Two year earlier, the court invalidated the Municipal Bankruptcy Act of 1934 in Ashton v. Cameron County Water Improvement District No. 1, emphasizing concerns over federalism. In response, Congress passed a revised Municipal Bankruptcy Act in 1936 that emphasized the autonomy of states in the bankruptcy process. Bekins upheld the revised statute. Bekins did not explicitly overrule Ashton; instead, it said the statute's respect for federalism was constitutionally adequate.[1]
In dissent, Justice McReynolds (who wrote Ashton) said that Ashton ought to have applied in this case as well.[1]