2. A uniform manner of discharging debts, when they are to be discharged
without payment.
The arrangement of the grants and prohibitions contained in the
Constitution is fit to be regarded on this occasion. The grant to
Congress and the prohibition on the States, though they are certainly to
be construed together, are not contained in the same clauses. The powers
granted to Congress are enumerated one after another in the eighth
section; the principal limitations on those powers, in the ninth
section; and the prohibitions to the States, in the tenth section. Now,
in order to understand whether any particular power be exclusively
vested in Congress, it is necessary to read the terms of the grant,
together with the terms of the prohibition. Take an example from that
power of which we have been speaking, the coinage power. Here the grant
to Congress is, "To coin money, regulate the value thereof, and of
foreign coins." Now, the correlative prohibition on the States, though
found in another section, is undoubtedly to be taken in immediate
connection with the foregoing, as much as if it had been found in the
same clause. The only just reading of these provisions, therefore, is
this: "Congress shall have power to coin money, regulate the value
thereof, and of foreign coin; but no State shall coin money, emit bills
of credit, or make any thing but gold and silver coin a tender in
payment of debts."
These provisions respect the medium of payment, or standard of value,
and, thus collated, their joint result is clear and decisive. We think
the result clear, also, of those provisions which respect the discharge
of debts without payment. Collated in like manner, they stand thus:
"Congress shall have power to establish uniform laws on the subject of
bankruptcies throughout the United States, but no State shall pass any
law impairing the obligation of contracts." This collocation cannot be
objected to, if they refer to the same subject-matter; and that they do
refer to the same subject-matter we have the authority of this court for
saying, because this court solemnly determined, in _Sturges v.
Crowninshield_, that this prohibition on the States did apply to systems
of bankruptcy. It must be now taken, therefore, that State bankrupt laws
were in the mind of the Convention when the prohibition was adopted, and
therefore the grant to Congress on the subject of bankrupt laws, and the
prohibition to the States on the same subject, are properly to be taken
and read together; and being thus read together, is not the intention
clear to take away from the States the power of passing bankrupt laws,
since, while enacted by them, such laws would not be uniform, and to
confer the power exclusively on Congress, by whom uniform laws could be
established?
Suppose the order of arrangement in the Constitution had been otherwise
than it is, and that the prohibitions to the States had preceded the
grants of power to Congress, the two powers, when collated, would then
have read thus: "No State shall pass any law impairing the obligation of
contracts; but Congress may establish uniform laws on the subject of
bankruptcies." Could any man have doubted, in that case, that the
meaning was, that the States should not pass laws discharging debts
without payment, but that Congress might establish uniform bankrupt
acts? And yet this inversion of the order of the clauses does not alter
their sense. We contend, that Congress alone possesses the power of
establishing bankrupt laws; and although we are aware that, in _Sturges
v. Crowninshield_, the court decided that such an exclusive power could
not be inferred from the words of the grant in the seventh section, we
yet would respectfully request the bench to reconsider this point. We
think it could not have been intended that both the States and general
government should exercise this power; and therefore, that a grant to
one implies a prohibition on the other. But not to press a topic which
the court has already had under its consideration, we contend, that,
even without reading the clauses of the Constitution in the connection
which we have suggested, and which is believed to be the true one, the
prohibition in the tenth section, taken by itself, does forbid the
enactment of State bankrupt laws, as applied to future as well as
present debts. We argue this from the words of the prohibition, from the
association they are found in, and from the objects intended.
1. The words are general. The States can pass no law impairing
contracts; that is, any contract. In the nature of things a law may
impair a future contract, and therefore such contract is within the
protection of the Constitution. The words being general, it is for the
other side to show a limitation; and this, it is submitted, they have
wholly failed to do, unless they shall have established the doctrine
that the law itself is part of the contract. It may be added, that the
particular expression of the Constitution is worth regarding. The thing
prohibited is called a _law_, not an _act_. A law, in its general
acceptation, is a rule prescribed for future conduct, not a legislative
interference with existing rights. The framers of the Constitution would
hardly have given the appellation of _law_ to violent invasions of
individual right, or individual property, by acts of legislative power.
Although, doubtless, such acts fall within this prohibition, yet they
are prohibited also by general principles, and by the constitutions of
the States, and therefore further provision against such acts was not so
necessary as against other mischiefs.
2. The most conclusive argument, perhaps, arises from the connection in
which the clause stands. The words of the prohibition, so far as it
applies to civil rights, or rights of property, are, that "no State
shall coin money, emit bills of credit, make any thing but gold and
silver coin a tender in the payment of debts, or pass any law impairing
the obligation of contracts." The prohibition of attainders, and _ex
post facto_ laws, refers entirely to criminal proceedings, and therefore
should be considered as standing by itself; but the other parts of the
prohibition are connected by the subject-matter, and ought, therefore,
to be construed together. Taking the words thus together, according to
their natural connection, how is it possible to give a more limited
construction to the term "contracts," in the last branch of the
sentence, than to the word "debts," in that immediately preceding? Can a
State make any thing but gold and silver a tender in payment of future
debts? This nobody pretends. But what ground is there for a distinction?
No State shall make any thing but gold and silver a tender in the
payment of debts, nor pass any law impairing the obligation of
contracts. Now, by what reasoning is it made out that the debts here
spoken of are any debts, either existing or future, but that the
contracts spoken of are subsisting contracts only? Such a distinction
seems to us wholly arbitrary. We see no ground for it. Suppose the
article, where it uses the word _debts_, had used the word _contracts_.
The sense would have been the same then that it now is; but the identity
of terms would have made the nature of the distinction now contended for
somewhat more obvious. Thus altered, the clause would read, that no
State should make any thing but gold and silver a tender in discharge of
_contracts_, nor pass any law impairing the obligation of _contracts_;
yet the first of these expressions would have been held to apply to all
contracts, and the last to subsisting contracts only. This shows the
consequence of what is now contended for in a strong light. It is
certain that the substitution of the word _contracts_ for _debts_ would
not alter the sense; and an argument that could not be sustained, if
such substitution were made, cannot be sustained now. We maintain,
therefore, that, if tender laws may not be made for future debts,
neither can bankrupt laws be made for future contracts. All the
arguments used here may be applied with equal force to tender laws for
future debts. It may be said, for instance, that, when it speaks of
_debts_, the Constitution means existing debts, and not mere
possibilities of future debt; that the object was to preserve vested
rights; and that if a man, after a tender law had passed, had contracted
a debt, the manner in which that tender law authorized that debt to be
discharged became part of the contract, and that the whole debt, or
whole obligation, was thus qualified by the pre-existing law, and was no
more than a contract to deliver so much paper money, or whatever other
article might be made a tender, as the original bargain expressed.
Arguments of this sort will not be found wanting in favor of tender
laws, if the court yield to similar arguments in favor of bankrupt laws.
These several prohibitions of the Constitution stand in the same
paragraph; they have the same purpose, and were introduced for the same
object; they are expressed in words of similar import, in grammar, and
in sense; they are subject to the same construction, and we think no
reason has yet been given for imposing an important restriction on one
part of them, which does not equally show that the same restriction
might be imposed also on the other part.
We have already endeavored to maintain, that one great political object
intended by the Constitution would be defeated, if this construction
were allowed to prevail. As an object of political regulation, it was
not important to prevent the States from passing bankrupt laws
applicable to present debts, while the power was left to them in regard
to future debts; nor was it at all important, in a political point of
view, to prohibit tender laws as to future debts, while it was yet left
to the States to pass laws for the discharge of such debts, which, after
all, are little different in principle from tender laws. Look at the law
before the court in this view. It provides, that, if the debtor will
surrender, offer, or tender to trustees, for the benefit of his
creditors, all his estate and effects, he shall be discharged from all
his debts. If it had authorized a tender of any thing but money to any
one creditor, though it were of a value equal to the debt, and thereupon
provided for a discharge, it would have been clearly invalid. Yet it is
maintained to be good, merely because it is made for all creditors, and
seeks a discharge from all debts; although the thing tendered may not be
equivalent to a shilling in the pound of those debts. This shows, again,
very clearly, how the Constitution has failed of its purpose, if, having
in terms prohibited all tender laws, and taken so much pains to
establish a uniform medium of payment, it has yet left the States the
power of discharging debts, as they may see fit, without any payment at
all.
To recapitulate what has been said, we maintain, first, that the
Constitution, by its grants to Congress and its prohibitions on the
States, has sought to establish one uniform standard of value, or medium
of payment. Second, that, by like means, it has endeavored to provide
for one uniform mode of discharging debts, when they are to be
discharged without payment. Third, that these objects are connected, and
that the first loses much of its importance, if the last, also, be not
accomplished. Fourth, that, reading the grant to Congress and the
prohibition on the States together, the inference is strong that the
Constitution intended to confer an exclusive power to pass bankrupt laws
on Congress. Fifth, that the prohibition in the tenth section reaches to
all contracts, existing or future, in the same way that the other
prohibition in the same section extends to all debts existing or
future. Sixthly, that, upon any other construction, one great political
object of the Constitution will fail of its accomplishment.
[Footnote 1: Sturges v. Crowninshield, 4 Wheat. Rep. 122.]