopkinson's Lecture on Commercial Integrity, pp. 9, 20. * 359 in proportion to their respective debts. Such a law ought to admit of no preferences to endorsers; no favors to friends; no partial assignments for special objects, which are just so many means by which an insolvent debtor may stipulate for and cover benefits for himself; and finally, while a bankrupt law ought to inflict severe penalties upon a fraudulent, prevaricating, and perjured debtor, it ought to hold out cheering inducement and honorable rewards to the open and upright man, to cherish and protect the unfortunate, but honest debtor, and to return him a part of his substance, with which to supply his wants and resume his business. Again, men too frequently assume the profession of merchants in this country, who are utterly unqualified by the general education, by the particular education, by the knowledge and acquirements, which are indispensable to command respect, and obtain a continued and honorable success. To open the springs and manage the currents of commerce, to plan a voyage of adventure and calculate its contingencies, to provide and regulate the funds and finances of various extensive mercantile operations, so that they shall meet every want at the proper time and place, is the business of the higher order of merchants. Is commerce so low in the scale of human affairs, that the qualifications it demands are so common, as to require no education suitable for them, no experience to obtain them? Why should not a youth, who aims at the profits and honors of commerce, who expects to be distinguished by ability and success as a merchant, begin his career in a counting-house, where he can see the practical operations of business in its various branches; where he can acquire habits of system, regularity, and exactness; acquire thorough skill in accounts; learn to distinguish, with promptness and accuracy, the qualities of merchandise; anticipate the fluctuations of the market, by the causes which usually affect them; and acquire a tact of caution and foresight, of calculation and decision, which alone can secure a safe and continued prosperity. This is the way in which merchants who deserve, or even aspire to the name, are made in other countries.* * Ibid., |