by Peter Irons
Another part of “the people” to whose rights the Marshall Court gave little weight was the growing debtor class, whose ranks expanded rapidly during the years that culminated in the Panic of 1819. A case the Court decided that year provided a judicial test of the powers of state legislatures to protect debtors from financial disaster. Construing the meaning of the Contract Clause in Sturges v. Crouwninshield, the Court shaped constitutional doctrine from the kind of debt collection dispute that would be handled today in small-claims courts.
The case began when Richard Crowninshieid borrowed $1,544 from Josiah Sturges in March 1811. Both men then lived in New York, where promissory notes were executed for payment the following August. Crowninshield suffered a business failure and did not pay Sturges at the scheduled time. In November 1811, Crowninshield filed for bankruptcy under an act of the New York legislature, passed in April of that year “for the benefit of insolvent debtors and their creditors.” A state court discharged Crowninshield from his debt to Sturges in February 1812. He then returned to his original home state of Massachusetts, where he prospered in the textile business. Sturges waited until 1816 to file suit against Crowninshield in federal court in Boston, claiming that the New York law “impaired the obligation of contract” and violated the Constitution.
Two Supreme Court justices, Bushrod Washingthon and Brockholst Livingston, ruling as circuit judges in 1814 and 1817, had reached different conclusions in deciding similar “insolvency” cases. Washington ruled that state laws could not apply to contracts made before the laws were passed, and were only valid in “prospective” effect, while Livingston held that insolvency laws could have “retrospective” application to debts contracted before their passage. Justice Joseph Story, sitting on circuit court in Boston, heard arguments in Sturges v. Crowninshield and persuaded the district judge who sat with him to decide the case without an opinion. Under the Supreme Court’s rules, this action would allow the Court to resolve the conflicts between the earlier opinions of justices Washington and Livingston. Story believed the New York bankruptcy law violated the Contract Clause, and he lobbied his fellow justices to support his position.
By any measure, the conflict between Sturges and Growninshield was small potatoes. But from such trivial disputes as theirs, hundreds of Supreme Court cases have arisen over the past two centuries. Several of these penny-ante cases have changed the course of constitutional history. Chief Justice Marshall grabbed the Sturges case to strike down state laws relieving debtors from contracts entered into before the insolvency laws were passed. Writing for a unanimous Court, Marshall first held that the Constitution’s grant to Congress in Article I of power to establish “uniform laws on the subject of bankruptcies throughout the United States” did not invalidate existing state laws, since Congress had not yet enacted a “uniform” bankruptcy law.
Having cleared this easy hurdle, Marschall proceeded to “the great question” before the Court. “Does the law of New York,” he asked, “impair the obligation of contracts” entered into before the law was passed? Marshall held that New York could not impair the contract Sturges and Crowninshield had made the month before the state legislature passed its insolvency act. “In the case at bar,” Marshall wrote, “the defendant has given his promissory note to pay the plaintiff a sum of money, on or before a certain day.” This obligation could not be changed by subsequent legislation. “Any law which releases a part of this obligation,” he concluded, “must, in the literal sense of the word, impair it.”
Much like his twentieth-century successor Earl Warren, John Marshall was pragmatic and flexible in reading the Constitution. When the “plain meaning” of its provisions suited his purpose, Marshal) cited them with Bible-thumping certitude. But when they were vague or imprecise, he retreated to “general principles” of law—drawn from English common law—to justify his opinions. Marshall relied on the “literal” words of the Constitution in the Sturges case, while he cited the common law for support in Fletcher v. Peck. In both cases, Marshall was less concerned with means than ends. His goal in both was to protect those who owned property from state lawmakers who listened to the victims of land speculators and debt collectors.
A second clause in the Constitution offered Marshall another tool with which to construct a nationalist bulwark against “popular” control of the economy. The Framers had given Congress the power to “regulate commerce . . . among the several states” in Article I. The Court’s first major decision involving this clause, Gibbons v. Ogden in 1824, blocked state interference with the commercial was not related, we should note, to the later Ogden v. Saunders decision.)
The Gibbons case began in 1798 when the New York legislature granted Robert Livingston a charter that gave him a monopoly over steamboat navigation in New York Harbor and the Hudson River. Livingston’s company had no real competition; at that time, steamboats were slow and costly to operate. But with Robert Fulton’s improvements of steamboat design, the New York monopoly became highly profitable, and Fulton joined in a partnership with Livingston. Their company later granted the right to operate steamboats between New York and New Jersey to the partnership of Aaron Olden, a former New Jersey governor, and Thomas Gibbons, a wealthy Georgia lawyer. Like many business partners, the two men had a falling-out and fought for control of their company. Ogden held title to the New York monopoly under state law, while Gibbons had acquired a federal permit under the Coastal Licensing Act of 1793. After his break with Olden, Gibbons joined forces with Cornelius Vanderbilt—the leading capitalist of his time—and challenged Ogden’s monopoly by operating ferries across the Hudson. Olden then sued Gibbons in state court to enforce his monopoly; not surprisingly, the New York judges ruled in his favor. Gibbons then appealed to the Supreme Court, arguing that his federal permit was superior to Ogden’s state charter.
A great deal of money rested on the outcome of Gibbons v. Ogden. Before the construction of bridges that spanned rivers like the Hudson, ferries that held state charters could charge high fares for carrying passengers and goods. Monopolies, by definition, had no competitors to keep prices down. During this period of rapid economic growth, those who looked ahead to an expanding national economy viewed monopolies as drags upon commerce. John Marshall shared this vision, and held no sympathy for claims of state power over interstate commerce.
For an initial retainer of $500, Cornelius Vanderbilt hired Daniel Webster to argue for Thomas Gibbons before the Supreme Court. This proved a shrewd investment, as Chief Justice Marshall repeated Webster’s argument almost verbatim in his opinion for a unanimous Court. Marshall began by stating that since the Constitution gave Congress the power to regulate “commerce” among the states, “it becomes necessary to settle the meaning of the word.” Ogden’s lawyer had argued that “commerce” meant only the “buying and selling” of good and not their movement between states. Marshall rejected this definition. “All America understands,” he wrote, that the word “commerce” includes navigation. The Framers of the Constitution “must have used the word in that sense,” Marshal added, because “the power over commerce, including navigation, was one of the primary objects for which the people of America adopted their government, and must have been contemplated in forming it.”
What the Framers “must have” meant was clear to Marshall but did not appear in the Constitution. Not a word in Madison’s notes of the Constitutional Convention refers to navigation between the states as an object of the Commerce Clause. While Marshall probably was correct in concluding that the Framers had “contemplated” the powers of Congress over interstate commerce to include all forms of “commercial intercourse” between the states, including the navigation of rivers and bays, his reading of the term “commerce” allowed the states no powers of regulation. The power of Congress “to prescribe the rule by which commerce is to be governed,” he wrote, “is complete in itself, may be exercised to its utmost extent, and acknowledges no limitations, other
than are prescribed in the Constitution.” And he found no limits on this power in the Constitution.
Marshall’s opinion in Gibbons v. Ogden marked the last victory of the Federalists over the Republicans on the economic battlefield. By this time, in the mid-1820s, the parties of Hamilton and Jefferson had changed their names and split into quarreling factions. In fact, the electors in the presidential contest in 1824 split their votes between four candidates who all claimed to be Democratic-Republicans. The Federalist Party had vanished, but John Marshall still waved its banner. His opinion in Gibbons suited the temper of the times; the federal government had become the engine of expansion, and the states were now seen as brakes on the road to prosperity. For the first—and only—time in his long judicial career, Marshall issued an opinion that gained popular acclaim. Almost everyone opposed monopolies and high prices, and very few people looked closely at Marshall’s reasoning in the steamboat case. Those who wanted to cross the Hudson did not care how the Framers defined the word “commerce” in the Constitution; they simply wanted the cheapest fares across the river.
Three years after the cheering ended for his Gibbons opinion, Marshall found himself in bitter dissent from another Supreme Court decision the public greeted with applause. The Court’s ruling in the 1827 case of Ogden v Saunders illustrates the impact of shifting political tides on judicial doctrine. In his Sturges opinion in 1819, Marshall had built the “impairment of contracts” clause into a rigid barrier against state bankruptcy laws. Eight years later, the majority he commanded in that case had eroded. The presidential elections of 1820 sand 1824 resulted in the addition of two justices who displayed more independence than Marshall appreciated. President James Monroe, who buried John Quincy Adams by 231 electoral votes to one in 1820, nominated only one justice to the Supreme Court. Smith Thompson of New York, a former state judge and Monroe’s navy secretary, replaced Brockholst Livingston in 1824 and served until his death in 1843. Although he resembled William Johnson in voting as a states’ rights advocate in cases that tested federal powers, Thompson hardly ever spoke for himself, writing just eighty-five opinions during twenty years on the Court. Like his New York predecessor Chief Justice John Jay, he preferred dabbling in state politics to judicial service. Unlike Jay, who finally won election as New York’s governor, Thompson failed in his only campaign for that office in 1828.
John Quincy Adams ran second to Andrew Jackson in the 1824 presidential election, winning only eighty-four electoral votes to Jackson’s ninety-nine, with the ramaining seventy-eight split between two other Democratic-Republican candidates. Since no candidate had a majority, the House of Representatives—with each state having one vote—placed Adams in the White House. The northern states prevailed over the southern, while the growing western region split its votes between Jackson of Tennessee and Henry Clay of Kentucky. Adams made only one appointment to the Supreme Court, choosing Robert Trimble in 1826 to replace Thomas Todd in the “Kentucky seat.” Adams was a mediocre president and Trimble—who died in 1828—an equally mediocre justice.
Although the Court did not decide the case of Ogden v. Saunders until 1827, this lawsuit began in 1808 with the bankruptcy of George Ogden, a New York merchant whose many creditors pursued him for years in federal courts. New York had passed a bankruptcy law in 1806 that differed from the “retrospective” law that Marshall struck down in the Sturges case because it altered the terms of contracts made before the law’s passage. In contrast, the law challenged in Ogden applied “prospectively” to contracts made after its enactment; one of its provisions discharged New York debtors from obligations to out-of-state creditors.
Because the Court had already ruled in Sturges that states could pass bankruptcy laws, the outcome in Ogden v. Saunders should not have caused much judicial dissension. It seemed to be such a simple case that Daniel Webster, who argued for the creditors who sued George Ogden, was forced to rely on fanciful legal doctrine in attacking the New York law. Webster argued that states could not pass any bankruptcy laws, and went further to claim that contract terms were governed by principles of “universal law” and not by “the particular law of the place” where the contract was made. Surprisingly, three justices—led by Chief Justice Marshall—agreed with Webster’s rejection of well-established legal doctrine and precedent, an indication of their hostility to any legislative relief for debtors. But a majority of four spared the bankruptcy laws of all the states from judicial invalidation. Justices Thompson and Trimble, who had joined the Court after the Sturges decision, voted to uphold the New York bankruptcy law. Justice William Johnson stated the majority view in arguing that states shared “concurrent” power with Congress in this field. Unlike Marshall, he looked at and enjoyed in subserviency to the good of the whole,” Johnson wrote. “The state construes them, the state applies them, the state controls them, and the state decides how far the social exercise of the rights they give us over each other can be justly asserted.” It seemed obvious to Johnson and the Court’s majority that the provisions of existing bankruptcy laws are incorporated into contracts made after their enactment. James Wilson, who had been instrumental in placing the Contract Clause in the Constitution, told the Framers in 1787 that “retrospective interferences only are to be prohibited” by the clause. In other words, lawmakers cannot revoke or alter contracts after the parties agreed on their terms. There could be no clearer expression of the Framers’ “original intent” on this question. But Marshall believed so firmly in the sanctity of contract that he exploded in dissent. The Court’s decision in Ogden v. Saunders, he wrote, would make “inanimate, inoperative and unmeaning” a constitutional provision “on which the good and the wise reposed confidently.” These provident and prudent citizens, of course, were those who always paid their debts on time. Reading the Contract Clause as a means to promote “the good of the whole” over the interests of “the good and the wise” struck Marshall as pandering to the improvident and imprudent.
Chief Justice Marshall cared more deeply about constitutional doctrine than about whether his opinions drew cheers or catcalls from the public. One final opinion illustrates Marshall’s consistent vision of a Supreme Court empowered “to say what the law is” in every case raising claims under the Constitution, with little concern for the impact of the Court’s decisions on the rights of ordinary Americans. In Barron v. Baltimore, decided in 1833, the justices faced the question of whether the Constitution prohibits the states as well as Congress from depriving “any person” of their “life, liberty, or property, without due process of law,” as provided by the Fifth Amendment. The Barron case required the Court to decide, for the first time, whether the Bill of Rights applied to the states or just to the federal government. As has often happened in American constitutional history, a question of great significance was presented in a run-of-the-mill case.
The suit between John Barren and the city of Baltimore began with a roadbuilding project in 1815. Barron’s family operated a shipping wharf in Baltimore’s harbor, and the largest vessels could dock at the wharf. But the soil dumped into the harbor as roads were graded and washed into it by rains gradually blocked access to the wharf for the large ships that had previously loaded and unloaded goods into nearby warehouses. Barren sued the city in state court in 1822, claiming that its actions violated the Fifth Amendment provision barring the taking of “private property . . . for public use without just compensation.” A jury awarded Barron $4,500 in damages, but the state’s highest court reversed this judgment, holding that the city was not subject to the provisions of the Bill of Rights.
Chief Justice Marshall disposed of this case in one of his shortest opinions. He stated Barron’s claim to the protection of the Fifth Amendment in these words: “He insists that this amendment, being in favor of the liberty of the citizen, ought to be so construed as to restrain the legislative power of a state, as well as that of the United States.” Marshall brushed aside Barron’s argument: “The quest
ion thus presented is, we think, of great importance, but not of much difficulty.” The Constitution was “established by the people of the United States for themselves, for their own government, and not for the government of the individual states,” he wrote. But the question was not as simple, nor the answer as clear, as Marshall presumed. For one thing, the Framers had placed in the Constitution, in Section 10 of Article I, several express limitations on state powers. One of them—as we have seen—barred states from passing laws “impairing the obligation of contracts,” a provision Marshall had used to strike down many state laws. But he attempted to turn the provisions of Section 10 to his advantage. “It is worthy of remark,” he wrote, “that these inhibitions generally restrain state legislation on subjects entrusted to the general government, or in which the people of all the states feel an interest.” Legislation regarding contracts, however, was not solely entrusted to Congress, and the people of all the states had an interest in protecting their property from “taking” without just compensation. Why could they not turn to federal courts for protection of rights granted in the Constitution?
Marshall answered this question by asserting that the express limitations on state power in Section 10 were the only ones intended by the Framers. He required some “strong reason” for departing from this “safe and judicious” reading of their intent. “We search in vain for that reason,” Marshall wrote. He noted that the Constitution was ratified over the “immense opposition” of those who demanded a bill of rights to restrain the powers of Congress. Marshall, of course, had voted in the Virginia ratification convention against Anti-federalist demands for a bill of rights. But with the Fifth Amendment before him for interpretation, he took the “safe and judicious” course of deciding that it “is not applicable to the legislation of the states.” Marshall ruled in John Barron’s lawsuit, that the Supreme Court “has no jurisdiction of the cause; and it is dismissed.”