In the first half of the nineteenth century, Congress occasionally expanded the right of removal to federal courts in order to protect specific areas of federal authority such as enforcement of customs regulations during the War of 1812 and the collection of revenue following South Carolina’s attempt to nullify tariff laws.
After the Supreme Court of the United States in 1874 overturned the removal provisions in two recent acts, Representative Luke Poland of Vermont introduced legislation to restore the right of removal in all civil cases in which one of the defendants was a citizen of a state other than that in which the suit was filed.
Although the House rejected this modest extension of removal and passed a bill to make only minor revisions in the law, Senator Matthew Carpenter of Wisconsin proposed amendments to grant full federal jurisdiction to the United States circuit courts and guarantee the right of removal in any civil case arising under federal law or in which there was diversity of citizenship, with the $500 threshold applying to both categories of cases.
The debate in Congress focused on the growing significance of interstate commerce and the economic benefits of a uniform system of justice.
The United States House of Representatives accepted that version of the bill, which President Ulysses S. Grant signed into law in March 1875.