BAN 



239 



BAN 



B-mkolc, 



Bank- 

 ruptcy. 



fits of Scotch banks ; but as they never keep gold or 

 silverin their repositories equal to the amount of their 

 notes in circulation, an agent in Landon, to accept 

 and pay their 'rafts, is indispensibly requisite ; for 

 they must be able to give bills on London to all 

 claimants who will not be otherwise satisfied, or to 

 convert their own drafts into cash in case of urgent 

 demands. Country banks generally establish an 

 .agency in London, by investing their capital and bor- 

 rowed money in the public funds, under the enntroul 

 of the ager.t, who is thus secured for the amount of 

 his engagements on account of the bank. The ad- 

 vantage of this plan is, that the bank obtains interest 

 for its capital and borrowed money, and at the same 

 time, in cases of emergency, can convert the whole 

 > cash by the sale of stock. By judicious manage- 

 ment, and especially by taking care to purchase a 

 surplus of bills on London, a private bank may be 

 conducted with very little capital in Scotland, where 

 the facility of carrying on the business, has induced 

 the erection of many of them ; but their operations 

 are beneficial to society at large, and the advantages 

 of an abundant currency are evident, from the grow- 

 ing wealth and prosperity of the country. 



See Macpherson'a Annals of Commerce, vol. i. p. 

 341, et seq. Ibid, vol. ii. p. 253, et seq. Smith's 

 Wealth of S'utions, vol. i. p. 480 ; vol. ii. p. 220, et 

 seq. Allardice's Address to the Proprietors of the 

 Bank of England, p. 130, et seq. Fairman on the 

 Funds, p. 43. Allardice, p. 76. Ibid. p. 131. Life 

 ofLaiv. (r) 



BANKOK, one of the chief towns of the king- 

 dom of Siam, situated in an island about seven leagues 

 from the sea, near the mouth of the river Menam. In 

 the end of the 17th century, the French had an esta- 

 blishment in Bankok, consisting of two companies of 

 40 men each, in a square fort on the other side of the 

 river; but they abandoned it in 168,5. The vessels 

 of all the nations that trade with Siam are obliged to 

 pay duty here, and to give an account of their cargo 

 and crew. The passport which they receive from 

 the custom-house officer is shewn at a small village 

 called Canon-Bautenan, which is about an hour's 

 journey from Ju'i'da ; and if there appears to be no 

 fraud, they are permitted to trade in every part of 

 the kingdom. ( ;' ) 



BANKRUPTCY, in its more general and ex- 

 tended sense, may be defined insolvency, actual or 

 presumed, followed by some open and public act de- 

 noting that the insolvency is irretrievable. He is a 

 a bankrupt " Qui fortunes vitio vel sua, vel parti m 

 Jbrlunce partim suo vitio, non solvendo /actus, foro 

 cessit." Cicero, 2d Philip. 



In the early ages of a state, the law of bankruptcy 

 is uniformly cruel and oppressive. The unfortunate 

 debtoris regarded asa criminal, without distinguishing 

 whetherhis inability has arisen from culpability or from 

 misfortune ; and the law looks merely to the interest 

 of the creditor, without paying any regard to the 

 feelings or to the future comfort of the debtor. The 

 eventy of the Roman laws against debtors in the in- 

 fancy of the republic, and the oppression of creditors, 

 which occasioned so many popular insurrections and so 

 many secessions to the Moris Sacer, are known to every 

 one. As states advance in civilization, and as commerce 



becomes more extended, less illiberal notions prevail, 

 and the innocent trader, reduced to bankruptcy by 

 misfortune, becomes an object of compassion rather 

 than of severity. Creditors too begin to sec, that it 

 is for the public interest that the funds of the bank- 

 rupt should belong to the creditors at large, instead 

 of being left to be scrambled for by the diligence of 

 individuals ; and through the frequency of failures 

 which attends the growth of commerce, the principles 

 of the bankrupt law are examined and matured into a 

 regular system. The great fundamental principle 

 upon which every code of bankrupt law must rest is, 

 that from the moment of the failure, the funds of the 

 bankrupt become the common property of his credi- 

 tors at large, and are no longer liable to be disposed 

 of by himself, orto be attachedby individual creditors. 

 The perfection of every code must depend upon the 

 manner in which this principle is carried into effect, 

 by the adoption of a simple, economical, and speedy- 

 mode of distributing the common fund. 



It was not till a very late period that the bankrupt 

 law of Scotland assumed a systematic form. We, 

 indeed, at an carry date, adopted from the Roman 

 law the mild remedy of the cessio bonorum, by which 

 an honest though insolvent debtor, who was willing 

 to surrender all his effects to his creditors, escaped 

 the hardship of a long imprisonment ; and by the 

 statutes 1621, c. 18, and 1696, c. 5, attempts were 

 made to prevent insolvent debtors from granting any 

 deeds in defraud of their creditors. By this last sta- 

 tute, bankruptcy was accurately defined, and its date 

 being fixed, a presumption of law was established 

 against all deeds granted within 60 days of it, in fa- 

 vour of prior creditors. Still, however, no plan was 

 devised for a general distribution of the bankrupt's 

 effects. The creditors were left to proceed with 

 their individual diligence as they best could, and the 

 maxim of law being " Jus civile vigilantibus scrip- 

 tarn est," an unfortunate debtor was, on the first 

 suspicion of insolvency, overpowered with a torrent 

 of diligence, which even the best credit could scarce- 

 ly withstand. The great increase of commerce du- 

 ring the last century, and the consequent frequency 

 of failures, imperiously called for an alteration of this 

 system, and after a variety of experiments, the plan 

 which is now in execution was adopted, by the statute 

 33 Geo. III. c. 74. This statute, though merely tem- 

 porary and experimental, has been repeatedly renew- 

 ed ; and the system which it establishes, although 

 perhaps still capable of considerable improvement, is 

 admitted on all hands to possess great and peculiar ex- 

 cellencies. 



By the statute 1696, c. v. any person may be ren- 

 dered a bankrupt who is at the time in Scotland, 

 and subject to its laws. The effect of this bank- 

 ruptcy against persons who are not traders, is only 

 such as to enable creditors to challenge undue pre- 

 ferences, and to follow forth the ordinary processes 

 for attachment and distribution of tlie funds. But 

 by the 33d Geo. III., a new process called sequestra- 

 tion is introduced, by which the whole estate of a 

 bankrupt trader is adjudged from him, and vested in 

 a trustee for the creditors at large. The statute de- 

 scribes the persons liable to bankruptcy by seques- 

 tration, to be " in general, any person who, either 



Bank- 

 ruptcy. 



