This section is from the book "The Law Of Contracts", by Theophilus Parsons. Also available from Amazon: The law of contracts.
The British colonies in this country did not adopt as part of their common law the English laws of bankruptcy and insolvency, but in many instances passed insolvent laws of their own. When they became independent, and the present Constitution of the United States was formed, the framers of it had the sagacity to perceive that a power to make a general bankrupt law, however seldom it might need to be exercised, must always exist in the general government of a commercial State; and this Constitution provides that " Congress shall have power ... to establish . . . uniform laws on the subject of bankruptcies, throughout the United States. "(m) As this does not expressly and precisely declare that Congress may "pass a bankrupt * law," it was open to question, or at least to argument, whether Congress could make such a national law, or could only "establish * uniformity among the bankrupt laws of the several States. But this question is now settled. It is, indeed, generally admitted, that the almost contemporary construction of it should have sufficed to prevent the question. For, on the 4th of April, 1800, the first bankrupt law was framed by Congress. It was limited to five years, and thence to the end of the next session of Congress. But it was repealed Dec. 19, 1803. (n)
(l) See the remarks of Mr. Justice Blackstone on the purpose and policy of these laws. 2 Bl. Com. 4*3.
(m) Article 1, Section 8.
If this early repeal indicated the unpopularity of such a law, that was further proved by the tact that no serious effort was made by petition to Congress to renew it, or provide a national bankrupt law, until 1840. (o) This measure was then pressed with much urgency, but very earnestly opposed; and it was defeated for that session. In the next, however, the effort was renewed, and was successful; a bankrupt law was enacted on the 19th of August, 1841.
The opposition was grounded in part upon the constitutional objection, that the power given to Congress was only incident to the power to regulate commerce, and that "bankruptcy," in the Constitution, must be held to bear its "limited and technical sense, as determined by English law. (p) A stronger objection
(n) The act of 1800, with the decisions upon it, will be found in the second volume of United States Statutes at Large, page 19, and the repealing act in the same volume, page 248. In this repealing act it was provided that the repeal "shall in nowise affect the execution of any commission of bankruptcy which mav* have been issued prior to the passing of this act, but every such commission may and shall be proceeded on and fully executed, as though this act hat! not been passed."
(o) In 1829, twelve years before the passage of the last national bankrupt aw, a powerful article appeared in the American Jurist, from the pen of Hon. S. E. Sewall of Massachusetts. It strongly sets forth the condition of the countrv, under the contradictory opinions regarding, and conflicting adjudications upou, the State insolvent laws; calls for the enactment of a national law which shall establish uniformity upon the subject, and combats the objections to such an enactment. 1 Am. Jur. 35.
(p) 2 Kent, 480 (8th ed.). The note to this page presents the legislative history of this law in a manner which supersedes the necessity of examination here. Chancellor Kent is of opinion, that the provision in the bankrupt act which rendered it a general insolvent act (that which provided for voluntary bankruptcy), was the one most exclusively in operation, and gave occasion to serious doubts whether it was within the true construction and purview of the Constitution; and that it was that branch of the statute that brought the system - in his opinion, justly - into general discredit and condemnation, and led to the repeal of the law. Notwithstanding the doubts of which the learned Chancellor speaks, it seems to have been settled, so far as State courts could do it, that the provision for voluntary bankrupts was equally constitutional with the rest of the law, and that it applied to all debts, except those specified as beyond its application, contracted before or after its passage. Kunzler v. Kohaus, 5 Hill, 317; sackett v. Andross, id. 327. These cases are of great interest, as presenting very fully the argument on one side and the other on the right of Congress to pass a law for the benefit of voluntary debtors, which should apply to debts contracted before the act. in the first case, Cowen, J, delivered the opinion of the majority of the court, vindicating the constitutionality of the law in both these respects. From that opinion Bronson, J., dissented, and in the second case above cited, set forth his views with his customary earnestness and ability, in an opinion of nearly fifty pages. His conclusion is, that the voluntary branch of the bank-runt law was unconstitutional, for the following reasons: 1. It is not confined to traders, but extends to all classes of debtors 2. It places the whole power in the hands of the debtor, without giving any means of coercion to the creditor. 3. It discharges the debt without the consent of the creditor in any form, and so violates the obligation of the contracts. 4. If it retroacts, so as to discharge debts contracted before its passage, then it not only violates contracts, but it goes entirely beyond the scope of the bankrupt power' It is not & law but a sen* was the waste and expense of all proceedings in bankruptcy. The evidence of this is strong, and has grown in strength from the first operation of the statutes, and has called forth, not only an unqualified admission of the fact, but the regret and severe reprehension of the best judges, {q)
*In the law of 1841, there was an endeavor to avoid a part of these objections, by uniting, in certain respects, the insolvency system with the bankrupt system. Two classes of debtors were provided for; or rather the statute, in the first place, permitted all debtors to become bankrupt, excepting only public defaulters, or those who had become debtors in some fiduciary capacity, (r) There was then a provision intended to be nearly equivalent to the English limitation to traders. Debtors who belonged to this latter class might be made bankrupts by tence or judgment against creditors, and Congress has no judicial power over the subject. A similar view was adopted by Judge Wells, of the U. S. District Court of Missouri, in the case of Edward Klein. The opinion will be found in 2 N. Y. Leg. Obs. 184 , but on appeal his decision was reversed by Catron, J., of the U. S. Supreme Court, sitting in the Circuit Court. He held that the law of 1841 was constitutional, in the matter of Edward Klein, 1 How. 277, in note to Nelson v. Car-land. The law was pronounced constitutional also in Thompson v. Alger, 12 Met. 428, State Bank v. Wilborn, 1 Eng. 35; Loud v. Pierce, 25 Me. 233; Morse v. Hovey, 1 Barb. Ch. 404; Lalor v. Wattles, 3 Gil man, 225; Dresser v. Brooks, 3 Barb 429. And a suit which had been commenced before the law of insolvency went into operation, was wholly abrogated by the law, if the creditor proved is debt; and in case of the failure of the debtor to obtain a discharge, it was necessary that the action should be recommenced ah initio. Haxtun v. Corse, 2 Barb. Ch. 506.
 
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