Major Acts of Congress | Judiciary Act of 1789

Wythe W. Holt, Jr.

When the First Congress gathered in the spring of 1789, eleven of the thirteen states had recently agreed to the Constitution. Although the Constitution provided important details for the legislative and executive branches, it did not flesh out the judicial branch of the new national government. For example, no one knew whether there would be any federal courts other than the "one Supreme Court" mandated by the Constitution, or how many judges would sit on the Supreme Court, or what sorts of jurisdiction any lower federal court might have. So, one of the First Congress's first and most important duties was to establish the federal judiciary. After a summer of heavy debate, the Judiciary Act of 1789 (1 Stat. 73) was signed into law in September.

THE POWER OF THE NATIONAL GOVERNMENT

The Framers of the Constitution, and even more so the citizens of the United States, were sharply divided on the issue of federalism. Debate raged as to how much power should be delegated by the previously independent states to the newly centralized national government—which, because of that centralized power was threatening to the powers and privileges of the states.

Federalists, including most of the Framers, wanted to increase the power of the central government, while "anti-Federalists" either desired no such increase or were afraid that the Constitution increased national power too much.

The issue of federal power versus states' power extended to the idea of a national judiciary. Under the loose alliance established by the Articles of Confederation, there had been no national court structure. Some saw no need for a national court system even in 1787 to 1789, when the Constitution was drafted, debated, and adopted, arguing that the existing state courts would be good enough. Some thought that only a few federal judges would be needed to deal with issues such as the interpretation of the Constitution, controversies between states, cases involving the official representatives of other nations, and perhaps admiralty cases concerning commerce on the high seas. Others thought that national courts should essentially replace the state courts, at least for much important litigation over debts, contracts, and commerce.

THE PROBLEM OF DEBTS

At the Constitutional Convention in 1787, the Framers were seriously upset at many actions taken by the state legislatures and courts during the six years since England had surrendered at Yorktown. Most of the offending actions concerned debts, since state courts were the usual debt collection agency for creditors (people to whom a debt is owed). The 1780s were depression years, as the Revolution had drained off to Europe all of the hard money (coin) in circulation in the former colonies. Paper money was manufactured to fill the gap, but its worth generally declined rapidly. Bad crop years in the middle of the decade made times even tougher, for most Americans were farmers. States also increased taxes to pay off their own war debts. The common people and many in the elites found that they could not pay their debts, especially millions of dollars owed to British merchants since before the Revolution broke out. Many people thought that winning the war with England meant these debts were canceled, and many were so angry at British depredations throughout eight bloody years of war that repaying them seemed out of the question in any case.

State courts were flooded with debt cases, and sympathetic or frightened judges ruled according to the prevailing winds of Democratic public opinion. Juries openly forgave debts. The people demanded relief in the forms of paper money, debt moratoria, tax relief, and the closing of courts. Legislatures obliged in many states, by making other things besides "gold and silver Coin a Tender in Payment of Debts" and otherwise passing "Law[s] impairing the Obligation of Contracts" (to quote two prohibitions placed on the states in article I, section 10 of the 1787 Constitution), as well as delaying taxes due. When legislatures or courts balked or matters got worse, popular antidebt protests or marches occurred in at least eight states from 1785 to 1787. In five states these protests temporarily closed some courts, Shays' Rebellion in Massachusetts in 1786–1787 being only the largest and longest of them.

The "British debts," or the prewar debts that Americans owed to British merchants, proved even more difficult to deal with. Six states closed their courts to British creditors. Every state enacted some legislation suspending, lowering, or otherwise impairing (that is, making less collectible) these debts, and most allowed juries to deduct interest accrued during wartime. Owing to British pressure, the 1783 Peace Treaty provided that "Creditors ... shall meet with no lawful Impediment to the Recovery of the full value in Sterling Money of all bona fide debts heretofore contracted." But, faced with debtor upset and the popular hatred of "British debts," state legislatures continued to enact legislation against those debts. Courts and juries from New York to Georgia, especially those below the Mason-Dixon line, where more than 80 percent of such debts rested, continued to refuse to enforce them.

THE CONSTITUTIONAL CONVENTION

Popular debtor representatives by and large refused the seats offered to them at the Constitutional Convention, so that it was dominated by those who favored creditors interests and wealthy planters. Such Framers continually expressed outrage against debtor interests and against the state courts that enforced them. James Madison asked bluntly, "What was to be done after improper Verdicts in State tribunals obtained under the biased directions of a dependent Judge, or the local prejudices of an undirected jury?" But even many convention delegates opposed a system of lower federal courts, and it was clear that popular opposition to national courts would be great. Because of this controversy and opposition, the article of the Constitution concerning the judiciary was short and vague.

The Constitution specified only a Supreme Court, allowing Congress to decide whether to create other courts and how many judges would sit on each. It gave the Supreme Court jurisdiction over:

• • Suits involving foreign citizens
• • Suits between citizens of two states
• • All suits arising under the Constitution, the laws of Congress, and treaties
• • Cases in equity (in which jurors did not sit)
• • Appellate jurisdiction over questions of fact (enabling the Supreme Court to override jury verdicts on appeal)
• • All admiralty cases and instances involving the United States as a party

These provisions, though broadly stated, seemed to sweep into federal court all the troublesome debt issues. While the Supreme Court was given trial jurisdiction over suits between states and suits involving the public ministers of other nations, and appellate jurisdiction over all others, Congress could make "exceptions" and "regulations." Some terms were even vaguer. No one knew, for example, what constituted a suit "arising under" the Constitution or a treaty.

When the newly drafted Constitution was disclosed, it was met by raging anti-Federalist opposition. The judiciary provisions in particular provoked much antagonism. To many, the broad and vague jurisdictional language undermined the state courts, especially in instances of debt. The fight over adoption was fierce, and the Constitution was barely accepted in such large key states as Massachusetts, Virginia, and New York. It apparently passed in Pennsylvania and New Hampshire only because of political shenanigans, and North Carolina and Rhode Island at first rejected it outright. Some anti-Federalist opponents were elected to the First Congress. With so much controversy, Congress, facing the crucial issue of the judiciary, would have to find a compromise.

CONGRESSIONAL COMPROMISE: A THREE-TIERED FEDERAL COURT

Thanks to the wise leadership of Senator Oliver Ellsworth of Connecticut, the Judiciary Act of 1789 put forth a compromise plan that established a strong national judiciary (though there were some surprises). Ellsworth developed an acceptable structure for the judicial branch that, with three major exceptions, has endured to the present day.

Contrary to those who wished for a minimal judicial presence, the act established three tiers of federal courts: the Supreme Court, district courts, and circuit courts:

The Supreme Court was to sit at the place of government, primarily as an appeals court, and was staffed by a Chief Justice and five associates.

Single-judge district courts were placed in each state. These courts, with trial jurisdiction over admiralty, revenue collection, and petty crimes, had very little to do with the matters that divided Federalists and anti-Federalists, and they established a localized, nonconfrontational presence of the national government.

Circuit courts would sit twice a year in each of the states and would handle most of the trials in matters of contention between the Federalists and anti-Federalists: debt cases involving British creditors, suits between citizens of different states, and important criminal trials. Supposedly to cut costs, but more likely to enable judges of national reputation to handle the tough issues of the day, the circuit courts were staffed with two Supreme Court judges, plus the local district judge.

To calm the opposition, the Judiciary Act gave trial jurisdiction over suits arising under the Constitution, federal laws, and treaties to state courts. Decisions could be appealed to the Supreme Court only when the ruling was against the national interest. Over the strong objection of Great Britain, only debt cases worth more than 500 dollars (at the time a large sum) could be brought to federal court. The Supreme Court was prevented from overturning facts found by juries.

State legislation in favor of creditors was quickly overturned. Nevertheless, no great anti-Federalist explosion occurred over the judiciary structure as set up by the act. Prosperity returned, helping to calm the populace, and continuing upset over British debt cases was finally settled diplomatically. After about a century, with anti-Federalist fears long forgotten, later acts made some changes to the judiciary: they established federal trial jurisdiction over federal questions, stopped the practice of Supreme Court justices ceased serving in circuit courts, and made circuit courts exclusively appellate. Otherwise, the Judiciary Act of 1789 is with us still.

See also: JUDICIARY ACT OF 1801.