I had the pleasure of receiving your late letter yesterday. The question which you state is indeed an important & delicate one. I have never yet had reason to decide it although it has been twice within my view. Once it was directly before me but the counsel on each side waived it.¹ In the other case, the question (which aroze incidentally) was whether a contract made by a citizen of Rhode Island with a foreigner in a foreign country & to be executed in a foreign country was discharged by a discharge under the Insolvent Law of Rhode Island.² I gave the question a very full consideration upon the footing of principle & authority & decided that it was not a discharge. As my opinion is somewhat elaborate & contains considerable research as to the lex loci &c. I will send you a copy if you wish it— In this last opinion I avowed that I did not mean to decide on the general constitutionality of an Insolvent Law of a State, which provided for a complete discharge of antecedent contracts.

I have long expected the question which is now before you; & I rejoice that it has not fallen to my lot to make the first decision— But I will communicate to you with the greatest pleasure my present views subject to your better examination.

And I am free to declare that the strong inclination of my opinion is that such an insolvent act as you state so far as it purports to discharge the party from his contracts is unconstitutional— My reasons are 1. That I think the power given by the constitution to Congress to establish “uniform laws on the subject of bankruptcies throughout the U.S” is an exclusive power given to the U.S. In the Federalist No. 82, you will find that the power to establish an uniform note of naturalization is deemed an exclusive power, & I suppose that it is now universally deemed so. By parity of reasons that to establish a bankrupt law ought to be deemed exclusive; and if so then the states have no authority to pass, an Insolvent Law—³ 2. That such an Insolvent Law violates the provisions of the constitution. It is an act which impairs the obligation of contracts.⁴

I will not trouble you with the reasoning & principles by which I support these two points. They would lead me to a very long discussion— But on the last I will suggest a few observations— It is clear that the clause in the constitution prohibiting states from passing acts impairing the obligation of contracts, did not mean to provide for the mere case of passing acts making paper money tender &c. a discharge, for that is prohibited in an independent clause— The clause has a more extensive operation & must, if the words have their ordinary imports, apply to all laws, while take away or impair the obligatory terms or force of a contract, while the contract remains unperformed by the party contracting— Now an Insolvent law which declares that a party shall be discharged from the payment of a sum of money stipulated by his contract, upon paying a less sum or even (as most cases are) a nominal sum is in fact a law impairing the force of that contract— It dissolves the obligation to pay & substitutes new terms by compulsion to which the parties have never assented— In point of fact Insolvent Laws generally go further & discharge the party from the whole obligation upon the mere compliance with the terms of such laws whether any money be received by way of dividend or not under the commission— Now I confess that I cannot well see the difference between such a law & a law declaring certain specific contracts void & of no obligatory force, although valid by law when originally made.

The principal objections which have occurred against my construction of the constitution are 1. The general usage & practice of many States for many years to pass insolvent acts, & a general acquiescence in their validity— 2. That every contract carries in its bosom a tacit condition that it is to be regulated by the laws of the state where it is made, for the time being. 3. That such an Insolvent act does not take away the obligation of the contract but only bars the remedy, like the Statute of Limitation— I do not think it necessary to say one word as to the two first objections as it seems to me that they carry along with them their own answer— The third is certainly plausible & not without weight. It presents the only difficulty which has impressed itself on my mind.

I admit that the modes of redress or the remedy for breach of a contract are, strictly speaking, no part of the contract itself— It is no necessary part of the contract that the party’s body shall be liable to imprisonment—or his land be subject to an elegit or sale, on nonperformance of his contract & judgment obtained against him— But even this admission must have its limitation— For there must be some compulsive process by which to compel a defaulter to pay his debts. If there be none, & the payment be purely voluntary, there is no such thing existing as an obligation of contract, for the terms impart a power or legal ability to compel its performance— I should therefore have little difficulty in holding that a law was unconstitutional which declared that neither the party's person nor his goods nor money nor estate should be liable to respond his contract. There must then be a reasonable limitation as to the power of the Legislature over the remedies on contracts. And I should think it must be qualified thus far, that although the Legislature may vary the extent & nature of the remedy, yet the party should have a reasonable security of his Debtor’s person or effects to respond his debt.

As to the Stat. of Limitations, the true way of considering that, is, that it is but a Legislative regulation of the time & manner of prosecuting suits— & the party is deemed guilty of negligence who omits to pursue his remedy within the limited period. The Stat: of Limitations has no direct tendency to impair the obligation of contracts. It leaves them in full force; but requires the party to pursue his remedy thereon within a reasonable time. If therefore the obligation of contracts be impaired by such a Statute, it is not by the direct operation of the act itself but by the voluntary neglect of the party. It might be added also that the law presumes a performance or payment when the party does not sue within the time of limitation— and yet I think, that if a statute of limitations were passed which denied all suits from the day of its passage upon antecedent contracts, or provided so short a time that in common sense it would be unreasonable, it would be difficult to support such a statute against the charge of unconstitutionality— There is therefore a Limitation also in the Legislative power in this respect, & it must be that the direct effect of such a statute shall not be to destroy all the remedy of the party without reasonable notice.

I will not trouble you with any further explanations of my views on this subject— It might deserve consideration whether a party who comes in under a commission of insolvency & receives his dividend does not thereby voluntarily surrender up all his rights under the contract except so far as they are found under the commission—and an act which went no farther I should incline to believe constitutional—and perhaps a distinction may exist between contracts made antecedent & there made subsequent to an Insolvent act, although as at present advised I am not inclined to support such a distinction.

You may recollect that in massachusetts there is no insolvent act & there never has been one— The subject has been very frequently discussed in our Legislature for several years past— It is within my own personal knowlege that the late Chief Justice Parsons was distinctly of opinion that the state had no constitutional power to pass an insolvent law, which should discharge the party. He grounded himself upon both of the reasons which I have above stated— I mention his opinion because it is entitled to great weight & as he expressed it frequently after deliberation, and was a strong advocate for state sovereignty, I think it may be well deemed worthy of notice.

I do not know of any decision in which the construction of the clause in controversy has been fully discussed— In one case of a person bond in Massachusetts, which the Legislature declared should not be deemed to be forfeited by certain acts previously done, which the courts had held an escape, the question was made as to its constitutionality; & the court supported it— But the reasoning of the court is very short & unsatisfactory & is but little more than a mere expression of the result of their opinion.

I have written you in some haste, which I beg you to receive as an apology for any inaccuracies of expression & I must beg you to favour me with a copy of the opinion which you shall deliver in the case before you.

My Circuit does not commence until the first of may & I shall communicate to you all the important points which may come before me— As I have kept regular Reports of all decisions made by me, I will bring for you an abstract of them when we next meet at Washington. I am Dear with the highest respect Your very obliged friend