CHAPTER XXXIV

OTHER POWERS OF CONGRESS

Naturalization

Clause 4 of § 8 of Art. 1. of the Constitution gives to Congress the power to establish "an uniform rule of naturalization."

This power has already been considered in an earlier chapter dealing with citizenship and it is here necessary only to add that the power, though in an early and ill considered case held to be one that may be concurrently exercised by the States, was in Chirac v. Chirac,1 decided in 1817, declared to be exclusively in Congress and this doctrine has not since been questioned.

Bankruptcy: definition of

The same clause which gives to Congress the power to establish an uniform rule of naturalization, authorizes that body to "establish uniform laws on the subject of bankruptcies throughout the United States."

The construction which has been given to this clause furnishes one of the few exceptions to the general rule that the technical terms of the Constitution are to be given the meaning which they had at the time the Constitution was adopted. In 1789 "bankruptcy" and "insolvency" had, in the English law, different and distinct. meanings. Bankruptcy applied only to merchants or traders charged with having committed some fraudulent or quasi-fraudulent act upon their creditors, who there

12 Wh. 259; 4 L. ed. 234.

upon might institute proceedings to have their debtor declared a bankrupt, his property taken and distributed in payment of his debts, and he himself either discharged from further liability therefor, or imprisoned as the court might think fit. Insolvency, upon the other hand, described the status of a debtor, not a trader, who, in order to obtain a discharge might in certain cases surrender, or offer to surrender, all his property in payment of his debts.

In this country, however, from the beginning Congress and the Supreme Court have given to the term "Bankruptcy" a meaning broad enough to cover "Insolvency" as well. Indeed the distinction between the two was not generally recognized in the colonies before the separation from England.

By various acts Congress has, from time to time, enacted laws providing for both voluntary and involuntary bankruptcy, that is for proceedings instituted by the debtor himself or in invitum by his creditors. The details of this legislation need not here be given. It is sufficient to say that the first law was enacted in 1800, and repealed in 1803; the second law in 1841 was repealed in 1843; the third in 1867, and after being several times amended, repealed in 1878; the fourth law, now in force, being passed July 1, 1898.

3

In Sturges v. Crowninshield,2 affirmed in Ogden v. Saunders, the court held that the power to establish bankruptcy laws is not exclusively vested in Congress, but may be exercised by the States in the absence of Federal Legislation.

State bankruptcy laws and the obligation of contracts

The right of the States, in the absence of conflicting

24 Wh. 122; 4 L. ed. 529. 3 12 Wh. 213; 6 L. ed. 606.

congressional legislation, to enact bankruptcy laws is limited by the provision of the Constitution that no State shall pass any law impairing the obligation of contracts. Indeed, if we are to accept the statement of the court in Hanover v. Moyses this prohibition was made for this express purpose.

4

In Sturges v. Crowninshield the court held invalid a State law which discharged the debtor from a contract entered into previous to its passage.

In Ogden v. Saunders, the court held valid a State bankruptcy law which discharged the debtor and his future. acquisitions of property so far as it related to debts contracted subsequent to the passage of the law. The law was, thus, in effect, read into each contract as a clause thereof.

The authority of the States to deal by bankruptcy or other laws with contracts entered into subsequent to their enactment is plenary.5

State laws have no extraterritorial force

In Ogden v. Saunders was laid down the important principle that a certificate of discharge under a State law cannot be pleaded in bar of an action brought by a citizen of another State in the courts of the United States, or of any other State than that where the discharge was obtained. The creditor of another State is, however, concluded by the discharge in bankruptcy if by appearance or otherwise he has made himself a party to the original insolvency proceedings.

The United States is, of course, not under this territorial limitation in the exercise of its bankruptcy powers, and, furthermore, it is not limited with reference to the impair

4 186 U. S. 181; 22 Sup. Ct. Rep. 857; 46 L. ed. 1113.

5 Edwards v. Kearzey, 96 U. S. 595; 24 L. ed. 793; Denny v. Bennett, 128 U. S. 489; 9 Sup. Ct. Rep. 134; 32 L. ed. 491.

ment of the obligation of contracts. National bankrupt laws may, therefore, be made applicable to contracts already entered into at the time of their passage."

It is, however, required of national bankrupt laws that they shall be uniform. The uniformity is a geographical The laws must, in all their provisions, be equally applicable to all of the States, and to incorporated territories.7

one.

State laws suspended but not annulled by Federal bankruptcy laws: Effect of the law of 1898

The enactment of a national bankrupt law does not operate to annul state laws on the same subject, but simply to suspend their operation so long as the national regulation is in force. Upon the repeal of the Federal law the State laws at once revive, and do not need reenactment. So also a State law passed while a Federal bankruptcy law is in force goes at once into force with the repeal of the Federal Statute.8

The precise effect of the enactment of a Federal bankruptcy law in suspending the operation of existing State laws is not definitely determined from either the decisions of the State or Federal courts. That a State law covering the same ground as the national act, even though its provisions be not inconsistent therewith, is suspended is generally, though not uniformly, admitted. If, then, it is conceded that the intention of Congress was, by the enactment of a bankruptcy law, to cover the entire subject, all State laws relating to bankruptcy are suspended while the national law remains in force.9

6 Hanover Bank v. Moyses, 186 U. S. 181; 22 Sup. Ct. Rep. 857; 46 L. ed. 1113.

7 Quære as to unincorporated Territories.

8 Butler v. Goreley, 146 U. S. 303; 13 Sup. Ct. Rep. 84; 36 L. ed. 981.

9 Tua v. Carriere, 117 U. S. 201; 6 Sup. Ct. Rep. 565; 29 L. ed. 855.

Even if the view be accepted that by the act of 1898, the general subject of bankruptcy was fully covered there still remains, in many cases, the difficulty of determining when State laws relating to general assignments for the benefit of creditors, receiverships of corporations, etc., may be held to be in the nature of bankruptcy laws and as such rendered inoperative during the existence of the Federal law.

Coinage

Congress is given power "to coin money, regulate the value thereof, and of foreign coin, and fix the standards of weights and measures.”

The authority thus given has been freely exercised by Congress but this legislation has given rise to very few constitutional questions.

It is to be observed that power is given not only to coin, but to provide what shall be the legal tender value of the pieces coined. There has been no question but that the States possess no concurrent jurisdiction. The power is an exclusively Federal one.10

Weights and measures

With reference to standards of weights and measurements the States are recognized to have power to legislate in the absence of congressional action.

Counterfeiting

Congress is expressly given the power "to provide for the punishment of counterfeiting the securities and current

See the excellent article of Professor Williston in Harvard Law Review, XXII, 547, entitled “The Effect of a National Bankruptcy Law upon State Laws."

10 By Art. I, § 10, cl. 1 of the Constitution, the States are expressly denied the power to coin money.