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also obliged, by its charter, to give the government the necessary facilities for transferring the public funds from place to place within the U. States, without charging commissions, or claiming any allowance on account of the difference of exchange, and to transact all the business of commissioners of loans whenever required so to do. The bank is prohibited from issuing bills under the denomination of 5 dollars.-It is an object proposed by the charter, as appears from some of the provisions already noticed, to make the institution independent of the fortunes, and place it beyond the exigencies, of the government, by limiting the amount of loans that may be made to the government, and prohibiting the purchase of the public debt. It is not in the power of congress to exonerate the bank from the liability to pay, in specie, its deposits made, or notes put into circulation, previously to the passing of any act for that purpose; so that the depositors and holders of its notes are entirely secure from any interposition of the government between themselves and the bank, in violation of the contract held by them. The institution is thus essentially commercial in its character, being directly auxiliary to the government, and subject to its control only as a financial engine. It has had an important influence upon the industry and commerce of the country, and the credit of the government, and has been of immense utility in the management of its finances. But its greatest and most beneficial influence has been felt in the restoration of the currency to a sound state; for, at the time of its going into operation, many of the state banks had an immense amount of unredeemable paper in circulation, purporting, it is true, to be payable to the bearer, in specie, on presentment for that purpose, but which was not, in fact, so paid. Immediately on the bank of the U.States going into operation, with its various branches in the principal commercial cities, it became necessary for all the other banks, within the circle of its influence, to resume specie payments, or discontinue their operations. Those which had not resources to resume specie payments necessarily stopped; and the consequence of the influence of this institution is, a complete restoration of the currency to specie or its equivalent. In fine, whether we consider the extent of the capital of the institution, that of its operation, or its commercial and financial utility and influence, it may justly be considered the second institution of the kind

iliary to the public credit, by supplying temporary loans in cases of emergency. So thoroughly convinced were the public of the necessity of such an institution, that the members of the same political party from which the constitutional objections had been made to the old bank, and which had refused to renew its charter, passed an act of congress, which was approved by the president April 10, 1816, chartering the present bank of the U. States, with a capital of $35,000,000, upon principles, and with provisions, very similar to those contained in the former charter. For this charter the government demanded and received a bonus of $1,500,000 from the stockholders. The government became a stockholder in the same proportion as in the former bank, taking one fifth, or $7,000,000 of the stock. The direction of the institution was left to the stockholders, as in the old bank, except that the government reserved the right of appointment and removal at pleasure, by the president, of 5 directors out of the 25, the other 20 being elected by the stockholders. The government also reserved the right to deinand a statement of the concerns of the institution by committees of either branch of the legislature. One quarter of the subscriptions to the stock were payable either in gold and silver, or U. States stock, at the option of subscribers. The 7 millions to be subscribed by the government was payable either in gold and silver, or public stock at an interest of 5 per cent., at the option of the government. The transactions of the corporation were limited to making loans and trading in the precious metals, and the sale of such goods or proceeds of such lands as should be pledged. Branches may be established in any parts of the U. States or their territories. No other similar corporations are to be chartered by the government, except banks in the district of Columbia, with a capital, in the whole, not exceed ing $6,000,000, during the period for which the charter was granted, namely, to the 3d of March, 1836. The bank is prohibited from purchasing any part of the public debt, taking interest over 6 per cent., or loaning to the government over $500,000, or to any state over $50,000. And the debts of the institution are in no case to exceed the amount of deposits by more than $35,000,000. And, in case of refusing payment of its notes or deposits in specie, the bank is made liable to pay interest at the rate of 12 per cent. per annum. The bank is

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in the world, ranking, in all these respects, next after that of England. The stock was made the subject of speculation soon after its establishment, and rose, at one time, to the enormous advance of 56 per cent. upon the original subscription; but the great losses incurred by some of the branches, especially those of the new states, and other causes, subsequently reduced it to 10 per cent. discount on its original subscription value. It has since risen to a more steady market value of about 20 to 25 per cent. advance. The amount of the circulation for 1828 was, on an average, between $12,000,000 and $13,000,000. The deposits for the same year averaged from $13,000,000 to $14,000,000. The dividends have varied from 5 to 6 per cent. In January, 1829, there were 21 offices of discount, besides the bank at Philadelphia; namely, at Portland, Portsmouth, Boston, Providence, Hartford, New York, Baltimore, Washington, Richmond, Norfolk, Fayetteville, Charleston, Savannah, Mobile, New Orleans, Nashville, Louisville, Lexington, Cincinnati, Pittsburg, Chilicothe.-Besides the bank of the U. States, there are, in the U. States, more than 350 banking companies, incorporated by the several states, in active operation, and in good credit, besides 50 or 60 of doubtful standing. The amounts of capital vary from $50,000 to $3,000,000. The whole banking capital of the country was stated, in 1804, to be $26,707,000, and, in 1813, $77,158,000. It must have increased greatly since that time, but the amount is not easily ascertained with precision.

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BANKRUPT is derived, generally, from bancus, a bench, and ruptus, broken, in allusion to the benches formerly used by the money-lenders in Italy, which were broken in case of their failure. This word signifies, in its most general sense, an insolvent person, but, more strictly, an insolvent merchant. There is, perhaps, no branch of legislation more difficult, and at the same time more important, than that which defines the relations of debtors and creditors. One of the first objects of all laws, after the protection of the person, is, the enforcement of the obligation of contracts, and, among all the contracts made in a community, those imposing the obligation to pay money constitute the most numerous class. Some of the first questions in legislation are,-By what measures shall this obligation be enforced? and by what penalties shall the breach of it be punished? In many communities, especially in the earlier

stages of civilization, the breach of such a contract or obligation is regarded as a crime, and the insolvent debtor treated as a criminal. The ancient laws upon this subject, in England, regard the insolvent trader in this light. The early laws of the Romans and Athenians authorized the most rigorous measures for procuring satisfaction of a debt, even permitting the sale of the debtor into slavery for this purpose. And the Battas of Sumatra are said to sell, not only the debtor, but also his family, for the benefit of the creditor. But as civilization advances, the laws put a more mild construction upon the debtor's failure to fulfil his contract, and, with certain qualifications, and under certain restrictions, attribute it to misfortune, and, on his giving up his property to be divided among his creditors, discharge him from all further liability. Both by the French code and the English statutes, the persons capable of becoming bankrupts are such as fall under the general description of merchants: the French code describes them as commercants; the English statute of 6 Geo. IV, c. 16, s. 2., imbodying the previous acts and judicial decisions on this subject, enumerates particularly the descriptions of persons who are to be considered merchants, and capable of becoming bankrupts; and the statute of 33 Geo. III, relating to bankrupts in Scotland, describes a person capable of becoming such to be one who, "either for himself, or as agent for others, seeks his living by buying and selling, or by the workmanship of goods or commodities."

The power of making bankrupt laws, in the U. States, is, by the constitution, conferred on congress, and was generally understood to be exclusively vested in that body. The question how far the several states may legislate upon this subject, has been discussed in the supreme court of the U. States, in a number of cases arising under the state insolvent laws. In the case of Ogden v. Saunders, it was settled that a state insolvent law, whereby it is provided that a debtor, on giving up his property to his creditors, is absolutely discharged from further liability, will, as long as there is no act of congress on bankruptcy, be valid, in respect to creditors residing in such state, and to contracts made in the state subsequently to the passing of such law. According to this decision, an insolvent law of a state, however general in its provisions, can have only a partial operation as a bankrupt law; but, in the cases completely

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within the jurisdiction of the states, may have all the essential operation of such a law, not being limited to a mere discharge of the person of the debtor on his surrendering his effects. This decision recog. nised in the states larger powers than had previously been supposed to have been retained by them. But congress alone has the power to make a bankrupt law, which shall be applicable to, and binding upon, all creditors in the U. States, and all descriptions of debts. This power was exercised by congress, in 1800, by the enactment of a bankrupt law, limited to five years, and which expired by its own limitation. This act was modelled upon the English statutes of bankruptcy existing at the time, and, like them, was applicable to no debtors except merchants. -By the French mercantile law, a bankrupt merchant must, within three days after stopping payment, give notice of it to the tribunal of commerce, which, even if the notice is not given immediately, proceeds, at the request of the creditors, or by virtue of its own authority without any petition, or on motion of the king's procureur, to put the debtor's store-house, counting-house, effects, books and papers under seal, also to appoint a commissioner from its own body, and several sworn agents, who give security for the faithful discharge of their trust, and to put the bankrupt in prison or under arrest and surveillance, from which, however, after an investigation of his affairs, he may be released, either unconditionally, or on giving bail. From the day of his failure, the bankrupt is divested of all his interest and title in his property, and, during the ten days preceding, no one can acquire any right in it, by pledge or mortgage; and any gratuitous transfer by him during that time is void, and any transfer made for consideration may be annulled, if attended with circumstances indicating fraud. And all acts done or contracts made by him, in fraud of his creditors, are void. An advertisement of the bankruptcy must be posted up in public places, and inserted in the gazette. The agents above-mentioned continue to manage the affairs of the bankrupt only 14 days, or until the appointment of the provisional syndics (trustees). The commissioner, within three days after the bankrupt's leger has been put into his hands, makes a catalogue of the creditors, and convenes them by means of letters and the public papers. The creditors assemble at the fixed time and place, in the presence of the commissioner, to whom they deliver

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a list containing three times as many names, as, in their opinion, there should be persons appointed provisional trustees (syndics provisoires) of the property. From this list the requisite number is appointed by the tribunal of commerce. Within 24 hours after the appointment of trustees, the functions of the agents cease, and they render their account to the trustees, who, under the superintendence of the commissioner, now have the management of all the affairs of the bankrupt. They immediately remove the seals, and take an inventory of the bankrupt's effects, in the presence of a justice of the peace, with the aid of the bankrupt. Within eight days from entering upon office, they render to the king's procureur a report of the state of the bankrupt's affairs, and take charge of, and administer upon, his estate. The moneys received are placed in a chest with a double lock, of which the oldest trustee has one key, and the other is given to a creditor, selected by the commissioner. Every week, the commissioner is furnished with the cash account of the trustees, and may, upon their suggestion and that of the creditors, if he thinks it advisable, put the money already received at interest. It is the duty of the trustees to call in the debts of the bankrupt, and to have any mortgages made to him recorded, if he has not had it done himself; likewise to summon, without delay, all the creditors, by letter or the public papers, to appear before them within 40 days, personally or by attorney, to prove their claims, present their vouchers, or deposit them with the tribunal of commerce. The examination of claims is made within 14 days after the expiration of the 40 days, and every ereditor, whose claims have been allowed, is at liberty to be present at the discussion of others' claims, and offer objections. After the claims have been discussed, each creditor must deliver, within eight days, an affidavit to the commissioner, that his demands are true. Whether a process shall be allowed, to establish the contested claims, rests on the decision of the tribunal of commerce. After the expiration of the time fixed for allowing claims, it is the duty of the trustees to take note of the creditors who do not appear; the commissioner gives information of them to the tribunal of commerce, which now assigns an additional period for their appearance, which, in respect to inhabitants of the kingdom, is regulated by the distance of their residence, one day being allowed for every three myria

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metres, about 183 English miles. In cases of foreign creditors, longer delays are allowed. After the expiration of this period, those who do not appear are excluded from a future dividend. Within three days after the period assigned for making affidavit, the creditors whose claims are allowed, are convened, and the state of the bankrupt's property is laid before them in the presence of the commissioner and the bankrupt. This is the time for the accord, which may take place if açceded to by the majority of the creditors, the sum of whose claims constitutes at least three fourths of the amount of debts to be liquidated. Creditors who hold collateral security for their debts have no voice in the decision. In case of presumption of fraud, from an examination of the bankrupt's books and papers, no accord is valid. If an accord is inade, it must be signed during this sitting. Whoever is against it, is allowed a space of eight days to exhibit his objections. The accord, when legally ratified, restores the bankrupt to his former situation. If no accord is effected, the assembled creditors have to appoint definitive trustees (syndics definitifs), and a cashier to receive the moneys arising from the income or sale of the bankrupt's property. The duties of these definitive trustees are the same with those of the provisional trustees and the agents whom they succeeded; and the provisional trustees account and transfer the affairs over to the definitive, in the same manner as the agents had done to them. Monthly reports are made to the commissioner, who now has to fix the dividends. Prior to the final division, the creditors are convened, under the superintendence of the commissioner, and the final account is submitted by the trustees. The commissioner, on the suggestion of the syndics, assigns to the bankrupt's family their apparel and household furniture. Wives, married with a stipulation for separate property, or for community of goods accompanied with a separate interest in immovable property, retain the estate to which they are thus entitled, and also such as may have accrued to them by succession or donation. They are also entitled to retain personal property acquired by them, if it is the proceeds of such estate, and the right to employ such estate has been secured to them at the time when it came into their possession. Except in such cases, the presumption of law is, that property acquired by the wife has been paid for from the estate of the husband, and it is to be considered as

belonging to him, unless she can substantiate her claim to it. She has a right, however, to articles of dress and furniture proved to belong to her by the marriage contract, or to have fallen to her by inheritance. Goods sold to the bankrupt may be reclaimed by the vender, if they are still in transitu, and not yet delivered at the store-house of the bankrupt, and have not been sold by him on authority of the bill of lading, or other sufficient authority. But all the bankrupt's advances for freight, charges, &c., on account of the goods, must first be refunded. And so the price, for which the goods consigned to the bankrupt for sale, on account and risk of the consignor, have been sold by him to third persons, may be claimed by the consignor, if it has not been paid to the bankrupt, or passed into the accounts between him and the consignor. The simple bankrupt (that is, he who is convicted of mere negligence) is liable to imprisonment for a time not less than one month, nor more than two years. The fraudulent bankrupt is condemned to hard labor (travaux forcés) for a definite time.-By the English statute of 6 Geo. IV, it is made an act of bankruptcy for a debtor to depart the realm, remain abroad, leave his house, shut himself up in his house, suffer himself to be arrested for a debt not due, yield himself up to be put in prison, suffer himself to be outlawed, procure himself to be arrested, or his goods to be attached, or make transfers of his lands or goods, with intent to defraud his creditors. So it is an act of bankruptcy in a debtor, on commitment for debt, to lie in prison 20 days, or escape from prison. A man may become a bankrupt, also, by declaring himself such at the bankrupt office. Where the debtor does not so declare himself bankrupt, proceedings are commenced against him as such, on petition to the chancellor, by one creditor to the amount of £100, or two or more to the amount of £150. And in case the petitioners do not establish the bankruptcy, they are liable for the costs of the proceedings, and damages to the party petitioned against. The act extends to aliens, denizens and women. On a petition being made, the lord chancellor appoints commissioners, to take charge of the body, lands and effects of the party petitioned against. These commissioners proceed to take testimony that the petitioners are creditors, that the debtor is a merchant or trader within the meaning of the statute, and that he has committed an act of bankruptcy. These facts being established, they adjudge that

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he is a bankrupt, and give notice thereof in the London Gazette. The commissioners are invested with ample powers for getting possession of the bankrupt's person and effects. They assign all his property, real and personal, to assignees appointed by themselves, and these assignees subsequently assign it over to other assignees, appointed at the second meeting of the creditors, in case of such other assignees being so appointed, and approved by the commissioners. Creditors, whose debts are not due, are allowed to prove them, discounting interest. Sureties and bail for the bankrupt, when they pay the whole debt for which they are bound, may represent their claims under the commission, and receive the dividends that would otherwise have been assigned to the party to whom they pay the debt, even if it is not paid until after the commission issues. Persons holding policies of insurance signed by the bankrupt, may also present their claims, and if the contingency, whereby they would be entitled to a loss, happens before the commission is closed, their claims will be allowed. An annuity creditor is also admitted to prove; likewise sureties on an annuity bond, and any creditor whose debt depends on a contingency, if the contingency take effect pending the commission. The conveyance made to the assignees will transfer to them, for the benefit of the creditors, all goods of any other person in the possession of the bankrupt at the time of the failure, and, by permission of the owner, reputed to belong to the bankrupt. Conveyances and transfers made by the bankrupt after he shall have been insolvent, except upon consideration of marriage, or other good consideration, are void, and the property so transferred is disposed of by the assignees for the benefit of the creditors. The assignees may, at their election, assume any subsisting lease held by the bankrupt, or any agreement by him to purchase lands. The bankruptcy dissolves articles of apprenticeship entered into with the bankrupt, and if he has received any apprentice's fee, on account of taking an apprentice, a part or the whole of it is returned by the commissioners. The assignees may execute any powers vested in the bankrupt, which he might have executed for his own benefit. If the bankrupt was trustee of property, the chancellor appoints others in his stead. Conveyances by, and contracts and transactions by and with, the bankrupt, bona fide, and executions levied more than two 47

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months before the issuing of the commission, though after the act of bankruptcy, are valid if the other party had no notice of the previous act of bankruptcy. Payments made at any time before the bankruptcy are also valid. The creditors appoint a receiver of the money, the proceeds of the bankrupt's property. The money must be vested in exchequer bills on interest, if so directed by the commissioners. The first dividend is made at the end of 12, and the final one at the end of 18 months. In case the bankrupt does not surrender himself within 42 days after notice, or appear, as required, from time to time, to be examined on oath before the commissioners, or does not discover all his property, or deliver up all his books and papers relating thereto, or conceals and embezzles property to the value of £10, or papers relating thereto, he is deemed guilty of felony, and liable to be transported for life, or for a term not less than seven years. During his examination, an allowance is made to him for the support of his family. The bankrupt is absolutely discharged from all his debts and liabilities subsisting at the time of his becoming bankrupt, in case of his obtaining, and the lord chancellor's allowing, a certificate of four fifths in number and value of creditors to the amount of £20 each, or, after six months from the time of his last examination, of three fifths in number and value of such creditors, or nine tenths in number, that he has duly surrendered, and in all things conformed to the requisitions of the act. All contracts to induce creditors to sign the certificate are void. But, if it be a second case of the debtor's bankruptcy, his certificate will not exempt his future property and earnings from liability to his creditors, unless the dividends amount to 15s. in the pound. A bankrupt who obtains his certificate, if the dividends amount to 10s. in the pound, is allowed 5 per cent. on the amount, not exceeding €400; and if the dividends amount to 12s. 6d. in the pound, he is allowed 71⁄2 per cent., not exceeding £500; and if the dividends amount to 15s. in the pound, he is allowed 10 per cent., not exceeding £600: but if they are less than 10s. in the pound, he is only allowed such sum as the assignees and commissioners may think fit, not over 3 per cent., nor exceeding £300. But the bankrupt is not entitled to a certificate, if he has lost, in gambling, within 12 months, £200, or £20 in any one day in that time; or if he has lost £200 in stockjobbing, or has caused false

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