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History for Bankruptcy Scholars

posted by Buce

A few years ago, there wasn’t much of any good bankruptcy history. Now we have David Skeel and Bruce Mann—a big improvement. But there is still plenty to be done. And in particular, bankruptcy doesn’t seem to have worked its way into mainstream historical writing just yet. Skim the table of contents to standard histories and you will find little or nothing that addresses debt problem sin any substantial way. 

One distinguished exception is Charles Sellers’ The Market Revolution: Jacksonian America, 1815-1846.(1991). Sellers writes the history of Jacksonian America in what you might call “the Karl Polanyi mode”—as a history of creatures coming to understand themselves as commodities, part of emerging dominant pattern of commerce in the young Republic.   

Sellers is a professor at Berkeley (emeritus), and the book is apparently still in print, but best way I can tell, it is perhaps a bit of an orphan in history circles—perhaps too old-fashioned in both subject and style. Apparently it was commissioned to be part of a multi-volume Oxford History of the United   States—the series in process for nearly half a century now, still only half done (link). It is said that editor found it “too economic,” though a saucy backstory says he “was put off by some pages on public panic about masturbation” (the topic does not appear in the index—but see p. 255).   

 In any event, Sellers might well remain the history of choice for inquirers with a bankruptcy bent. Here are some of his thoughts on Sturges v. Crowninshield:

The Constitution’s contract clause struck down state laws passed in the 1780s easing creditor pressure on small debtors. In some places, a third of the householders were still being hauled into court as defaulting debtors every year; and for those who could not pay, the penalty was jail. Although imprisonment for debt was alleviated by prison-bound laws releasing debtors during the day to follow their occupations, and although most were held only briefly, thousands were still being arrested, often for small sums. … The Constitution’s framers demonstrated their class bias most clearly by coupling the contract clause’s inflexibility toward small debtors with a bankruptcy clause mandating relief for large debtors. … In Sturgis v. Crowninshield … a New Yorklaw was challenged, on the double grounds that the Constitution gave Congress the exclusive right to pass bankruptcy laws and that such laws by the states impaired “the obligation of contracts.”   

Marshall obtained a unanimous judgment against the New York law only by surrendering his own view that the bankruptcy clause preempted the field and prevented any state action on the subject even if Congress failed to exercise its bankruptcy powers. He also had to concede that he states could abolish imprisonment for debt.  Thus he induced several justices to agree that the New York law impaired the obligation of contracts. Even then several justices remained convinced that states could pass laws relieving debts contracted subsequent to the legislation. The opinion the Chief Justice drafted for an ostensibly unanimous Court was ambiguous on the point, but it clearly forbade states to relieve debts already contracted. (87-89)   

 Sellers does a nice job of putting bankruptcy in the context of the larger debates over economic law and constitutional doctrine. Thus he points out that Sturges succeed by just a few weeks the decision in Dartmouth College v. Woodward, and preceded McCulloch v. Maryland.  Thus within six weeks, Sellers points out, the court “forbade the states to interfere with the chartered privileges of corporations, to relieve existing debts, or to impede in any fashion the constitutional functions or instrumentalities of the federal government.” (89)

[Afterthought: with my record, it will turn out that Bob already has this guy signed up as a guest blogger...]

Comments

Nope, no guest blogging stint this time, although we'll take that as a nomination. I love this book. It was something I read not too long before I started teaching and was very influential on my thinking. A while back, there was an effort on LawPrawfs blog at http://prawfsblawg.blogs.com/ to create a "canon" of literature in particular fields. The idea was to create a list of books that persons new to the field should. I have strong reservations about the utility of scholarly canons (unless it's spelled with two "n's"), but I might have a list of "Books That New Scholars Would Find Useful for Years to Come." Sellers's Market Revolution would be on that list.

I recently obtained the urge to delve into the history of the Bankruptcy Clause of the Constitution. As such, I also had to relearn my early American history. In doing so I was reacquainted to Shays' Rebellion.

I find it ironic that uprisings by debtor farmers was one factor that helped the change from the Articles of Confederation(with no bankruptcy clause) to the Constitution (with a bankruptcy clause).

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