to dwarf all development and growth, to tie up the hands of the government, and prevent any adaptation of measures to changing circumstances; in short, to arrest all progress and petrify the nation in the form and condition which existed when the Constitution was framed.

§ 397. The restricted meaning of the provision under examination has not been adopted either by Congress or by the judiciary. "Bankrupts" describe and include all insolvent debtors; and "laws on the subject of bankruptcies" are those whose principal object is to distribute the estates of such insolvents ratably among their creditors. Congress has full power to pass such laws, subject to the single condition that they shall be uniform throughout the United States. Whether the legislation shall apply to all failing debtors, or be confined to certain classes, such as merchants and traders; whether it shall release the debtor from further liability or not; whether it shall provide for a voluntary proceeding on his part, or only permit steps to be taken against him; whether it shall affect past indebtedness, or be restricted to such as shall be incurred in future; all these are mere matters of policy, to be adopted or rejected by Congress according to its views of expediency; they are not at all involved in the definition or extent of its power; none of them are necessary to the proper exercise of its jurisdiction.

§ 398. In the year 1841, Congress passed a general bankrupt law which contained two separate systems. One, the compulsory, permitted creditors to proceed against their failing debtors under certain specified circumstances, to procure them to be declared bankrupts, and their assets distributed pro rata. The other, the voluntary, provided means for failing debtors themselves, on their own motion, against the consent of creditors, to be declared bankrupts, to have their estates ratably distributed, and themselves discharged from all further liability in respect to the claims against them. This voluntary system was not limited to merchants and traders, but extended to all debtors, except those who had been clothed with a fiduciary capacity; nor was its operation restricted to debts incurred subsequent to the passage of the act, but applied to all those con

tracted prior thereto. The statute gave original jurisdiction to the United States District Courts to hear and determine applications made by or against the insolvent, and allowed an appeal therefrom to the circuit judges, but did not provide for any further appeal to the Supreme Court. The present bankrupt law, passed in the year 1867, resembles, in many of its general features, that of 1841, but differs greatly from the former legislation in matters of detail.

§ 399. A vast number of cases arose under the act of 1841, and were passed upon by the district and circuit judges of the United States. Objections were made to the constitutionality of the statute, on the ground that it was an insolvent, and not a bankrupt law; that it impaired the obligation of contracts by discharging debts already existing; in short, that Congress, in its passage, had transcended their powers. The same questions also came before several of the state courts which were called upon, in private suits between creditor and debtor, to decide as to the validity of the discharge in bankruptcy set up as a defence by the latter. As has been already stated, the law was generally sustained in all its parts. It is sufficient for my purpose, to cite a single case from each of these classes; and I make the selection, because in each the whole matter was very carefully and elaborately examined and discussed by the respective courts.

§ 400. The case of In re Klein1 arose in a United States circuit court, and was decided by Mr. Justice Catron. In the course of his opinion he says: 2 "The ideas attached to the word "bankruptcies in this connection are numerous and complicated; they form a subject of extensive and complicated legislation; of this subject Congress has general jurisdiction; and the true inquiry is, to what limits is that jurisdiction restricted? I hold it extends to all cases where the law causes to be distributed the property of the debtor among his creditors; this is its least limit. Its greatest is a discharge of the debtor from his contracts. And all intermediate legislation, affecting substance and form, but tending to further the great end of the subject, distribution and discharge

11 Howard's R. 277, in notis.

2 Ibid. 280.

are in the competence and discretion of Congress. With the policy of the law, letting in all classes, others as well as traders, and permitting the bankrupt to come in voluntarily and be discharged without the consent of his creditors, the courts have no concern; it belongs to the law-makers."

§ 401. The same point was presented and similarly decided in Kunzler v. Kohaus,1 and Sackett v. Andross.2 In these cases the Supreme Court of New York most elaborately considered the whole subject, and, notwithstanding a vigorous and somewhat peremptory dissent from Mr. Justice Bronson, held that "bankruptcies" apply to all persons unable to pay their debts; that the power of Congress is not restrained to any particular mode of discharge, whether voluntary or invol untary; and that the power exists to relieve the insolvent from debts antecedent as well as those subsequent to the statute. There is no direct restriction upon the power of Congress to pass laws impairing the obligation of contracts; and it was considered that the general grant of power to pass laws on the subject of bankruptcies, ex vi termini, includes prior as well as subsequent liabilities within its purview. The prohibition upon Congress from passing ex post facto laws, refers, as will be shown hereafter, to criminal offences only.3

§ 402. From the foregoing statement and analysis, it appears to be settled by judicial decision and legislative practice, that Congress has full authority to pass all laws relating to the distribution of the estates, and discharge of the liabilities, of failing debtors, whether we technically call such laws "bankrupt" or "insolvent"; that it may provide for the compulsory seizure and distribution of the assets at the instance of creditors, or the voluntary proceeding at the suit of the debtor; that the discharge may be made operative upon debts contracted prior as well as subsequent to the passage of the statute; that all matters of detail, such as whether the operation of the laws shall extend to all insolvents, or be confined to particular and designated classes, are mere questions

2 Ibid. 327.

15 Hill's R. 317. 3 See also McCormick v. Pickering, 4 Comstock's R. 276; Thompson v. Alger, 12 Metcalf's R. 428.

of policy, to be settled by Congress, and not questions of legislative jurisdiction, to be determined by courts. And I see no reason why Congress may not incorporate provisions looking to the punishment of fraudulent or extravagant debtors, by withholding the discharge for a time, or even by imprisoning the person in case where this severity is warranted by the circumstances.

§ 403. I cannot leave this subject without departing somewhat from my general plan, and adding a remark upon the policy of legislation under the grant of power so distinctly conferred, and the expediency of a national system of bankruptcy. I pass by the consideration of the relief it will afford to thousands of debtors hopelessly insolvent, and the fresh impetus it will give to business; because this topic belongs more especially to the political and social economist. There are other reasons which seem to me unanswerable, which apply to all times, and show that such a system should be a permanent part of the national legislation.

§ 404. The great trade and commerce of the country now passes beyond the limits of any one state; it is in a measure international; the creditor resides in one state, under one municipal law, the debtor in a different commonwealth which is governed by another local code. The diversities. among the state laws which regulate the collection of debts. and the settlement of the estates of insolvents, whether fraudulent or simply unfortunate, are almost as numerous as the states themselves. In some, preferential assignments are permitted, in others forbidden; in some, long stays upon execution are allowed; in some, an insolvent may be discharged from liability with the consent of a definite portion of the creditors; in others, without the consent of any; in others still, not without the consent of all. Added to this discrepancy, it is firmly settled by the Supreme Court of the United States, that an insolvent's discharge under a state law has no extraterritorial effect; that it is not in the least binding upon a creditor residing in another commonwealth who has not assented to it, although he may have been notified of the proceeding and made a party thereto.

§ 405. It certainly cannot be claimed that any benefit arises from this confusion and contradiction; that the rights of either creditor or debtor are subserved thereby. Among absolutely independent and sovereign nations, there will, of course, be more or less diversity of municipal laws; and persons engaged in foreign trade and commerce must necessarily be put to some inconvenience. But even among independent nations the tendency of the present age is to assimilate their systems of commercial and mercantile law. Among the several states of the Union, this diversity, and its accompanying inconvenience, need not exist. The Constitution confers upon Congress full power virtually to ordain one set of rules governing the relations of debtor and creditor throughout the whole extent of the country. The "uniformity" permitted. by the organic law would render a discharge in one state binding in all others; would establish the same acts and defaults of the debtor as occasions for bankrupt proceedings in every section; would abolish the iniquitous privilege of making preferential assignments; would enable the merchant in New York or Philadelphia who sells on credit to a trader in Illinois or Kentucky, to feel certain that when the time for payment should arrive, his debtor would not have failed and placed his assets completely beyond the reach of the deceived and exasperated creditor.

§ 406. If it should be objected that this legislation will oust the states of their jurisdiction, and render much of their law inoperative, I answer, in this very effect consists the great benefit of a national system of uniform laws on the subject of bankruptcies. It cannot be said that the measures of Congress will interfere with any rights and functions reserved to the states; for the grant of power to establish bankrupt laws is as express and as comprehensive as that to regulate commerce. All the reasons which led the convention and the people to confer upon Congress a supreme authority over foreign and inter-state commerce, all the arguments which show that the regulations of that commerce should be uniform, and must, therefore, be within the authority of the national legislature, are as strong and convincing when applied