BANKRUPT, a term derived generally from Italian, banca, a bench, and Latin, rut in:, broken, in allusion to the benches formerly used by the money-lenders in Italy, which were broken in case of their failure. The word in its most general sense signifies an insolvent person, but more strictly an insolvent mer chant There is perhaps no branch of legislation more difficult, and at the saute tinie more im portant, titan 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 ail the contracts made in a community those imposing the obligation to pay inoney constitute the most numerous class. Some of the first questions in legislation are: By what means shall this obligation be en forced and by what penalties shall the breach of it be punished? In many communities, es pecially in the earlier stages of civilization, the breach of such a contract or obligation is re garded as a crime, and the insolvent debtor is treated as a crirainal. The ancient laws upon this subject in England so regard the insolvent trader. The early laws of the Romans and Athenians authorized the most rigorous meas ures for procuring satisfaction of a debt, even permitting the sale of the debtor into slavery for this purpose. The Battas of Sumatra still, it is reported, 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 qualifica tions, and under certain restrictions, attribute it to misfortune, and, on giving up his property to be divided among his creditors, discharge him from all further liability.
The power of making bankrupt laws in the United States was, by the Constitution, con ferred on Congress, which alone had the power to make a bankrupt law applicable to, and bind ing upon, all creditors in the United States, and for all descriptions of debts. This power was first exercised by Congress in 1800, by the en actment of a bankrupt law limited to five years, and which expired by its own limitation. This act was modeled upon the English statutes of bankruptcy existing at the time, and, like them, was applicable to no debtors except merchants. Both by the English statutes and the French Code, persons capable of becoming bankrupts are such as fall under the general description of merchants, which the French describe as conunercants.
A statute in the reign of George III, re lating to bankrupts in Scotland, describes a person capable of becoming such to be one who ((either for himself, or as an agent for others, seeks his living by buying and selling, or by the workmanship of goods or commodities'; an English statute of the' reign of George IV, embodying the previous acts and judicial de cisions on this subject, enumerates particularly the descriptions of persons who are to be con sidered merchants and capable of becoming bankrupts. See BANKRUPTCY LAWS.