the door to voluntary petitions, rehabilitation of the debtor has become
an object of increasing concern to Congress. An adjudication in
bankruptcy is no longer requisite to the exercise of bankruptcy
jurisdiction. In 1867 the debtor for the first time was permitted,
either before or after adjudication of bankruptcy, to propose terms of
composition which would become binding upon acceptance by a designated
majority of his creditors and confirmation by a bankruptcy court. This
measure was held constitutional,[1090] as were later acts which provided
for the reorganization of corporations which are insolvent or unable to
meet their debts as they mature,[1091] and for the composition and
extension of debts in proceedings for the relief of individual
farmer-debtors.[1092] Nor is the power of Congress limited to adjustment
of the rights of creditors. The Supreme Court has also ruled that the
rights of a purchaser at a judicial sale of the debtor's property are
within reach of the bankruptcy power, and may be modified by a
reasonable extension of the period for redemption from such sale.[1093]
The sympathetic attitude with which the Court has viewed these
developments is reflected in the opinion in Continental Illinois
National Bank and Trust Co. _v._ Chicago, R.I. and P.R. Co.,[1094] where
Justice Sutherland wrote, on behalf of a unanimous court: "* * * these
acts, far-reaching though they may be, have not gone beyond the limit of
Congressional power; but rather have constituted extensions into a field
whose boundaries may not yet be fully revealed."[1095]

CONSTITUTIONAL LIMITATIONS ON THE POWER

In the exercise of its bankruptcy powers Congress must not transgress
the Fifth and Tenth Amendments. It may not take from a creditor specific
property previously acquired from a debtor nor circumscribe the
creditor's right to such an unreasonable extent as to deny him due
process of law;[1096] neither may it subject the fiscal affairs of a
political subdivision of a State to the control of a federal bankruptcy
court.[1097] Since Congress may not supersede the power of a State to
determine how a corporation shall be formed, supervised and dissolved, a
corporation which has been dissolved by a decree of a State court may
not file a petition for reorganization under the Bankruptcy Acts.[1098]
But Congress may impair the obligation of a contract and may extend the
provisions of the bankruptcy laws to contracts already entered into