Some reflections on the law of bankruptcy: wrote at the desire of a friend: shewing, that such a law would be beneficial to the publick, and analogous to reason and our holy religion. And by him humbly recommended to the consideration of the publick.
N. N.
Page  1


YOUR most esteemed came to Hand on the 15th Instant: I duly perused it, and was highly pleased to see your generous Concern for the Publick, and Pity for the Individuals; and the many Schemes you had projected for the Advantage of both; which confirmed me in the Opinion I had long entertained of you, as a Gentleman of a publick benevolent Spirit; but was really surprized, when you desired my Opinion concerning the Law of Bankruptcy, as to the Expediency or Non-Expediency, of having that, or one as near like it as may be, made in this Colony, for the Relief of insolvent Debtors; for as the Study of Politicks has not been my Business, I really esteem myself a very incompetent Judge: However any Service I can render, you may freely command: I will suggest some Thoughts on the Subject, for your private Reflection, but shall not be anxious in the Affair; being persuaded your Candour will pardon a Thousand Faults. But to proceed:

I conceive there are scarcely any Reasons for such an Act in England, but what hold good with regard to the Plantations in America; which are much upon a Par; Debtors and Creditors being much the same in the Plantations as at home; and in as much as the Legislative Body at home, have made an Act for the Ease and Benefit of Bankrupts, or insolvent Debtors; we may conclude they judged it beneficial to the State in general, all Things considered, tho' some Individuals might possibly sometimes be injured by it, which I hope to prove by-and-by seldom happens to be the Case. I have long thought such an Act the proper Object of our Legislature's Attention, for this Reason, that it might be of publick Service (tho' there are many others) and shall therefore the more chearfully give my Thoughts on the Subject, hoping it may give Occasion to a much abler Pen [yours] to take the Affair in Hand, which I doubt not is sufficient fully to evince the Expediency, Impor|tance and Necessity of such an Act.

Page  2 I shall consider this Act in the

  • FIRST PLACE, As beneficial to the Publick,
  • SECONDLY, Serviceable in general to the Debtor.
  • THIRDLY, In general, no Disservice to the Creditor.
  • FOURTHLY, Agreeable to Reason, and the Genius of our holy Religion.

I can't but hope, if I should be so happy as to prove such an Act beneficial to the Publick; generally a Service to the Debtor; seldom a Disservice to the Creditor, and always consistent with Reason, and the Genius and Temper of our holy Religion; that this Colony may be induced (through your Influence) to follow the Example of its Mother-Country; and possibly the rather, as one of our neighbouring Colonies have lately done the same: And as the same has lately been recommended to be done, to the Government of Virginia; what Advantage it will give those Colonies over us I leave you to judge.

First, then, An Act of Bankruptcy, I conceive, may be beneficial to the Publick in two Respects.

First, it might be beneficial, as it would save a good deal of Expence, and prevent many ill Consequences. Let us view a Man who is an insolvent Debtor, prosecuted according to Form of Law, and imprisoned (I had almost said Divine Law, and under that terrible Sentence, Thou shalt not come out thence till thou hast paid the utmost Farthing,) there to be holden by Law till the Debt be discharged, How many Evils will unavoidably arise to the Publick! Is the Man there ever like to discharge the Debt? No; that Place is not a Place for Improvement but Punish|ment: What will be the Consequence then? This without Dispute; if the Man has 1000l. or 10,000 l. of his Creditor's Estate in his Hands, he will consume it in such a Manner (in a Thousand Ways too tedious to be mentioned) that neither his Creditor or the Publick will be bene|fitted by it: Such Losses are impoverishing to the Publick; besides the Publick will lose entirely the Benefit of the Man's Labour during the Time of his Confinement; if not altogether that of his Family, yet very much of it; as the Family is destitute of its Head and Guide. How fatal would such Instances, if they should be multiplied, prove to the Publick! for upon a moderate Computation, every Instance subjects the Publick to a Loss of 5 or 600l. per Annum; and 'tis more than probable, that Instances will be multiplied to our Sorrow, if we do not prevent them by ascertaining the Value of our Medium, the Uncertainty of which has ruined many; or pass some Acts for their Relief. Now under what Obligation the Publick can be to suffer such Losses (especially when its Page  3 not like to serve any good End) I leave to those that are better Judges of Obligations than I am, to determine. The Loss is yet more consi|siderable, should this Man, (thus imprisoned) being an honest Man, (which may be the Case) be a Man of Skill and Experience in Merchan|dize, (which by the Bye are such Attainments that every Man does not attain to, tho' many are so happy as to blunder into an Estate without them) who, by the Badness of the Times in Trade, or by the mere Providence of GOD, has been reduced: Or should he be a Man of known Ingenuity, either in Literature or in any of the mechanical Arts, which are beneficial to Mankind; as the Goal is no Place for the Improvement of a Man's Skill, &c. I could mention many more ill Consequences that attend a Confinement; but I will only observe, that this Man (after having been fatigued, plagued and disgraced with a four or five Years Imprisonment, which he looks upon (often justly) rather as a Piece of Revenge and Ill-nature, and done rather in Compliance to the malicious Temper of a haughty Creditor, than with any View to the Good of himself, his Creditor, or the Publick) is generally either so much lost as to any Sense of Honour or Ambition, or is so much depressed in his Spirits, and out of Humour with Mankind, or has contracted so strong a Habit of Idleness, tho' he should be so happy as to escape that of Intemperance in Drink, and maintain a good Constitution, which few under those Circumstances do; he is never like any more to be of any great Service to himself or any Body else. These are some of the Evils such an Act would prevent. Moreover, as a Prison is generally the Consequence of a Failure in this Government, which (under our present Circumstances) in the Apprehension of Men, so much resembles the final Punishment of Wickedness, they imagine, the Man that is so un|happy as to be doomed to that Place, is not only become a Bankrupt as to his Fortune, but as to his Faith and Honour; and generally treat him as such; which gives Mankind such terrible Apprehensions with regard to the Consequences of a Failure; that let a Man's Integrity be almost what it will, if his Fortune is declining and sinking, 'tis ten to one, if, in order to save himself, he does not pursue such Measures (his Temp|tations being almost invincible) as really bankrupts both his Faith and Fortune: Whereas did we believe, that a Man might be a Bankrupt, and yet be a Man of Honour and Fidelity; in this Case, a Man in declining Circumstances, of a common Degree of Honesty, (his Temp|tations not being in any Measure so great as in the other Case) would in ordinary act quite a different Part, a Part more friendly to Vertue, more Page  4 healthful to the Publick, less detrimental to his Creditors, and by far safer and more honourable for himself. But,

Secondly, it might be beneficial, as it would be productive of much positive Good. When I was in England, I was informed, and I take it to be Fact, that there are Thousands of Gentlemen who have proved Bankrupts, and have upon the Statute, delivered up their Effects to their proper Owners, began the World anew, and are now Men of distinguished Characters in the mercantile Life; who by their Skill in and Application to Business, have procured vast Fortunes. This every one will allow to be a publick Good: But this could never have been the Case with those Gentlemen, had they been under the unhappy Circumstances that our Debtors are.

I am sensible, that those Men who prove insolvent, are commonly branded as Villains, and judged unworthy any more to be entrusted with any of the Concerns of this Life: I am sorry that this Brand is fixed on every one of this Character, so much without Distinction. Some Villains I grant there are; but then I would observe, that there are a great many Men, Men of Probity and Honour, who not being sufficiently instructed in the Nature of Trade, have, either with a small or with a large Fortune, which is much the same in the Quotient if they over-trade, put themselves into Business of this Nature, and have over-traded their Stock; which has been the Cause of their Ruin: These unfortunate Gentlemen have purchased their Skill at a dear Rate; but are now possi|bly qualified for the Business, which heretofore they were not capable of managing; if so, why should the Publick be deprived of the Service, which by Experience (dear to themselves) they are now capable and willing to render? Moreover, some Men are render'd insolvent by the mere Providence of God, (which by Statute should hurt no Man) should these Men be deemed as Villains, because they are subject to a Fate that is unavoidable? and because God, who gives the good Things of this Life as it pleases him, has not given with so liberal a Hand to these Men as to others, for Reasons best known to himself; shall these unhappy Men therefore be denied the Privilege and Pleasure of breathing the common Air, to which the Birds and Beasts are welcome? and because God disciplines, shall Men punish?

But suppose the Worst, that these Men have render'd themselves insolvent by their own wicked immoral Conduct; I ask, will it serve any good Purposes in the State, to commit these Men to Goal? will the Publick be benefitted by it; will their Creditors, or will they themselves? Page  5 I believe neither, for Reasons before assigned; then there can be no good Reasons why they should be committed, in Manner and Form notwith|standing. Shall they be committed as Sinners? No certainly! as such they are accountable to the highest Tribunal, and to that only. We may be thought to be tolerable good Judges as to Property, mea & tua, commoda & incommoda; but as to Virtue and Vice as such, we are insuf|ficient Judges: As to Virtue and Vice, there are so many Things to be counted upon, that He only who knows all Things is a proper Judge.

I ask Pardon for this long Digression, and now observe more perti|nently to this Head, that an Act for the Ease of Bankrupts, is productive of Good to the Publick in this Respect, that whatever Effects the insol|vent Debtor has in his Hands, instead of consuming of it to no good Purpose, he returns it to his Creditors, for them to improve, to the Advantage of themselves, and consequently of the Publick: This affects the Publick in a two-fold Ratio; first by saving the Interest, and secondly by applying of it to good Purposes; and is similar to taking a Weight out of one Scale, and putting it into the other, in the general Ballance; one Pound thus applied makes two odds. 'Tis moreover productive of Good, as it is a Motive and Incitement to Industry. Suppose a Man insolvent, that he owes large Sums of Money, and has Nothing to dis|charge them with, if he is put into Goal, there is no Opportunity or Motive for Industry; his Thoughts and Concern there, are to no Manner of Purpose; and if after he has been disgraced and plagued with a long Confinement, he should take the Poor-Man's Oath, and in that Manner obtain Goal-Delivery, his Spirits are so sunk with the Weight of his Debts, he has no Heart to contrive or work for his Relief, and in Con|sequence will do Nothing to Purpose: He imagines (as the Proverb is) he is working for a dead Horse; and that he is Nothing but a Slave to his Creditors; that he is like never to possess any Thing for himself or Family, and so the remaining Part of Life is lost (and worse than lost) to himself, his Creditors, and to the Publick: Of this every Man's Experience abundantly convinces him. For my Part, I never knew an Instance, of any Man, under these Circumstances, ever making any Thing for himself, or any Body else; but was he take Benefit by the Act of Bankruptcy, and deliver up his Effects to his Creditors, and begin the World anew, he might be encouraged to Frugality and Industry, and do every Thing in his Power to make an Interest for himself, as every Thing that he should then acquire would be his own. But before I proceed to the next Head, I shall obviate the following Objection, viz.

Page  6That the Government cannot, in Equity, discharge a Debt due from a Debtor to a Creditor, without the Consent of the Creditor.

To this Objection I answer in the first Place, that as we hold our Estates under the Government, and have all our Interests defended and protected by it, it must always be supposed, that the Government has an equitable Right to inspect our Trade and Commerce one with another, and determine under all Circumstances, when a Man shall be holden, and when discharged. Secondly, I would say, that a Government is to be considered as one great Family, and that our Estates, as we are Members of the same, are properly to be considered as so many Parts of the Common-Stock; which we are allowed to improve for our own Benefit, but in such a Form as not to be detrimental to the Government: Of this the Government, or such Part as shall be appointed for that Purpose, are the only proper judges; consequently any Contracts we make, if they should be judged prejudicial to the common Interest, may be made void, and of none Effect.

SECONDLY, Such an Act would be serviceable in general to Debtors.

First, 'tis a Service done to them, as it gives them the Advantage of beginning the World again, and of making an Interest for themselves and the Publick; which will be a strong Motive to them thus industri|ously to improve it; and as it delivers them from the Goal, and innu|merable Evils natural and moral, that generally attend it.

2dly, 'Tis a Favour done them, as it delivers them from the Malice and Revenge of their Creditors. The Troubles that attend a Failure, are almost infinite, and should really excite our Pity: Why then should the Publick abandon such an unhappy Man to the Fury and Resentment of his incensed Creditors? For, says an Author,

their Losses generally sour their Tempers, and keep their Resentments warm against the unhappy Occasion of them, even to the Extinction sometimes of Humanity: But one should think, that the Lamentations of a fallen Familiar and Intimate (frequently heighten'd by the Tears of a tender Wife, and affecting Cries of their innocent Babes) would be prevailing Objects to excite Compassion from those who have always experienced a courteous and gentle Treatment from the unhappy Sufferer; but Philanthropy is almost lost amongst us, and Mankind are grown so degenerate, as to become insensible to the Distresses of others, much less to defend them from, or administer Relief under them; the unfor|tunate Man is now equally shunn'd with the infected one; and the best Usage he finds is Slights from almost every Individual 〈…〉 quondam Page  7 Acquaintance, whilst the worst is swelled to an immoderate Height by Insults offered him, Contumeies and Reproaches thrown out against him; and Abuses, Invectives and unmerited Aspersions are frequently added, to compleat the Catalogue, and augment his Miseries; few regard him, fewer still caress him, and the Paucity of those who protect or assist him, are reduced to the lowest Degree of Comparison.
It appears then, such an Act would be a Kindness to a Debtor, and for that Reason he ought to have the Benefit of it; if there be not a stronger Reason why he should not from the Part of the Creditor; which will appear not to be the Case, if it should be found to be no Prejudice to the Creditor in general, for the Debtor thus to be benefitted: Which is the Design of the next Head.

THIRDLY, I am to consider this Act as it relates to the Creditors; and say, 'tis no Disservice in general to them.

For the Proof of this, I appeal to all Mankind; for they are as good Judges of it as I am: How frequently do we observe Bankrupts, or insolvent Debtors, spend their Creditor's Estates in Goal, often large Sums, and after a Length of Time are supported at the Expence of the Creditors until they are tired of it, and finally obtain Goal-Delivery, upon taking the Poor-Man's Oath; and the Creditors, after having suffered the Loss of large Sums (which might be saved by the Act of Bankruptcy) found to be at a greater Remove from their just Dues than ever; and complain that all their Fatigue and Costs are to no Purpose: And indeed, where has been a notable Instance to the Contrary? Upon the Whole, we have Reason to imagine, that the Law of Bankruptcy in general, is rather a Favour than a Prejudice even to the Creditor himself. But having in Part anticipated myself on this Head, I proceed to say,

FOURTHLY, That such an Act is consistent with Reason, and agree|able to the Genius of our holy Religion.

First, With Reason: Reason considers all Trade properly as a Barter, an Exchange of one Article for another; as, when I purchase any Article of Merchandize of a Merchant, I give him another Article, or secure to give him one in exchange for it; and that Reason says, must be a Meum & Tuum, a Thing that can be mine and then his: So Reason understands it, and so Men understand it. Accordingly the Italians, and we from them practice, as understanding of it in this Form: For when A. B. buys 100 wt. of Piemento of C. D. on Time, the Journal post is not A. B. Debiter to C. D. properly for 100 wt. of Piemento bought on Time; but Piemento is Debitor to C. D. for 100 wt. bought on Time; Page  8 for this plain Reason, because Piemento is the Ground, Foundation or Cause of C. D's Demand on A. B. and not A. B. himself; therefore C. D. makes A. B. Dr. not to himself, but to Piemento 100 wt. bought on Time, at &c. From whence I argue, that when I purchase a Quantity of Merchandize of a Merchant, the Merchandize so purchased, or the Avails of it, is Debtor to the Merchant, and not I myself abstracted from the Merchandize or its Avails. And inasmuch as it cannot, in ordinary, be determined what are the particular Avails of the Merchan|dize so purchased, Reason will judge every Thing I stand possess'd of (if Things convertible) to be Avails, and consequently accountable to the Merchant; therefore so long as I stand possessed of any such Avails, the Merchant has a proper Foundation for his Demands; for these Avails are accountable to him, or in other Words are his Debtors properly in the Nature of Things: But if I deliver up these Avails to the Merchant, or through the Disposition of Providence have none to deliver up his Demands cease; because the very Things that were accountable, or his Debotrs, cease to be, or have no Existence, and I in Reason am dis|charged: If so, it will from thence follow, that supposing I should begin the World again with Nothing, but what I received with my Being, and should acquire a second Interest in the World, the Merchant, or my Creditor, could have no Demand on me; for as Debtor and Creditor have a joint Existence, and can not exist separately; if the Debtor die, as in this Case, the Creditor dies also. Moreover, Reason supposes, and the Parties suppose, that whenever a Contract is made, and one Thing is given, or secured to be given, in Exchange for another, that the Thing so given, or secured to be given, is an Equivalent to the Thing received: So our Courts of Justice understand it: For if A. makes a Demand on B. for One Hundred Pounds Money; in order to recover, A. is obliged to prove, that B. has received the Value of his Demand; which is the sole Foundation of A's Demand against B. Whence then is the Creditor's Demand on the Person of the Debtor exclusive of his Interest? Did the Parties understand, that at the Time of the Contract, the Debtor obliged his Estate, himself, Soul and Body, to answer the Creditor's Demand? If this was the Case, Reason says the Bargain shall be void ipso facto; for the Debtor was over-reached, having never received the Value from the Creditor, of those Things which he has secured to be exchanged for it: If this was their Understanding, the Soul was under|valued, (and the Debtor ought to have Remedy) if we can rely on the Judgment of Him that made it; for he tells us, that Thousands of Rams,Page  9and Ten Thousands of Rivers of Oil, are not an Equivalent: So that truly, and in the Nature of Things, the Creditor's Demand lies not against the Person, but the Estate, of the Debtor. But if it should be objected, as a Consequence from my Reasoning, that the Person of the Debtor can in no Case be taken and holden; I shall not allow the Consequence; for Reason supposes he may be taken and holden, but then 'tis with this View, viz. that the Creditor may come at the Estate of the Debtor; for the Debtor in this Case is considered only as a Key to the Creditor's Interest; but when the Creditor has received all the Debtor's Estate, be that an Equivalent to his Demand or not, Reason says, he has no Demand on his Person; that being a Thing that was never understood to be a Commodity in Trade, there being no Equivalent to it, consequently not to be dealt for. I add, that the Law of Bankruptcy seems to be built upon this Foundation, viz. that a Creditor's Demand lies against the Estate, and not against the Person, of the Debtor.

But 'tis objected, that this is hard on the Part of the Creditor: 'Tis possible, I allow, he may be hurt by it, but not very probable; but the Contrary would be much harder on the Part of the Debtor; for in the first Case, the Creditor loses only his Estate, but in the second, the Debtor not only loses his Estate (which is right) but he loses himself also. I would say farther, in Answer to this Objection, that Men always trade on this Supposition, that 'tis possible that either the Debtor or the Creditor may lose their Interest; and that Things are so uncertain and fluctuating in this Life, that in ordinary, a Man knows not whether his Estate will be most secure in his own Hands, or in the Hands of his Debtor; and that in both Cases we must be concluded by the Determi|nations of Providence.

2dly, I would say, such an Act is agreeable to the Genius of our holy Religion. As we are Intelligences of Rank (with Gratitude be it spoken to the Author of our Being) we, in the Purpose of Heaven, are designed for social Happiness, in a World that is to succeed this: This State there|fore, we now live in, is to be considered as preparatory to that, and as a State of Trial and Discipline to qualify us for it: 'Tis necessary there|fore, that we should be subjected in this State to various Troubles and Distresses; as Loss of Friends, Sickness, Poverty, &c. Hence appears the Necessity why Men who are to act a Part on this troublesome Stage, should be of a benevolent, compassionate, forgiving Temper: Accor|dingly we see, that the sacred Laws are calculated to beget and promote such a Temper and Disposition: If there be among you a poor Man of onePage  10of thy Brethren, &c. thou shalt not harden thine Heart, nor shut thy Hand from thy poor Brother; but thou shalt open thine Hand wide unto him, and shalt surely lend him sufficient for his Need, in that which he wanteth: If thy Brother be waxen poor, &c. then thou shalt relieve him, &c. that he may live. If, says JOB, I have seen any perish for Want of Cloathing, or any Poor without Covering; if his Loins have not blessed me, &c. then let mine Arm fall from my Shoulder-blade, and mine Arm be broken from the Bone. Whoso hath this World's Good, and seeth his Brother have Need, and shutteth up his Bowels of Compassion from him, how dwelleth the Love of God in him! My little Children, let us not love in Word, neither in Tongue, but in Deed and in Truth. When we turn over the Pages of the sacred Volume, wrote from the Mouth of our Divine Master, and there observe the sublime Sentiments of Benevolence, Compassion, Forbearance, Forgiveness of Injuries, and Enemies, &c. enforced by the most powerful Arguments drawn from Life and Death, and the same exhibited in Perfection in his own glorious Person; we are ready to imagine, that all that call themselves his Disciples, are governed by these noble Principles; Principles that are the Glory of the Christian Religion, and the Dignity of human Nature; and indeed all supposed Excellencies, if these and such-like are wanting, in a moral Account might justly be esteemed as Cyphers; but, alas! how great our Mistake! how few have imbibed the Sentiments, or are influenced by the Example of our benevolent, glorious moral Preceptor! How contrary will our Principles appear to those of our benevolent Master; if, while he could forgive his Enemies and Persecutors, and do Good to all as he had Opportunity, we▪ upon an Affront or Injury done us, should encourage a Spirit of Resentment and Revenge, prose|cute every such Injury, tho' by legal Process, to the Utmost; and by this Means imprison and distress our Fellow-Men, and render Life to the last Degree tasteless, even to those that have as exquisite a Taste for Happiness as we, and are the Children of the same Father, and the Care of the same Providence.

Let us, says a celebrated Author, who are his Disciples, abhor Contention and Revenge; let us not prosecute every little Injury to the utmost, nor govern ourselves by those false Maxims of Prudence and Honour, which Pride and Self-Love have introduced on the Ruins of real Christianity: Let us not even in the most legal Methods, seek the Punishment of others who have wronged us; except 〈◊〉 Circumstances in which, we are in our Consciences persuaded, it 〈◊〉 the Whole, be a greater Charity to animadvert on the Offence, 〈◊〉 to pass it by; Page  11 and even then, let us act in a calm and dispassionate Manner, pitying and loving the Persons of the Injurious, even while, for the Sake of Society, we prosecute their Crimes.

Our Lord tells us, that the Kingdom of Heaven (or the Gospel Dispen|sation) is like to a certain King, who would take Account of his Servants; and when he had begun to reckon, one was brought unto him which owed him Ten Thousand Talents; but forasmuch as he had not to pay, his Lord commanded him to be sold, and his Wife and Children, and all that he had, and payment to be made: The Servant therefore fell down, and worshipped him, saying, Lord, have Patience with me, and I will pay thee all: Then the Lord of that Servant was moved with Compassion, and loosed him, and forgave him the Debt. But the same Servant went out, and found one of his Fellow-Servants which owed him an Hundred Pence; and he laid Hands on him, and took him by the Throat, saying, Pay me what thou owest: And his Fellow-Servant fell down at his Feet, and besought him, saying, Have Patience with me, and I will pay thee all: And he would not; but went and cast him into Prison, till he should pay the Debt. So when his Fellow-Servants saw what was done, they were very sorry, and came and told unto their Lord all that was done. Then his Lord, after that he had called him, said unto him, O thou wicked Servant, I forgave thee all that Debt, because thou desiredst me: Shouldest not thou also have Compassion on thy Fellow-Servant, even as I had Pity on thee? And his Lord was wroth, and delivered him to the Tormentors till he should pay all that was due unto him. So likewise shall my heavenly Father do also unto you, if ye from your Hearts forgive not every one his Brother their Trespasses. We are not to understand, that the Gospel obliges us, to forgive every Man his Debts, upon his desiring the same; no: but then I think it may well be expected, that those who are formed upon the benevolent Principles of our holy Religion, will not, can not, prosecute, distress and imprison those of their Fellow-Men, whom Providence has rendered incapable of dis|charging their Obligations; and that, if they are really governed by those Principles, they will rather discharge their insolvent Debtors, than punish and imprison them; and especially when they have no reasonable Prospect of serving themselves, or the State, in so doing. How agree|able then would an Act for the Relief of insolvent Debtors, be to the Temper and Genius of our holy Religion! and what a solid Foundation shall we lay for Happiness, as a Body Politick, and as Individuals, if we are really governed by the Maxims and Instructions of our glorious Master! Thus much I have said, that you may know how much

I am, SIR, Your devoted humble Servant, N. N.