27 Argument for Appellees. as it This must be true of bankruptcy. As soon touches the State in the remotest degree, it would seem that the power could not exist. There surely cannot be a little bankruptcy. Surely Congress must have the whole power or none. The power in bankruptcy would seem to be much more sinister than the power to tax, because the power to tax operates ordinarily in an even, like manner. The State, of course, is prohibited by the contract clause from impairing the obligations of a contract. Now, it would seem that regardless of what sort of statute a State might pass, it can not add to or take away from the power of Congress in that regard. If a consent is needed to make an Act of Congress effective, then it must be that the power does not exist. If Congress must look to another sovereign for its power, it can not have the power. Irrigation districts in California exercise governmental functions. The legislature has plenary power over them. They are State agencies. The legislature can destroy them by simply repealing the Act under which they exist, and the State can go out and do the work itself, by its own agents directly. The better considered cases hold that the beneficial interest in the property acquired by one of these districts is in the State itself. It does not make much difference in this connection whether it is in the State or the land owner, The district, as a legal entity, is not the beneficial owner. If the beneficial interest is in the land owner, he must be brought into court. How could there well be a bankruptcy of one of these public agencies that can not respond to a judgment? It has no property that is subject to execution. In answer to questions from the Chief Justice, Mr. Childers conceded that, under chapter X, no plan of com position can go through unless approved by the district; and that the California Act of 1934 gave consent to the submission of such a plan under chapter IX, if not under chapter X; but he maintained that, even so, the federal bankruptcy power can not be applied. All the power of government, whether possessed by the Nation or a State, can not be asserted to effect the composition of an indebtedness of such a district. THE CHIEF JUSTICE. So that the State would be prohibited to effect a composition of 60 per cent., no matter how fair it is, and the Federal Government would be prohibited, although this district has an economic plight which needs relief for the benefit of the people of the district, and incidentally the people of the State. There is no power in the Government against a creditor to provide for that relief? MR. CHILDERS. That is right. And the remedy would be much worse, I believe, than the disease. THE CHIEF JUSTICE. Remedies often are. MR. JUSTICE MCREYNOLDS. What power is there in a State Government or Federal Government or any other government to repudiate debts? MR. CHILDERS. I think that is answered. I don't think there is any power, and I don't think the power ought to be there. As a matter of economics, I believe it would do much more harm to these districts than it could possibly do good. And if the power existed, the power might be exercised all the way. By leave of Court, briefs of amici curiae were filed by Messrs. U. S. Webb, Attorney General of California, Greek L. Rice, Attorney General of Mississippi, Ray McKittrick, Attorney General of Missouri, Gray Mashburn, Attorney General of Nevada, Frank H. Patton, Attorney General of New Mexico, I. H. Van Winkle, Attorney General of Oregon, and Ray E. Lee, Attorney 27 Opinion of the Court. General of Wyoming, on behalf of those States; Messrs. G. W. Hamilton, Attorney General of Washington, and Fred J. Cunningham, on behalf of the State of Washington; and Messrs. Jack Holt, Attorney General of Arkansas, and Chas. D. Frierson, on behalf of the State of Arkansas and certain drainage districts thereof, all in support of appellant in No. 772; by Messrs. Cary D. Landis, Attorney General of Florida, and Giles J. Patterson, on behalf of the State of Florida, in support of appellant in No. 757; and by Messrs. Francis V. Keesling and Charles L. Childers, on behalf of the West Coast Life Ins. Co., in support of appellees. MR. CHIEF JUSTICE HUGHES delivered the opinion of the Court. These are direct appeals from the judgment of the District Court for the Southern District of California under the Act of August 24, 1937, c. 754, 50 Stat. 751. They present the question of the constitutional validity of the Act of August 16, 1937, 50 Stat. 653, amending the Bankruptcy Act by adding Chapter X providing for the composition of indebtedness of the taxing agencies or instrumentalities therein described. A certificate was issued to the Attorney General and the United States intervened. The District Court held the statute invalid as applied to the appellant and dismissed its petition for composition. The court considered itself bound by the decision in Ashton v. Cameron County District, 298 U. S. 513. Appellant, the Lindsay-Strathmore Irrigation District, was organized in the year 1915 under the California Irrigation District Act of March 31, 1897 (Cal. Stat. 1897, p. 254). It comprises about 15,260 acres in Tulare County. It is an irrigation district and taxing agency created for the purpose of constructing and operating irrigation projects and works devoted to the improvement of lands for 304 U.S. Opinion of the Court. agricultural purposes. On September 21, 1937, it presented its petition for the confirmation of a plan of composition. The petition alleged insolvency; that its indebtedness consisted of outstanding bonds aggregating $1,427,000 in principal, with unpaid interest of $439,085.15; that no interest or principal falling due since July 1, 1933, had been paid; that the low price of agricultural products had prevented the owners of land within the irrigation district from meeting their assessments; that upon the assessment levied by the District in the year 1932 there was a delinquency of 47 per cent. and that since that year there had been levied only an assessment of sufficient amount to maintain and operate its works; that the District's plan for the composition of its debts provided for the payment in cash of a sum equal to 59.978 cents for each dollar of the principal amount of its outstanding bonds in satisfaction of all amounts due; that creditors owning about 87 per cent. in the principal amount of the bonds had accepted the plan and consented to the filing of the petition; and that payment of the amount required was to be made from the proceeds of a loan which the Reconstruction Finance Corporation had agreed to make upon new refunding serial bonds equal to the amount borrowed and bearing interest at four per cent. The District Court approved the petition as filed in good faith and directed the creditors to show cause why an injunction should not issue staying the commencement of suits upon the securities affected by the plan. The appellees as bondholders appeared and moved to dismiss the petition upon the ground that Chapter X of the Bankruptcy Act violated the Fifth and Tenth Amendments of the Federal Constitution. It appeared from the return to the order to show cause that these creditors had obtained an alternative writ of mandate from the state court directing the county board of supervisors to levy an assessment upon the lands within the District sufficient to pay 27 Opinion of the Court. the amounts due the complaining creditors, and that the proceedings in that court had been suspended pending the proceeding in the bankruptcy court. First. Chapter X of the Bankruptcy Act is limited to voluntary proceedings for the composition of debts. Aside from the question as to the power of the Congress to provide this method of relief for the described taxing agencies, it is well settled that a proceeding for composition is in its nature within the federal bankruptcy power. Compositions were authorized by the Bankruptcy Act of 1867, as amended by the Act of 1874, c. 390, § 17, 18 Stat. 182. It is unnecessary to the validity of such a proceeding that it should result in an adjudication of bankruptcy. In re Reiman, 20 Fed. Cas. 490, 496, 497; Continental National Bank v. Chicago, R. I. & P. Ry. Co., 294 U. S. 648, 672, 673. In the Continental Bank case, in the course of a full consideration of the scope of the federal bankruptcy power and of the evolution of its exercise, we said: "The constitutionality of the old provision for a composition is not open to doubt. In re Reiman, 20 Fed. Cas. 490, 496 497, cited with approval in Hanover National Bank v. Moyses, supra. [186 U. S. at p. 187.] That provision was there sustained upon the broad ground that the 'subject of bankruptcies' was nothing less than 'the subject of the relations between an insolvent or nonpaying or fraudulent debtor, and his creditors, extending to his and their relief.' That it was not necessary for the proceedings to be carried through in bankruptcy was held not to warrant the objection that the provision did not constitute a law on the subject of bankruptcies." Second. It is unnecessary to consider the question whether Chapter X would be valid as applied to the irrigation district in the absence of the consent of the State which created it, for the State has given its consent. We think that this sufficiently appears from the statute of California enacted in 1934. Laws of 1934, Ex. Sess., |