1. A purchase of the property of a loyal citizen of the United
States under a confiscation and sale made pursuant to statutes of
the late rebel confederacy, passed in aid of their rebellion, is
void.
Texas v.
While, 7 Wall. 700, affirmed on this point.
2. The acts of Congress known as the Legal Tender are
constitutional, when applied to contracts made before their
passage.
Hepburn v.
Griswold, 8 Wall. 603, on this point overruled.
3. They are also valid as applicable to contracts made
since.
The case in the FIRST one,
Knox v. Lee, was thus:
Before the rebellion, Mrs. Lee, a loyal citizen of the United
States, resident in Pennsylvania, owned a flock of sheep in Texas,
which, on the outbreak of the rebellion, she left there in charge
of their shepherd. In March, 1863, the Confederate authorities,
under certain statutes which they had passed in aid of the
rebellion, confiscated and sold the sheep as the property of an
"alien enemy," one Knox purchasing them at $10.87 1/2 apiece,
"Confederate money," then worth but the third part of a like sum in
coin. The rebellion being suppressed, Mrs. Lee brought trespass
below against Knox for damages (laid at $15,000) for taking and
converting the sheep. Knox pleaded in bar the confiscation and sale
by the Confederate government -- a plea which the court overruled.
The case then coming on to be tried, it was proved that the flock
consisted of 608 sheep, of which 30, 40, or perhaps 50, were bucks,
about 140 or 150 wethers, and about 300 ewes, the witnesses varying
both as to the number of sheep and the proportion of bucks,
wethers, and ewes. It was also proved that in 1860 and 1861, the
flock was worth $8 per head for ewes, and about $4 per head for
Page 79 U. S. 458
wethers, and about from $20 to $25 per head for breeding bucks,
in specie. The witnesses all testified that the sheep
would not bring in March, 1863, the price that they would have
brought in 1860 or 1861, though one witness testified that at the
sale. one party remarked,
that if he could get a good title to
the sheep, he would give $10 or $12 a head for them. Whether
he meant specie or Confederate paper was not testified to.
The ordinary money in use in the United States at the time of
the sale and purchase being notes of the United States, commonly
known as "greenbacks" -- notes whose issue was authorized by acts
of Congress, and dated February 25, 1862, July 11, 1862, and March
3, 1863, [
Footnote 1] and which
the said acts declared should be a legal tender in the payment of
all debts -- the plaintiffs offered to prove what was the
difference in value between gold and silver and this United States
currency known as greenbacks, for the purpose of showing that gold
and silver had a greater value than greenbacks, and for the purpose
of allowing the jury to estimate the difference between the two, to
which evidence
the defendant, at the time it was offered,
objected, on the ground that the United States currency
was made a legal tender by law, and that there was no difference in
value in law between the two. The court sustained the objection,
and excluded all evidence as to the difference in value between
specie and legal tender notes of the United states, and no evidence
was allowed to go to the jury on this point.
After having ruled as above, the court, on its own motion, at
the conclusion of its charge, said as follows:
"In assessing damages, the jury will
recollect that
whatever amount they may give by their verdict can be discharged by
the payment of such amount in legal tender notes of the United
States."
The jury found, June, 1867, for the plaintiff, $7,368, and
Page 79 U. S. 459
the defendant brought the case here, complaining first of the
overruling of his plea, and second, of the above-quoted sentence in
the charge, which he alleged had led the jury improperly to
increase the damages.
There had been a previous trial, when, so far as the record
showed, without any instruction of the sort complained of as
increasing the damages, the jury found a verdict for $7,376, an
amount slightly greater than that given by the second verdict.
Page 79 U. S. 529
MR. JUSTICE STRONG delivered the opinion of the Court.
The controlling questions in these cases are the following: are
the acts of Congress, known as the legal tender acts,
constitutional when applied to contracts made before their passage,
and secondly, are they valid as applicable to debts contracted
since their enactment? These questions have been elaborately
argued, and they have received from the court that consideration
which their great importance demands. It would be difficult to
overestimate the consequences which must follow our decision. They
will affect the entire business of the country, and take hold of
the possible continued existence of the government. If it be held
by this Court that Congress has no constitutional power, under any
circumstances, or in any emergency, to make Treasury notes a legal
tender for the payment of all debts (a power confessedly possessed
by every independent sovereignty other than the United States), the
government is without those means of self-preservation which, all
must admit, may, in certain contingencies, become indispensable,
even if they were not when the acts of Congress now called in
question were enacted. It is also clear that if we hold the acts
invalid as applicable to debts incurred, or transactions which have
taken place since their enactment, our decision must cause,
throughout the country, great business derangement, widespread
distress, and the rankest injustice. The debts which have been
contracted since February 25, 1862, constitute, doubtless, by far
the greatest portion of the existing indebtedness of the country.
They have been contracted in view of the acts of Congress declaring
Treasury
Page 79 U. S. 530
notes a legal tender, and in reliance upon that declaration. Men
have bought and sold, borrowed and lent, and assumed every variety
of obligations contemplating that payment might be made with such
notes. Indeed, legal tender Treasury notes have become the
universal measure of values. If now, by our decision, it be
established that these debts and obligations can be discharged only
by gold coin; if, contrary to the expectation of all parties to
these contracts, legal tender notes are rendered unavailable, the
government has become an instrument of the grossest injustice; all
debtors are loaded with an obligation it was never contemplated
they should assume; a large percentage is added to every debt, and
such must become the demand for gold to satisfy contracts, that
ruinous sacrifices, general distress, and bankruptcy may be
expected. These consequences are too obvious to admit of question.
And there is no well founded distinction to be made between the
constitutional validity of an act of Congress declaring Treasury
notes a legal tender for the payment of debts contracted after its
passage and that of an act making them a legal tender for the
discharge of all debts, as well those incurred before as those made
after its enactment. There may be a difference in the effects
produced by the acts, and in the hardship of their operation, but
in both cases, the fundamental question, that which tests the
validity of the legislation, is can Congress constitutionally give
to Treasury notes the character and qualities of money? Can such
notes be constituted a legitimate circulating medium having a
defined legal value? If they can, then such notes must be available
to fulfill all contracts (not expressly excepted) solvable in
money, without reference to the time when the contracts were made.
Hence it is not strange that those who hold the legal tender acts
unconstitutional when applied to contracts made before February,
1862, find themselves compelled also to hold that the acts are
invalid as to debts created after that time, and to hold that both
classes of debts alike can be discharged only by gold and silver
coin.
The consequences of which we have spoken, serious as
Page 79 U. S. 531
they are, must be accepted, if there is a clear incompatibility
between the Constitution and the legal tender acts. But we are
unwilling to precipitate them upon the country unless such an
incompatibility plainly appears. A decent respect for a coordinate
branch of the government demands that the judiciary should presume,
until the contrary is clearly shown, that there has been no
transgression of power by Congress -- all the members of which act
under the obligation of an oath of fidelity to the Constitution.
Such has always been the rule. In
Commonwealth v. Smith,
[
Footnote 2] the language of
the court was,
"It must be remembered that, for weighty reasons, it has been
assumed as a principle, in construing constitutions, by the Supreme
Court of the United States, by this Court, and by every other court
of reputation in the United States, that an act of the legislature
is not to be declared void unless the violation of the Constitution
is so manifest as to leave no room for reasonable doubt,"
and, in
Fletcher v. Peck, [
Footnote 3] Chief Justice Marshall said,
"It is not on slight implication and vague conjecture that the
legislature is to be pronounced to have transcended its powers and
its acts to be considered void. The opposition between the
Constitution and the law should be such that the judge feels a
clear and strong conviction of their incompatibility with each
other."
It is incumbent, therefore, upon those who affirm the
unconstitutionality of an act of Congress to show clearly that it
is in violation of the provisions of the Constitution. It is not
sufficient for them that they succeed in raising a doubt.
Nor can it be questioned that, when investigating the nature and
extent of the powers conferred by the Constitution upon Congress,
it is indispensable to keep in view the objects for which those
powers were granted. This is a universal rule of construction
applied alike to statutes, wills, contracts, and constitutions. If
the general purpose of the instrument is ascertained, the language
of its provisions must be construed with reference to that purpose
and so as to subserve
Page 79 U. S. 532
it. In no other way can the intent of the framers of the
instrument be discovered. And there are more urgent reasons for
looking to the ultimate purpose in examining the powers conferred
by a constitution than there are in construing a statute, a will,
or a contract. We do not expect to find in a constitution minute
details. It is necessarily brief and comprehensive. It prescribes
outlines, leaving the filling up to be deduced from the outlines.
In
Martin v. Hunter, [
Footnote 4] it was said,
"The Constitution unavoidably deals in general language. It did
not suit the purpose of the people in framing this great charter of
our liberties to provide for minute specifications of its powers,
or to declare the means by which those powers should be carried
into execution."
And with singular clearness was it said by Chief Justice
Marshall, in
McCulloch v. State of Maryland, [
Footnote 5]
"A constitution, to contain an accurate detail of all the
subdivisions of which its great powers will admit, and of all the
means by which it may be carried into execution, would partake of
the prolixity of a political code, and would scarcely be embraced
by the human mind. It would probably never be understood by the
public. Its nature, therefore, requires that only its great
outlines should be marked, its important objects designated, and
the minor ingredients which compose those objects be deduced from
the nature of the objects themselves."
If these are correct principles, if they are proper views of the
manner in which the Constitution is to be understood, the powers
conferred upon Congress must be regarded as related to each other,
and all means for a common end. Each is but part of a system, a
constituent of one whole. No single power is the ultimate end for
which the Constitution was adopted. It may, in a very proper sense,
be treated as a means for the accomplishment of a subordinate
object, but that object is itself a means designed for an ulterior
purpose. Thus the power to levy and collect taxes, to coin money
and regulate its value, to raise and support armies, or to provide
for and maintain
Page 79 U. S. 533
a navy, are instruments for the paramount object, which was to
establish a government, sovereign within its sphere, with
capability of self-preservation, thereby forming a union more
perfect than that which existed under the old Confederacy.
The same may be asserted also of all the nonenumerated powers
included in the authority expressly given
"to make all laws which shall be necessary and proper for
carrying into execution the specified powers vested in Congress,
and all other powers vested by the Constitution in the government
of the United States, or in any department or officer thereof."
It is impossible to know what those nonenumerated powers are,
and what is their nature and extent, without considering the
purposes they were intended to subserve. Those purposes, it must be
noted, reach beyond the mere execution of all powers definitely
entrusted to Congress and mentioned in detail. They embrace the
execution of all other powers vested by the Constitution in the
government of the United States, or in any department or officer
thereof. It certainly was intended to confer upon the government
the power of self-preservation. Said Chief Justice Marshall in
Cohens v. Bank of Virginia, [
Footnote 6]
"America has chosen to be, in many respects and to many
purposes, a nation, and for all these purposes her government is
complete; for all these objects it is supreme. It can then, in
effecting these objects, legitimately control all individuals or
governments within the American territory."
He added, in the same case:
"A constitution is framed for ages to come, and is designed to
approach immortality as near as mortality can approach it. Its
course cannot always be tranquil. It is exposed to storms and
tempests, and its framers must be unwise statesmen indeed, if they
have not provided it, as far as its nature will permit, with the
means of self-preservation from the perils it is sure to
encounter."
That would appear, then, to be a most unreasonable construction
of the Constitution which denies to the government created by it
the right to
Page 79 U. S. 534
employ freely every means, not prohibited, necessary for its
preservation and for the fulfillment of its acknowledged duties.
Such a right, we hold, was given by the last clause of the eighth
section of its first article. The means or instrumentalities
referred to in that clause, and authorized, are not enumerated or
defined. In the nature of things, enumeration and specification
were impossible. But they were left to the discretion of Congress,
subject only to the restrictions that they be not prohibited, and
be necessary and proper for carrying into execution the enumerated
powers given to Congress, and all other powers vested in the
government of the United States or in any department or officer
thereof.
And here, it is to be observed, it is not indispensable to the
existence of any power claimed for the federal government that it
can be found specified in the words of the Constitution, or clearly
and directly traceable to someone of the specified powers. Its
existence may be deduced fairly from more than one of the
substantive powers expressly defined, or from them all combined. It
is allowable to group together any number of them and infer from
them all that the power claimed has been conferred. Such a
treatment of the Constitution is recognized by its own provisions.
This is well illustrated in its language respecting the writ of
habeas corpus. The power to suspend the privilege of that writ is
not expressly given, nor can it be deduced from any one of the
particularized grants of power. Yet it is provided that the
privileges of the writ shall not be suspended except in certain
defined contingencies. This is no express grant of power. It is a
restriction. But it shows irresistibly that somewhere in the
Constitution power to suspend the privilege of the writ was
granted, either by someone or more of the specifications of power
or by them all combined. And that important powers were understood
by the people who adopted the Constitution to have been created by
it, powers not enumerated, and not included incidentally in anyone
of those enumerated, is shown by the amendments. The first ten of
these were suggested in the conventions of
Page 79 U. S. 535
the states, and proposed at the first session of the first
Congress, before any complaint was made of a disposition to assume
doubtful powers. The preamble to the resolution submitting them for
adoption recited that the
"conventions of a number of the states had, at the time of their
adopting the Constitution, expressed a desire, in order to prevent
misconstruction or abuse of its powers, that further declaratory
and
restrictive clauses should be added."
This was the origin of the amendments, and they are significant.
They tend plainly to show that, in the judgment of those who
adopted the Constitution, there were powers created by it, neither
expressly specified nor deducible from anyone specified power, or
ancillary to it alone, but which grew out of the aggregate of
powers conferred upon the government, or out of the sovereignty
instituted. Most of these amendments are denials of power which had
not been expressly granted, and which cannot be said to have been
necessary and proper for carrying into execution any other powers.
Such, for example, is the prohibition of any laws respecting the
establishment of religion, prohibiting the free exercise thereof,
or abridging the freedom of speech or of the press.
And it is of importance to observe that Congress has often
exercised, without question, powers that are not expressly given
nor ancillary to any single enumerated power. Powers thus exercised
are what are called by Judge Story in his Commentaries on the
Constitution, resulting powers, arising from the aggregate powers
of the government. He instances the right to sue and make
contracts. Many others might be given. The oath required by law
from officers of the government is one. So is building a capitol or
a presidential mansion, and so also is the penal code. This last is
worthy of brief notice. Congress is expressly authorized
"to provide for the punishment of counterfeiting the securities
and current coin of the United States, and to define and punish
piracies and felonies committed on the high seas and offenses
against the laws of nations."
It is also empowered to declare the punishment of treason, and
provision is made for impeachments. This is the extent of power to
punish crime
Page 79 U. S. 536
expressly conferred. It might be argued that the expression of
these limited powers implies an exclusion of all other subjects of
criminal legislation. Such is the argument in the present cases. It
is said because Congress is authorized to coin money and regulate
its value it cannot declare anything other than gold and silver to
be money or make it a legal tender. Yet Congress, by the act of
April 30, 1790, entitled "An act more effectually to provide for
the punishment of certain crimes against the United States," and
the Supplementary Act of March 3, 1825, defined and provided for
the punishment of a large class of crimes other than those
mentioned in the Constitution, and some of the punishments
prescribed are manifestly not in aid of any single substantive
power. No one doubts that this was rightfully done, and the power
thus exercised has been affirmed by this Court in
United States
v. Marigold. [
Footnote 7]
This case shows that a power may exist as an aid to the execution
of an express power, or an aggregate of such powers, though there
is another express power given relating in part to the same subject
but less extensive. Another illustration of this may be found in
connection with the provisions respecting a census. The
Constitution orders an enumeration of free persons in the different
states every ten years. The direction extends no further. Yet
Congress has repeatedly directed an enumeration not only of free
persons in the states but of free persons in the territories, and
not only an enumeration of persons but the collection of statistics
respecting age, sex, and production. Who questions the power to do
this?
Indeed the whole history of the government and of congressional
legislation has exhibited the use of a very wide discretion, even
in times of peace and in the absence of any trying emergency, in
the selection of the necessary and proper means to carry into
effect the great objects for which the government was framed, and
this discretion has generally been unquestioned, or, if questioned,
sanctioned by this Court. This is true not only when an attempt has
been
Page 79 U. S. 537
made to execute a single power specifically given, but equally
true when the means adopted have been appropriate to the execution,
not of a single authority, but of all the powers created by the
Constitution. Under the power to establish post offices and post
roads Congress has provided for carrying the mails, punishing theft
of letters and mail robberies, and even for transporting the mails
to foreign countries. Under the power to regulate commerce,
provision has been made by law for the improvement of harbors, the
establishment of observatories, the erection of lighthouses,
breakwaters, and buoys, the registry, enrollment, and construction
of ships, and a code has been enacted for the government of seamen.
Under the same power and other powers over the revenue and the
currency of the country, for the convenience of the Treasury and
internal commerce, a corporation known as the United States Bank
was early created. To its capital the government subscribed
one-fifth of its stock. But the corporation was a private one,
doing business for its own profit. Its incorporation was a
constitutional exercise of congressional power for no other reason
than that it was deemed to be a convenient instrument or means for
accomplishing one or more of the ends for which the government was
established, or, in the language of the first article, already
quoted, "necessary and proper" for carrying into execution some or
all the powers vested in the government. Clearly this necessity, if
any existed, was not a direct and obvious one. Yet this Court, in
McCulloch v. Maryland, [
Footnote 8] unanimously ruled that in authorizing the
bank, Congress had not transcended its powers. So debts due to the
United States have been declared by acts of Congress entitled to
priority of payment over debts due to other creditors, and this
Court has held such acts warranted by the Constitution. [
Footnote 9]
This is enough to show how, from the earliest period of our
existence as a nation, the powers conferred by the Constitution
have been construed by Congress and by this Court whenever such
action by Congress has been called in question.
Page 79 U. S. 538
Happily the true meaning of the clause authorizing the enactment
of all laws necessary and proper for carrying into execution the
express powers conferred upon Congress, and all other powers vested
in the government of the United States, or in any of its
departments or officers, has long since been settled. In
Fisher
v. Blight, [
Footnote
10] this Court, speaking by Chief Justice Marshall, said that
in construing it,
"it would be incorrect and would produce endless difficulties if
the opinion should be maintained that no law was authorized which
was not indispensably necessary to give effect to a specified
power. Where various systems might be adopted for that purpose it
might be said with respect to each that it was not necessary
because the end might be obtained by other means."
"Congress," said this Court
"must possess the choice of means, and must be empowered to use
any means which are in fact conducive to the exercise of a power
granted by the Constitution. The government is to pay the debt of
the Union and must be authorized to use the means which appear to
itself most eligible to effect that object. It has, consequently, a
right to make remittances by bills or otherwise, and to take those
precautions which will render the transaction safe."
It was in this case, as we have already remarked, that a law
giving priority to debts due to the United States was ruled to be
constitutional for the reason that it appeared to Congress to be an
eligible means to enable the government to pay the debts of the
Union.
It was, however, in
McCulloch v. Maryland that the
fullest consideration was given to this clause of the Constitution
granting auxiliary powers, and a construction adopted that has ever
since been accepted as determining its true meaning. We shall not
now go over the ground there trodden. It is familiar to the legal
profession, and indeed, to the whole country. Suffice it to say, in
that case it was finally settled that in the gift by the
Constitution to Congress of authority to enact laws "necessary and
proper" for the execution of all the powers created by it, the
necessity spoken
Page 79 U. S. 539
of is not to be understood as an absolute one. On the contrary,
this Court then held that the sound construction of the
Constitution must allow to the national legislature that discretion
with respect to the means by which the powers it confers are to be
carried into execution, which will enable that body to perform the
high duties assigned to it in the manner most beneficial to the
people. Said Chief Justice Marshall, in delivering the opinion of
the Court:
"Let the end be legitimate, let it be within the scope of the
Constitution, and all means which are appropriate, which are
plainly adapted to that end, which are not prohibited, but consist
with the letter and spirit of the Constitution, are
constitutional."
The case also marks out with admirable precision the province of
this Court. It declares that
"when the law (enacted by Congress) is not prohibited and is
really calculated to effect any of the objects entrusted to the
government, to undertake here to inquire into the degree of its
necessity would be to pass the line which circumscribes the
judicial department and to tread on legislative ground. This Court
(it was said) disclaims all pretensions to such a power."
It is hardly necessary to say that these principles are received
with universal assent. Even in
Hepburn v. Griswold,
[
Footnote 11] both the
majority and minority of the court concurred in accepting the
doctrines of
McCulloch v. Maryland as sound expositions of
the Constitution, though disagreeing in their application.
With these rules of constitutional construction before us,
settled at an early period in the history of the government,
hitherto universally accepted, and not even now doubted, we have a
safe guide to a right decision of the questions before us. Before
we can hold the legal tender acts unconstitutional, we must be
convinced they were not appropriate means, or means conducive to
the execution of any or all of the powers of Congress, or of the
government, not appropriate in any degree (for we are not judges of
the degree of appropriateness), or we must hold that they were
prohibited.
Page 79 U. S. 540
This brings us to the inquiry whether they were, when enacted,
appropriate instrumentalities for carrying into effect, or
executing any of the known powers of Congress, or of any department
of the government. Plainly to this inquiry, a consideration of the
time when they were enacted, and of the circumstances in which the
government then stood, is important. It is not to be denied that
acts may be adapted to the exercise of lawful power, and
appropriate to it, in seasons of exigency, which would be
inappropriate at other times.
We do not propose to dilate at length upon the circumstances in
which the country was placed, when Congress attempted to make
Treasury notes a legal tender. They are of too recent occurrence to
justify enlarged description. Suffice it to say that a civil war
was then raging which seriously threatened the overthrow of the
government and the destruction of the Constitution itself. It
demanded the equipment and support of large armies and navies, and
the employment of money to an extent beyond the capacity of all
ordinary sources of supply. Meanwhile the public Treasury was
nearly empty, and the credit of the government, if not stretched to
its utmost tension, had become nearly exhausted. Moneyed
institutions had advanced largely of their means, and more could
not be expected of them. They had been compelled to suspend specie
payments. Taxation was inadequate to pay even the interest on the
debt already incurred, and it was impossible to await the income of
additional taxes. The necessity was immediate and pressing. The
army was unpaid. There was then due to the soldiers in the field
nearly a score of millions of dollars. The requisitions from the
War and Navy Departments for supplies exceeded fifty millions, and
the current expenditure was over one million per day. The entire
amount of coin in the country, including that in private hands, as
well as that in banking institutions, was insufficient to supply
the need of the government three months, had it all been poured
into the Treasury. Foreign credit we had none. We say nothing of
the overhanging paralysis of trade, and of business generally,
Page 79 U. S. 541
which threatened loss of confidence in the ability of the
government to maintain its continued existence, and therewith the
complete destruction of all remaining national credit.
It was at such a time and in such circumstances that Congress
was called upon to devise means for maintaining the army and navy,
for securing the large supplies of money needed, and, indeed, for
the preservation of the government created by the Constitution. It
was at such a time and in such an emergency that the legal tender
acts were passed. Now, if it were certain that nothing else would
have supplied the absolute necessities of the Treasury, that
nothing else would have enabled the government to maintain its
armies and navy, that nothing else would have saved the government
and the Constitution from destruction, while the legal tender acts
would, could anyone be bold enough to assert that Congress
transgressed its powers? Or if these enactments did work these
results, can it be maintained now that they were not for a
legitimate end, or "appropriate and adapted to that end," in the
language of Chief Justice Marshall? That they did work such results
is not to be doubted. Something revived the drooping faith of the
people; something brought immediately to the government's aid the
resources of the nation, and something enabled the successful
prosecution of the war, and the preservation of the national life.
What was it, if not the legal tender enactments?
But if it be conceded that some other means might have been
chosen for the accomplishment of these legitimate and necessary
ends, the concession does not weaken the argument. It is urged now,
after the lapse of nine years, and when the emergency has passed,
that Treasury notes without the legal tender clause might have been
issued, and that the necessities of the government might thus have
been supplied. Hence it is inferred there was no necessity for
giving to the notes issued the capability of paying private debts.
At best this is mere conjecture. But admitting it to be true, what
does it prove? Nothing more than that
Page 79 U. S. 542
Congress had the choice of means for a legitimate end, each
appropriate, and adapted to that end, though, perhaps, in different
degrees. What then? Can this Court say that it ought to have
adopted one rather than the other? Is it our province to decide
that the means selected were beyond the constitutional power of
Congress, because we may think that other means to the same ends
would have been more appropriate and equally efficient? That would
be to assume legislative power, and to disregard the accepted rules
for construing the Constitution. The degree of the necessity for
any congressional enactment, or the relative degree of its
appropriateness, if it have any appropriateness, is for
consideration in Congress, not here. Said Chief Justice Marshall,
in
McCulloch v. Maryland, as already stated,
"When the law is not prohibited, and is really calculated to
effect any of the objects entrusted to the government, to undertake
here to inquire into the degree of its necessity, would be to pass
the line which circumscribes the judicial department, and to tread
on legislative ground."
It is plain to our view, however, that none of those measures
which it is now conjectured might have been substituted for the
legal tender acts, could have met the exigencies of the case, at
the time when those acts were passed. We have said that the credit
of the government had been tried to its utmost endurance. Every new
issue of notes which had nothing more to rest upon than government
credit, must have paralyzed it more and more, and rendered it
increasingly difficult to keep the army in the field, or the navy
afloat. It is an historical fact that many persons and institutions
refused to receive and pay those notes that had been issued, and
even the head of the Treasury represented to Congress the necessity
of making the new issues legal tenders, or rather, declared it
impossible to avoid the necessity. The vast body of men in the
military service was composed of citizens who had left their farms,
their workshops, and their business with families and debts to be
provided for. The government could not pay them with ordinary
Treasury notes, nor could they discharge their debts
Page 79 U. S. 543
with such a currency. Something more was needed, something that
had all the uses of money. And as no one could be compelled to take
common Treasury notes in payment of debts, and as the prospect of
ultimate redemption was remote and contingent, it is not too much
to say that they must have depreciated in the market long before
the war closed, as did the currency of the Confederate States.
Making the notes legal tenders gave them a new use, and it needs no
argument to show that the value of things is in proportion to the
uses to which they may be applied.
It may be conceded that Congress is not authorized to enact laws
in furtherance even of a legitimate end, merely because they are
useful, or because they make the government stronger. There must be
some relation between the means and the end; some adaptedness or
appropriateness of the laws to carry into execution the powers
created by the Constitution. But when a statute has proved
effective in the execution of powers confessedly existing, it is
not too much to say that it must have had some appropriateness to
the execution of those powers. The rules of construction heretofore
adopted, do not demand that the relationship between the means and
the end shall be direct and immediate. Illustrations of this may be
found in several of the cases above cited. The charter of a Bank of
the United States, the priority given to debts due the government
over private debts, and the exemption of federal loans from
liability to state taxation, are only a few of the many which might
be given. The case of
Veazie Bank v. Fenno [
Footnote 12] presents a suggestive
illustration. There, a tax of ten percent on state bank notes in
circulation was held constitutional, not merely because it was a
means of raising revenue, but as an instrument to put out of
existence such a circulation in competition with notes issued by
the government. There, this Court, speaking through the Chief
Justice, avowed that it is the constitutional right of Congress to
provide a currency for the whole country; that this might be done
by coin, or United States
Page 79 U. S. 544
notes, or notes of national banks, and that it cannot be
questioned Congress may constitutionally secure the benefit of such
a currency to the people by appropriate legislation. It was said
there can be no question of the power of this government to emit
bills of credit; to make them receivable in payment of debts to
itself; to fit them for use by those who see fit to use them in all
the transactions of commerce; to make them a currency uniform in
value and description, and convenient and useful for circulation.
Here the substantive power to tax was allowed to be employed for
improving the currency. It is not easy to see why, if state bank
notes can be taxed out of existence for the purposes of indirectly
making United States notes more convenient and useful for
commercial purposes, the same end may not be secured directly by
making them a legal tender.
Concluding, then, that the provision which made Treasury notes a
legal tender for the payment of all debts other than those
expressly excepted was not an inappropriate means for carrying into
execution the legitimate powers of the government, we proceed to
inquire whether it was forbidden by the letter or spirit of the
Constitution. It is not claimed that any express prohibition
exists, but it is insisted that the spirit of the Constitution was
violated by the enactment. Here those who assert the
unconstitutionality of the acts mainly rest their argument. They
claim that the clause which conferred upon Congress power "to coin
money, regulate the value thereof, and of foreign coin," contains
an implication that nothing but that which is the subject of
coinage, nothing but the precious metals can ever be declared by
law to be money, or to have the uses of money. If by this is meant
that because certain powers over the currency are expressly given
to Congress, all other powers relating to the same subject are
impliedly forbidden, we need only remark that such is not the
manner in which the Constitution has always been construed. On the
contrary it has been ruled that power over a particular subject may
be exercised as auxiliary to an express power, though there is
another express power relating
Page 79 U. S. 545
to the same subject, less comprehensive. [
Footnote 13] There an express power to punish a
certain class of crimes (the only direct reference to criminal
legislation contained in the Constitution), was not regarded as an
objection to deducing authority to punish other crimes from another
substantive and defined grant of power. There are other decisions
to the same effect. To assert, then, that the clause enabling
Congress to coin money and regulate its value tacitly implies a
denial of all other power over the currency of the nation, is an
attempt to introduce a new rule of construction against the solemn
decisions of this Court. So far from its containing a lurking
prohibition, many have thought it was intended to confer upon
Congress that general power over the currency which has always been
an acknowledged attribute of sovereignty in every other civilized
nation than our own, especially when considered in connection with
the other clause which denies to the states the power to coin
money, emit bills of credit, or make anything but gold and silver
coin a tender in payment of debts. We do not assert this now, but
there are some considerations touching these clauses which tend to
show that if any implications are to be deduced from them, they are
of an enlarging rather than a restraining character. The
Constitution was intended to frame a government as distinguished
from a league or compact, a government supreme in some particulars
over states and people. It was designed to provide the same
currency, having a uniform legal value in all the states. It was
for this reason the power to coin money and regulate its value was
conferred upon the federal government, while the same power as well
as the power to emit bills of credit was withdrawn from the states.
The states can no longer declare what shall be money, or regulate
its value. Whatever power there is over the currency is vested in
Congress. If the power to declare what is money is not in Congress,
it is annihilated. This may indeed have been intended. Some powers
that usually belong to sovereignties were extinguished,
Page 79 U. S. 546
but their extinguishment was not left to inference. In most
cases, if not
brk:in all, when it was intended that governmental powers,
commonly acknowledged as such, should cease to exist, both in the
states and in the federal government, it was expressly denied to
both, as well to the United States as to the individual states. And
generally, when one of such powers was expressly denied to the
states only, it was for the purpose of rendering the federal power
more complete and exclusive. Why, then, it may be asked, if the
design was to prohibit to the new government, as well as to the
states, that general power over the currency which the states had
when the Constitution was framed, was such denial not expressly
extended to the new government, as it was to the states? In view of
this, it might be argued with much force that when it is considered
in what brief and comprehensive terms the Constitution speaks, how
sensible, its framers must have been that emergencies might arise
when the precious metals (then more scarce than now) might prove
inadequate to the necessities of the government and the demands of
the people -- when it is remembered that paper money was almost
exclusively in use in the states as the medium of exchange, and
when the great evil sought to be remedied was the want of
uniformity in the current value of money, it might be argued, we
say, that the gift of power to coin money and regulate the value
thereof was understood as conveying general power over the
currency, the power which had belonged to the states, and which
they surrendered. Such a construction, it might be said, would be
in close analogy to the mode of construing other substantive powers
granted to Congress. They have never been construed literally, and
the government could not exist if they were. Thus the power to
carry on war is conferred by the power to "declare war." The whole
system of the transportation of the mails is built upon the power
to establish post offices and post roads. The power to regulate
commerce has also been extended far beyond the letter of the grant.
Even the advocates of a strict literal construction of the phrase,
"to coin money and regulate the value thereof,"
Page 79 U. S. 547
while insisting that it defines the material to be coined as
metal, are compelled to concede to Congress large discretion in all
other particulars. The Constitution does not ordain what metals may
be coined, or prescribe that the legal value of the metals, when
coined, shall correspond at all with their intrinsic value in the
market. Nor does it even affirm that Congress may declare anything
to be a legal tender for the payment of debts. Confessedly the
power to regulate the value of money coined, and of foreign coins,
is not exhausted by the first regulation. More than once in our
history has the regulation been changed without any denial of the
power of Congress to change it, and it seems to have been left to
Congress to determine alike what metal shall be coined, its purity,
and how far its statutory value, as money, shall correspond, from
time to time, with the market value of the same metal as bullion.
How then can the grant of a power to coin money and regulate its
value, made in terms so liberal and unrestrained, coupled also with
a denial to the states of all power over the currency, be regarded
as an implied prohibition to Congress against declaring Treasury
notes a legal tender, if such declaration is appropriate, and
adapted to carrying into execution the admitted powers of the
government?
We do not, however, rest our assertion of the power of Congress
to enact legal tender laws upon this grant. We assert only that the
grant can, in no just sense, be regarded as containing an implied
prohibition against their enactment, and that, if it raises any
implications, they are of complete power over the currency, rather
than restraining.
We come next to the argument much used, and indeed the main
reliance of those who assert the unconstitutionality of the legal
tender acts. It is that they are prohibited by the spirit of the
Constitution because they indirectly impair the obligation of
contracts. The argument, of course, relates only to those contracts
which were made before February, 1862, when the first act was
passed, and it has no bearing upon the question whether the acts
are valid when
Page 79 U. S. 548
applied to contracts made after their passage. The argument
assumes two things -- first, that the acts do, in effect, impair
the obligation of contracts, and second, that Congress is
prohibited from taking any action which may indirectly have that
effect. Neither of these assumptions can be accepted. It is true
that under the acts, a debtor, who became such before they were
passed, may discharge his debt with the notes authorized by them,
and the creditor is compellable to receive such notes in discharge
of his claim. But whether the obligation of the contract is thereby
weakened can be determined only after considering what was the
contract obligation. It was not a duty to pay gold or silver, or
the kind of money recognized by law at the time when the contract
was made, nor was it a duty to pay money of equal intrinsic value
in the market. (We speak now of contracts to pay money generally,
not contracts to pay some specifically defined species of money.)
The expectation of the creditor and the anticipation of the debtor
may have been that the contract would be discharged by the payment
of coined metals, but neither the expectation of one party to the
contract respecting its fruits nor the anticipation of the other
constitutes its obligation. There is a well recognized distinction
between the expectation of the parties to a contract and the duty
imposed by it. [
Footnote 14]
Were it not so, the expectation of results would be always
equivalent to a binding engagement that they should follow. But the
obligation of a contract to pay money is to pay that which the law
shall recognize as money when the payment is to be made. If there
is anything settled by decision, it is this, and we do not
understand it to be controverted. [
Footnote 15] No one ever doubted that a debt of one
thousand dollars, contracted before 1834, could be paid by one
hundred eagles coined after that year, though they contained no
more gold than ninety-four eagles such as were coined when the
contract was made, and this,
Page 79 U. S. 549
not because of the intrinsic value of the coin, but because of
its legal value. The eagles coined after 1834 were not money until
they were authorized by law, and had they been coined before,
without a law fixing their legal value, they could no more have
paid a debt than uncoined bullion, or cotton, or wheat. Every
contract for the payment of money simply is necessarily subject to
the constitutional power of the government over the currency,
whatever that power may be, and the obligation of the parties is
therefore assumed with reference to that power. Nor is this
singular. A covenant for quiet enjoyment is not broken, nor is its
obligation impaired, by the government's taking the land granted in
virtue of its right of eminent domain. The expectation of the
covenantee may be disappointed. He may not enjoy all he
anticipated, but the grant was made and the covenant undertaken in
subordination to the paramount right of the government. [
Footnote 16] We have been asked
whether Congress can declare that a contract to deliver a quantity
of grain may be satisfied by the tender of a less quantity.
Undoubtedly not. But this is a false analogy. There is a wide
distinction between a tender of quantities, or of specific
articles, and a tender of legal values. Contracts for the delivery
of specific articles belong exclusively to the domain of state
legislation, while contracts for the payment of money are subject
to the authority of Congress, at least so far as relates to the
means of payment. They are engagements to pay with lawful money of
the United States, and Congress is empowered to regulate that
money. It cannot, therefore, be maintained that the legal tender
acts impaired the obligation of contracts.
Nor can it be truly asserted that Congress may not, by its
action, indirectly impair the obligation of contracts, if by the
expression be meant rendering contracts fruitless, or partially
fruitless. Directly it may, confessedly, by passing a bankrupt act,
embracing past as well as future transactions.
Page 79 U. S. 550
This is obliterating contracts entirely. So it may relieve
parties from their apparent obligations indirectly in a multitude
of ways. It may declare war, or, even in peace, pass nonintercourse
acts, or direct an embargo. All such measures may, and must operate
seriously upon existing contracts, and may not merely hinder, but
relieve the parties to such contracts entirely from performance. It
is then clear that the powers of Congress may be exerted, though
the effect of such exertion may be in one case to annul, and in
other cases to impair the obligation of contracts. And it is no
sufficient answer to this to say it is true only when the powers
exerted were expressly granted. There is no ground for any such
distinction. It has no warrant in the Constitution, or in any of
the decisions of this Court. We are accustomed to speak for mere
convenience of the express and implied powers conferred upon
Congress. But in fact the auxiliary powers, those necessary and
appropriate to the execution of other powers singly described, are
as expressly given as is the power to declare war, or to establish
uniform laws on the subject of bankruptcy. They are not catalogued,
no list of them is made, but they are grouped in the last clause of
section eight of the first article, and granted in the same words
in which all other powers are granted to Congress. And this Court
has recognized no such distinction as is now attempted. An embargo
suspends many contracts and renders performance of others
impossible, yet the power to enforce it has been declared
constitutional. [
Footnote
17] The power to enact a law directing an embargo is one of the
auxiliary powers, existing only because appropriate in time of
peace to regulate commerce, or appropriate to carrying on war.
Though not conferred as a substantive power, it has not been
thought to be in conflict with the Constitution, because it impairs
indirectly the obligation of contracts. That discovery calls for a
new reading of the Constitution.
If, then, the legal tender acts were justly chargeable with
impairing contract obligations, they would not, for that
Page 79 U. S. 551
reason, be forbidden, unless a different rule is to be applied
to them from that which has hitherto prevailed in the construction
of other powers granted by the fundamental law. But, as already
intimated, the objection misapprehends the nature and extent of the
contract obligation spoken of in the Constitution. As in a state of
civil society property of a citizen or subject is ownership,
subject to the lawful demands of the sovereign, so contracts must
be understood as made in reference to the possible exercise of the
rightful authority of the government, and no obligation of a
contract can extend to the defeat of legitimate government
authority.
Closely allied to the objection we have just been considering is
the argument pressed upon us that the legal tender acts were
prohibited by the spirit of the Fifth Amendment, which forbids
taking private property for public use without just compensation or
due process of law. That provision has always been understood as
referring only to a direct appropriation, and not to consequential
injuries resulting from the exercise of lawful power. It has never
been supposed to have any bearing upon or to inhibit laws that
indirectly work harm and loss to individuals. A new tariff, an
embargo, a draft, or a war may inevitably bring upon individuals
great losses -- may indeed render valuable property almost
valueless. They may destroy the worth of contracts. But whoever
supposed that because of this, a tariff could not be changed, or a
nonintercourse act or an embargo be enacted, or a war be declared?
By the Act of June 28, 1834, a new regulation of the weight and
value of gold coin was adopted, and about six percent was taken
from the weight of each dollar. The effect of this was that all
creditors were subjected to a corresponding loss. The debts then
due became solvable with six percent less gold than was required to
pay them before. The result was thus precisely what it is contended
the legal tender acts worked. But was it ever imagined this was
taking private property without compensation or without due process
of law? Was the idea ever advanced that the new regulation of gold
coin was against the spirit of the Fifth Amendment? And has
anyone
Page 79 U. S. 552
in good faith avowed his belief that even a law debasing the
current coin by increasing the alloy would be taking private
property? It might be impolitic and unjust, but could its
constitutionality be doubted? Other statutes have from time to time
reduced the quantity of silver in silver coin without any question
of their constitutionality. It is said, however, now that the act
of 1834 only brought the legal value of gold coin more nearly into
correspondence with its actual value in the market or its relative
value to silver. But we do not perceive that this varies the case
or diminishes its force as an illustration. The creditor who had a
thousand dollars due him on the 31st day of July, 1834 (the day
before the act took effect), was entitled to a thousand dollars of
coined gold of the weight and fineness of the then existing
coinage. The day after, he was entitled only to a sum six percent
less in weight and in market value, or to a smaller number of
silver dollars. Yet he would have been a bold man who had asserted
that because of this the obligation of the contract was impaired or
that private property was taken without compensation or without due
process of law. No such assertion, so far as we know, was ever
made. Admit it was a hardship, but it is not every hardship that is
unjust, much less that is unconstitutional; and certainly it would
be an anomaly for us to hold an act of Congress invalid merely
because we might think its provisions harsh and unjust.
We are not aware of anything else which has been advanced in
support of the proposition that the legal tender acts were
forbidden by either the letter or the spirit of the Constitution.
If therefore they were, what we have endeavored to show,
appropriate means for legitimate ends, they were not transgressive
of the authority vested in Congress.
Here we might stop, but we will notice briefly an argument
presented in support of the position that the unit of money value
must possess intrinsic value. The argument is derived from
assimilating the constitutional provision respecting a standard of
weights and measures to that conferring
Page 79 U. S. 553
the power to coin money and regulate its value. It is said there
can be no uniform standard of weights without weight, or of measure
without length or space, and we are asked how anything can be made
a uniform standard of value which has itself no value? This is a
question foreign to the subject before us. The legal tender acts do
not attempt to make paper a standard of value. We do not rest their
validity upon the assertion that their emission is coinage, or any
regulation of the value of money; nor do we assert that Congress
may make anything which has no value money. What we do assert is
that Congress has power to enact that the government's promises to
pay money shall be, for the time being, equivalent in value to the
representative of value determined by the coinage acts, or to
multiples thereof. It is hardly correct to speak of a standard of
value. The Constitution does not speak of it. It contemplates a
standard for that which has gravity or extension; but value is an
ideal thing. The coinage acts fix its unit as a dollar; but the
gold or silver thing we call a dollar is, in no sense, a standard
of a dollar. It is a representative of it. There might never have
been a piece of money of the denomination of a dollar. There never
was a pound sterling coined until 1815, if we except a few coins
struck in the reign of Henry VIII, almost immediately debased, yet
it has been the unit of British currency for many generations. It
is, then, a mistake to regard the legal tender acts as either
fixing a standard of value or regulating money values, or making
that money which has no intrinsic value.
But, without extending our remarks further, it will be seen that
we hold the acts of Congress constitutional as applied to contracts
made either before or after their passage. In so holding, we
overrule so much of what was decided in
Hepburn v.
Griswold, [
Footnote 18]
as ruled the acts unwarranted by the Constitution so far as they
apply to contracts made before their enactment. That case was
decided by a divided Court, and by a Court having a less number of
judges than the law
Page 79 U. S. 554
then in existence provided this Court shall have. These cases
have been heard before a full Court, and they have received our
most careful consideration. The questions involved are
constitutional questions of the most vital importance to the
government and to the public at large. We have been in the habit of
treating cases involving a consideration of constitutional power
differently from those which concern merely private right.
[
Footnote 19] We are not
accustomed to hear them in the absence of a full court if it can be
avoided. Even in cases involving only private rights, if convinced
we had made a mistake, we would hear another argument and correct
our error. And it is no unprecedented thing in courts of last
resort, both in this country and in England, to overrule decisions
previously made. We agree this should not be done inconsiderately,
but in a case of such far-reaching consequences as the present,
thoroughly convinced as we are that Congress has not transgressed
its powers, we regard it as our duty so to decide and to affirm
both these judgments.
The other questions raised in the case of
Knox v. Lee
were substantially decided in
Texas v. White. [
Footnote 20]
Judgment in each case affirmed.
[
Footnote 1]
12 Stat. at Large 345, 532, 709. For the form of the notes
mentioned in the text,
See Bank v.
Supervisors, 7 Wall. 26; and for the exact language
of the acts,
see Lane County v. Oregon, 7 Wall. 74, and
Hepburn v.
Griswold, 8 Wall. 605.
[
Footnote 2]
4 Binney 123.
[
Footnote 3]
10 U. S. 6 Cranch
87.
[
Footnote 4]
14 U. S. 1
Wheat. 326.
[
Footnote 5]
17 U. S. 4
Wheat. 405.
[
Footnote 6]
19 U. S. 6
Wheat. 414.
[
Footnote 7]
50 U. S. 9 How.
560.
[
Footnote 8]
17 U. S. 4
Wheat. 416.
[
Footnote 9]
Fisher v.
Blight, 2 Cranch 358.
[
Footnote 10]
6 U. S. 2 Cranch
358.
[
Footnote 11]
75 U. S. 8 Wall.
603.
[
Footnote 12]
75 U. S. 8 Wall.
533.
[
Footnote 13]
United States v.
Marigold, 9 How. 560.
[
Footnote 14]
Apsden v. Austin, 5 Adolphus & Ellis' N.S. 671;
Dunn v. Sayles, ib., 685;
Coffin v. Landis, 10
Wright 426.
[
Footnote 15]
Davies 28;
Barrington v. Potter, Dyer 81, b., fol. 67;
Faw v.
Marsteller, 2 Cranch 29.
[
Footnote 16]
Dobbins v. Brown, 2 Jones (Pennsylvania) 75;
Workman v. Mifflin, 6 Casey 362.
[
Footnote 17]
Gibbons v.
Ogden, 9 Wheat. 1.
[
Footnote 18]
75 U. S. 8 Wall.
603.
[
Footnote 19]
Briscoe v. Bank of
Kentucky, 8 Pet. 118.
[
Footnote 20]
74 U. S. 7 Wall.
700.
MR. JUSTICE BRADLEY, concurring:
I concur in the opinion just read, and should feel that it was
out of place to add anything further on the subject were it not for
its great importance. On a constitutional question involving the
powers of the government, it is proper that every aspect of it and
every consideration bearing upon it should be presented and that no
member of the Court should hesitate to express his views. I do not
propose, however, to go into the subject at large, but only to make
such additional observations as appear to me proper for
consideration, at the risk of some inadvertent repetition.
The Constitution of the United States established a
government,
Page 79 U. S. 555
and not a league, compact, or partnership. It was constituted by
the people. It is called a government. In the eighth section of
Article I, it is declared that Congress shall have power to make
all laws which shall be necessary and proper for carrying into
execution the foregoing powers and all other powers vested by this
Constitution in the government of the United States or in any
department or office thereof. As a government it was invested with
all the attributes of sovereignty. It is expressly declared in
Article VI that the Constitution, and the laws of the United States
made in pursuance thereof, and all treaties made under the
authority of the United States, shall be the supreme law of the
land.
The doctrine so long contended for that the federal Union was a
mere compact of states, and that the states, if they chose, might
annul or disregard the acts of the national legislature or might
secede from the Union at their pleasure, and that the general
government had no power to coerce them into submission to the
Constitution should be regarded as definitely and forever
overthrown. This has been finally effected by the national power as
it had often been before by overwhelming argument.
The United States is not only a government, but it is a national
government, and the only government in this country that has the
character of nationality. It is invested with power over all the
foreign relations of the country, war, peace, and negotiations and
intercourse with other nations, all which are forbidden to the
state governments. It has jurisdiction over all those general
subjects of legislation and sovereignty which affect the interests
of the whole people equally and alike and which require uniformity
of regulations and laws, such as the coinage, weights and measures,
bankruptcies, the postal system, patent and copyright laws, the
public lands, and interstate commerce, all which subjects are
expressly or impliedly prohibited to the state governments. It has
power to suppress insurrections, as well as to repel invasions and
to organize, arm, discipline, and call into service the militia of
the whole country. The President
Page 79 U. S. 556
is charged with the duty and invested with the power to take
care that the laws be faithfully executed. The judiciary has
jurisdiction to decide controversies between the states and between
their respective citizens, as well as questions of national
concern, and the government is clothed with power to guarantee to
every state a republican form of government and to protect each of
them against invasion and domestic violence. For the purpose of
carrying into effect and executing these and the other powers
conferred and of providing for the common defense and general
welfare, Congress is further invested with the taxing power in all
its forms, except that of laying duties on exports, with the power
to borrow money on the national credit, to punish crimes against
the laws of the United States and of nations, to constitute courts,
and to make all laws necessary and proper for carrying into
execution the various powers vested in the government or any
department or officer thereof.
Such being the character of the general government, it seems to
be a self-evident proposition that it is invested with all those
inherent and implied powers which, at the time of adopting the
Constitution, were generally considered to belong to every
government as such and as being essential to the exercise of its
functions. If this proposition be not true, it certainly is true
that the government of the United States has express authority, in
the clause last quoted, to make all such laws (usually regarded as
inherent and implied) as may be necessary and proper for carrying
on the government as constituted and vindicating its authority and
existence.
Another proposition equally clear is that at the time the
Constitution was adopted, it was and had for a long time been the
practice of most, if not all, civilized governments to employ the
public credit as a means of anticipating the national revenues for
the purpose of enabling them to exercise their governmental
functions and to meet the various exigencies to which all nations
are subject, and that the mode of employing the public credit was
various in different countries and at different periods --
sometimes by the agency
Page 79 U. S. 557
of a national bank, sometimes by the issue of exchequer bills or
bills of credit and sometimes by pledges of the public domain. In
this country, the habit had prevailed from the commencement of the
eighteenth century of issuing bills of credit, and the revolution
of independence had just been achieved, in great degree, by the
means of similar bills issued by the Continental Congress. These
bills were generally made a legal tender for the payment of all
debts, public and private, until, by the influence of English
merchants at home, Parliament prohibited the issue of bills with
that quality. This prohibition was first exercised in 1751 against
the New England colonies, and subsequently, in 1763, against all
the colonies. It was one of the causes of discontent which finally
culminated in the Revolution. Dr. Franklin endeavored to obtain a
repeal of the prohibitory acts, but only succeeded in obtaining
from Parliament, in 1773, an act authorizing the colonies to make
their bills receivable for taxes and debts due to the colony that
issued them. At the breaking out of the war, the Continental
Congress commenced the issue of bills of credit, and the war was
carried on without other resources for three or four years. It may
be said with truth that we owe our national independence to the use
of this fiscal agency. Dr. Franklin, in a letter to a friend, dated
from Paris, in April, 1779, after deploring the depreciation which
the Continental currency had undergone, said:
"The only consolation under the evil is that the public debt is
proportionately diminished by the depreciation, and this by a kind
of imperceptible tax, everyone having paid a part of it in the fall
of value that took place between the receiving and paying such sums
as passed through his hands."
He adds:
"This effect of paper currency is not understood this side the
water. And indeed the whole is a mystery even to the politicians,
how we have been able to continue a war four years without money,
and how we could pay with paper that had no previously fixed fund
appropriated specially to redeem it. This currency, as we manage
it, is a wonderful machine. It performs its office when we issue
it; it pays and clothes troops, and provides
Page 79 U. S. 558
victuals and ammunition. [
Footnote
2/1]"
In a subsequent letter, of 9th October, 1780, he says:
"They [the Congress] issued an immense quantity of paper bills
to pay, clothe, arm, and feed their troops and fit out ships, and
with this paper, without taxes for the first three years, they
fought and battled one of the most powerful nations of Europe.
[
Footnote 2/2]"
The Continental bills were not made legal tenders at first, but
in January, 1777, the Congress passed resolutions declaring that
they ought to pass current in all payments and be deemed in value
equal to the same nominal sums in Spanish dollars, and that anyone
refusing so to receive them ought to be deemed an enemy to the
liberties of the United States, and recommending to the
legislatures of the several states to pass laws to that effect.
[
Footnote 2/3]
Massachusetts and other colonies, on the breaking out of the
war, disregarded the prohibition of Parliament and again conferred
upon their bills the quality of legal tender. [
Footnote 2/4]
These precedents are cited without reference to the policy or
impolicy of the several measures in the particular cases; that is
always a question for the legislative discretion. They establish
the
historical fact that when the Constitution was
adopted, the employment of bills of credit was deemed a legitimate
means of meeting the exigencies of a regularly constituted
government, and that the affixing to them of the quality of a legal
tender was regarded as entirely discretionary with the legislature.
Such a quality was a mere incident that might or might not be
annexed. The Continental Congress not being a regular government,
and not having the power to make laws for the regulation of private
transactions, referred the matter to the state legislatures. The
framers of the Constitution were familiar with all this history.
They were familiar with the governments which had thus exercised
the prerogative of issuing bills having the quality, and intended
for the purposes referred to. They had first drawn their breath
under these governments; they
Page 79 U. S. 559
had helped to administer them. They had seen the important uses
to which these securities might be applied.
In view, therefore, of all these facts when we find them
establishing the present government, with all the powers before
rehearsed, giving to it, amongst other things, the sole control of
the money of the country and expressly prohibiting the
states from issuing bills of credit and from making
anything but gold and silver a legal tender, and imposing no such
restriction upon the general government, how can we resist the
conclusion that they intended to leave to it that power unimpaired,
in case the future exigencies of the nation should require its
exercise?
I am aware that, according to the report of Mr. Madison in the
original draft of the Constitution, the clause relating to the
borrowing of money read, "to borrow money and emit bills on the
credit of the United States," and that the words, "and emit bills,"
were, after some debate, struck out. But they were struck out with
diverse views of members, some deeming them useless and others
deeming them hurtful. The result was that they chose to adopt the
Constitution as it now stands, without any words either of grant or
restriction of power, and it is our duty to construe the instrument
by its words, in the light of history, of the general nature of
government, and the incidents of sovereignty.
The same argument was employed against the creation of a United
States bank. A power to create corporations was proposed in the
Convention and rejected. The power was proposed with a limited
application to cases where the public good might require them and
the authority of a single state might be incompetent. It was still
rejected. It was then confined to the building of canals, but
without effect. It was argued that such a power was unnecessary and
might be dangerous. Yet Congress has not only chartered two United
States banks, whose constitutionality has been sustained by this
Court, but several other institutions. As a means appropriate and
conducive to the end of carrying into effect the other powers of
the government, such as that of borrowing money with promptness and
dispatch and
Page 79 U. S. 560
facilitating the fiscal operations of the government, it was
deemed within the power of Congress to create such an institution
under the general power given to pass all such laws as might be
necessary and proper for carrying into execution the other powers
granted. The views of particular members or the course of
proceedings in the Convention cannot control the fair meaning and
general scope of the Constitution as it was finally framed and now
stands. It is a finished document, complete in itself and to be
interpreted in the light of history and of the circumstances of the
period in which it was framed.
No one doubts at the present day nor has ever seriously doubted
that the power of the government to emit bills exists. It has been
exercised by the government without question for a large portion of
its history. This being conceded, the incidental power of giving
such bills the quality of legal tender follows almost as a matter
of course.
I hold it to be the prerogative of every government not
restrained by its constitution to anticipate its resources by the
issue of exchequer bills, bills of credit, bonds, stock, or a
banking apparatus. Whether those issues shall or shall not be
receivable in payment of private debts is an incidental matter in
the discretion of such government unless restrained by
constitutional prohibition.
This power is entirely distinct from that of coining money and
regulating the value thereof. It is not only embraced in the power
to make all necessary auxiliary laws, but it is incidental to the
power of borrowing money. It is often a necessary means of
anticipating and realizing promptly the national resources when,
perhaps, promptness is necessary to the national existence. It is
not an attempt to coin money out of a valueless material, like the
coinage of leather or ivory or kowrie shells. It is a pledge of the
national credit. It is a promise by the government to pay dollars;
it is not an attempt to make dollars. The standard of value is not
changed. The government simply demands that its credit shall be
accepted and received by public and private creditors during the
pending exigency. Every government
Page 79 U. S. 561
has a right to demand this when its existence is at stake. The
interests of every citizen are bound up with the fate of the
government. None can claim exemption. If they cannot trust their
government in its time of trial, they are not worthy to be its
citizens.
But it is said, why not borrow money in the ordinary way? The
answer is, the legislative department, being the nation itself,
speaking by its representatives, has a choice of methods, and is
the master of its own discretion. One mode of borrowing, it is
true, is to issue the government bonds and to invite capitalists to
purchase them. But this is not the only mode. It is often too tardy
and inefficient. In time of war or public danger, Congress,
representing the sovereign power, by its right of eminent domain
may authorize the President to take private property for the public
use and give government certificates therefor. This is largely done
on such occasions. It is an indirect way of compelling the owner of
property to lend to the government. He is forced to rely on the
national credit.
Can the poor man's cattle and horses and corn be thus taken by
the government when the public exigency requires it, and cannot the
rich man's bonds and notes be in like manner taken to reach the
same end? If the government enacts that the certificates of
indebtedness which it gives to the farmer for his cattle and
provender shall be receivable by the farmer's creditors in payment
of his bonds and notes, is it anything more than transferring the
government loan from the hands of one man to the hands of another
perhaps far more able to advance it? Is it anything more than
putting the securities of the capitalist on the same platform as
the farmer's stock?
No one supposes that these government certificates are never to
be paid -- that the day of specie payments is never to return. And
it matters not in what form they are issued. The principle is still
the same. Instead of certificates, they may be Treasury notes or
paper of any other form. And their payment may not be made directly
in coin, but they may be first convertible into government bonds or
other
Page 79 U. S. 562
government securities. Through whatever changes they pass, their
ultimate destiny is to be paid. But it is the prerogative of the
legislative department to determine when the fit time for payment
has come. It may be long delayed, perhaps many may think it too
long after the exigency has passed. But the abuse of a power, if
proven, is no argument against its existence. And the courts are
not responsible therefor. Questions of political expediency belong
to the legislative halls, not to the judicial forum. It might
subserve the present good if we should declare the legal tender act
unconstitutional, and a temporary public satisfaction might be the
result. But what a miserable consideration would that be for a
permanent loss of one of the just and necessary powers of the
government -- a power which, had Congress failed to exercise it
when it did, we might have had no court here today to consider the
question nor a government or a country to make it important to do
so.
Another ground of the power to issue Treasury notes or bills is
the necessity of providing a proper currency for the country, and
especially of providing for the failure or disappearance of the
ordinary currency in times of financial pressure and threatened
collapse of commercial credit. Currency is a national necessity.
The operations of the government, as well as private transactions,
are wholly dependent upon it. The state governments are prohibited
from making money or issuing bills. Uniformity of money was one of
the objects of the Constitution. The coinage of money and
regulation of its value is conferred upon the general government
exclusively. That government has also the power to issue bills. It
follows as a matter of necessity as a consequence of these various
provisions that it is specially the duty of the general government
to provide a national currency. The states cannot do it except by
the charter of local banks, and that remedy, if strictly legitimate
and constitutional, is inadequate, fluctuating, uncertain, and
insecure, and operates with all the partiality to local interests
which it was the very object of the Constitution to avoid. But,
regarded as a duty of the general government, it is
Page 79 U. S. 563
strictly in accordance with the spirit of the Constitution, as
well as in line with the national necessities.
It is absolutely essential to independent national existence
that government should have a firm hold on the two great sovereign
instrumentalities of the sword and the purse, and the right to
wield them without restriction on occasions of national peril. In
certain emergencies, government must have at its command not only
the personal services -- the bodies and lives -- of its citizens,
but the lesser, though not less essential, power of absolute
control over the resources of the country. Its armies must be
filled and its navies manned by the citizens in person. Its
material of war, its munitions, equipment, and commissary stores
must come from the industry of the country. This can only be
stimulated into activity by a proper financial system, especially
as regards the currency.
A constitutional government, notwithstanding the right of
eminent domain, cannot take physical and forcible possession of all
that it may need to defend the country, and is reluctant to
exercise such a power when it can be avoided. It must purchase, and
by purchase command materials and supplies, products of
manufacture, labor, service of every kind. The government cannot by
physical power compel the workshops to turn out millions of
dollars' worth of manufactures in leather and cloth and wood and
iron which are the very first conditions of military equipment. It
must stimulate and set in motion the industry of the country. In
other words, it must purchase. But it cannot purchase with specie.
That is soon exhausted, hidden, or exported. It must purchase by
credit. It cannot force its citizens to take its bonds. It must be
able to lay its hands on the currency -- that great instrument of
exchange by which the people transact all their own affairs with
each other; that thing which they must have, and which lies at the
foundation of all industrial effort and all business in the
community. When the ordinary currency disappears, as it often does
in time of war, when business begins to stagnate and general
bankruptcy is imminent, then the government
Page 79 U. S. 564
must have power at the same time to renovate its own resources
and to revive the drooping energies of the nation by supplying it
with a circulating medium. What that medium shall be, what its
character and qualities, will depend upon the greatness of the
exigency and the degree of promptitude which it demands. These are
legislative questions. The heart of the nation must not be crushed
out. The people must be aided to pay their debts and meet their
obligations. The debtor interest of the country represent its bone
and sinew, and must be encouraged to pursue its avocations. If
relief were not afforded, universal bankruptcy would ensue and
industry would be stopped and government would be paralyzed in the
paralysis of the people. It is an undoubted fact that during the
late civil war, the activity of the workshops and factories, mines
and machinery, shipyards, railroads and canals of the loyal states
caused by the issue of the legal tender currency constituted an
inexhaustible fountain of strength to the national cause.
These views are exhibited not for the purpose of showing that
the power is a desirable one, and therefore ought to be assumed --
much less for the purpose of giving judgment on the expediency of
its exercise in any particular case -- but for the purpose of
showing that it is one of those vital and essential powers inhering
in every national sovereignty and necessary to its
self-preservation.
But the creditor interest will lose some of its gold! Is gold
the one thing needful? Is it worse for the creditor to lose a
little by depreciation than everything by the bankruptcy of his
debtor? Nay, is it worse than to lose everything by the subversion
of the government? What is it that protects him in the accumulation
and possession of his wealth? Is it not the government and its
laws?, and can he not consent to trust that government for a brief
period until it shall have vindicated its right to exist? All
property and all rights, even those of liberty and life, are held
subject to the fundamental condition of being liable to be impaired
by providential calamities and national vicissitudes. Taxes impair
my income or the value of my property. The condemnation
Page 79 U. S. 565
of my homestead or a valuable part of it for a public
improvement or public defense will sometimes destroy its value to
me; the conscription may deprive me of liberty and destroy my life.
So with the power of government to borrow money -- a power to be
exercised by the consent of the lender, if possible, but to be
exercised without his consent if necessary. And when exercised in
the form of legal tender notes or bills of credit, it may operate
for the time being to compel the creditor to receive the
credit
of the government in place of the gold which he expected to
receive from his debtor. All these are fundamental political
conditions on which life, property, and money are respectively held
and enjoyed under our system of government -- nay, under any system
of government. There are times when the exigencies of the state
rightly absorb all subordinate considerations of private interest,
convenience, or feeling, and at such times the temporary though
compulsory acceptance by a private creditor of the government
credit, in lieu of his debtor's obligation to pay, is one of the
slightest forms in which the necessary burdens of society can be
sustained. Instead of being a violation of such obligation, it
merely subjects it to one of those conditions under which it is
held and enjoyed.
Another consideration bearing upon this objection is the fact
that the power given to Congress to coin money and regulate the
value thereof, includes the power to alter the metallic standard of
coinage, as was done in 1834; whereby contracts made before the
alteration, and payable thereafter, were satisfied by the payment
of six percent less of pure gold than was contemplated when the
contracts were made. This power and this consequence flowing from
its exercise, were much discussed in the great case of Mixed
Moneys, in Sir John Davies's Reports [
Footnote 2/5] and it was there held to belong to the
King's ordinary prerogative over the coinage of money, without any
sanction from Parliament. Subsequent acts of Parliament fixed the
standard of purity and weight
Page 79 U. S. 566
in the coinage of the realm, which has not been altered for a
hundred and fifty years past. But the same authority which fixed it
in the time of Queen Anne, is competent at any time to change it.
Whether it shall be changed or not is a matter of mere legislative
discretion. And such is undoubtedly the public law of this country.
Therefore, the mere fact that the value of debts may be depreciated
by legal tender laws, is not conclusive against their validity; for
that is clearly the effect of other powers which may be exercised
by Congress in its discretion.
It follows as a corollary from these views, that it makes no
difference in the principle of the thing, that the contract of the
debtor is a specific engagement, in terms, to pay gold or silver
money, or to pay in specie. So long as the money of the country, in
whatever terms described, is in contemplation of the parties, it is
the object of the legal tender laws to make the credit of the
government a lawful substitute therefor. If the contract is for the
delivery of a chattel or a specific commodity or substance, the law
does not apply. If it is
bona fide for so many carats of
diamonds or so many ounces of gold as bullion, the specific
contract must be performed. But if terms which naturally import
such a contract are used by way of evasion, and money only is
intended, the law reaches the case. Not but that Congress might
limit the operation of the law in any way it pleased. It might make
an exception of cases where the contract expressly promises gold
and silver money. But if it has not done so; if the enactment is
general in its terms, specific promises to pay the money in specie
are just as much subject to the operation of the law as a mere
promise to pay so many dollars -- for that, in contemplation of
law, is a promise to pay money in specie.
Hence I differ from my brethren in the decision of one of the
cases now before the court, to-wit, the case of
Tribilcock v.
Wilson, [
Footnote 2/6] in
which the promise (made in June, 1861), was to pay, one year after
date, the sum of nine hundred dollars
Page 79 U. S. 567
with ten percent interest from date, payable in specie. Of
course this difference arises from the different construction given
to the legal tender acts. I do not understand the majority of the
Court to decide that an act so drawn as to embrace, in terms,
contracts payable in specie, would not be constitutional. Such a
decision would completely nullify the power claimed for the
government. For it would be very easy, by the use of one or two
additional words, to make all contracts payable in specie.
It follows as another corollary from the views which I have
expressed that the power to make Treasury notes a legal tender,
whilst a mere incidental one to that of issuing the notes
themselves, and to one of the forms of borrowing money, is
nevertheless a power not to be resorted to except upon
extraordinary and pressing occasions, such as war or other public
exigencies of great gravity and importance, and should be no longer
exerted than all the circumstances of the case demand.
I do not say that it is a war power, or that it is only to be
called into exercise in time of war; for other public exigencies
may arise in the history of a nation which may make it expedient
and imperative to exercise it. But of the occasions when, and of
the times how long, it shall be exercised and in force, it is for
the legislative department of the government to judge. Feeling
sensibly the judgments and wishes of the people, that department
cannot long (if it is proper to suppose that within its sphere it
ever can) misunderstand the business interests and just rights of
the community.
I deem it unnecessary to enter into a minute criticism of all
the sayings, wise or foolish, that have from time to time been
uttered on this subject by statesmen, philosophers, or theorists.
The writers on political economy are generally opposed to the
exercise of the power. The considerations which they adduce are
very proper to be urged upon the depositary of the power. The
question whether the power exists in a national government is a
great practical question relating to the national safety and
independence, and statesmen
Page 79 U. S. 568
are better judges of this question than economists can be. Their
judgment is ascertained in the history and practice of governments
and in the silence as well as the words of our written
Constitution. A parade of authorities would serve but little
purpose after Chief Justice Marshall's profound discussion of the
powers of Congress in the great case of
McCulloch v. State of
Maryland. If we speak not according to the spirit of the
Constitution and authorities and the incontrovertible logic of
events, elaborate extracts cannot add weight to our decision.
Great stress has been laid on the supposed fact that England, in
all its great wars and emergencies, had never made its exchequer
bills a legal tender. This imports a eulogium on British
conservatism in relation to contracts which that nation would
hardly regard as flattering. It is well known that for over twenty
years, from 1797 to 1820, the most stringent paper money system
that ever existed prevailed in England, and lay at the foundation
of all her elasticity and endurance. It is true that the Bank of
England notes, which the bank was required to issue until they
reached an amount then unprecedented, were not technically made
legal tenders except for the purpose of relieving from arrest and
imprisonment for debt; but worse than that, the bank was expressly
forbidden to redeem its notes in specie except for a
certain small amount to answer the purpose of change. The people
were obliged to receive them. The government had nothing else
wherewith to pay its domestic creditors. The people themselves had
no specie, for that was absorbed by the Bank of England and
husbanded for the uses of government in carrying on its foreign
wars and paying its foreign subsidies. The country banks depended
on the Bank of England for support, and of course they could not
redeem their circulation in specie. The result was that the nation
was perforce obliged to treat the bank notes as a legal tender or
suffer inevitable bankruptcy. In such a state of things, it went
very hard with any man who demanded specie in fulfillment of his
contracts. A man by the name of Grigby tried it, and brought his
case into court, and elicited from
Page 79 U. S. 569
Lord Alvanley the energetic expression: "Thank God, few such
creditors as the present plaintiff have been found since the
passing of the act." [
Footnote 2/7]
It is to be presumed that he was the last that ever showed himself
in an English court.
It is well known that since the resumption of specie payments,
the act of 1833, rechartering the bank, has expressly made the Bank
of England notes a legal tender.
It is unnecessary to refer to other examples. France is a
notable one. Her assignats, issued at the commencement and during
the Revolution, performed the same office as our Continental bills,
and enabled the nation to gather up its latent strength and call
out its energies. Almost every nation of Europe, at one time or
another, has found it necessary or expedient to resort to the same
method of carrying on its operations or defending itself against
aggression.
It would be sad indeed if this great nation were now to be
deprived of a power so necessary to enable it to protect its own
existence and to cope with the other great powers of the world. No
doubt foreign powers would rejoice if we should deny the power. No
doubt foreign creditors would rejoice. They have, from the first,
taken a deep interest in the question. But no true friend to our
government, to its stability and its power to sustain itself under
all vicissitudes, can be indifferent to the great wrong which it
would sustain by a denial of the power in question -- a power to be
seldom exercised, certainly, but one the possession of which is so
essential and, as it seems to me, so undoubted.
Regarding the question of power as so important to the stability
of the government, I cannot acquiesce in the decision of
Hepburn v. Griswold. I cannot consent that the government
should be deprived of one of its just powers by a decision made at
the time, and under the circumstances, in which that decision was
made. On a question relating to the power of the government where I
am perfectly satisfied that it has the power, I can never consent
to abide by a decision denying it unless made with reasonable
unanimity
Page 79 U. S. 570
and acquiesced in by the country. Where the decision is recent
and is only made by a bare majority of the Court and during a time
of public excitement on the subject, when the question has largely
entered into the political discussions of the day, I consider it
our right and duty to subject it to a further examination, if a
majority of the Court are dissatisfied with the former decision.
And in this case, with all deference and respect for the former
judgment of the Court, I am so fully convinced that it was
erroneous, and prejudicial to the rights, interest, and safety of
the general government, that I, for one, have no hesitation in
reviewing and overruling it. It should be remembered, that this
Court, at the very term in which, and within a few weeks after, the
decision in
Hepburn v. Griswold was delivered, when the
vacancies on the bench were filled, determined to hear the question
reargued. This fact must necessarily have had the effect of
apprising the country that the decision was not fully acquiesced
in, and of obviating any injurious consequences to the business of
the country by its reversal.
In my judgment, the decrees in all the cases before us should be
affirmed.
[
Footnote 2/1]
Franklin's Works, vol. 8, p. 329.
[
Footnote 2/2]
Ib., p. 507.
[
Footnote 2/3]
Journals of Congress, vol. 3, p. 19-20; Pitkin's History, vol.
2, p. 155.
[
Footnote 2/4]
Bancroft's History, vol. 7, p. 324.
[
Footnote 2/5]
Page 48.
[
Footnote 2/6]
See infra, 79 U. S. 687.
[
Footnote 2/7]
2 Bosanquet & Puller 528.
THE CHIEF JUSTICE, dissenting:
We dissent from the argument and conclusion in the opinion just
announced.
The rule by which the constitutionality of an act of Congress
passed in the alleged exercise of an implied power is to be tried
is no longer, in this Court, open to question. It was laid down in
the case of
McCulloch v. Maryland, [
Footnote 3/1] by Chief Justice Marshall, in these
words:
"Let the end be legitimate, let it be within the scope of the
Constitution, and all means which are appropriate, which are
plainly adapted to that end, which are not prohibited but
consistent with the letter and spirit of the Constitution, are
constitutional."
And it is the plain duty of the Court to pronounce acts of
Page 79 U. S. 571
Congress not made in the exercise of an express power nor coming
within the reasonable scope of this rule, if made in virtue of an
implied power, unwarranted by the Constitution. Acts of Congress
not made in pursuance of the Constitution are not laws.
Neither of these propositions was questioned in the case of
Hepburn v. Griswold. [
Footnote
3/2] The judges who dissented in that case maintained that the
clause in the Act of February 25, 1862, making the United States
notes a legal tender in payment of debts, was an appropriate,
plainly adapted means to a constitutional end, not prohibited but
consistent with the letter and spirit of the Constitution. The
majority of the court as then constituted, five judges out of
eight, felt
"obliged to conclude that an act making mere promises to pay
dollars a legal tender in payments of debts previously contracted
is not a means appropriate, plainly adapted, really calculated to
carry into effect any express power vested in Congress, is
inconsistent with the spirit of the Constitution, and is prohibited
by the Constitution."
In the case of the
United States v. De Witt, [
Footnote 3/3] we held unanimously that a
provision of the internal revenue law prohibiting the sale of
certain illuminating oil in the states was unconstitutional, though
it might increase the production and sale of other oils, and
consequently the revenue derived from them, because this
consequence was too remote and uncertain to warrant the court in
saying that the prohibition was an appropriate and plainly adapted
means for carrying into execution the power to lay and collect
taxes.
We agree, then, that the question whether a law is a necessary
and proper means to execution of an express power, within the
meaning of these words as defined by the rule -- that is to say, a
means appropriate, plainly adapted, not prohibited but consistent
with the latter and spirit of the Constitution -- is a judicial
question. Congress may not adopt any means for the execution of an
express power that Congress may see fit to adopt. It must be a
necessary and
Page 79 U. S. 572
proper means within the fair meaning of the rule. If not such it
cannot be employed consistently with the Constitution. Whether the
means actually employed in a given case are such or not, the court
must decide. The court must judge of the fact, Congress of the
degree of necessity.
A majority of the Court, five of four, in the opinion which has
just been read, reverses the judgment rendered by the former
majority of five to three, in pursuance of an opinion formed after
repeated arguments, at successive terms, and careful consideration,
and declares the legal tender clause to be constitutional -- that
is to say, that an act of Congress making promises to pay dollars
legal tender as coined dollars in payment of preexisting debts is a
means appropriate and plainly adapted to the exercise of powers
expressly granted by the Constitution, and not prohibited itself by
the Constitution but consistent with its letter and spirit. And
this reversal, unprecedented in the history of the Court, has been
produced by no change in the opinions of those who concurred in the
former judgment. One closed an honorable judicial career by
resignation after the case had been decided, [
Footnote 3/4] after the opinion had been read and agreed
to in conference, [
Footnote 3/5]
and after the day when it would have been delivered in court
[
Footnote 3/6] had not the delivery
been postponed for a week to give time for the preparation of the
dissenting opinion. The Court was then full, but the vacancy caused
by the resignation of Mr. Justice Grier having been subsequently
filled and an additional justice having been appointed under the
act increasing the number of judges to nine, which took effect on
the first Monday of December, 1869, the then majority find
themselves in a minority of the Court, as now constituted, upon the
question.
Their convictions, however, remain unchanged. We adhere to the
opinion pronounced in
Hepburn v. Griswold. Reflection has
only wrought a firmer belief in the soundness of the constitutional
doctrines maintained, and in the importance of them to the
country.
Page 79 U. S. 573
We agree that much of what was said in the dissenting opinion in
that case, which has become the opinion of a majority of the court
as now constituted, was correctly said. We fully agree in all that
was quoted from Chief Justice Marshall. We had indeed accepted,
without reserve, the definition of implied powers in which that
great judge summed up his argument, of which the language quoted
formed a part. But if it was intended to ascribe to us "the
doctrine that when an act of Congress is brought to the test of
this clause of the Constitution," namely, the clause granting the
power of ancillary legislation, "its necessity must be absolute,
and its adaptation to the conceded purpose unquestionable," we must
be permitted not only to disclaim it, but to say that there is
nothing in the opinion of the then majority which approaches the
assertion of any such doctrine. We did indeed venture to cite, with
approval, the language of Judge Story in his great work on the
Constitution, that the words necessary and proper were intended to
have "a sense at once admonitory and directory," and to require
that the means used in the execution of an express power "should be
bona fide, appropriate to the end," [
Footnote 3/7] and also ventured to say that the Tenth
Amendment, reserving to the states or the people all powers not
delegated to the United States by the Constitution, nor prohibited
by it to the states, "was intended to have a like admonitory and
directory sense," and to restrain the limited government
established by the Constitution from the exercise of powers not
clearly delegated or derived by just inference from powers so
delegated. In thus quoting Judge Story and in this expression of
our own opinion, we certainly did not suppose it possible that we
could be understood as asserting that the clause in question "was
designed as a restriction upon the ancillary power incidental to
every grant of power in express terms." It was this proposition
which "was stated and refuted" in
McCulloch v. Maryland.
That refutation touches nothing said by us. We assert only that
the
Page 79 U. S. 574
words of the Constitution are such as admonish Congress that
implied powers are not to be rashly or lightly assumed, and that
they are not to be exercised at all, unless, in the words of Judge
Story they are "
bona fide appropriate to the end," or, in
the words of Chief Justice Marshall, "appropriate, plainly adapted"
to a constitutional and legitimate end, and "not prohibited, but
consistent with the letter and spirit of the Constitution."
There appears, therefore, to have been no real difference of
opinion in the Court as to the rule by which the existence of an
implied power is to be tested, when
Hepburn v. Griswold
was decided, though the then minority seem to have supposed there
was. The difference had reference to the application of the rule
rather, than to the rule itself.
The then minority admitted that in the powers relating to
coinage, standing alone, there is not "a sufficient warrant for the
exercise of the power" to make notes a legal tender, but thought
them
"not without decided weight, when we come to consider the
question of the existence of this power as one necessary and proper
for carrying into execution other admitted powers of the
government."
This weight they found in the fact that an "express power over
the lawful money of the country was confided to Congress and
forbidden to the states." It seemed to them not an "unreasonable
inference" that, in a certain contingency,
"making the securities of the government perform the office of
money in the payment of debts would be in harmony with the power
expressly granted to coin money."
We perceive no connection between the express power to coin
money and the inference that the government may, in any
contingency, make its securities perform the functions of coined
money, as a legal tender in payment of debts. We have supposed that
the power to exclude from circulation notes not authorized by the
national government might perhaps be deduced from the power to
regulate the value of coin, but that the power of the government to
emit bills of credit was an exercise of the power to borrow money,
and that its power over the currency was incidental to that power
and to the
Page 79 U. S. 575
power to regulate commerce. This was the doctrine of
Veazie
Bank v. Fenno, [
Footnote 3/8]
although not fully elaborated in that case. The question whether
the quality of legal tender can be imparted to these bills depends
upon distinct considerations.
Was, then, the power to make these notes of the government --
these bills of credit -- a legal tender in payments and
appropriate, plainly adapted means to a legitimate and
constitutional end? or, to state the question as the opinion of the
then minority stated it,
"does there exist any power in Congress, or in the government,
by express grant, in execution of which this legal tender act was
necessary and proper in the sense here defined and under the
circumstances of its passage?"
The opinion of the then minority affirmed the power on the
ground that it was a necessary and proper means, within the
definition of the Court in the case of
McCulloch v.
Maryland, to carry on war, and that it was not prohibited by
the spirit or letter of the Constitution, though it was admitted to
be a law impairing the obligation of contracts and notwithstanding
the objection that it deprived many persons of their property
without compensation and without due process of law.
We shall not add much to what was said in the opinion of the
then majority on these points.
The reference made in the opinion just read, as well as in the
argument at the bar to the opinions of the Chief Justice when
Secretary of the Treasury, seems to warrant, if it does not
require, some observations before proceeding further in the
discussion.
It was his fortune at the time the legal tender clause was
inserted in the bill to authorize the issue of United States notes
and received the sanction of Congress, to be charged with the
anxious and responsible duty of providing funds for the prosecution
of the war. In no report made by him to Congress was the expedient
of making the notes of the
Page 79 U. S. 576
United States a legal tender suggested. He urged the issue of
notes payable on demand in coin or received as coin in payment of
duties. When the state banks had suspended specie payments, he
recommended the issue of United States notes receivable for all
loans to the United States and all government dues except duties on
imports. In his report of December, 1862, he said that "United
States notes receivable for bonds bearing a secure specie interest
are next best to notes convertible into coin," and after stating
the financial measures which in his judgment were advisable, he
added:
"The Secretary recommends, therefore, no mere paper money
scheme, but on the contrary a series of measures looking to a safe
and gradual return to gold and silver as the only permanent basis,
standard, and measure of value recognized by the Constitution."
At the session of Congress before this report was made, the bill
containing the legal tender clause had become a law. He was
extremely and avowedly averse to this clause, but was very
solicitous for the passage of the bill to authorize the issue of
United States notes then pending. He thought it indispensably
necessary that the authority to issue these notes should be granted
by Congress. The passage of the bill was delayed, if not jeoparded,
by the difference of opinion which prevailed on the question of
making them a legal tender. It was under these circumstances that
he expressed the opinion, when called upon by the Committee of Ways
and Means, that it was necessary, [
Footnote 3/9] and he was not sorry to find it sustained
by the decisions of respected courts, not unanimous indeed, nor
without contrary decisions of state courts equally respectable.
Examination and reflection under more propitious circumstances have
satisfied him that this opinion was erroneous, and he does not
hesitate to declare it. He would do so just as unhesitatingly if
his favor to the legal tender clause had been at that time decided
and his opinion as to the constitutionality of the measure
clear.
Page 79 U. S. 577
Was the making of the notes a legal tender necessary to the
carrying on the war? In other words, was it necessary to the
execution of the power to borrow money? It is not the question
whether the issue of notes was necessary, nor whether any of the
financial measures of the government were necessary. The issuing of
the circulation commonly known as greenbacks was necessary, and was
constitutional. They were necessary to the payment of the army and
the navy and to all the purposes for which the government uses
money. The banks had suspended specie payment, and the government
was reduced to the alternative of using their paper or issuing its
own.
Now it is a common error, and in our judgment it was the error
of the opinion of the minority in
Hepburn v. Griswold, and
is the error of the opinion just read, that considerations
pertinent to the issue of United States notes have been urged in
justification of making them a legal tender. The real question is
was the making them a legal tender a necessary means to the
execution of the power to borrow money? If the notes would
circulate as well without as with this quality, it is idle to urge
the plea of such necessity. But the circulation of the notes was
amply provided for by making them receivable for all national
taxes, all dues to the government, and all loans. This was the
provision relied upon for the purpose by the secretary when the
bill was first prepared, and his reflections since have convinced
him that it was sufficient. Nobody could pay a tax, or any debt, or
buy a bond without using these notes. As the notes, not being
immediately redeemable, would undoubtedly be cheaper than coin,
they would be preferred by debtors and purchasers. They would thus,
by the universal law of trade, pass into general circulation. As
long as they were maintained by the government at or near par value
of specie, they would be accepted in payment of all dues, private
as well as public. Debtors, as a general rule, would pay in nothing
else unless compelled by suit, and creditors would accept them as
long as they would lose less by acceptance than by suit. In new
transactions, sellers would demand and purchasers would
Page 79 U. S. 578
pay the premium for specie in the prices of commodities. The
difference to them in the currency, whether of coin or of paper,
would be in the fluctuations to which the latter is subject. So
long as notes should not sink so low as to induce creditors to
refuse to receive them because they could not be said to be in any
just sense payments of debts due, a provision for making them a
legal tender would be without effect except to discredit the
currency to which it was applied. The real support of note
circulation not convertible on demand into coin is receivability
for debts due the government, including specie loans, and
limitation of amount. If the amount is smaller than is needed for
the transactions of the country, and the law allows the use in
these transactions of but one description of currency, the demand
for that description will prevent its depreciation. But history
shows no instance of paper issues so restricted. An approximation
in limitation is all that is possible, and this was attempted when
the issues of United States notes were restricted to one hundred
and fifty millions. But this limit was soon extended to four
hundred and fifty millions, and even this was soon practically
removed by the provision for the issue of notes by the national
banking associations without any provision for corresponding
reduction in the circulation of United States notes, and still
further by the laws authorizing the issue of interest bearing
securities, made a tender for their amount, excluding interest.
The best support for note circulation is not limitation, but
receivability, especially for loans bearing coin interest. This
support was given until the fall of 1864, when a loan bearing
increased currency interest, payable in three years and convertible
into a loan bearing less coin interest, was substituted for the six
percent and five percent loans bearing specie interest for which
the notes had been previously received.
It is plain that a currency so supported cannot depreciate more
than the loans -- in other words, below the general credit of the
country. It will rise or fall with it. At the present moment, if
the notes were received for five percent
Page 79 U. S. 579
bonds, they would be at par. In other words, specie payments
would be resumed.
Now does making the notes a legal tender increase their value?
It is said that it does, by giving them a new use. The best
political economists say that it does not. When the government
compels the people to receive its notes, it virtually declares that
it does not expect them to be received without compulsion. It
practically represents itself insolvent. This certainly does not
improve the value of its notes. It is an element of depreciation.
In addition, it creates a powerful interest in the debtor class and
in the purchasers of bonds to depress to the lowest point the
credit of the notes. The cheaper these become, the easier the
payment of debts and the more profitable the investments in bonds
bearing coin interest.
On the other hand, the higher prices become for everything the
government needs to buy, and the greater the accumulation of public
as well as private debt. It is true that such a state of things is
acceptable to debtors, investors in bonds, and speculators. It is
their opportunity of relief or wealth. And many are persuaded by
their representations that the forced circulation is not only a
necessity but a benefit. But the apparent benefit is a delusion,
and the necessity imaginary. In their legitimate use, the notes are
hurt, not helped, by being made a legal tender. The legal tender
quality is only valuable for the purposes of dishonesty. Every
honest purpose is answered as well and better without it.
We have no hesitation, therefore, in declaring our conviction
that the making of these notes a legal tender was not a necessary
or proper means to the carrying on war or to the exercise of any
express power of the government.
But the absence of necessity is not our only, or our weightiest,
objection to this legal tender clause. We still think,
notwithstanding the argument adduced to the contrary, that it does
violate an express provision of the Constitution and the spirit, if
not the letter, of the whole instrument. It cannot be maintained
that legislation justly
Page 79 U. S. 580
obnoxious to such objections can be maintained as the exercise
of an implied power. There can be no implication against the
Constitution. Legislation, to be warranted as the exercise of
implied powers, must not be "prohibited, but consistent with the
letter and spirit of the Constitution."
The Fifth Amendment provides that no person shall be deprived of
life, liberty, or property without compensation or due process of
law. The opinion of the former minority says that the argument
against the validity of the legal tender clause, founded on this
constitutional provision, is "too vague for their perception." It
says that a "declaration of war would be thus unconstitutional"
because it might depreciate the value of property, and "the
abolition of tariff on sugar, or iron" because it might destroy the
capital employed in those manufactures; and "the successive issues
of government bonds" because they might make those already in
private hands less valuable. But it seems to have escaped the
attention of the then minority that to declare war, to lay and
repeal taxes, and to borrow money are all express powers, and that
the then majority were opposing the prohibition of the Constitution
to the claim of an implied power. Besides, what resemblance is
there between the effect of the exercise of these express powers
and the operation of the legal tender clause upon preexisting
debts? The former are indirect effects of the exercise of
undisputed powers. The latter acts directly upon the relations of
debtor and creditor. It violates that fundamental principle of all
just legislation that the legislature shall not take the property
of A. and give it to B. It says that B., who has purchased a farm
of A. for a certain price, may keep the farm without paying for it
if he will only tender certain notes which may bear some proportion
to the price, or be even worthless. It seems to us that this is a
manifest violation of this clause of the Constitution.
We think also that it is inconsistent with the spirit of the
Constitution in that it impairs the obligation of contracts. In the
opinion of the then minority, it is frankly said: "Undoubtedly it
is a law impairing the obligation of contracts made
Page 79 U. S. 581
before its passage," but it is immediately added: "While the
Constitution forbids the states to pass such laws, it does not
forbid Congress," and this opinion, as well as the opinion just
read, refers to the express authority to establish a uniform system
of bankruptcy as a proof that it was not the intention of the
Constitution to withhold that power. It is true that the
Constitution grants authority to pass a bankrupt law, but our
inference is that in this way only can Congress discharge the
obligation of contracts. It may provide for ascertaining the
inability of debtors to perform their contracts, and, upon the
surrender of all their property, may provide for their discharge.
But this is a very different thing from providing that they may
satisfy contracts without payment, without pretense of inability,
and without any judicial proceeding.
That Congress possesses the general power to impair the
obligation of contracts is a proposition which, to use the language
of Chief Justice Marshall, [
Footnote
3/10] "must find its vindication in a train of reasoning not
often heard in courts of justice." "It may well be added," said the
same great judge, [
Footnote
3/11]
"whether the nature of society and of government does not
prescribe some limits to legislative power, and if any be
prescribed, where are they to be found if the property of an
individual, fairly and honestly acquired, can be seized without
compensation? To the legislature all legislative power is granted,
but the question whether the act of transferring the property of an
individual to the public is in the nature of a legislative power is
well worthy of serious reflection."
And if the property of an individual cannot be transferred to
the public, how much less to another individual?
These remarks of Chief Justice Marshall were made in a case in
which it became necessary to determine whether a certain act of the
Legislature of Georgia was within the constitutional prohibition
against impairing the obligation of contracts. And they assert
fundamental principles of society and government in which that
prohibition had its origin.
Page 79 U. S. 582
They apply with great force to the construction of the
Constitution of the United States. In like manner and spirit, MR.
JUSTICE CHASE had previously declared [
Footnote 3/12] that "an act of the legislature contrary
to the great first principles of the social compact cannot be
considered a rightful exercise of legislative authority." Among
such acts he instances "a law that destroys or impairs the lawful
private contracts of citizens." Can we be mistaken in saying that
such a law is contrary to the spirit of a Constitution ordained to
establish justice? Can we be mistaken in thinking that if Marshall
and Story were here to pronounce judgment in this case, they would
declare the legal tender clause now in question to be prohibited by
and inconsistent with the letter and spirit of the
Constitution?
It is unnecessary to say that we reject wholly the doctrine,
advanced for the first time, we believe, in this Court by the
present majority that the legislature has any "powers under the
Constitution which grow out of the aggregate of powers conferred
upon the government or out of the sovereignty instituted by it." If
this proposition be admitted, and it be also admitted that the
legislature is the sole judge of the necessity for the exercise of
such powers, the government becomes practically absolute and
unlimited.
Our observations thus far have been directed to the question of
the constitutionality of the legal tender clause and its operation
upon contracts made before the passage of the law. We shall now
consider whether it be constitutional in its application to
contracts made after its passage. In other words, whether Congress
has power to make anything but coin a legal tender.
And here it is well enough again to say that we do not question
the authority to issue notes or to fit them for a circulating
medium, or to promote their circulation by providing for their
receipt in payment of debts to the government and for redemption
either in coin or in bonds -- in short, to adapt them to use as
currency. Nor do we question the
Page 79 U. S. 583
lawfulness of contracts stipulating for payment in such notes or
the propriety of enforcing the performance of such contracts by
holding the tender of such currency according to their terms
sufficient. The question is has Congress power to make the notes of
the government, redeemable or irredeemable, a legal tender without
contract and against the will of the person to whom they are
tendered? In considering this question, we assume as a fundamental
proposition that it is the duty of every government to establish a
standard of value. The necessity of such a standard is indeed
universally acknowledged. Without it, the transactions of society
would become impossible. All measures, whether of extent, or
weight, or value, must have certain proportions of that which they
are intended to measure. The unit of extent must have certain
definite length, the unit of weight certain definite gravity, and
the unit of value certain definite value. These units, multiplied
or subdivided, supply the standards by which all measures are
properly made. The selection, therefore, by the common consent of
all nations of gold and silver as the standard of value was
natural, or, more correctly speaking, inevitable. For whatever
definitions of value political economists may have given, they all
agree that gold and silver have more value in proportion to weight
and size, and are less subject to loss by wear or abrasion, than
any other material capable of easy subdivision and impression, and
that their value changes less and by slower degrees, through
considerable periods of time, than that of any other substance
which could be used for the same purpose. And these are qualities
indispensable to the convenient use of the standard required. In
the construction of the constitutional grant of power to establish
a standard of value,
every presumption is therefore
against that which would authorize the adoption of any other
materials than those sanctioned by universal consent.
But the terms of the only express grant in the Constitution of
power to establish such a standard leave little room for
presumptions. The power conferred is the power to coin money, and
these words must be understood as they were
Page 79 U. S. 584
used at the time the Constitution was adopted. And we have been
referred to no authority which at that time defined coining
otherwise than as minting or stamping metals for money, or money
otherwise than as metal coined for the purposes of commerce. These
are the words of Johnson, whose great dictionary contains no
reference to money of paper.
It is true that notes issued by banks, both in England and
America, were then in circulation and were used in exchanges, and
in common speech called money, and that bills of credit, issued
both by Congress and by the states, had been recently in
circulation under the same general name; but these notes and bills
were never regarded as real money, but were always treated as its
representatives only, and were described as currency. The legal
tender notes themselves do not purport to be anything else than
promises to pay money. They have been held to be securities, and
therefore exempt from state taxation, [
Footnote 3/13] and the idea that it was ever designed
to make such notes a standard of value by the framers of the
Constitution is wholly new. It seems to us impossible that it could
have been entertained. Its assertion seems to us to ascribe folly
to the framers of our fundamental law and to contradict the most
conspicuous facts in our public history.
The power to coin money was a power to determine the fineness,
weight, and denominations of the metallic pieces by which values
were to be measured, and we do not perceive how this meaning can be
extended without doing violence to the very words of the
Constitution by imposing on them a sense they were never intended
to bear. This construction is supported by contemporaneous and all
subsequent action of the legislature; by all the recorded
utterances of statesmen and jurists, and the unbroken tenor of
judicial opinion until a very recent period, when the excitement of
the civil war led to the adoption, by many, of different views.
Page 79 U. S. 585
The sense of the Convention which framed the Constitution is
clear from the account given by Mr. Madison of what took place when
the power to emit bills of credit was stricken from the reported
draft. He says distinctly that he acquiesced in the motion to
strike out because the government would not be disabled thereby
from the use of public notes, so far as they would be safe and
proper, while it cut off the pretext for a paper currency, and
particularly for making the bills a tender either for public or
private debts. [
Footnote 3/14]
The whole discussion upon bills of credit proves beyond all
possible question that the Convention regarded the power to make
notes a legal tender as absolutely excluded from the Constitution.
[
Footnote 3/15]
The papers of the federalist, widely circulated in favor of the
ratification of the Constitution, discuss briefly the power to coin
money as a power to fabricate metallic money, without a hint that
any power to fabricate money of any other description was given to
Congress, [
Footnote 3/16] and the
views which it promulgated may be fairly regarded as the views of
those who voted for adoption.
Acting upon the same views, Congress took measures for the
establishment of a mint, exercising thereby the power to coin
money, and has continued to exercise the same power in the same way
until the present day. It established the dollar as the money unit,
determined the quantity and quality of gold and silver of which
each coin should consist, and prescribed the denominations and
forms of all coins to be issued. [
Footnote 3/17] Until recently, no one in Congress ever
suggested that that body possessed power to make anything else a
standard of value.
Statesmen who have disagreed widely on other points have agreed
in the opinion that the only constitutional measures of value are
metallic coins, struck as regulated by the authority of Congress.
Mr. Webster expressed not only his opinion but the universal and
settled conviction of
Page 79 U. S. 586
the country when he said: [
Footnote 3/18]
"Most unquestionably there is no legal tender and there can be
no legal tender in this country, under the authority of this
government or any other, but gold and silver, either the coinage of
our mints or foreign coin at rates regulated by Congress. This is a
constitutional principle perfectly plain and of the very highest
importance. The states are prohibited from making anything but gold
and silver a tender in payment of debts, and although no such
express prohibition is applied to Congress,
yet as Congress has
no power granted to it in this respect but to coin money and
regulate the value of foreign coin, it clearly has no power to
substitute paper or anything else for coin as a tender in payment
of debts and in discharge of contracts."
And this Court, in
Gwin v. Breedlove, [
Footnote 3/19] said: "
By the Constitution of
the United States, gold and silver coin made current by law
can only be tendered in payment of debts." And in
United States v. Marigold, [
Footnote 3/20] this Court, speaking of the trust and
duty of maintaining a uniform and pure metallic standard of uniform
value throughout the Union, said:
"The power of coining money and regulating its value
was
delegated to Congress by the Constitution for the very
purpose, as assigned by the framers of that instrument,
of
creating and preserving the uniformity and purity of such a
standard of value."
The present majority of the Court say that legal tender notes
"have become the universal measure of values," and they hold that
the legislation of Congress substituting such measures for coin by
making the notes a legal tender in payment is warranted by the
Constitution.
But if the plain sense of words, if the contemporaneous
exposition of parties, if common consent in understanding, if the
opinions of courts avail anything in determining the meaning of the
Constitution, it seems impossible to doubt that the power to coin
money is a power to establish a uniform standard of value, and that
no other power to establish such a standard, by making notes a
legal tender, is conferred upon Congress by the Constitution.
Page 79 U. S. 587
My brothers CLIFFORD and FIELD concur in these views, but in
consideration of the importance of the principles involved, will
deliver their separate opinions. My brother NELSON also
dissents.
[
Footnote 3/1]
17 U. S. 4
Wheat. 421.
[
Footnote 3/2]
75 U. S. 8
Wall. 606.
[
Footnote 3/3]
76 U. S. 9 Wall.
41.
[
Footnote 3/4]
27 November, 1869.
[
Footnote 3/5]
29 January, 1870.
[
Footnote 3/6]
31 January, 1870.
[
Footnote 3/7]
1 Story on the Constitution, p. 42, § 1251.
[
Footnote 3/8]
75 U. S. 8
Wall. 548.
[
Footnote 3/9]
Letters of the Secretary of the Treasury to the Committee of
Ways and Means, January 22 and 29, 1862; Spaulding's Financial
History, pp. 27, 46, 54.
[
Footnote 3/10]
Fletcher v.
Peck, 6 Cranch 132.
[
Footnote 3/11]
Ibid., 10 U. S.
135.
[
Footnote 3/12]
Calder v.
Bull, 3 Dall. 388.
[
Footnote 3/13]
Bank v.
Supervisors, 7 Wall. 31.
[
Footnote 3/14]
3 Madison's Papers, 1346.
[
Footnote 3/15]
See infra, pp.
79 U. S. 653,
79 U. S. 656 --
REP.
[
Footnote 3/16]
Dawson's Federalist 294.
[
Footnote 3/17]
1 Stat. at Large 225, 246, and subsequent acts.
[
Footnote 3/18]
4 Webster's Works 271, 280.
[
Footnote 3/19]
43 U. S. 2 How.
38.
[
Footnote 3/20]
50 U. S. 9 How.
567.
MR. JUSTICE CLIFFORD, dissenting:
Money, in the constitutional sense, means coins of gold and
silver fabricated and stamped by authority of law as a measure of
value, pursuant to the power vested in Congress by the
Constitution. [
Footnote 4/1]
Coins of copper may also be minted for small fractional
circulation, as authorized by law and the usage of the government
for eighty years, but it is not necessary to discuss that topic at
large in this investigation. [
Footnote
4/2]
Even the authority of Congress upon the general subject does not
extend beyond the power to coin money, regulate the value thereof
and of foreign coin. [
Footnote
4/3]
Express power is also conferred upon Congress to fix the
standard of weights and measures, and of course that standard, as
applied to future transactions, may be varied or changed to promote
the public interest, but the grant of power in respect to the
standard of value is expressed in more guarded language, and the
grant is much more restricted.
Power to fix the standard of weights and measures is evidently a
power of comparatively wide discretion, but the power to regulate
the value of the money authorized by the Constitution to be coined
is a definite and precise grant of power, admitting of very little
discretion in its exercise, and is not equivalent, except to a very
limited extent, to the power to fix the standard of weights and
measures, as the money authorized by that clause of the
Constitution is coined money, and as a necessary consequence must
be money of actual value, fabricated from the precious metals
generally used for that purpose at the period when the Constitution
was framed.
Page 79 U. S. 588
Coined money such as is authorized by that clause of the
instrument consists only of the coins of the United States
fabricated and stamped by authority of law, and is the same money
as that described in the next clause of the same section as the
current coins of the United States, and is the same money also as
"the gold and silver coins" described in the tenth section of the
same article, which prohibits the states from coining money,
emitting bills of credit, or making "anything but gold and silver
coin a tender in payment of debts."
Intrinsic value exists in gold and silver, as well before as
after it is fabricated and stamped as coin, which shows
conclusively that the principal discretion vested in Congress under
that clause of the Constitution consists in the power to determine
the denomination, fineness, or value and description of the coins
to be struck, and the relative proportion of gold or silver,
whether standard or pure, and the proportion of alloy to be used in
minting the coins, and to prescribe the mode in which the intended
object of the grant shall be accomplished and carried into
practical effect.
Discretion, to some extent, in prescribing the value of the
coins minted is beyond doubt vested in Congress, but the plain
intent of the Constitution is that Congress, in determining that
matter, shall be governed chiefly by the weight and intrinsic value
of the coins, as it is clear that if the stamped value of the same
should much exceed the real value of gold and silver not coined,
the minted coins would immediately cease to be either current coins
or a standard of value as contemplated by the Constitution.
[
Footnote 4/4] Commercial
transactions imperiously require a standard of value, and the
commercial world, at a very early period in civilization, adopted
gold and silver as the true standard for that purpose, and the
standard originally adopted has ever since continued to be so
regarded by universal consent to the present time.
Paper emissions have, at one time or another, been authorized
and employed as currency by most commercial nations,
Page 79 U. S. 589
and by no government, past or present, more extensively than by
the United States, and yet it is safe to affirm that all experience
in its use as a circulating medium has demonstrated the proposition
that it cannot by any legislation, however stringent, be made a
standard of value or the just equivalent of gold and silver.
Attempts of the kind have always failed, and no body of men,
whether in public or private stations, ever had more instructive
teachings of the truth of that remark than the patriotic men who
framed the federal Constitution, as they had seen the power to emit
bills of credit freely exercised during the war of the Revolution
not only by the Confederation, but also by the states, and knew
from bitter experience its calamitous effects and the utter
worthlessness of such a circulating medium as a standard of value.
Such men, so instructed, could not have done otherwise than they
did do, which was to provide an irrepealable standard of value, to
be coined from gold and silver, leaving as little upon the subject
to the discretion of Congress as was consistent with a wise
forecast and an invincible determination that the essential
principles of the Constitution should be perpetual as the means to
secure the blessings of liberty to themselves and their
posterity.
Associated as the grant to coin money and regulate the value
thereof is with the grant to fix the standard of weights and
measures, the conclusion, when that fact is properly weighed in
connection with the words of the grant, is irresistible that the
purpose of the framers of the Constitution was to provide a
permanent standard of value which should, at all times and under
all circumstances, consist of coin, fabricated and stamped, from
gold and silver, by authority of law, and that they intended at the
same time to withhold from Congress, as well as from the states,
the power to substitute any other money as a standard of value in
matters of finance, business, trade, or commerce.
Support to that view may also be drawn from the last words of
the clause giving Congress the unrestricted power to regulate the
value of foreign coin, as it would be difficult if not impossible
to give full effect to the standard of value
Page 79 U. S. 590
prescribed by the Constitution, in times of fluctuation, if the
circulating medium could be supplied by foreign coins not subject
to any congressional regulation as to their value.
Exclusive power to regulate the alloy and value of the coin
struck by their own authority or by the authority of the states was
vested in Congress under the Confederation, but the Congress was
prohibited from enacting any regulation as to the value of the
coins unless nine states assented to the proposed regulation.
Subject to the power of Congress to pass such regulations, it is
unquestionably true that the states, under the Confederation as
well as the United States, possessed the power to coin money, but
the Constitution, when it was adopted, denied to the states all
authority upon the subject, and also ordained that they should not
make anything but gold and silver coin a tender in payment of
debts.
Beyond all doubt, the framers of the Constitution intended that
the money unit of the United States, for measuring values, should
be one dollar, as the word dollar in the plural form is employed in
the body of the Constitution, and also in the Seventh Amendment,
recommenced by Congress at its first session after the Constitution
was adopted. Two years before that, to-wit, July 6, 1785, the
Congress of the Confederation enacted that the money unit of the
United States should "be one dollar," and one year later, to-wit,
August 8, 1786, they established the standard for gold and silver,
and also provided that the money of account of the United States
should correspond with the coins established by law. [
Footnote 4/5]
On the 4th of March, 1789, Congress first assembled under the
Constitution, and proceeded without unnecessary delay to enact such
laws as were necessary to put the government in operation which the
Constitution had ordained and established. Ordinances had been
passed during the Confederation
Page 79 U. S. 591
to organize the executive departments, and for the establishment
of a mint, but the new Constitution did not perpetuate any of those
laws, and yet Congress continued to legislate for a period of three
years before any new law was passed prescribing the money unit or
the money of account, either for "the public offices" or for the
courts. Throughout that period, it must have been understood that
those matters were impliedly regulated by the Constitution, as
tariffs were enacted, tonnage duties imposed, laws passed for the
collection of duties, the several executive departments created,
and the judiciary of the United States organized and empowered to
exercise full jurisdiction under the Constitution.
Duties of tonnage and import duties were required, by the act of
the 31st of July, 1789, to be paid "in gold and silver coin," and
Congress in the same act adopted comprehensive regulations as to
the value of foreign coin, but no provision was made for coining
money or for a standard of value, except so far as that subject is
involved in the regulation as to the value of foreign coin or for a
money unit, nor was any regulation prescribed as to the money of
account. Revenue for the support of the government, under those
regulations, was to be derived solely from duties of tonnage and
import duties, and the express provision was that those duties
should be collected in gold and silver coin. [
Footnote 4/6]
Legislation under the Constitution had proceeded thus far before
the Treasury Department was created. Treasury regulations for the
collection, safekeeping, and disbursement of the public moneys
became indispensable, and Congress, on the 2d September, 1789,
passed the act to establish the Treasury Department, which has ever
since remained in force. [
Footnote
4/7] By that act, the Secretary of the Treasury is declared to
be the head of the department, and it is made his duty, among other
things, to digest and prepare plans for the improvement and
management of the public finances
Page 79 U. S. 592
and for the support of the public credit; to prepare and report
estimates of the public revenue and of the public expenditures; to
superintend the collection of the revenue; to prescribe forms of
keeping and stating accounts and for making returns; to grant all
warrants for moneys to be issued from the Treasury, in pursuance of
appropriations by law, and to perform all such services relative to
the finances as he shall be directed to perform.
Moneys collected from duties of tonnage and from import duties
constituted at that period the entire resources of the national
Treasury, and the antecedent act of Congress, providing for the
collection of those duties, imperatively required that all such
duties should be paid in gold and silver coin, from which it
follows that the moneys mentioned in the act creating the Treasury
Department were moneys of gold and silver coin which were collected
as public revenue from the duties of tonnage and import duties
imposed by the before-mentioned prior acts of Congress.
Appropriations made by Congress were understood as appropriations
of moneys in the Treasury, and all warrants issued by the Secretary
of the Treasury were understood to be warrants for the payment of
gold and silver coin. Forms for keeping and stating accounts and
for making returns and for warrants for moneys to be issued from
the Treasury were prescribed, and in all those forms the Secretary
of the Treasury adopted the money unit recognized in the
Constitution, and which had been ordained four years before by the
Congress of the Confederation.
Argument to show that the national Treasury was organized on the
basis that the gold and silver coins of the United States were to
be the standard of value is unnecessary, as it is a historical fact
which no man or body of men can ever successfully contradict.
Public attention had been directed to the necessity of establishing
a mint for the coinage of gold and silver several years before the
Convention met to frame the Constitution, and a committee was
appointed by the Congress of the Confederation to consider and
report upon the subject. They reported on the 21st February,
Page 79 U. S. 593
1782, more than a year before the treaty of peace, in favor of
creating such an establishment, and on the 16th of October, 1786,
the Congress adopted an ordinance providing that a mint should be
established for the coinage of gold, silver, and copper, agreeable
to the resolves of Congress previously mentioned, which prescribed
the standard of gold and silver and recognized the money unit
established by the resolves passed in the preceding year. [
Footnote 4/8]
Congressional legislation organizing the new government had now
progressed to the point where it became necessary to reexamine that
subject and to make provision for the exercise of the power to coin
money, as authorized by the Constitution. Pursuant to that power,
Congress, on April 2, 1792, passed the act establishing a mint for
the purpose of a national coinage, and made provision, among other
things, that coins of gold and silver of certain fineness and
weight and of certain denominations, value and descriptions, should
be from time to time struck and coined at the said mint. Specific
provision is there made for coining gold and silver coins as
follows: first, gold coins, to-wit: Eagles of the value of ten
dollars or units; half-eagles of the value of five dollars;
quarter-eagles of the value of two and a half dollars, the act
specifying in each case the number of grains and fractions of a
grain the coin shall contain, whether fabricated from pure or
standard gold. Second, silver coins, to-wit, "DOLLARS OR UNITS,"
each to contain 371 grains and 4/16ths parts of a grain of pure
silver, or 416 grains of standard silver. Like provision is also
made for the coinage of half-dollars, quarter-dollars, dimes, and
half-dimes, and also for the coinage of certain copper coins, but
it is not necessary to enter much into those details in this
case.
Provision, it must be conceded, is not there made in express
terms that the money unit of the United States shall be one dollar,
as in the ordinance passed during the Confederation, but the act
under consideration assumes throughout that the
Page 79 U. S. 594
coin called dollar is the coin employed for that purpose, as is
obvious from the fact that the words dollars and units are treated
as synonymous, and that all the gold coins previously described in
the same section are measured by that word as the acknowledged
money unit of the Constitution. Very strong doubts are entertained
whether an act of Congress is absolutely necessary to constitute
the gold and silver coins of the United States, fabricated and
stamped as such by the proper executive officers of the mint, a
legal tender in payment of debts. Constituted as such coins are by
the Constitution the standard of value, the better opinion would
seem to be that they become legal tender for that purpose, if
minted of the required weight and fineness, as soon as they are
coined and put in circulation by lawful authority, but it is
unnecessary to decide that question in this case, as the Congress,
by the 16th section of the act establishing a mint, provided that
all the gold and silver coins which shall have been struck at, and
issued from, the said mint shall be a lawful tender in all payments
whatsoever -- those of full weight "according to the respective
values herein declared, and those of less than full weight at
values proportioned to their respective weights." Such a regulation
is at all events highly expedient, as all experience shows that
even gold and silver coins are liable to be diminished in weight by
wear and abrasion, even if it is not absolutely necessary in order
to constitute the coins, if of full weight, a legal tender.
Enough has already been remarked to show that the money unit of
the United States is the coined dollar, described in the act
establishing the mint, but if more be wanted, it will be found in
the 20th section of that act, which provides that the money of
account of the United States shall be expressed in dollars or
units, dimes or tenths &c., and that all accounts in the public
offices and all proceedings in the federal courts all be kept and
had in conformity to that regulation. [
Footnote 4/9]
Completed, as the circle of measures adopted by Congress
Page 79 U. S. 595
were, to put the new government into successful operation by the
passage of that act, it will be instructive to take a brief review
of the important events which occurred within the period of ten
years next preceding its passage, or of the ten years next
following the time when that measure was first proposed in the
Congress of the Confederation. Two reasons suggest the 21st of
February, 1782, as the time to commence the review, in addition to
the fact that it was on that day that the committee of Congress
made their report approving of the project to establish a national
mint. [
Footnote 4/10] They are as
follows: (1) because that date just precedes the close of the War
of the Revolution, and (2) because the date at the same time
extends back to a period when all America had come to the
conclusion that all the paper currency in circulation was utterly
worthless, and that nothing was fit for a standard of value but
gold and silver coin fabricated and stamped by the national
authority. Discussion upon the subject was continued and the
ordinance was passed, but the measure was not put in operation, as
the Convention met the next year, and the Constitution was framed,
adopted, and ratified, the President and the members of Congress
were elected, laws were passed, the judicial system was organized,
the executive departments were created, the revenue system
established, and provision was made to execute the power vested in
Congress to coin money and provide a standard of value, as ordained
by the Constitution.
Perfect consistency characterizes the measures of that entire
period in respect to the matter in question, and it would be
strange if it had been otherwise, as the whole series of measures
were to a very large extent the doings of the same class of men,
whether the remark is applied to the old Congress, or the
Convention which framed the Constitution, or to the first and
second sessions of the new Congress which passed the laws referred
to and put the new system of government under the Constitution into
full operation. Wise and complete as those laws were, still
some
Page 79 U. S. 596
difficulties arose, as the several states had not adopted the
money unit of the United States nor the money of account prescribed
by the twentieth section of the act establishing the mint. Such
embarrassments, however, were chiefly felt in the federal courts,
and they were not of long continuance, as the several states, one
after another, in pretty rapid succession, adopted the new system
established by Congress both as to the money unit and the money of
account. Virginia, December 19, 1792, reenacted that section in the
act of Congress without any material alteration, and New Hampshire,
on the 20th of February, 1794, passed a similar law. [
Footnote 4/11] Massachusetts adopted the
same provision the next year, and so did Rhode Island and South
Carolina. [
Footnote 4/12] Georgia
concurred on the 22d of February, 1796, and New York on the 27th of
January, 1797, and all the other states adopted the same regulation
in the course of a few years. [
Footnote 4/13] State concurrence was essential in those
particulars to the proper working of the new system, and it was
cheerfully accorded by the state legislatures without unnecessary
delay.
Congress established as the money unit the coin mentioned in the
Constitution, and the one which had been adopted as such seven
years before in the resolve passed by the Congress of the
Confederation. Dollars, and decimals of dollars were adopted as the
money of account by universal consent, as may be inferred from the
unanimity exhibited by the states in following the example of
Congress. Nothing remained for Congress to do to perfect the new
system but to execute the power to coin money and regulate the
value thereof, as it is clear that the Constitution makes no
provision for a standard of value unless the power to establish it
is conferred by that grant.
Power to fix the standard of weights and measures is vested in
Congress by the Constitution in plain and unambiguous
Page 79 U. S. 597
terms, and it was never doubted, certainly not until within a
recent period, that the power conferred to coin money or to
fabricate and stamp coins from gold and silver, which in the
constitutional sense is the same thing, together with the power to
determine the fineness, weight, and denominations of the moneys
coined, were intended to accomplish the same purpose as to values.
Indubitably it was so understood by Congress in prescribing the
various regulations contained in the act establishing the national
mint, and it continued to be so understood by all branches of the
government -- executive, legislative, and judicial -- and by the
whole people of the United States for the period of seventy years
from the passage of that act.
New regulations became necessary, and were passed in the
meantime increasing slightly the proportion of alloy used in
fabricating the gold coins, but if those enactments are carefully
examined, it will be found that no one of them contains anything
inconsistent in principle with the views here expressed. Gold, at
the time the act establishing the mint became a law, was valued 15
to 1 as compared with silver, but the disparity in value gradually
increased, and to such an extent that the gold coins began to
disappear from circulation, and to remedy that evil, Congress found
it necessary to augment the
relative proportion of alloy
by diminishing the required amount of gold, whether pure or
standard. Eagles coined under that act were required to contain
each 232 grains of pure gold or 258 grains of standard gold.
[
Footnote 4/14] Three years
later, Congress enacted that the standard for both gold and silver
coins should thereafter be such that of 1000 parts by weight, 900
should be of pure metal and 100 of alloy, by which the gross weight
of the dollar was reduced to 412 1/2 grains, but the fineness of
the coins was correspondingly increased, so that the money unit
remained of the same intrinsic value as under the original act.
Apply that rule to the eagle and it will be seen that its gross
weight would be increased, as it was in fact by that act, but it
continued
Page 79 U. S. 598
to contain, as under the preceding act, 232 grains of pure gold
and no more, showing conclusively that no change was made in the
value of the coins. [
Footnote
4/15]
Double eagles and gold dollars were authorized to be "struck and
coined" at the mint by the Act of March 3, 1849, but the standard
established for other gold coins was not changed, and the provision
was that the new coins should also be legal tender for their coined
value. [
Footnote 4/16]
Fractional silver coins were somewhat reduced in value by the
Act of February 21, 1853, but the same act provided to the effect
that the silver coins issued in conformity thereto should not be a
legal tender for any sum exceeding five dollars, showing that the
purpose of the enactment was to prevent the fractional coins, so
essential for daily use, from being hoarded or otherwise withdrawn
from circulation. [
Footnote
4/17]
Suppose it be conceded, however, that the effect of that act was
slightly to debase the fractional silver coins struck and coined
under it, still it is quite clear that the amount was too
inconsiderable to furnish any solid argument against the
proposition that the standard of value in the United States was
fixed by the Constitution, and that such was the understanding,
both of the government and of the people of the United States, for
a period of more than seventy years from the time the Constitution
was adopted and put in successful operation under the laws of
Congress. Throughout that period, the value of the money unit was
never diminished, and it remains today, in respect to value, what
it was when it was defined in the act establishing the mint, and it
is safe to affirm that no one of the changes made in the other
coins, except perhaps the fractional silver coins, ever extended
one whit beyond the appropriate limit of constitutional
regulation.
Treasury notes, called United States notes, were authorized to
be issued by the Act of February 25, 1862, to the amount of
$150,000,000, on the credit of the United States, but they were not
to bear interest, and were to be made
Page 79 U. S. 599
payable to bearer at the Treasury. They were to be issued by the
Secretary of the Treasury, and the further provision was that the
notes so issued should be lawful money and legal tender in payment
of all debts, public and private, within the United States, except
duties on imports and interest upon bonds and notes of the United
States, which the act provides "shall be paid in coin." [
Footnote 4/18] Subsequent acts passed for
a similar purpose also except "certificates of indebtedness and of
deposit," but it will not be necessary to refer specially to the
other acts, as the history of that legislation is fully given in
the prior decision of this Court upon the same subject. [
Footnote 4/19]
Strictly examined, it is doubtful whether either of the cases
before the Court presents any such questions as those which have
been discussed in the opinion of the majority of the Court just
read; but suppose they do, which is not admitted, it then becomes
necessary to inquire in the first place whether those questions are
not closed by the recorded decisions of this Court. Two questions
are examined in the opinion of the majority of the Court: (1)
whether the legal tender acts are constitutional as to contracts
made before the acts were passed; (2) whether they are valid if
applied to contracts made since their passage.
Assume that the views here expressed are correct, and it matters
not whether the contract was made before or after the act of
Congress was passed, as it necessarily follows that Congress cannot
under any circumstances make paper promises of any kind a legal
tender in payment of debts. Prior to the decision just pronounced,
it is conceded that the second question presented in the record was
never determined by this Court except as it is involved in the
first question, but it is admitted by the majority of the Court
that the first question -- that is, the question whether the acts
under consideration are constitutional as to contracts made before
their passage -- was fully presented in the case of
Hepburn
v.
Page 79 U. S. 600
Griswold, and that the Court decided that an act of
Congress making mere paper promises to pay dollars a legal tender
in payment of debts previously contracted is unconstitutional and
void.
Admitted or not, it is as clear as anything in legal decision
can be that the judgment of the Court in that case controls the
first question presented in the cases before the Court unless it be
held that the judgment in that case was given for the wrong party
and that the opinion given by the Chief Justice ought to be
overruled.
Attempt is made to show that the second question is an open one,
but the two, in my judgment, involve the same considerations, as
Congress possesses no other power upon the subject than that which
is derived from the grant to coin money, regulate the value
thereof, and of foreign coin. By that remark it is not meant to
deny the proposition that Congress, in executing the express
grants, may not pass all laws which shall be necessary and proper
for carrying the same into execution, as provided in another clause
of the same section of the Constitution. Much consideration of that
topic is not required, as the discussion was pretty nearly
exhausted by the Chief Justice in the case of
Hepburn v.
Griswold, [
Footnote 4/20]
which arose under the same act and in which he gave the opinion. In
that case, the contract bore date prior to the passage of the law,
and he showed conclusively that it could never be necessary and
proper, within the meaning of the Constitution, that Congress, in
executing any of the express powers, should pass laws to compel a
creditor to accept paper promises as fulfilling a contract for the
payment of money expressed in dollars. Obviously the decision was
confined to the case before the Court, but I am of the opinion that
the same rule must be applied whether the contract was made before
or after the passage of the law, as the contract for the payment of
money, expressed in dollars, is a contract to make the payment in
such money as the Constitution recognizes and establishes as a
standard of value. Money
Page 79 U. S. 601
values can no more be measured without a standard of value than
distances without a standard of extent, or quantities without a
standard of weights or measures, and it is as necessary that there
should be a money unit as that there should be a unit of extent, or
of weight, or quantity. [
Footnote
4/21]
Credit currency, whether issued by the states or the United
States, or by private corporations or individuals, is not
recognized by the Constitution as a standard of value, nor can it
be made such by any law which Congress or the states can pass, as
the laws of trade are stronger than any legislative enactment.
Commerce requires a standard of value, and all experience warrants
the prediction that commerce will have it, whether the United
States agree or disagree, as the laws of commerce in that respect
are stronger than the laws of any single nation of the commercial
world. [
Footnote 4/22] Values
cannot be measured without a standard any more than time or
duration, or length, surface, or solidity, or weight, gravity, or
quantity. Something in every such case must be adopted as a unit
which bears a known relation to that which is to be measured, as
the dollar for values, the hour for time or duration, the foot of
twelve inches for length, the yard for cloth measure, the square
foot or yard for surface, the cubic foot for solidity, the gallon
for liquids, and the pound for weights, the pound avoirdupois being
used in most commercial transactions and the pound troy "for
weighing gold and silver and precious stones, except diamonds."
[
Footnote 4/23]
Unrestricted power "to fix the standard of weights and measures"
is vested in Congress, but until recently Congress had not enacted
any general regulations in execution of that power. [
Footnote 4/24] Regulations upon the
subject existed in the states at the adoption of the Constitution,
the same as those
Page 79 U. S. 602
which prevailed at that time in the parent country, and Judge
Story says that the understanding was that those regulations
remained in full force and that the states, until Congress should
legislate, possessed the power to fix their own weights and
measures. [
Footnote 4/25]
Power to coin money and regulate the value of domestic and
foreign coin was vested in the national government to produce
uniformity of value and to prevent the embarrassments of a
perpetually fluctuating and variable currency. [
Footnote 4/26]
Money, says the same commentator, is the universal medium or
common standard by a comparison with which the value of all
merchandise may be ascertained; and he also speaks of it as "a sign
which represents the respective values of all other commodities."
[
Footnote 4/27] Such a power --
that is, the power to coin money -- he adds, is one of the ordinary
prerogatives of sovereignty, and is almost universally exercised in
order to preserve a proper circulation of good coin of a known
value in the home market. [
Footnote
4/28]
Interests of such magnitude and pervading importance as those
involved in providing for a uniform standard of value throughout
the Union were manifestly entitled to the protection of the
national authority, and in view of the evils experienced for the
want of such a standard during the war of the Revolution, when the
country was inundated with floods of depreciated paper, the members
of the Convention who framed the Constitution did not hesitate to
confide the power to Congress not only to coin money and regulate
the value thereof, but also the power to regulate the value of
foreign coin, which was denied to the Congress of the
Confederation. [
Footnote
4/29]
Influenced by these considerations and others expressed
Page 79 U. S. 603
in the opinion of the Chief Justice, this Court decided in the
case referred to that the act of Congress making the notes in
question "lawful money and a legal tender in payment of debts"
could not be vindicated as necessary and proper means for carrying
into effect the power vested in Congress to coin money and regulate
the value thereof, or any other express power vested in Congress
under the Constitution. Unless that case, therefore, is overruled,
it is clear in my judgment that both the cases before the Court are
controlled by that decision. Controversies determined by the
Supreme Court are finally and conclusively settled, as the
decisions are numerous that the Court cannot review and reverse
their own judgments. [
Footnote
4/30]
But where the parties are different, it is said the Court in a
subsequent case may overrule a former decision, and it must be
admitted that the proposition, in a technical point of view, is
correct. Such examples are to be found in the reported decisions of
the Court, but they are not numerous and it seems clear that the
number ought never to be increased, especially in a matter of so
much importance, unless the error is plain and upon the clearest
convictions of judicial duty.
Judgment was rendered for the plaintiff in that case on the 17th
of September, 1864, in the highest court of the state, and on the
23d of June in the succeeding year the defendants sued out a writ
of error and removed the cause into this Court for reexamination.
[
Footnote 4/31] Under the regular
call of the docket, the case was first argued at the December Term
1867, but at the suggestion of the Attorney General, an order was
passed that it be reargued, and the case was accordingly continued
for that purpose. Able counsel appeared at the next term and it was
again elaborately argued on both sides. Four or five other cases
were also on the calendar, supposed at that time to involve the
same constitutional
Page 79 U. S. 604
questions, and those cases were also argued, bringing to the aid
of the Court an unusual array of counsel of great learning and
eminent abilities. Investigation and deliberation followed,
authorities were examined, and oft-repeated consultations among the
Justices ensued, and the case was held under advisement as long as
necessary to the fullest examination by all the Justices of the
Court before the opinion of the Court was delivered. By law, the
Supreme Court at that time consisted of the Chief Justice and seven
associate justices, the act of Congress having provided that no
vacancy in the office of associate justice should be filled until
the number should be reduced to six. [
Footnote 4/32] Five of the number, including the Chief
Justice, concurred in the opinion in that case, and the judgment of
the state court was affirmed, three of the associate justices
dissenting. Since that time, one of the justices who concurred in
that opinion of the Court has resigned, and Congress having
increased the number of the associate justices to eight, the two
cases before the Court have been argued, and the result is that the
opinion delivered in the former case is overruled, five Justices
concurring in the present opinion and four dissenting. Five
Justices concurred in the first opinion, and five have overruled
it. [
Footnote 4/33] Persuaded
that the first opinion was right for the reasons already assigned,
it is not possible that I should concur in the second, even if it
were true that no other reasons of any weight could be given in
support of the judgment in the first case and that the conclusion
there reached must stand or fall without any other support. Many
other reasons, however, may be invoked to fortify that conclusion
equally persuasive and convincing with those to which reference has
been made.
All writers upon political economy agree that money is the
universal standard of value and the measure of exchange, foreign
and domestic, and that the power to coin and regulate the value of
money is an essential attribute of national sovereignty. Goods and
chattels were directly bartered,
Page 79 U. S. 605
one for another, when the division of labor was first
introduced, but gold and silver were adopted to serve the purpose
of exchange by the tacit concurrence of all nations at a very early
period in the history of commercial transactions. [
Footnote 4/34] Commodities of various kinds were
used as money at different periods in different countries, but
experience soon showed the commercial nations that gold and silver
embodied the qualities desirable in money in a much greater degree
than any other known commodity or substance. [
Footnote 4/35] Daily experience shows the truth of
that proposition and supersedes the necessity of any remarks to
enforce it, as all admit that a commodity to serve as a standard of
value and a medium of exchange must be easily divisible into small
portions; that it must admit of being kept for an indefinite period
without deteriorating; that it must possess great value in small
bulk and be capable of being easily transported from place to
place; that a given denomination of money should always be equal in
weight and quality, or fineness to other pieces of money of the
same denomination, and that its value should be the same or as
little subject to variation as possible. [
Footnote 4/36] Such qualities, all agree, are united in
a much greater degree in gold and silver than in any other known
commodity, which was as well known to the members of the Convention
who framed the Constitution as to any body of men since assembled
and entrusted to any extent with the public affairs. They not only
knew that the money of the commercial world was gold and silver,
but they also knew, from bitter experience, that paper promises,
whether issued by the states or the United States, were utterly
worthless as a standard of value for any practical purpose.
Evidence of the truth of these remarks of the most convincing
character is to be found in the published proceedings of that
Convention. Debate upon the subject first arose when an amendment
was proposed to prohibit the states
Page 79 U. S. 606
from emitting bills of credit or making anything but gold and
silver coin a tender in payment of debts, and from the character of
that debate, and the vote on the amendment, it became apparent that
paper money had but few if any friends in the Convention. [
Footnote 4/37] Article seven of the draft
of the Constitution, as reported to the Convention, contained the
clause, "and emit bills on the credit of the United States,"
appended to the grant of power vested in Congress to borrow money,
and it was on the motion to strike out that clause that the
principal discussion in respect to paper money took place. Mr.
Madison inquired if it would not be sufficient to prohibit the
making such bills a tender, as that would remove the temptation to
emit them with unjust views. Promissory notes, he said, in that
shape, that is when not a tender, "may in some emergencies be
best." Some were willing to acquiesce in the modification suggested
by Mr. Madison, but Mr. Morris, who submitted the motion, objected,
insisting that if the motion prevailed, there would still be room
left for the notes of a responsible minister, which, as he said,
"would do all the good without the mischief." Decided objections
were advanced by Mr. Ellsworth, who said he thought the moment a
favorable one "to shut and bar the door against paper money," and
others expressed their opposition to the clause in equally decisive
language, even saying that they would sooner see the whole plan
rejected than retain the three words, "and emit bills." Suffice it
to say, without reproducing the discussion, that the motion
prevailed -- nine states to two -- and the clause was stricken out
and no attempt was ever made to restore it. Paper money as legal
tender had few or no advocates in the Convention, and it never had
more than one open advocate throughout the period the Constitution
was under discussion, either in the Convention which framed it or
in the conventions of the states where it was ratified. Virginia
voted in the affirmative on the motion to strike out that clause,
Mr. Madison being satisfied that if the motion prevailed,
Page 79 U. S. 607
it would not have the effect to disable the government from the
use of Treasury notes, and being himself in favor of cutting
"off the pretext for a paper currency, and particularly for
making the bills a tender, either for public or private
debts." [
Footnote 4/38] When
the draft for the Constitution was reported, the clause prohibiting
the states from making anything but gold and silver a tender in
payment of debts contained an exception "in case Congress
consented," but the Convention struck out the exception and made
the prohibition absolute, one of the members remarking that it was
a favorable moment to crush out paper money, and all or nearly all
of the Convention seemed to concur in the sentiment. [
Footnote 4/39]
Contemporaneous acts are certainly evidence of intention, and if
so, it is difficult to see what more is needed to show that the
members of that Convention intended to withhold from the states and
from the United States all power to make anything but gold and
silver a standard of value or a tender in payment of debts. Equally
decisive proof to the same effect is found in the debates which
subsequently occurred in the conventions of the several states, to
which the Constitution, as adopted, was submitted for ratification.
[
Footnote 4/40] Mr. Martin
thought that the states ought not to be totally deprived of the
right to emit bills of credit, but he said "that the Convention was
so smitten with the paper money dread that they insisted that the
prohibition should be absolute." [
Footnote 4/41]
"Currency" is a word much more comprehensive than the word
"money," as it may include bank bills and even bills of exchange as
well as coins of gold and silver, but the word "money," as employed
in the grant of power under consideration, means the coins of gold
and silver, fabricated and stamped as required by law, which, by
virtue of their intrinsic value, as universally acknowledged, and
their official origin, become the medium of exchange and the
standard
Page 79 U. S. 608
by which all other values are expressed and discharged. Support
to the proposition that the word money, as employed in that clause,
was intended to be used in the sense here supposed is also derived
from the language employed in certain numbers of the Federalist,
which, as is well known, were written and published during the
period the question whether the states would ratify the
Constitution was pending in their several conventions. Such men as
the writers of those essays never could have employed such language
if they had entertained the remotest idea that Congress possessed
the power to make paper promises a legal tender. [
Footnote 4/42]
Like support is also derived from the language of Mr. Hamilton
in his celebrated report recommending the incorporation of a
national bank. He first states the objection to the proposed
measure that banks tend to banish the gold and silver of the
country, and secondly he gives the answer to that objection made by
the advocates of the bank that it is immaterial what serves the
purpose of money, and then says that the answer is not entirely
satisfactory, as the permanent increase or decrease of the precious
metals in a country can hardly ever be a matter of
indifference.
"As the commodity taken in lieu of every other, it [coin] is a
species of the most effective wealth, and as the money of the
world, it is of great concern to the state that it possesses a
sufficiency of it to face any demands which the protection of its
external interests may create."
He favored the incorporation of a national bank, with power to
issue bills and notes
payable on demand in gold and
silver, but he expressed himself as utterly opposed to paper
emissions by the United States, characterizing them as so liable to
abuse and even so certain of being abused that the government ought
never to trust itself "with the use of so seducing and dangerous an
element." [
Footnote 4/43] Opposed
as he was to paper emissions by the United States, under any
circumstances, it is past belief that he could ever have concurred
in the proposition to make
Page 79 U. S. 609
such emissions a tender in payment of debts, either as a member
of the Convention which framed the Constitution or as the head of
the Treasury Department. Treasury notes, however, have repeatedly
been authorized by Congress, commencing with the Act of 30th of
June, 1812, but it was never supposed before the time when the
several acts in question were passed that Congress could make such
notes a legal tender in payment of debts. [
Footnote 4/44] Such notes, it was enacted, should be
received in payment of all duties and taxes laid and in payment for
public lands sold by the federal authority. Provision was also made
in most or all of the acts that the Secretary of the Treasury, with
the approbation of the President, might cause Treasury notes to be
issued at the par value thereof in payment of services, of
supplies, or of debts for which the United States were or might be
answerable by law to such person or persons as should be
willing to accept the same in payment, but it never
occurred to the legislators of that day that such notes could be
made a legal tender in discharge of such indebtedness or that the
public creditor could be compelled to accept them in payment of his
just demands. [
Footnote 4/45]
Financial embarrassments, second only in their disastrous
consequences to those which preceded the adoption of the
Constitution, arose towards the close of the last war with Great
Britain, and it is matter of history that those embarrassments were
too great and pervading to be overcome by the use of Treasury notes
or any other paper emissions without a specie basis. Expedients of
various kinds were suggested, but it never occurred either to the
executive or to Congress that a remedy could be found by making
Treasury notes, as then authorized, a legal tender, and the result
was that the Second Bank of the United States was incorporated.
[
Footnote 4/46] Paper currency,
it may be said, was authorized by that act, which is undoubtedly
true, and it is also true that the bills or notes of the bank were
made receivable in all payments to the United States if the same
were at the time
Page 79 U. S. 610
payable on demand, but the act provided that the corporation
should not refuse, under a heavy penalty, the payment in gold and
silver of any of its notes, bills, or obligations, nor of any
moneys received upon deposit in the bank or in any of its offices
of discount and deposit.
Serious attempt is made, strange to say, to fortify the
proposition that the acts in question are constitutional from the
fact that Congress, in providing for the use of Treasury notes and
in granting the charters to the respective national banks, made the
notes and bills receivable in payment of duties and taxes, but the
answer to the suggestion is so obvious that it is hardly necessary
to pause to suggest its refutation. [
Footnote 4/47] Creditors may exact gold and silver or
they may waive the right to require such money and accept credit
currency, or commodities other than gold and silver, and the United
States, as creditors, or in the exercise of their express power to
lay and collect taxes, duties, imposts, and excises may, if they
see fit, accept the Treasury notes or bank bills in such payments
as substitutes for the constitutional currency. Further discussion
of the proposition is unnecessary, as it is plainly destitute of
any merit whatever. [
Footnote
4/48]
Resort was also had to Treasury notes in the revulsion of 1837,
and during the war with Mexico, and also in the great revulsion of
1857, but the new theory that Congress could make Treasury notes a
legal tender was not even suggested, either by the President or by
any member of Congress. [
Footnote
4/49]
Seventy years are included in this review, even if the
computation is only carried back to the passage of the act
establishing the mint, and it is clear that there is no trace of
any act, executive or legislative, within that period which affords
the slightest support to the new constitutional theory that
Congress can by law constitute paper emissions a tender in payment
of debts. Even Washington, the father of our country, refused to
accept paper money in payment of debts contracted before the War of
Independence, and the proof
Page 79 U. S. 611
is full to the point that Hamilton, as well as Jefferson and
Madison, was opposed to paper emissions by the national authority.
[
Footnote 4/50]
Sufficient also is recorded in the reports of the decisions of
this Court to show that the Court, from the organization of the
judicial system to the day when the judgments in the cases before
the court were announced, [
Footnote
4/51] held opinions utterly opposed to such a construction of
the Constitution as would authorize Congress to make paper promises
a legal tender as between debtor and creditor. Throughout that
period, the doctrine of the Court has been, and still is, unless
the opinion of the Court just read constitutes an exception, that
the government of the United States, as ordained and established by
the Constitution, is a government of enumerated powers; that all
the powers not delegated to the United States by the Constitution
nor prohibited by it to the states are reserved to the states
respectively or to the people; that every power vested in the
federal government under the Constitution is in its nature
sovereign, and that Congress may pass all laws necessary and proper
to carry the same into execution -- or in other words that the
power being sovereign includes, by force of the term, the requisite
means, fairly applicable to the attainment of the contemplated end,
which are not precluded by restrictions or exceptions expressed or
necessarily implied, and not contrary to the essential ends of
political society. [
Footnote
4/52]
Definitions slightly different have been given by different
jurists to the words "necessary and proper," employed in the clause
of the Constitution conferring upon Congress the power to pass laws
for carrying the express grants of power into execution, but no one
ever pretended that a construction or definition could be sustained
that the general clause would authorize the employment of such
means in the execution of one express grant as would
practically
Page 79 U. S. 612
nullify another or render another utterly nugatory.
Circumstances made it necessary that Mr. Hamilton should examine
that phrase at a very early period after the Constitution was
adopted, and the definition he gave to it is as follows:
"All the means requisite and fairly applicable to the attainment
of the end of such power which are not precluded by restrictions
and exceptions specified in the Constitution and not contrary to
the essential ends of political society."
Twenty-five years later, the question was examined by the
Supreme Court [
Footnote 4/53] and
authoritatively settled, the Chief Justice giving the opinion. His
words were:
"Let the end be legitimate, let it be within the scope of the
Constitution, and all means which are appropriate which are plainly
adapted to that end and which are not prohibited but consistent
with the letter and spirit of the Constitution, are
constitutional."
Substantially the same definition was adopted by the present
CHIEF JUSTICE in the former case, in which he gave the opinion of
the Court, and there is nothing contained in the federal reports
giving the slightest sanction to any broader definition of those
words. Take the definition given by Mr. Hamilton, which, perhaps,
is the broadest, if there is any difference, and still it is
obvious that it would give no countenance whatever to the theory
that Congress, in passing a law to execute one express grant of the
Constitution, could authorize means which would nullify another
express grant or render it nugatory for the attainment of the end
which the framers of the Constitution intended it should
accomplish.
Authority to coin money was vested in Congress to provide a
permanent national standard of value, everywhere the same and
subject to no variation except what Congress shall make under the
power to regulate the value thereof, and it is not possible to
affirm, with any hope that the utterance will avail in the
argument, that the power to coin money is not an express power, and
if those premises are
Page 79 U. S. 613
conceded it cannot be shown that Congress can so expand any
other express power by implication as to nullify or defeat the
great purposes which the power to coin money and establish a
standard of value was intended to accomplish.
Government notes, it is conceded, may be issued as a means of
borrowing money, because the act of issuing the notes may be, and
often is, a requisite means to execute the granted power, and being
fairly applicable to the attainment of the end, the notes, as
means, may be employed, as they are not precluded by any
restrictions or exceptions and are not repugnant to any other
express grant contained in the Constitution. Lighthouses, buoys,
and beacons may be erected under the power to regulate commerce,
but Congress cannot authorize an officer of the government to take
private property for such a purpose without just compensation, as
the exercise of such a power would be repugnant to the Fifth
Amendment. Power to lay and collect taxes is conferred upon
Congress, but the Congress cannot tax the salaries of the state
judges, as the exercise of such a power is incompatible with the
admitted power of the state to create courts, appoint judges, and
provide for their compensation. [
Footnote 4/54]
Congress may also impose duties, imposts, and excises to pay the
debts and provide for the common defense and general welfare, but
the Congress cannot lay any tax or duty on articles exported from
any state, nor can Congress give any preference by any regulation
of commerce or revenue to the ports of one state over those of
another, as the exercise of any such power is prohibited by the
Constitution. Exclusive power is vested in Congress to declare war,
to raise and support armies, to provide and maintain a navy, and to
make rules for the government and regulation of the land and naval
forces. Appropriations to execute those powers may be made by
Congress, but no appropriations of money to that use can be made
for a longer term than two years, as an appropriation for a longer
term is expressly
Page 79 U. S. 614
prohibited by the same clause which confers the power to raise
and support armies. By virtue of those grants of power Congress may
erect forts and magazines, may construct navy yards and dockyards,
manufacture arms and munitions of war, and may establish depots and
other needful buildings for their preservation, but the Congress
cannot take private property for that purpose without making
compensation to the owner, as the Constitution provides that
private property shall not be taken for public use without just
compensation.
Legislative power under the Constitution can never be rightfully
extended to the exercise of a power not granted nor to that which
is prohibited, and it makes no difference whether the prohibition
is express or implied, as an implied prohibition, when once
ascertained, is as effectual to negative the right to legislate as
one that is expressed; the rule being that Congress, in passing
laws to carry the express powers granted into execution, cannot
select any means as requisite for that purpose or as fairly
applicable to the attainment of the end, which are precluded by
restrictions or exceptions contained in the Constitution, or which
are contrary to the essential ends of political society. [
Footnote 4/55]
Concede these premises, and it follows that the acts of Congress
in question cannot be regarded as valid unless it can be held that
the power to make paper emissions a legal tender in payment of
debts can properly be implied from the power to coin money, and
that such emissions, when enforced by such a provision, become the
legal standard of value under the Constitution. Extended discussion
of the first branch of the proposition would seem to be
unnecessary, as the dissenting justices in the former case
abandoned that point and frankly stated in the dissenting opinion
delivered that they were not able to see in those clauses,
"standing alone, a sufficient warrant for the exercise of this
power." Through their organ on the occasion they referred to the
power to declare war, to suppress insurrection, to
Page 79 U. S. 615
raise and support armies, to provide and maintain a navy, to
borrow money, to pay the debts of the Union, and to provide for the
common defense and general welfare, as grants of power conferred in
separate clauses of the Constitution. Reference was then made in
very appropriate terms to the exigencies of the Treasury during
that period and the conclusion reached, though expressed
interrogatively, appears to be that the provision making the notes
a legal tender was a necessary and proper one as conducing "towards
the purpose of borrowing money, of paying debts, of raising armies,
of suppressing insurrection," or, as expressed in another part of
the same opinion, the provision was regarded as "necessary and
proper to enable the government to borrow money to carry on the
war." [
Footnote 4/56]
Suggestions or intimations are made in one or more of the
opinions given in the state courts that the power assumed by
Congress may be vindicated as properly implied from the power to
coin money, but inasmuch as that assumption was not the ground of
the dissent in the former case, and as the Court is not referred to
any case where a court affirming the validity of the acts of
Congress in question has ventured to rest their decision upon that
theory, it does not appear to be necessary to protract the
discussion upon that point.
Such notes are not declared in the acts of Congress to be a
standard of value, and if they were the provision would be as
powerless to impart that quality to the notes as were the processes
of the alchemist to convert chalk into gold or the contrivances of
the mechanic to organize a machine and give it perpetual motion.
Gold and silver were adopted as the standard of value, even before
civil governments were organized, and they have always been
regarded as such to the present time, and it is safe to affirm that
they will continue to be such by universal consent, in spite of
legislative enactments and of judicial decisions. Treasury notes,
or the notes in question, called by what name they may be,
never
Page 79 U. S. 616
performed that office, even for a day, and it may be added that
neither legislative enactments nor judicial decisions can compel
the commercial world to accept paper emissions of any kind as the
standard of value by which all other values are to be measured.
[
Footnote 4/57] Nothing but money
will in fact perform that office, and it is clear that neither
legislative enactments nor judicial decisions can perform
commercial impossibilities. Commodities undoubtedly may be
exchanged as matter of barter, or the seller may accept paper
promises instead of money, but it is nevertheless true, as stated
by Mr. Huskisson, that money is not only the
common
measure and
common representative of all other
commodities, but also the common and universal equivalent. Whoever
buys, gives, whoever sells, receives such a quantity of pure gold
or silver as is equivalent to the article bought or sold; or if he
gives or receives paper instead of money, he gives or receives that
which is valuable only as it stipulates the payment of a given
quantity of gold or silver. [
Footnote
4/58]
"Most unquestionably," said Mr. Webster, [
Footnote 4/59]
"there is no legal tender, and there can be no legal tender, in
this country, under the authority of this government, or any other,
but gold and silver. . . . This is a constitutional principle,
perfectly plain and of the very highest importance."
He admitted that no such express prohibition was contained in
the Constitution, and then proceeded to say:
"As Congress has no power granted to it in this respect but to
coin money and to regulate the value of foreign coins,
it
clearly has no power to substitute paper or anything else for
coin as a tender in payment of debts and in discharge of
contracts,"
adding that
"Congress has exercised the power fully in both its branches. It
has coined money and still coins it, it has regulated the value of
foreign coins and still regulates their value. The legal tender,
therefore, THE CONSTITUTIONAL STANDARD OF VALUE, IS ESTABLISHED AND
CANNOT BE OVERTHROWN."
Beyond peradventure, he was of the opinion that gold and silver,
at rates fixed by Congress, constituted the
Page 79 U. S. 617
legal standard of value, and that neither Congress nor the
states had authority to establish any other standard in its place.
[
Footnote 4/60]
Views equally decisive have been expressed by this Court in a
case where the remarks were pertinent to the question presented for
decision. [
Footnote 4/61] Certain
questions were certified here which arose in the circuit court in
the trial of an indictment in which the defendant was charged with
having brought into the United States from a foreign place, with
intent to pass, utter, publish, and sell certain false, forged, and
counterfeit coins, made, forged, and counterfeited in the
resemblance and similitude of the coins struck at the mint. Doubts
were raised at the trial whether Congress had the power to pass the
law on which the indictment was founded. Objection was made that
the acts charged were only a fraud in traffic, and, as such, were
punishable, if at all, under the state law. Responsive to that
suggestion the court say that the provisions of the section
"appertain rather to the execution of an important trust
invested by the Constitution, and to the obligation to fulfill that
trust on the part of the government, namely, the trust and the duty
of creating and maintaining
a uniform and pure metallic
standard of value throughout the Union; that the power of
coining money and of regulating its value was delegated to Congress
by the Constitution for the very purpose of
creating and
preserving the uniformity and purity of such a standard of
value, and on account of the impossibility which was foreseen
of otherwise preventing the inequalities and the confusion
necessarily incident to different views of policy which in
different communities would be brought to bear on this subject. The
power to coin money being thus given to Congress, founded on public
necessity, it must carry with it the correlative power of
protecting the creature and object of that power."
Appropriate suggestions follow as to the right of the government
to adopt measures to exclude counterfeits and prevent the true coin
from being substituted by others
Page 79 U. S. 618
of no intrinsic value, and the justice delivering the opinion
then proceeds to say that Congress
"having emitted a circulating medium,
a standard of value
indispensable for the purposes of the community and for the
action of the government itself, the Congress is accordingly
authorized and bound in duty to prevent its debasement and
expulsion and the destruction of the general confidence and
convenience by the influx and substitution of a spurious coin in
lieu of the constitutional currency."
Equally decisive views were expressed by the court six years
earlier, in the case of
Gwin v. Breedlove, [
Footnote 4/62] in which the opinion of
the Court was delivered by the late Mr. Justice Catron, than whom
no justice who ever sat in the Court was more opposed to the
expression of an opinion on a point not involved in the record.
No state shall coin money, emit bills of credit, or make
anything but gold and silver a tender in payment of debts. These
prohibitions, said Mr. Justice Washington, [
Footnote 4/63] associated with the powers granted to
Congress to coin money and regulate the value thereof and of
foreign coin, most obviously constitute members of the same family,
being upon the same subject and governed by the same policy. This
policy, said the learned justice, was to provide a fixed and
uniform standard of value throughout the United States, by which
the commercial and other dealings between the citizens thereof, or
between them and foreigners, as well as the moneyed transactions of
the government, should be regulated. Language so well chosen and so
explicit cannot be misunderstood, and the views expressed by Mr.
Justice Johnson in the same case are even more decisive. He said
the prohibition in the Constitution to make anything but gold or
silver coin a tender in payment of debts is express
and
universal. The framers of the Constitution regarded it as an
evil to be repelled without modification, and that they have
therefore left nothing to be inferred or deduced from construction
on the subject. [
Footnote
4/64]
Page 79 U. S. 619
Recorded as those opinions have been for forty-five years, and
never questioned, they are certainly entitled to much weight,
especially as the principles which are there laid down were
subsequently affirmed in two cases by the unanimous opinion of this
Court. [
Footnote 4/65]
Strong support to the view here taken is also derived from the
case of
Craig v. Missouri, last cited, in which the
opinion was given by the Chief Justice. Loan certificates issued by
the state were the consideration of the note in suit in that case,
and the defense was that the certificates were bills of credit and
that the consideration of the note was illegal. Responsive to that
defense the plaintiff insisted that the certificates were not bills
of credit, because they had not been made a legal tender, to which
the court replied, that the emission of bills of credit and the
enactment of tender laws were distinct operations, independent of
each other; that both were forbidden by the Constitution; that the
evils of paper money did not result solely from the quality of its
being made a tender in payment of debts; that that quality might be
the
most pernicious one, but that it was not an essential
quality of bills of credit nor the only mischief resulting from
such emission. [
Footnote
4/66]
Remarks of the Chief Justice in the case of
Sturges v.
Crowninshield [
Footnote
4/67] may also be referred to as even more explicit and
decisive to the same conclusion than anything embodied in the other
cases. He first describes in vivid colors the general distress
which followed the war in which our independence was established.
Paper money, he said, was issued, worthless lands and other
property of no use to the creditor were made a tender in payment of
debts, and the time of payment stipulated in the contract was
extended by law. Mischief to such an extent was done and so much
more was apprehended that general distrust prevailed, and all
Page 79 U. S. 620
confidence between man and man was destroyed. Special reference
was made to those grievances by the Chief Justice because it was
insisted that the prohibition to pass laws impairing the obligation
of contracts ought to be confined by the court to matters of that
description, but the court was of a different opinion, and held
that the Convention intended to establish a great principle, that
contracts should be inviolable, that the provision was intended "to
prohibit the use of any means by which the same mischief might be
produced." He admitted that that provision was not intended to
prevent the issue of paper money, as that evil was remedied and the
practice prohibited by the clause forbidding the states to "emit
bills of credit," inserted in the Constitution expressly for that
purpose, and he also admitted that the prohibition to emit bills of
credit was not intended to restrain the states from enabling
debtors to discharge their debts by the tender of property of no
real value to the creditor, "because for that subject also
particular provision is made" in the Constitution; but he added,
"NOTHING BUT GOLD AND SILVER COIN CAN BE MADE A TENDER IN PAYMENT
OF DEBTS." [
Footnote 4/68]
Utterances of the kind are found throughout the reported
decisions of this Court, but there is not a sentence or word to be
found within those volumes, from the organization of the court to
the passage of the acts of Congress in question, to support the
opposite theory.
Power, as before remarked, was vested in the Congress under the
Confederation to borrow money and emit bills of credit, and history
shows that the power to emit such bills had been exercised, before
the Convention which framed the Constitution assembled, to an
amount exceeding $350,000,000. [
Footnote 4/69] Still the draft of the Constitution, as
reported, contained the words "and to emit bills" appended
Page 79 U. S. 621
to the clause authorizing Congress to borrow money. When that
clause was reached, says Mr. Martin, a motion was made to strike
out the words "to emit
bills of credit;" and his account
of what followed affords the most persuasive and convincing
evidence that the Convention, and nearly every member of it,
intended to put an end to the exercise of such a power. Against the
motion, he says, we urged that it would be improper to deprive the
Congress of that power; that it would be a novelty unprecedented to
establish a government which should not have such authority; that
it was impossible to look forward into futurity so far as to decide
that events might not happen that would render the exercise of such
a power absolutely necessary &c. But a majority of the
Convention, he said, being wise beyond every event, and being
willing to risk any political evil rather than admit the idea of a
paper emission
in any possible case, refused to trust the
authority to a government to which they were lavishing the most
unlimited powers of taxation, and to the mercy of which they were
willing blindly to trust the liberty and property of the citizens
of every state in the Union, and
"they erased that clause from
the system." [
Footnote
4/70]
More forcible vindication of the action of the Convention could
hardly be made than is expressed in the language of the federalist,
[
Footnote 4/71] and the authority
of Judge Story warrants the statement that the language there
employed is "justified by almost every contemporary writer," and is
"attested in its truth by facts" beyond the influence of every
attempt at contradiction. Having adverted to those facts the
commentator proceeds to say,
"that the same reasons which show the necessity of denying to
the states the power of regulating coin, prove with equal force
that they ought not to be at liberty to substitute a paper medium
instead of coin."
Emissions of the kind were not declared by the Continental
Congress to be a legal tender, but Congress passed a resolution
declaring that they ought to be a tender in payment of all private
and public debts, and that a refusal to
Page 79 U. S. 622
receive the tender ought to be an extinguishment of the debt,
and recommended the states to pass such laws. They even went
further and declared that whoever should refuse to receive the
paper as gold or silver should be deemed an enemy to the public
liberty; but our commentator says that these measures of violence
and terror, so far from aiding the circulation of the paper, led on
to still further depreciation. [
Footnote 4/72] New emissions followed and new measures
were adopted to give the paper credit by pledging the public faith
for its redemption. Effort followed effort in that direction until
the idea of redemption at par was abandoned. Forty for one was
offered and the states were required to report the bills under that
regulation, but few of the old bills were ever reported, and of
course few only of the contemplated new notes were issued, and the
bills in a brief period ceased to circulate, and in the course of
that year quietly died in the hands of their possessors. [
Footnote 4/73]
Bills of credit were made a tender by the states, but all such,
as well as those issued by the Congress, were dead in the hands of
their possessors before the Convention assembled to frame the
Constitution. Intelligent and impartial belief in the theory that
such men, so instructed, in framing a government for their
posterity as well as for themselves, would deliberately vest such a
power, either in Congress or the states, as a part of their
perpetual system, can never in my judgment be secured in the face
of the recorded evidences to the contrary which the political and
judicial history of our country affords. Such evidence, so
persuasive and convincing as it is, must ultimately bring all to
the conclusion that neither the Congress nor the states can make
anything but gold or silver coin a tender in payment of debts.
Exclusive power to coin money is certainly vested in Congress,
but
"no amount of reasoning can show that executing a promissory
note and ordering it to be taken in payment
Page 79 U. S. 623
of public and private debts is a species of coining money.
[
Footnote 4/74]"
Complete refutation of such theory is also found in the
dissenting opinion in the former case, in which the Justice who
delivered the opinion states that he is not able to deduce the
power to pass the laws in question from that clause of the
Constitution, and in which he admits without qualification that the
provision making such notes a legal tender does undoubtedly impair
the "obligation of contracts made before its passage." Extended
argument, therefore, to show that the acts in question impair the
obligation of contracts made before their passage is unnecessary,
but the admission stops short of the whole truth, as it leaves the
implication to be drawn that the obligation of subsequent contracts
is not impaired by such legislation. Contracts for the payment of
money, whether made before or after the passage of such a
provision, are contracts, if the promise is expressed in dollars,
to pay the specified amount in the money recognized and established
by the Constitution as the standard on value, and any act of
Congress which in theory compels the creditor to accept paper
emissions instead of the money so recognized and established
impairs the obligation of such a contract, no matter whether the
contract was made before or after the act compelling the creditor
to accept such payment, as the Constitution in that respect is a
part of the contract, and by its terms entitles the creditor to
demand payment in the medium which the Constitution recognizes and
establishes as the standard of value.
Evidently the word "dollar," as employed in the Constitution,
means the money recognized and established in the express power
vested in Congress to coin money, regulate the value thereof and of
foreign coin, the framers of the Constitution having borrowed and
adopted the word as used by the Continental Congress in the
ordinance of the 6th of July, 1785, and of the 8th August, 1786, in
which it was enacted that the money unit of the United States
should be
Page 79 U. S. 624
"one dollar," and that the money of account should be dollars
and fractions of dollars, as subsequently provided in the ordinance
establishing a mint. [
Footnote
4/75]
Repeated decisions of this Court of recent date [
Footnote 4/76] have established the rule
that contracts to pay coined dollars can only be satisfied by the
payment of such money, which is precisely equivalent to a decision
that such notes as those described in the acts of Congress in
question are not the money recognized and established by the
Constitution as the standard of value, as the money so recognized
and established, if the contract is expressed in dollars, will
satisfy any and every contract between party and party. Beyond all
question, the cases cited recognize
"the fact accepted by all men throughout the world that value is
inherent in the precious metals; that gold and silver are in
themselves values, and being such, and being in other respects best
adapted to the purpose, are
the only proper measures of
value; that these values are determined by weight and purity,
and that form and impress are simply certificates of value, worthy
of absolute reliance only because of the known integrity and good
faith of the government which"
put them in circulation. [
Footnote
4/77]
When the intent of the parties as to the medium of payment is
clearly expressed in a contract, the court decided, in
Butler
v. Horwitz, above cited, that damages for the breach of it,
whether made before or since the enactment of these laws, may be
properly assessed so as to give effect to that intent, and no doubt
is entertained that that rule is correct. Parties may contract to
accept payment in Treasury notes, or specific articles, or in bank
bills, and if they do so, they are bound to accept the medium for
which they contracted, provided the notes, specific articles, or
bills are tendered on the day the payment under the contract become
due, and it is clear that such a tender, if seasonable and
sufficient in
Page 79 U. S. 625
amount, is a good defense to the action. Decided cases also
carry the doctrine much further, and hold, even where the contract
is payable in money and the promise is expressed in dollars, that a
tender of bank bills is a good tender if the party to whom it was
made placed his objections to receiving it wholly upon the ground
that the amount was not sufficient. [
Footnote 4/78]
Grant all that and still it is clear that where the contract is
for the payment of a certain sum of money and the promise is
expressed in dollars or in coined dollars, the promisee, if he sees
fit, may lawfully refuse to accept payment in any other medium than
gold and silver, made a legal tender by act of Congress passed in
pursuance of that provision of the Constitution which vests in
Congress the power to coin money, regulate the value thereof and of
foreign coin.
Foreign coin of gold and silver may be made a legal tender, as
the power to regulate the value thereof is vested in Congress as
well as the power to regulate the value of the coins fabricated and
stamped at the mint.
Opposed as the new theory is by such a body of evidence covering
the whole period of our constitutional history all tending to the
opposite conclusion, and unsupported as the theory is by a single
historical fact entitled to any weight, it would seem that the
advocates of the theory ought to be able to give it a fixed
domicile in the Constitution or else be willing to abandon it as a
theory without any solid constitutional foundation. Vagrancy in
that behalf, if conceded, is certainly a very strong argument at
this day, that the power does not reside in the Constitution at
all, as if the fact were otherwise, the period of eighty-five years
which has elapsed since the Constitution was adopted is surely long
enough to have enabled its advocates to discover its locality and
to be able to point out its home to those whose researches have
been less successful and whose conscientious
Page 79 U. S. 626
convictions lead them to the conclusion that, as applied to the
Constitution, it is a myth without a habitation or a name.
Unless the power to enact such a provision can be referred to
someone or more of the express grants of power to Congress, as the
requisite means, or as necessary and proper for carrying such
express power or powers into execution, it is usually conceded that
the provision must be regarded as unconstitutional, as it is not
pretended that the Constitution contains any express grant of power
authorizing such legislation. Powers not granted cannot be
exercised by Congress, and certainly all must agree that no powers
are granted except what are expressed or such as are fairly
applicable as requisite means to attain the end of a power which is
granted, or, in other words, are necessary and proper to carry
those which are expressed into execution. [
Footnote 4/79]
Pressed by these irrepealable rules of construction, as applied
to the Constitution, those who maintain the affirmative of the
question under discussion are forced to submit a specification.
Courts in one or more cases have intimated that the power in
question may be implied from the express power to coin money, but
inasmuch as no decided case is referred to where the judgment of
the court rests upon that ground, the suggestion will be dismissed
without further consideration, as one involving a proposition too
latitudinous to require refutation. Most of the cases referred to
attempt to deduce the power to make such paper emissions a legal
tender from the express power to borrow money, or from the power to
declare war, or from the two combined, as in the dissenting opinion
in the case which is now overruled.
Authority, it is conceded, exists in Congress to pass laws
providing for the issue of Treasury notes, based on the national
credit, as necessary and proper means for fulfilling the end of the
express power to borrow money, nor can it be doubted at this day,
that such notes, when issued by the
Page 79 U. S. 627
proper authority, may lawfully circulate as credit currency, and
that they may, in that conventional character, be lawfully
employed, if the act authorizing their issue so provides, to pay
duties, taxes, and all the public exactions required to be paid
into the national Treasury. Public creditors may also be paid in
such currency by their own consent, and they may be used in all
other cases, where the payment in such notes comports with the
terms of the contract. Established usage founded upon the practice
of the government, often repeated, has sanctioned these rules,
until it may now be said that they are not open to controversy, but
the question in the cases before the court is whether the Congress
may declare such notes to be lawful money, make them a legal
tender, and impart to such a currency the quality of being a
standard of value, and compel creditors to accept the payment of
their debts in such a currency as the equivalent of the money
recognized and established by the Constitution as the standard of
value by which the value of all other commodities is to be
measured. Financial measures, of various kinds, for borrowing money
to supply the wants of the Treasury, beyond the receipts from
taxation and the sales of the public lands, have been adopted by
the government since the United States became an independent
nation. Subscriptions for a loan of twelve millions of dollars
were, on the 4th of August, 1790, directed to be opened at the
Treasury, to be made payable in certificates issued for the debt
according to their specie value. [
Footnote 4/80] Measures of the kind were repeated in
rapid succession for several years, and laws providing for loans in
one form or another appear to have been the preferred mode of
borrowing money, until the 30th of June, 1812, when the first act
was passed "to authorize the issue of Treasury notes." [
Footnote 4/81]
Loans had been previously authorized in repeated instances, as
will be seen by the following references, to which many more might
be added. [
Footnote 4/82]
Page 79 U. S. 628
Earnest opposition was made to the passage of the first act of
Congress authorizing the issue of Treasury notes, but the measure
prevailed, and it may be remarked that the vote on the occasion was
ever after regarded as having settled the question as to the
constitutionality of such an act. Five millions of dollars were
directed to be issued by that act, and the Secretary of the
Treasury, with the approbation of the President, was empowered to
cause such portion of the notes as he might deem expedient to be
issued at par "to such public creditors or other persons as may
choose to receive such notes in payment," it never having occurred
to anyone that even a public creditor could be compelled to receive
such notes in payment except by his own consent. Twenty other
issues of such notes were authorized by Congress in the course of
the fifty years next after the passage of that act and before the
passage of the acts making such notes a legal tender, and every one
of such prior acts, being twenty in all, contains, either in
express words or by necessary implication, an equally decisive
negation to the new constitutional theory that Congress can make
paper emissions either a standard of value or a legal tender.
[
Footnote 4/83] Superadded to the
conceded fact that the Constitution contains no express words to
support such a theory, this long and unbroken usage, that Treasury
notes shall not be constituted a standard of value nor be made a
tender in payment of debts, is entitled to great weight, and when
taken in connection with the persuasive and convincing evidence,
derived from the published proceedings of the Convention, that the
framers of the Constitution never intended to grant any such power,
and from the recorded sentiments of the great men whose arguments
in favor of the reported draft procured its ratification, and
supported as that view is by the repeated decisions of this Court
and by the infallible rule of interpretation that the language of
one express power shall not be
Page 79 U. S. 629
so expanded as to nullify the force and effect of another
express power in the same instrument, it seems to me that it ought
to be deemed final and conclusive that Congress cannot constitute
such notes or any other paper emissions a constitutional standard
of value or make them a legal tender in payment of debts --
especially as it covers the period of two foreign wars, the
creation of the second national bank, and the greatest financial
revulsions through which our country has ever passed.
Guided by the views expressed in the dissenting opinion in the
former case, it must be taken for granted that the legal tender
feature in the acts in question was placed emphatically, by those
who enacted the provision, upon the necessity of the measure to the
further borrowing of money and maintaining the army and navy, and
such appears to be the principal ground assumed in the present
opinion of the Court. Enough also appears in some of the
interrogative sentences of the dissenting opinion to show that the
learned Justice who delivered it intended to place the dissent very
largely upon the same ground.
Nothing need be added, it would seem, to show that the power to
make such notes a standard of value and a legal tender cannot be
derived from the power to borrow money without so expanding it by
implication as to nullify the power to coin money and regulate its
value, nor without extending the scope and operation of the power
to borrow money to an object never contemplated by the framers of
the Constitution; and if so, then it only remains to inquire
whether it may be implied from the power to declare war, to raise
and support armies, or to provide and maintain a navy, or "to
enable the government to borrow money to carry on the war," as the
phrase is in the dissenting opinion in the former case.
Money is undoubtedly the sinews of war, but the power to raise
money to carry on war, under the Constitution, is not an implied
power, and whoever adopts that theory commits a great
constitutional error. Congress may declare war and Congress may
appropriate all moneys in the Treasury
Page 79 U. S. 630
to carry on the war, or Congress may coin money for that
purpose, or borrow money to any amount for the same purpose, or
Congress may lay and collect taxes, duties, imposts, and excises to
replenish the Treasury, or may dispose of the public lands or other
property belonging to the United States, and may in fact, by the
exercise of the express powers of the Constitution, command the
whole wealth and substance of the people to sustain the public
credit and prosecute the war to a successful termination. Two
foreign wars were successfully conducted by means derived from
those sources, and it is not doubted that those express powers will
always enable Congress to maintain the national credit and defray
the public expenses in every emergency which may arise, even though
the national independence should be assailed by the combined forces
of all the rest of the civilized world. All remarks, therefore, in
the nature of entreaty or appeal, in favor of an implied power to
fulfill the great purpose of national defense or to raise money to
prosecute a war are a mere waste of words, as the most powerful and
comprehensive means to accomplish the purpose for which the appeal
is made are found in the express powers vested in Congress to lay
and collect taxes, duties, imposts, and excises without limitation
as to amount, to borrow money also without limitation, and to coin
money, dispose of the public lands, and to appropriate all moneys
in the public Treasury to that purpose.
Weighed in the light of these suggestions, as the question under
discussion should be, it is plain not only that the exercise of
such an implied power is unnecessary to supply the sinews of war,
but that the framers of the Constitution never intended to trust a
matter of such great and vital importance as that of raising means
for the national defense or for the prosecution of a war to any
implication whatever, as they had learned from bitter experience
that the great weakness of the Confederation during the war for
independence consisted in the want of such express powers.
Influenced by those considerations, the framers of the Constitution
not only authorized Congress to lay and collect taxes, duties,
Page 79 U. S. 631
imposts, and excises to any and every extent, but also to coin
money and to borrow money without any limitation as to amount,
showing that the argument that to deny the implied power to make
paper emissions a legal tender will be to cripple the government,
is a mere chimera, without any solid constitutional foundation for
its support.
Comprehensive, however, as the power of federal taxation is,
being without limitation as to amount, still there are some
restrictions as to the manner of its exercise and some exceptions
as to the objects to which it may be applied. Bills for raising
revenue must originate in the House of Representatives; duties,
imposts, and excises must be uniform throughout the United States;
direct taxes must be apportioned according to numbers; regulations
of commerce and revenue shall not give any preference to the ports
of one state over those of another, nor shall vessels bound to or
from one state be obliged to enter, clear, or pay duties in
another; nor shall any tax or duty be laid on articles exported
from any state.
Preparation for war may be made in peace, but neither the
necessity for such preparation nor the actual existence of war can
have the effect to abrogate or supersede those restrictions or to
empower Congress to tax the articles excepted from taxation by the
Constitution. Implied exceptions also exist limiting the power of
federal taxation as well as that of the states, and when an
exception of that character is ascertained, the objects falling
within it are as effectually shielded from taxation as those
falling within an express exception, for the plain reason that the
"government of the United States is acknowledged by all to be one
of enumerated powers," from which it necessarily follows that
powers not granted cannot be exercised. [
Footnote 4/84]
Moneys may be raised by taxes, duties, imposts, and excises to
carry on war as well as to pay the public debt or to provide for
the common defense and general welfare, but no appropriation of
money to that use can be made for a
Page 79 U. S. 632
period longer than two years, nor can Congress, in exercising
the power to levy taxes for that purpose or any other, abrogate or
supersede those restrictions, exceptions, and limitations, as they
are a part of the Constitution, and as such are as obligatory in
war as in peace, as any other rule would subvert, in time of war,
every restriction, exception, limitation, and prohibition in the
Constitution and invest Congress with unlimited power even
surpassing that possessed by the British Parliament.
Congress may also borrow money to carry on war without
limitation, and in exercising that express power may issue Treasury
notes as the requisite means for carrying the express power into
execution, but Congress cannot constitute such notes a standard of
value nor make them a legal tender, neither in time of war nor in
time of peace, for at least two reasons, either of which is
conclusive that the exercise of such a power is not warranted by
the Constitution: (1) because the published proceedings of the
Convention which adopted the Constitution, and of the state
conventions which ratified it, show that those who participated in
those deliberations never intended to confer any such power; (2)
because such a power, if admitted to exist, would nullify the
effect and operation of the express power to coin money, regulate
the value thereof and of foreign coin, as it would substitute a
paper medium in the place of gold and silver coin, which in itself,
as compared with coin, possesses no value, is not money, either in
the constitutional or commercial sense, but only a promise to pay
money, is never worth par, and often much less, even as domestic
exchange, and is always fluctuating and never acknowledged either
as a medium of exchange or a standard of value in any foreign
market known to American commerce.
Power to issue such notes, it is conceded, exists without
limitation, but the question is whether the framers of the
Constitution intended that Congress, in the exercise of that power
or the power to borrow money, whether in peace or war, should be
empowered to constitute paper emissions of any kind a standard of
value and make the same a legal
Page 79 U. S. 633
tender in payment of debts. Mere convenience, or even a
financial necessity in a single case, cannot be the test, but the
question is what did the framers of the Constitution intend at the
time the instrument was adopted and ratified?
Constitutional powers of the kind last mentioned -- that is, the
power to ordain a standard of value and to provide a circulating
medium for a legal tender -- are subject to no mutations of any
kind. They are the same in peace and in war. What the grants of
power meant when the Constitution was adopted and ratified they
mean still, and their meaning can never be changed except as
described in the Fifth Article, providing for amendments, as the
Constitution "is a law for rulers and people, equally in war and in
peace, and covers with the shield of its protection all classes of
men and under all circumstances." [
Footnote 4/85]
Delegated power ought never to be enlarged beyond the fair scope
of its terms, and that rule is emphatically applicable in the
construction of the Constitution. Restrictions may at times be
inconvenient or even embarrassing, but the power to remove the
difficulty by amendment is vested in the people, and if they do not
exercise it, the presumption is that the inconvenience is a less
evil than the mischief to be apprehended if the restriction should
be removed and the power extended, or that the existing
inconvenience is the least of the two evils; and it should never be
forgotten that the government ordained and established by the
Constitution is a government "of limited and enumerated powers,"
and that to depart from the true import and meaning of those powers
is to establish a new Constitution or to do for the people what
they have not chosen to do for themselves, and to usurp the
functions of a legislator and desert those of an expounder of the
law. Arguments drawn from impolicy or inconvenience, says Judge
Story, ought here to be of no weight, as "the only sound principle
is to declare
ita lex scripta est, to follow and to obey."
[
Footnote 4/86]
Page 79 U. S. 634
For these reasons, I am of the opinion that the judgment in each
of the cases before the court should be reversed.
[
Footnote 4/1]
Walker's Science of Wealth 124; Liverpool on Coins, 8.
[
Footnote 4/2]
7 Jefferson's Works 462.
[
Footnote 4/3]
Constitution, art. 8, clause 5.
[
Footnote 4/4]
Huskisson on Depreciation of Currency. 22 Financial Pamphlets
579.
[
Footnote 4/5]
1 Laws of the U.S., 1st ed., 646; 1 Curtis' History of the
Constitution 443; 10 Journals of Congress (Dunlap's ed), 225; 1
Life of Gouverneur Morris 273; 11 Journals of Congress 179.
[
Footnote 4/6]
1 Stat. at Large 24;
ib., 29.
[
Footnote 4/7]
Ib., 65.
[
Footnote 4/8]
1 Laws of the U.S. 647; 10 Journals of Congress 225; 11
id. 254; 8 Stat. at Large 80.
[
Footnote 4/9]
1 Stat. at Large 248, 250.
[
Footnote 4/10]
7 Journals of Congress 286.
[
Footnote 4/11]
13 Hening's Statutes (Va.) 478; Laws of New Hampshire 240.
[
Footnote 4/12]
2 Laws of Massachusetts, 657; Revised Laws of Rhode Island, p.
319; 5 Statutes of South Carolina 262.
[
Footnote 4/13]
M. & C. Dig. (Ga.), 33; 3 Laws of New York, Greeln. ed.
363.
[
Footnote 4/14]
4 Stat. at Large 699.
[
Footnote 4/15]
5 Stat. at Large 137.
[
Footnote 4/16]
9
id. 397.
[
Footnote 4/17]
10
id. 160
[
Footnote 4/18]
12 Stat. at Large 345.
[
Footnote 4/19]
Hepburn v.
Griswold, 8 Wall. 618; 12 Stat. at Large 370, 532,
710, 822.
[
Footnote 4/20]
8 Wall. 614, 625.
[
Footnote 4/21]
7 Jefferson's Works 472; 22 Financial Pamphlets 417; Horner's
Bullion Report.
[
Footnote 4/22]
McCullock, Commercial Dictionary, edition of 1869, 330.
[
Footnote 4/23]
2 Bouvier's Law Dictionary, 648; 7 Jefferson's Works 472;
Jefferson's Correspondence 133.
[
Footnote 4/24]
4 Stat. at Large 278; 5
id. 133; 14
id.
339.
[
Footnote 4/25]
2 Story on the Constitution (3d ed) § 1122; Rawle on the
Constitution 102; Cooley on Constitutional Limitations 596; Pomeroy
on the Constitution 263.
[
Footnote 4/26]
2 Story on the Constitution § 1122.
[
Footnote 4/27]
2 Story on the Constitution § 1118.
[
Footnote 4/28]
Mill, Political Economy 294.
[
Footnote 4/29]
2 Phillips's Paper Currency 135; 9 Jefferson's Works 254, 289; 6
Sparks, Washington's Letters 321.
[
Footnote 4/30]
Sibbald v. United
States, 12 Pet. 492;
Bridge
Co. v. Stewart, 3 How. 424;
Peck v.
Sanderson, 18 How. 42;
Noonan v.
Bradley, 12 Wall. 121.
[
Footnote 4/31]
Griswold v. Hepburn, 2 Duvall 20.
[
Footnote 4/32]
14 Stat. at Large 209.
[
Footnote 4/33]
16
id. 44.
[
Footnote 4/34]
Walker's Science of Wealth 127.
[
Footnote 4/35]
1 Smith's Wealth of Nations 35.
[
Footnote 4/36]
McCullock's Commercial Dictionary (ed. 1869) 894; Mill's
Political Economy 294; 7 Jefferson's Works 490.
[
Footnote 4/37]
3 Madison Papers 1442.
[
Footnote 4/38]
3 Madison Papers 1344; 5 Elliott's Debates 434, 485.
[
Footnote 4/39]
2 Curtis' History of the Constitution 364.
[
Footnote 4/40]
1 Elliott's Debates 492; 2
id. 486; 4
id. 184;
ib., 334, 336; 8
id. 290, 472, 478; 1
id. 369, 370.
[
Footnote 4/41]
1
id. 376.
[
Footnote 4/42]
Federalist, No. 44;
ibid., No. 42.
[
Footnote 4/43]
Hist. of the Bank of the United States 21, 24, 32.
[
Footnote 4/44]
2 Stat at Large, 766; 3
id. 100.
[
Footnote 4/45]
3
id. 315.
[
Footnote 4/46]
Ib., 266.
[
Footnote 4/47]
Metropolitan Bank v. Van Dyck, 27 N.Y. 42.
[
Footnote 4/48]
4 Webster's Works 271;
Thorndike v. United States, 2
Mason 18.
[
Footnote 4/49]
5 Stat. at Large 201;
ib.,. 469; 9
id. 118;
id. 257.
[
Footnote 4/50]
2 Phillips's Paper Currency 135; 6 Sparks' Letters of Washington
321.
[
Footnote 4/51]
Legal Tender Cases, 11 Wall. 682 [no opinion by
Court].
[
Footnote 4/52]
History of the Bank of the United States 95.
[
Footnote 4/53]
McCulloch v.
Maryland, 4 Wheat. 421.
[
Footnote 4/54]
Collector v.
Day, 11 Wall. 113;
Ward v.
Maryland, 12 Wall. 418.
[
Footnote 4/55]
History of the Bank of the United States 95.
[
Footnote 4/56]
Hepburn v.
Griswold, 8 Wall. 632.
[
Footnote 4/57]
Hepburn v.
Griswold, 8 Wall. 608.
[
Footnote 4/58]
22 Financial Pamphlets 580.
[
Footnote 4/59]
4 Webster's Works 271.
[
Footnote 4/60]
4
id. 280.
[
Footnote 4/61]
United States v.
Marigold, 9 How. 567.
[
Footnote 4/62]
43 U. S. 2 How.
38.
[
Footnote 4/63]
Ogden v.
Saunders, 12 Wheat. 265.
[
Footnote 4/64]
Ib., 25 U. S.
288.
[
Footnote 4/65]
United States v.
Marigold, 9 How. 567;
Gwin v.
Breedlove, 2 How. 38;
Craig
v. Missouri, 4 Pet. 434.
[
Footnote 4/66]
Briscoe v. Bank of
Kentucky, 11 Pet. 317;
Fox v.
Ohio, 5 How. 433.
[
Footnote 4/67]
17 U. S. 4
Wheat. 204.
[
Footnote 4/68]
Sturges v.
Crowninshield, 4 Wheat. 205.
[
Footnote 4/69]
2 Story on the Constitution, 3d ed. 249;
Briscoe v. Bank of
Kentucky, 11 Pet. 337; 1 Jefferson's Correspondence
401; American Almanac for 1830, p. 183.
[
Footnote 4/70]
1 Elliott's Debates 369.
[
Footnote 4/71]
Federalist, No. 44.
[
Footnote 4/72]
2 Journals of Congress 21; 3
id. 20; 2 Pitkin's History
155-156.
[
Footnote 4/73]
2 Story on the Constitution, 3d ed., §§ 1359, 1360; 2 Pitkin's
History 157; 1 Jefferson's Correspondence 402.
[
Footnote 4/74]
Pomeroy on the Constitution § 409.
[
Footnote 4/75]
10 Journals of Congress 225; 11
id. 179.
[
Footnote 4/76]
Bronson v.
Rodes, 7 Wall. 248;
Butler
v. Horwitz, 7 Wall. 259;
Bank v.
Supervisors, 7 Wall. 28.
[
Footnote 4/77]
Dewing v.
Sears, 11 Wall. 379;
Lane Co.
v. Oregon, 7 Wall. 73;
Willard v.
Tayloe, 8 Wall. 568.
[
Footnote 4/78]
Bank of the United States
v. Bank of Georgia, 10 Wheat. 347;
Thompson v.
Riggs, 5 Wall. 678;
Robinson v.
Noble, 8 Pet. 198;
Wright v. Reid, 3 Term
554;
Snow v. Perry, 9 Pickering 542; 2 Greenleaf on
Evidence § 601.
[
Footnote 4/79]
Martin v. Hunter's
Lessee, 1 Wheat. 326;
McCulloch v.
Maryland, 4 Wheat. 405; 1 Story on the Constitution
(3d ed) § 417.
[
Footnote 4/80]
1 Stat. at Large 139.
[
Footnote 4/81]
2 Stat. at Large 766
[
Footnote 4/82]
1
id. 142;
ib., 187;
ib., 345;
ib., 433;
ib., 607, 2
id. 60;
ib., 245;
ib., 349;
ib., 610;
ib., 656;
ib., 694.
[
Footnote 4/83]
5
id. 202; 9
id. 64; 4
id. 765; 2
id. 766;
ib., 801; 3
id. 161;
ib., 213, 5
id. 201;
ib., 228;
ib., 323;
ib., 469;
ib., 474;
ib., 581;
ib., 614; 9
id. 39;
ib., 118; 11
id. 257; 12
id. 121;
ib., 179;
ib., 259;
ib., 313;
ib., 338.
[
Footnote 4/84]
McCulloch v.
Maryland, 4 Wheat. 405.
[
Footnote 4/85]
Ex Parte
Milligan, 4 Wall. 120.
[
Footnote 4/86]
1 Story on the Constitution, 3d ed., § 426.
MR. JUSTICE FIELD, dissenting:
Whilst I agree with THE CHIEF JUSTICE in the views expressed in
his opinion in these cases, the great importance which I attach to
the question of legal tender induces me to present some further
considerations on the subject.
Nothing has been heard from counsel in these cases, and nothing
from the present majority of the Court, which has created a doubt
in my mind of the correctness of the judgment rendered in the case
of
Hepburn v. Griswold, [
Footnote 5/1] or of the conclusions expressed in the
opinion of the majority of the Court as then constituted. That
judgment was reached only after repeated arguments were heard from
able and eminent counsel and after every point raised on either
side had been the subject of extended deliberation.
The questions presented in that case were also involved in
several other cases, and had been elaborately argued in them. It is
not extravagant to say that no case has ever been decided by this
Court since its organization in which the questions presented were
more fully argued or more maturely considered. It was hoped that a
judgment thus reached would not be lightly disturbed. It was hoped
that it had settled forever that under a Constitution ordained,
among other things, "to establish justice," legislation giving to
one person the right to discharge his obligations to another by
nominal instead of actual fulfillment, could never be
justified.
I shall not comment upon the causes which have led to a reversal
of that judgment. They are patent to everyone. I will simply
observe that THE CHIEF JUSTICE and the Associate Justices, who
constituted the majority of the Court when that judgment was
rendered still adhere to their former convictions. To them the
reasons for the original decision are as cogent and convincing now
as they were when that
Page 79 U. S. 635
decision was pronounced, and to them its justice, as applied to
past contracts, is as clear today as it was then.
In the cases now before us, the questions stated, by order of
the Court, for the argument of counsel do not present with entire
accuracy the questions actually argued and decided. As stated, the
questions are:
1st. Is the act of Congress known as the Legal Tender Act
constitutional as to contracts made before its passage?
2d. Is it valid as applicable to transactions since its
passage?
The act thus designated as the Legal Tender Act is the Act of
Congress of February 25, 1862, authorizing the issue of United
States notes and providing for their redemption or funding, and for
funding the floating debt of the United States, [
Footnote 5/2] and the questions, as stated, would
seem to draw into discussion the validity of the entire act,
whereas the only questions intended for argument and actually
argued and decided relate 1st to the validity of that provision of
the act which declares that these notes shall be a legal tender in
payment of debts, as applied to private debts and debts of the
government contracted previous to the passage of the act, and 2d to
the validity of the provision as applied to similar contracts
subsequently made. The case of
Parker v. Davis involves
the consideration of the first question, and the case of
Knox
v. Lee is supposed by a majority of the Court to present the
second question.
No question was raised as to the validity of the provisions of
the act authorizing the issue of the notes and making them
receivable for dues to the United States, nor do I perceive that
any objection could justly be made at this day to these provisions.
The issue of the notes was a proper exercise of the power to borrow
money, which is granted to Congress without limitation. The extent
to which the power may be exercised depends, in all cases, upon the
judgment of that body as to the necessities of the government. The
power to borrow includes the power to give evidences of
indebtedness and obligations of repayment.
Page 79 U. S. 636
Instruments of this character are among the securities of the
United States mentioned in the Constitution. These securities are
sometimes in the form of certificates of indebtedness, but they may
be issued in any other form, and in such form and in such amounts
as will fit them for general circulation, and to that end may be
made payable to bearer and transferable by delivery. The form of
notes, varying in amounts to suit the convenience or ability of the
lender, has been found by experience a convenient form and the one
best calculated to secure the readiest acceptance and the largest
loan. It has been the practice of the government to use notes of
this character in raising loans and obtaining supplies from an
early period in its history, their receipt by third parties being
in all cases optional.
In June, 1812, Congress passed an act which provided for the
issue of Treasury notes and authorized the Secretary of the
Treasury, with the approbation of the President, "to borrow from
time to time, not under par, such sums" as the President might
think expedient "on the credit of such notes." [
Footnote 5/3]
In February, 1813, Congress passed another act for the issue of
Treasury notes, declaring "that the amount of money borrowed or
obtained by virtue of the notes" issued under its second section
should be a part of the money authorized to be borrowed under a
previous act of the same session. [
Footnote 5/4] There are numerous other acts of a similar
character on our statute books. More than twenty, I believe, were
passed previous to the legal tender act. [
Footnote 5/5]
Page 79 U. S. 637
In all of them, the issue of the notes was authorized as a means
of borrowing money, or obtaining supplies, or paying the debts of
the United States, and in all of them the receipt of the notes by
third parties was purely voluntary. Thus, in the first act, of
June, 1812, the Secretary of the Treasury was authorized, not only
to borrow on the notes, but to issue such notes as the President
might think expedient "in payment of supplies or debts due by the
United States to such public creditors or other persons" as might
"choose to receive such notes in payment at par." Similar
provisions are found in all the acts except where the notes are
authorized simply to take up previous loans.
The issue of the notes for supplies purchased or services
rendered at the request of the United States is only giving their
obligations for an indebtedness thus incurred, and the same power
which authorizes the issue of notes for money must also authorize
their issue for whatever is received as an equivalent for money.
The result to the United States is the same as if the money were
actually received for the notes and then paid out for the supplies
or services.
The notes issued under the Act of Congress of February 25, 1862,
differ from the Treasury notes authorized by the previous acts to
which I have referred in the fact that they do not bear interest
and do not designate on their face a period at which they shall be
paid, features which may affect their value in the market but do
not change their essential character. There cannot be, therefore,
as already stated, any just objection at this day to the issue of
the notes nor to their adaptation in form for general
circulation.
Nor can there be any objection to their being made receivable
for dues to the United States. Their receivability in this respect
is only the application to the demands of the government, and
demands against it, of the just principle which is applied to the
demands of individuals against each other, that cross-demands shall
offset and satisfy each other to the extent of their respective
amounts. No rights of third parties are in any respect affected by
the application of the rule here, and the purchasing and borrowing
power
Page 79 U. S. 638
of the notes are greatly increased by making them thus
receivable for the public dues. The objection to the act does not
lie in these features; it lies in the provision which declares that
the notes shall be "a legal tender in payment of all debts, public
and private," so far as that provision applies to private debts,
and debts owing by the United States.
In considering the validity and constitutionality of this
provision, I shall in the first place confine myself to the
provision in its application to private debts. Afterwards I shall
have something to say of the provision in its application to debts
owing by the government.
In the discussions upon the subject of legal tender, the
advocates of the measure do not agree as to the power in the
Constitution to which it shall be referred, some placing it upon
the power to borrow money, some on the coining power, and some on
what is termed a resulting power from the general purposes of the
government, and these discussions have been accompanied by
statements as to the effect of the measure, and the consequences
which must have followed had it been rejected, and which will now
occur if its validity be not sustained, which rest upon no solid
foundation, and are not calculated to aid the judgment in coming to
a just conclusion.
In what I have to say, I shall endeavor to avoid any such
general and loose statements, and shall direct myself to an inquiry
into the nature of these powers to which the measure is referred
and the relation of the measure to them.
Now if Congress can, by its legislative declaration, make the
notes of the United States a legal tender in payment of private
debts -- that is, can make them receivable against the will of the
creditor in satisfaction of debts due to him by third parties --
its power in this respect is not derived from its power to borrow
money, under which the notes were issued. That power is not
different in its nature or essential incidents from the power to
borrow possessed by individuals, and is not to receive a larger
definition. Nor is it different from the power often granted to
public and private corporations. The grant, it is true, is usually
accompanied in these
Page 79 U. S. 639
latter cases with limitations as to the amount to be borrowed,
and a designation of the objects to which the money shall be
applied -- limitations which in no respect affect the nature of the
power. The terms "power to borrow money" have the same meaning in
all these cases, and not one meaning when used by individuals,
another when granted to corporations, and still a different one
when possessed by Congress. They mean only a power to contract for
a loan of money upon considerations to be agreed between the
parties. The amount of the loan, the time of repayment, the
interest it shall bear, and the form in which the obligation shall
be expressed are simply matters of arrangement between the parties.
They concern no one else. It is no part or incident of a contract
of this character that the rights or interests of third parties,
strangers to the matter, shall be in any respect affected. The
transaction is completed when the lender has parted with his money
and the borrower has given his promise of repayment at the time and
in the manner and with the securities stipulated between them.
As an inducement to the loan and security for its repayment, the
borrower may of course pledge such property or revenues and annex
to his promises such rights and privileges as he may possess. His
stipulations in this respect are necessarily limited to his own
property, rights, and privileges, and cannot extend to those of
other persons.
Now whether a borrower -- be the borrower an individual, a
corporation, or the government -- can annex to the bonds, notes, or
other evidences of debt given for the money borrowed any quality by
which they will serve as a means of satisfying the contracts of
other parties must necessarily depend upon the question whether the
borrower possesses any right to interfere with such contracts and
determine how they shall be satisfied. The right of the borrower in
this respect rests upon no different foundation than the right to
interfere with any other property of third parties. And if it will
not be contended, as I think I may assume it will not be, that the
borrower possesses any right, in order to make a loan, to interfere
with the tangible and visible property of
Page 79 U. S. 640
third parties, I do not perceive how it can be contended that he
has any right to interfere with their property when it exists in
the form of contracts. A large part of the property of every
commercial people exists in that form, and the principle which
excludes a stranger from meddling with another's property which is
visible and tangible equally excludes him from meddling with it
when existing in the form of contracts.
That an individual or a corporation borrowing possesses no power
to annex to his evidences of indebtedness any quality by which the
holder will be enabled to change his contracts with third parties,
strangers to the loan, is admitted, but it is contended that
Congress possesses such power because, in addition to the express
power to borrow money, there is a clause in the Constitution which
authorizes Congress to make all laws "necessary and proper" for the
execution of the powers enumerated. This clause neither augments
nor diminishes the expressly designated powers. It only states in
terms what Congress would equally have had the right to do without
its insertion in the Constitution. It is a general principle that a
power to do a particular act includes the power to adopt all the
ordinary and appropriate means for its execution. "Had the
Constitution," says Hamilton, in the Federalist, speaking of this
clause,
"been silent on this head, there can be no doubt that all the
particular powers requisite as a means of executing the general
powers would have resulted to the government by unavoidable
implication. No axiom is more clearly established in law or in
reason, that whenever the end is required the means are authorized,
whenever a general power to do a thing is given, every particular
power necessary for doing it is included. [
Footnote 5/6]"
The subsidiary power existing without the clause in question,
its insertion in the Constitution was no doubt intended, as
observed by Mr. Hamilton, to prevent "all caviling refinements" in
those who might thereafter feel a disposition
Page 79 U. S. 641
to curtail and evade the legitimate authorities of the Union,
and also, I may add, to indicate the true sphere and limits of the
implied powers.
But though the subsidiary power would have existed without this
clause, there would have been the same perpetually recurring
question as now, as to what laws are necessary and proper for the
execution of the expressly enumerated powers.
The particular clause in question has at different times
undergone elaborate discussion in Congress, in cabinets, and in the
courts. Its meaning was much debated in the first Congress upon the
proposition to incorporate a national bank, and afterwards in the
cabinet of Washington, when that measure was presented for his
approval. Mr. Jefferson, then Secretary of State, and Mr. Hamilton,
then Secretary of the Treasury, differed widely in their
construction of the clause, and each gave his views in an elaborate
opinion. Mr. Jefferson held that the word "necessary" restricted
the power of Congress to the use of those means without which the
grant would be nugatory, thus making necessary equivalent to
indispensable.
Mr. Hamilton favored a more liberal and in my judgment a more
just interpretation, and contended that the terms "necessary and
proper" meant no more than that the measures adopted must have an
obvious relation as a means to the end intended. "If the end," he
said,
"be clearly comprehended within any of the specified powers, and
if the measure have an obvious relation to that end and is not
forbidden by any particular provision of the Constitution, it may
safely be deemed to come within the compass of the national
authority."
"There is also," he added,
"this further criterion which may materially assist the
decision. Does the proposed measure abridge a preexisting right of
any state or of any individual? If it does not, there is a strong
presumption in favor of its constitutionality, and slighter
relations to any declared object may be permitted to turn the
scale."
From the criterion thus indicated, it
Page 79 U. S. 642
would seem that the distinguished statesman was of opinion that
a measure which did interfere with a preexisting right of a state
or an individual would not be constitutional.
The interpretation given by Mr. Hamilton was substantially
followed by Chief Justice Marshall in
McCulloch v.
Maryland when, speaking for the Court, he said that if the end
to be accomplished by the legislation of Congress be legitimate,
and within the scope of the Constitution,
"all the means which are appropriate, which are plainly adapted
to that end, and which are not prohibited, but are consistent with
the letter and spirit of the Constitution, are constitutional."
The Chief Justice did not, it is true, in terms declare that
legislation which is not thus appropriate and plainly adapted to a
lawful end is unconstitutional, but such is the plain import of the
argument advanced by him, and that conclusion must also follow from
the principle that when legislation of a particular character is
specially authorized, the opposite of such legislation is
inhibited.
Tested by the rule given by Mr. Hamilton or by the rule thus
laid down by this Court through Mr. Chief Justice Marshall, the
annexing of a quality to the promises of the government for money
borrowed which will enable the holder to use them as a means of
satisfying the demands of third parties cannot be sustained as the
exercise of an appropriate means of borrowing. That is only
appropriate which has some relation of fitness to an end.
Borrowing, as already stated, is a transaction by which, on one
side, the lender parts with his money, and on the other the
borrower agrees to repay it in such form and at such time as may be
stipulated. Though not a necessary part of the contract of
borrowing, it is usual for the borrower to offer securities for the
repayment of the loan. The fitness which would render a means
appropriate to this transaction thus considered must have respect
to the terms which are essential to the contract, or to the
securities which the borrower may furnish as an inducement to the
loan. The quality of legal tender does not touch the terms of the
contract of borrowing, nor does it stand as a security for the
loan. A security supposes
Page 79 U. S. 643
some right or interest in the thing pledged which is subject to
the disposition of the borrower.
There has been much confusion on this subject from a failure to
distinguish between the adaptation of particular means to an end
and the effect, or supposed effect, of those means in producing
results desired by the government. The argument is stated thus: the
object of borrowing is to raise funds; the annexing of the quality
of legal tender to the notes of the government induces parties the
more readily to loan upon them; the result desired by the
government -- the acquisition of funds -- is thus accomplished;
therefore, the annexing of the quality of legal tender is an
appropriate means to the execution of the power to borrow. But it
is evident that the same reasoning would justify as appropriate
means to the execution of this power any measures which would
result in obtaining the required funds. The annexing of a provision
by which the notes of the government should serve as a free ticket
in the public conveyances of the country, or for ingress into
places of public amusement, or which would entitle the holder to a
percentage out of the revenues of private corporations or exempt
his entire property, as well as the notes themselves, from state
and municipal taxation would produce a ready acceptance of the
notes. But the advocate of the most liberal construction would
hardly pretend that these measures or similar measures touching the
property of third parties would be appropriate as a means to the
execution of the power to borrow. Indeed, there is no invasion by
government of the rights of third parties which might not thus be
sanctioned upon the pretense that its allowance to the holder of
the notes would lead to their ready acceptance and produce the
desired loan.
The actual effect of the quality of legal tender in inducing
parties to receive them was necessarily limited to the amount
required by existing debtors who did not scruple to discharge with
them their preexisting liabilities. For moneys desired from other
parties, or supplies required for the use of the army or navy, the
provision added nothing to the value of the notes. Their borrowing
power or purchasing
Page 79 U. S. 644
power depended, by a general and a universal law of currency,
not upon the legal tender clause, but upon the confidence which the
parties receiving the notes had in their ultimate payment. Their
exchangeable value was determined by this confidence, and every
person dealing in them advanced his money and regulated his charges
accordingly.
The inability of mere legislation to control this universal law
of currency is strikingly illustrated by the history of the bills
of credit issued by the Continental Congress during our
Revolutionary War. From June, 1775, to March, 1780, these bills
amounted to over $300,000,000. Depreciation followed as a natural
consequence, commencing in 1777, when the issues only equaled
$14,000,000. Previous to this time, in January, 1776, when the
issues were only $5,000,000, Congress had by resolution declared
that if any person should be "so lost to all virtue and regard to
his country" as to refuse to receive the bills in payment, he
should, on conviction thereof by the committee of the city, county,
or district, or, in case of appeal from their decision, by the
assembly, convention, council, or committee of safety of the colony
where he resided, be "deemed, published, and treated as an enemy of
his country and precluded from all trade or intercourse with the
inhabitants" of the colonies. [
Footnote
5/7]
And in January, 1777, when as yet the issues were only
$14,000,000, Congress passed this remarkable resolution:
"
Resolved That all bills of credit emitted by authority
of Congress ought to pass current in all payments, trade, and
dealings in these states, and be deemed in value equal to the same
nominal sums in Spanish milled dollars, and that whosoever shall
offer, ask, or receive more in the said bills for any gold or
silver coins, bullion, or any other species of money whatsoever,
than the nominal sum or amount thereof in Spanish milled dollars,
or more in the said bills for any lands, houses, goods, or
commodities whatsoever than the same could be purchased at of the
same person or persons in gold, silver, or any other species of
money whatsoever,
Page 79 U. S. 645
or shall offer to sell any goods or commodities for gold or
silver coins or any other species of money whatsoever and refuse to
sell the same for the said continental bills, every such person
ought to be deemed an enemy to the liberty of these United States
and to forfeit the value of the money so exchanged, or house, land,
or commodity so sold or offered for sale. And it is recommended to
the legislatures of the respective states to enact laws inflicting
such forfeitures and other penalties on offenders as aforesaid as
will prevent such pernicious practices. That it be recommended to
the legislatures of the United States to pass laws to make the
bills of credit issued by the Congress a lawful tender in payments
of public and private debts, and a refusal thereof an
extinguishment of such debts; that debts payable in sterling money
be discharged with continental dollars at the rate of 4
s.
6
d. sterling per dollar, and that in discharge of all
other debts and contracts continental dollars pass at the rate
fixed by the respective states for the value of Spanish milled
dollars."
The several states promptly responded to the recommendations of
Congress and made the bills a legal tender for debts and the
refusal to receive them an extinguishment of the debt.
Congress also issued, in September, 1779, a circular addressed
to the people on the subject in which they showed that the United
States would be able to redeem the bills, and they repelled with
indignation the suggestion that there could be any violation of the
public faith. "The pride of America," said the address,
"revolts from the idea; her citizens know for what purposes
these emissions were made, and have repeatedly plighted their faith
for the redemption of them; they are to be found in every man's
possession, and every man is interested in their being redeemed;
they must therefore entertain a high opinion of American credulity
who suppose the people capable of believing, on due reflection,
that all America will, against the faith, the honor, and the
interest of all America, be ever prevailed upon to countenance,
support, or permit so ruinous, so disgraceful a
Page 79 U. S. 646
measure. We are convinced that the efforts and arts of our
enemies will not be wanting to draw us into this humiliating and
contemptible situation. Impelled by malice and the suggestions of
chagrin and disappointment at not being able to bend our necks to
the yoke, they will endeavor to force or seduce us to commit this
unpardonable sin in order to subject us to the punishment due to
it, and that we may thenceforth be a reproach and a byword among
the nations. Apprised of these consequences, knowing the value of
national character, and impressed with a due sense of the immutable
laws of justice and honor, it is impossible that America should
think without horror of such an execrable deed. [
Footnote 5/8]"
Yet in spite of the noble sentiments contained in this address,
which bears the honored name of John Jay, then President of
Congress and afterwards the first Chief Justice of this Court, and
in spite of legal tender provisions and harsh penal statutes, the
universal law of currency prevailed. Depreciation followed until it
became so great that the very idea of redemption at par was
abandoned.
Congress then proposed to take up the bills by issuing new bills
on the credit of the several states, guaranteed by the United
States, not exceeding one-twentieth of the amount of the old issue,
the new bills to draw interest and be redeemable in six years. But
the scheme failed and the bills became, during 1780, of so little
value that they ceased to circulate and "quietly died," says the
historian of the period, "in the hands of their possessors."
[
Footnote 5/9]
And it is within the memory of all of us that during the late
rebellion the notes of the United States issued under the Legal
Tender Act rose in value in the market as the successes of our arms
gave evidence of an early termination of the war, and that they
fell in value with every triumph of the Confederate forces. No
legislation of Congress declaring these notes to be money instead
of representatives
Page 79 U. S. 647
of money or credit could alter this result one jot or title. Men
measured their value not by congressional declaration, which could
not alter the nature of things, but by the confidence reposed in
their ultimate payment.
Without the legal tender provision, the notes would have
circulated equally well and answered all the purposes of government
-- the only direct benefit resulting from that provision arising,
as already stated, from the ability it conferred upon unscrupulous
debtors to discharge with them previous obligations. The notes of
state banks circulated without possessing that quality and supplied
a currency for the people just so long as confidence in the ability
of the banks to redeem the notes continued. The notes issued by the
national bank associations during the war, under the authority of
Congress, amounting to $300,000,000, which were never made a legal
tender, circulated equally well with the notes of the United
States. Neither their utility nor their circulation was diminished
in any degree by the absence of a legal tender quality. They rose
and fell in the market under the same influences and precisely to
the same extent as the notes of the United States, which possessed
this quality.
It is foreign, however, to my argument to discuss the utility of
the legal tender clause. The utility of a measure is not the
subject of judicial cognizance, nor, as already intimated, the test
of its constitutionality. But the relation of the measure as a
means to an end, authorized by the Constitution, is a subject of
such cognizance, and the test of its constitutionality, when it is
not prohibited by any specific provision of that instrument and is
consistent with its letter and spirit. "The degree," said
Hamilton,
"in which a measure is necessary can never be a test of the
legal right to adopt it. That must be a matter of opinion, and can
only be a test of expediency. The relation between the means and
the end, between the nature of a means employed toward the
execution of the power and the object of that power, must be the
criterion of unconstitutionality, not the more or less of necessity
or utility. "
Page 79 U. S. 648
If this were not so, if Congress could not only exercise, as it
undoubtedly may, unrestricted liberty of choice among the means
which are appropriate and plainly adapted to the execution of an
express power, but could also judge, without its conclusions' being
subject to question in cases involving private rights, what means
are thus appropriate and adapted, our government would be not what
it was intended to be, one of limited, but one of unlimited
powers.
Of course Congress must inquire in the first instance and
determine for itself not only the expediency but the fitness to the
end intended of every measure adopted by its legislation. But the
power of this tribunal to revise these determinations in cases
involving private rights has been uniformly asserted, since the
formation of the Constitution to this day, by the ablest statesmen
and jurists of the country.
I have thus dwelt at length upon the clause of the Constitution
investing Congress with the power to borrow money on the credit of
the United States because it is under that power that the notes of
the United States were issued, and it is upon the supposed enhanced
value which the quality of legal tender gives to such notes, as the
means of borrowing, that the validity and constitutionality of the
provision annexing this quality are founded. It is true that in the
arguments of counsel and in the several opinions of different state
courts to which our attention has been called, and in the
dissenting opinion in
Hepburn v. Griswold, reference is
also made to other powers possessed by Congress, particularly to
declare war, to suppress insurrection, to raise and support armies,
and to provide and maintain a navy, all of which were called into
exercise and severely taxed at the time the Legal Tender Act was
passed. But it is evident that the notes have no relation to these
powers or to any other powers of Congress except as they furnish a
convenient means for raising money for their execution. The
existence of the war only increased the urgency of the government
for funds. It did not add to its powers to raise such funds, or
change in any respect the nature of those powers or the
transactions which they authorized. If the
Page 79 U. S. 649
power to engraft the quality of legal tender upon the notes
existed at all with Congress, the occasion, the extent, and the
purpose of its exercise were mere matters of legislative
discretion, and the power may be equally exerted when a loan is
made to meet the ordinary expenses of government in time of peace
as when vast sums are needed to raise armies and provide navies in
time of war. The wants of the government can never be the measure
of its powers.
The Constitution has specifically designated the means by which
funds can be raised for the uses of the government, either in war
or peace. These are taxation, borrowing, coining, and the sale of
its public property. Congress is empowered to levy and collect
taxes, duties, imposts, and excises of any extent which the public
necessities may require. Its power to borrow is equally unlimited.
It can convert any bullion it may possess into coin, and it can
dispose of the public lands and other property of the United States
or any part of such property. The designation of these means
exhausts the powers of Congress on the subject of raising money.
The designation of the means is a negation of all others, for the
designation would be unnecessary and absurd if the use of any and
all means were permissible without it. These means exclude a resort
to forced loans and to any compulsory interference with the
property of third persons except by regular taxation in one of the
forms mentioned.
But this is not all. The power "to coin money" is, in my
judgment, inconsistent with and repugnant to the existence of a
power to make anything but coin a legal tender. To coin money is to
mould metallic substances having intrinsic value into certain forms
convenient for commerce, and to impress them with the stamp of the
government indicating their value. Coins are pieces of metal of
definite weight and value thus stamped by national authority. Such
is the natural import of the terms "to coin money" and "coin," and
if there were any doubt that this is their meaning in the
Constitution, it would be removed by the language which immediately
follows the grant of the "power
Page 79 U. S. 650
to coin," authorizing Congress to regulate the value of the
money thus coined, and also "of foreign coin," and by the
distinction made in other clauses between coin and the obligations
of the general government and of the several states.
The power of regulation conferred is the power to determine the
weight and purity of the several coins struck, and their consequent
relation to the monetary unit which might be established by the
authority of the government -- a power which can be exercised with
reference to the metallic coins of foreign countries but which is
incapable of execution with reference to their obligations or
securities.
Then, in the clause of the Constitution immediately following,
authorizing Congress "to provide for the punishment of
counterfeiting the securities and current coin of the United
States," a distinction between the obligations and coins of the
general government is clearly made. And in the tenth section, which
forbids the states to "coin money, emit bills of credit, and make
anything but gold and silver coin a tender in payment of debts," a
like distinction is made between coin and the obligations of the
several states. The terms "gold" and "silver." as applied to the
coin, exclude the possibility of any other conclusion.
Now money in the true sense of the term is not only a medium of
exchange, but it is a standard of value by which all other values
are measured. Blackstone says, and Story repeats his language,
"Money is a universal medium or common standard, by a comparison
with which the value of all merchandise may be ascertained, or it
is a sign which represents the respective values of all
commodities. [
Footnote 5/10]"
Money being such standard, its coins or pieces are necessarily a
legal tender to the amount of their respective values for all
contracts or judgments payable in money, without any legislative
enactment to make them so. The provisions in the different coinage
acts that the coins to be struck shall be such legal tender, are
merely declaratory of their effect when offered in payment, and are
not essential to give them that character.
Page 79 U. S. 651
The power to coin money is therefore a power to fabricate coins
out of metal as money, and thus make them a legal tender for their
declared values as indicated by their stamp. If this be the true
import and meaning of the language used, it is difficult to see how
Congress can make the paper of the government a legal tender. When
the Constitution says that Congress shall have the power to make
metallic coins a legal tender, it declares in effect that it shall
make nothing else such tender. The affirmative grant is here a
negative of all other power over the subject.
Besides this, there cannot well be two different standards of
value, and consequently two kinds of legal tender for the discharge
of obligations arising from the same transactions. The standard or
tender of the lower actual value would in such case inevitably
exclude and supersede the other, for no one would use the standard
or tender of higher value when his purpose could be equally well
accomplished by the use of the other. A practical illustration of
the truth of this principle we have all seen in the effect upon
coin of the act of Congress making the notes of the United States a
legal tender. It drove coin from general circulation, and made it,
like bullion, the subject of sale and barter in the market.
The inhibition upon the states to coin money and yet to make
anything but gold and silver coin a tender in payment of debts must
be read in connection with the grant of the coinage power to
Congress. The two provisions, taken together, indicate beyond
question that the coins which the national government was to
fabricate and the foreign coins the valuation of which it was to
regulate were to consist principally, if not entirely, of gold and
silver.
The framers of the Constitution were considering the subject of
money to be used throughout the entire Union when these provisions
were inserted, and it is plain that they intended by them that
metallic coins fabricated by the national government, or adopted
from abroad by its authority, composed of the precious metals,
should everywhere be the standard and the only standard of value by
which exchanges could be regulated and payments made.
Page 79 U. S. 652
At that time, gold and silver moulded into forms convenient for
use, and stamped with their value by public authority, constituted,
with the exception of pieces of copper for small values, the money
of the entire civilized world. Indeed these metals divided up and
thus stamped always have constituted money with all people having
any civilization, from the earliest periods in the history of the
world down to the present time. It was with "four hundred sheckels
of silver, current money with the merchant," that Abraham bought
the field of Machpelah nearly four thousand years ago. [
Footnote 5/11] This adoption of the
precious metals as the subject of coinage -- the material of money
by all peoples in all ages of the world -- has not been the result
of any vagaries of fancy, but is attributable to the fact that they
of all metals alone possess the properties which are essential to a
circulating medium of uniform value.
"The circulating medium of a commercial community," says Mr.
Webster,
"must be that which is also the circulating medium of other
commercial communities, or must be capable of being converted into
that medium without loss. It must also be able not only to pass in
payments and receipts among individuals of the same society and
nation, but to adjust and discharge the balance of exchanges
between different nations. It must be something which has a value
abroad as well as at home, by which foreign as well as domestic
debts can be satisfied. The precious metals alone answer these
purposes. They alone, therefore, are money, and whatever else is to
perform the functions of money must be their representative and
capable of being turned into them at will. So long as bank paper
retains this quality, it is a substitute for money. Divested of
this, nothing can give it that character. [
Footnote 5/12]"
The statesmen who framed the Constitution understood this
principle as well as it is understood in our day. They had seen in
the experience of the Revolutionary period the demoralizing
tendency, the cruel injustice, and the intolerable
Page 79 U. S. 653
oppression of a paper currency not convertible on demand into
money, and forced into circulation by legal tender provisions and
penal enactments. When they therefore were constructing a
government for a country, which they could not fail to see was
destined to be a mighty empire and have commercial relations with
all nations, a government which they believed was to endure for
ages, they determined to recognize in the fundamental law as the
standard of value that which ever had been and always must be
recognized by the world as the true standard, and thus facilitate
commerce, protect industry, establish justice, and prevent the
possibility of a recurrence of the evils which they had experienced
and the perpetration of the injustice which they had witnessed. "We
all know," says Mr. Webster,
"that the establishment of a sound and uniform currency was one
of the greatest ends contemplated in the adoption of the present
Constitution. If we could now fully explore all the motives of
those who framed and those who supported that Constitution, perhaps
we should hardly find a more powerful one than this. [
Footnote 5/13]"
And how the framers of the Constitution endeavored to establish
this "sound and uniform currency" we have already seen in the
clauses which they adopted providing for a currency of gold and
silver coins. Their determination to sanction only a metallic
currency is further evident from the debates in the Convention upon
the proposition to authorize Congress to emit bills on the credit
of the United States. By bills of credit, as the terms were then
understood, were meant paper issues, intended to circulate through
the community for its ordinary purposes as money, bearing upon
their face the promise of the government to pay the sums specified
thereon at a future day. The original draft contained a clause
giving to Congress power "to borrow money and emit bills on the
credit of the United States," and when the clause came up for
consideration, Mr. Morris moved to strike out the words "and emit
bills on the credit
Page 79 U. S. 654
of the United States," observing that "if the United States had
credit, such bills would be unnecessary; if they had not, unjust
and useless." Mr. Madison inquired whether it would not be
"sufficient to prohibit the making them a legal tender." "This will
remove," he said, "the temptation to emit them with unjust views,
and promissory notes in that shape may in some emergencies be
best." Mr. Morris replied that striking out the words would still
leave room for "notes of a responsible minister," which would do
"all the good without the mischief." Mr. Gorham was for striking
out the words without inserting any prohibition. If the words
stood, he said, they might "suggest and lead to the measure," and
that the power, so far as it was necessary or safe, was "involved
in that of borrowing." Mr. Mason said he was unwilling "to tie the
hands of Congress," and thought Congress "would not have the power
unless it were expressed." Mr. Ellsworth thought it "a favorable
moment to shut and bar the door against paper money." "The
mischiefs," he said,
"of the various experiments which had been made were now fresh
in the public mind and had excited the disgust of all the
respectable part of America. By withholding the power from the new
government, more friends of influence would be gained to it than by
almost anything else. Paper money can in no case be necessary. Give
the government credit, and other resources will offer. The power
may do harm, never good."
Mr. Wilson thought that "it would have a most salutary influence
on the credit of the United States to remove the possibility of
paper money." "This expedient," he said, "can never succeed whilst
its mischiefs are remembered, and as long as it can be resorted to,
it will be a bar to other resources." Mr. Butler was urgent for
disarming the government of such a power, and remarked "that paper
was a legal tender in no country in Europe." Mr. Mason replied that
if there was no example in Europe, there was none in which the
government was restrained on this head, and he was averse "to tying
up the hands of the legislature altogether." Mr. Langdon preferred
to reject the whole plan than retain the words.
Page 79 U. S. 655
Of those who participated in the debates, only one, Mr. Mercer,
expressed an opinion favorable to paper money, and none suggested
that if Congress were allowed to issue the bills, their acceptance
should be compulsory -- that is, that they should be made a legal
tender. But the words were stricken out by a vote of nine states to
two. Virginia voted for the motion, and Mr. Madison has appended a
note to the debates stating that her vote was occasioned by his
acquiescence and that he
"became satisfied that striking out the words would not disable
the government from the use of public notes, as far as they could
be safe and proper, and would only cut off the pretext for a
paper currency and particularly for making the bills
a
tender either for public or private debts. [
Footnote 5/14]"
If anything is manifest from these debates, it is that the
members of the Convention intended to withhold from Congress the
power to issue bills to circulate as money -- that is, to be
receivable in compulsory payment, or, in other words, having the
quality of legal tender -- and that the express power to issue the
bills was denied under an apprehension that if granted, it would
give a pretext to Congress, under the idea of declaring their
effect, to annex to them that quality. The issue of notes simply as
a means of borrowing money, which of course would leave them to be
received at the option of parties, does not appear to have been
seriously questioned. The circulation of notes thus issued as a
voluntary currency and their receipt in that character in payment
of taxes, duties, and other public expenses was not subject to the
objections urged.
I am aware of the rule that the opinions and intentions of
individual members of the Convention, as expressed in its debates
and proceedings, are not to control the construction of the plain
language of the Constitution or narrow down the powers which that
instrument confers. Members, it is said, who did not participate in
the debate may have entertained different views from those
expressed. The several
Page 79 U. S. 656
state conventions to which the Constitution was submitted may
have differed widely from each other and from its framers in their
interpretation of its clauses. We all know that opposite opinions
on many points were expressed in the conventions, and conflicting
reasons were urged both for the adoption and the rejection of that
instrument. All this is very true, but it does not apply in the
present case, for on the subject now under consideration, there was
everywhere, in the several state conventions and in the discussions
before the people, an entire uniformity of opinion so far as we
have any record of its expression, and that concurred with the
intention of the Convention, as disclosed by its debates, that the
Constitution withheld from Congress all power to issue bills to
circulate as money, meaning by that bills made receivable in
compulsory payment, or, in other words, having the quality of legal
tender. Everyone appears to have understood that the power of
making paper issues a legal tender, by Congress or by the states,
was absolutely and forever prohibited.
Mr. Luther Martin, a member of the Convention, in his speech
before the Maryland Legislature as reported in his letter to that
body, states the arguments urged against depriving Congress of the
power to emit bills of credit, and then says that a
"majority of the Convention, being wise beyond every event and
being willing to risk any political evil rather than admit the idea
of a paper emission in any possible case, refused to trust this
authority to a government to which they were lavishing the most
unlimited powers of taxation and to the mercy of which they were
willing blindly to trust the liberty and property of the citizens
of every state in the Union,
and they erased that clause from
the system."
Not only was this construction given to the Constitution by its
framers and the people in their discussions at the time it was
pending before them, but until the passage of the act of 1862, a
period of nearly three-quarters of a century, the soundness of this
construction was never called in question by any legislation of
Congress or the opinion of any judicial tribunal. Numerous acts, as
already stated,
Page 79 U. S. 657
were passed during this period authorizing the issue of notes
for the purpose of raising funds or obtaining supplies, but in none
of them was the acceptance of the notes made compulsory. Only one
instance have I been able to find in the history of congressional
proceedings where it was even suggested that it was within the
competency of Congress to annex to the notes the quality of legal
tender, and this occurred in 1814. The government was then greatly
embarrassed from the want of funds to continue the war existing
with Great Britain, and a member from Georgia introduced into the
House of Representatives several resolutions directing an inquiry
into the expediency of authorizing the Secretary of the Treasury to
issue notes convenient for circulation and making provision for the
purchase of supplies in each state. Among the resolutions was one
declaring that the notes to be issued should be a legal tender for
debts due or subsequently becoming due between citizens of the
United States and between citizens and foreigners. The House agreed
to consider all the resolutions but the one containing the legal
tender provision. That it refused to consider by a vote of more
than two to one. [
Footnote
5/15]
As until the act of 1862 there was no legislation making the
acceptance of notes issued on the credit of the United States
compulsory, the construction of the clause of the Constitution
containing the grant of the coinage power never came directly
before this Court for consideration, and the attention of the Court
was only incidentally drawn to it. But whenever the Court spoke on
the subject even incidentally, its voice was in entire harmony with
that of the Convention.
Thus, in
Gwin v. Breedlove, [
Footnote 5/16] where a marshal of Mississippi,
commanded to collect a certain amount of dollars on execution,
received the amount in bank notes, it was held that he was liable
to the plaintiff in gold and silver. "By the Constitution of the
United States," said the Court, "gold or silver coin made current
by law can only be tendered in payment of debts."
Page 79 U. S. 658
And in the case of the
United States v. Marigold,
[
Footnote 5/17] where the
question arose whether Congress had power to enact certain
provisions of law for the punishment of persons bringing into the
United States counterfeit coin with intent to pass it, the Court
said: these provisions
"appertain to the execution of an important trust invested by
the Constitution, and to the obligation to fulfill that trust on
the part of the government -- namely the trust and the duty of
creating and maintaining a uniform and pure metallic standard of
value throughout the Union. The power of coining money and of
regulating its value was delegated to Congress by the Constitution
for the very purpose, as assigned by the framers of that
instrument, of creating and preserving the uniformity and purity of
such a standard of value, and on account of the impossibility which
was foreseen of otherwise preventing the inequalities and the
confusion necessarily incident to different views of policy, which
in different communities would be brought to bear on this subject.
The power to coin money being thus given to Congress, founded on
public necessity, it must carry with it the correlative power of
protecting the creature and object of that power."
It is difficult to perceive how the trust and duty here
designated of "creating and maintaining a uniform and metallic
standard of value throughout the Union" is discharged when another
standard of lower value and fluctuating character is authorized by
law which necessarily operates to drive the first from
circulation.
In addition to all the weight of opinion I have mentioned, we
have, to the same purport, from the adoption of the Constitution up
to the passage of the act of 1862, the united testimony of the
leading statesmen and jurists of the country. Of all the men who
during that period participated with any distinction in the
councils of the nation, not one can be named who ever asserted any
different power in Congress than what I have mentioned. As observed
by THE CHIEF JUSTICE, statesmen who disagreed widely on other
points agreed on this.
Page 79 U. S. 659
Mr. Webster, who has always been regarded by a large portion of
his countrymen as one of the ablest and most enlightened expounders
of the Constitution, did not seem to think there was any doubt on
the subject, although he belonged to the class who advocated the
largest exercise of powers by the general government. From his
first entrance into public life in 1812, he gave great
consideration to the subject of the currency, and in an elaborate
speech in the Senate in 1836 he said:
"Currency, in a large and perhaps just sense, includes not only
gold and silver and bank bills, but bills of exchange also. It may
include all that adjusts exchanges and settles balances in the
operations of trade and business, but if we understand by currency
the legal money of the country, and that which constitutes a lawful
tender for debts and is the statute measure of value, then
undoubtedly nothing is included but gold and silver. Most
unquestionably there is no legal tender, and there can be no legal
tender in this country, under the authority of this government or
any other, but gold and silver -- either the coinage of our own
mints or foreign coins, at rates regulated by Congress. This is a
constitutional principle perfectly plain and of the very highest
importance. The states are expressly prohibited from making
anything but gold and silver a tender in payment of debts, and
although no such express prohibition is applied to Congress, yet as
Congress has no power granted to it in this respect but to coin
money and to regulate the value of foreign coins, it clearly has no
power to substitute paper or anything else for coin as a tender in
payment of debts and in discharge of contracts. Congress has
exercised this power fully in both its branches. It has coined
money, and still coins it; it has regulated the value of foreign
coins, and still regulates their value. The legal tender,
therefore, the constitutional standard of value, is established and
cannot be overthrown. To overthrow it would shake the whole
system."
If now we consider the history of the times when the
Constitution was adopted; the intentions of the framers of that
instrument, as shown in their debates; the contemporaneous
Page 79 U. S. 660
exposition of the coinage power in the state conventions
assembled to consider the Constitution, and in the public
discussions before the people; the natural meaning of the terms
used; the nature of the Constitution itself as creating a
government of enumerated powers; the legislative exposition of
nearly three-quarters of a century; the opinions of judicial
tribunals, and the recorded utterances of statesmen, jurists, and
commentators, it would seem impossible to doubt that the only
standard of value authorized by the Constitution was to consist of
metallic coins struck or regulated by the direction of Congress,
and that the power to establish any other standard was denied by
that instrument.
There are other considerations besides those I have stated which
are equally convincing against the constitutionality of the legal
tender provision of the Act of February 25, 1862, so far as it
applies to private debts and debts by the government contracted
previous to its passage. That provision operates directly to impair
the obligation of such contracts. In the dissenting opinion in the
case of
Hepburn v. Griswold this is admitted to be its
operation, and the position is taken that while the Constitution
forbids the states to pass such laws, it does not forbid Congress
to do this, and the power to establish a uniform system of
bankruptcy, which is expressly conferred, is mentioned in support
of the position. In some of the opinions of the state courts, to
which our attention has been directed, it is denied that the
provision in question impairs the obligation of previous contracts,
it being asserted that a contract to pay money is satisfied,
according to its meaning, by the payment of that which is money
when the payment is made, and that if the law does not interfere
with this mode of satisfaction, it does not impair the obligation
of the contract. This position is true so long as the term "money"
represents the same thing in both cases or their actual
equivalents, but it is not true when the term has different
meanings. "Money" is a generic term, and contracts for money are
not made without a specification of the coins or denominations of
money, and the
Page 79 U. S. 661
number of them intended, as eagles, dollars, or cents, and it
will not be pretended that a contract for a specified number of
eagles can be satisfied by a delivery of an equal number of
dollars, although both eagles and dollars are money; nor would it
thus be contended, though at the time the contract matured, the
legislature had determined to call dollars eagles. Contracts are
made for things, not names or sounds, and the obligation of a
contract arises from its terms and the means which the law affords
for its enforcement.
A law which changes the terms of the contract, either in the
time or mode of performance, or imposes new conditions, or
dispenses with those expressed, or authorizes for its satisfaction
something different from that provided, is a law which impairs its
obligation, for such a law relieves the parties from the moral duty
of performing the original stipulations of the contract, and it
prevents their legal enforcement.
The notion that contracts for the payment of money stand upon
any different footing in this respect from other contracts appears
to have had its origin in certain old English cases, particularly
that of mixed money, [
Footnote
5/18] which were decided upon the force of the prerogative of
the King with respect to coin, and have no weight as applied to
powers possessed by Congress under our Constitution. The language
of Mr. Chief Justice Marshall in
Faw v. Marsteller,
[
Footnote 5/19] which is cited in
support of this notion, can only be made to express concurrence
with it when detached from its context and read separated from the
facts in reference to which it was used.
It is obvious that the act of 1862 changes the terms of
contracts for the payment of money made previous to its passage in
every essential particular. All such contracts had reference to
metallic coins, struck or regulated by Congress, and composed
principally of gold and silver, which constituted the legal money
of the country. The several
Page 79 U. S. 662
coinage acts had fixed the weight, purity, forms, impressions,
and denominations of these coins, and had provided that their value
should be certified by the form and impress which they received at
the mint.
They had established the dollar as the money unit, and
prescribed the grains of silver it should contain, and the grains
of gold which should compose the different gold coins. Every dollar
was therefore a piece of gold or silver certified to be of a
specified weight and purity, by its form and impress. A contract to
pay a specified number of dollars was then a contract to deliver
the designated number of pieces of gold or silver of this
character; and by the laws of Congress and of the several states,
the delivery of such dollars could be enforced by the holder.
The act of 1862 changes all this; it declares that gold or
silver dollars need not be delivered to the creditor according to
the stipulations of the contract; that they need not be delivered
at all; that promises of the United States, with which the creditor
has had no relations, to pay these dollars, at some uncertain
future day shall be received in discharge of the contracts -- in
other words, that the holder of such contracts shall take in
substitution for them different contracts with another party, less
valuable to him, and surrender the original.
Taking it, therefore, for granted that the law plainly impairs
the obligation of such contracts, I proceed to inquire whether it
is for that reason subject to any constitutional objection. In the
dissenting opinion in
Hepburn v. Griswold it is said, as
already mentioned, that the Constitution does not forbid
legislation impairing the obligation of contracts.
It is true there is no provision in the Constitution forbidding
in express terms such legislation. And it is also true that there
are express powers delegated to Congress the execution of which
necessarily operates to impair the obligation of contracts. It was
the object of the framers of that instrument to create a national
government competent to represent the entire country in its
relations with foreign nations and to accomplish by its legislation
measures of
Page 79 U. S. 663
common interest to all the people which the several states in
their independent capacities were incapable of effecting or, if
capable, the execution of which would be attended with great
difficulty and embarrassment. They therefore clothed Congress with
all the powers essential to the successful accomplishment of these
ends, and carefully withheld the grant of all other powers. Some of
the powers granted, from their very nature, interfere in their
execution with contracts of parties. Thus, war suspends intercourse
and commerce between citizens or subjects of belligerent nations;
it renders during its continuance the performance of contracts
previously made unlawful. These incidental consequences were
contemplated in the grant of the war power. So the regulation of
commerce and the imposition of duties may so affect the prices of
articles imported or manufactured as to essentially alter the value
of previous contracts respecting them; but this incidental
consequence was seen in the grant of the power over commerce and
duties. There can be no valid objection to laws passed in execution
of express powers that consequences like these follow incidentally
from their execution. But it is otherwise when such consequences do
not follow incidentally, but are directly enacted.
The only express authority for any legislation affecting the
obligation of contracts is found in the power to establish a
uniform system of bankruptcy, the direct object of which is to
release insolvent debtors from their contracts upon the surrender
of their property. From this express grant in the Constitution I
draw a very different conclusion from that drawn in the dissenting
opinion in
Hepburn v. Griswold and in the opinion of the
majority of the Court just delivered. To my mind, it is a strong
argument that there is no general power in Congress to interfere
with contracts that a special grant was regarded as essential to
authorize a uniform system of bankruptcy. If such general power
existed, the delegation of an express power in the case of
bankrupts was unnecessary. As very justly observed by counsel, if
this sovereign power could be taken in any case without express
Page 79 U. S. 664
grant, it could be taken in connection with bankruptcies, which
might be regarded in some respects as a regulation of commerce made
in the interest of traders.
The grant of a limited power over the subject of contracts
necessarily implies that the framers of the Constitution did not
intend that Congress should exercise unlimited power, or any power
less restricted. The limitation designated is the measure of
congressional power over the subject. This follows from the nature
of the instrument as one of enumerated powers.
The doctrine that where a power is not expressly forbidden, it
may be exercised would change the whole character of our
government. As I read the writings of the great commentators and
the decisions of this Court, the true doctrine is the exact reverse
-- that if a power is not in terms granted and is not necessary and
proper for the exercise of a power thus granted, it does not
exist.
The position that Congress possesses some undefined power to do
anything which it may deem expedient as a resulting power from the
general purposes of the government, which is advanced in the
opinion of the majority, would of course settle the question under
consideration without difficulty, for it would end all controversy
by changing our government from one of enumerated powers to one
resting in the unrestrained will of Congress.
"The government of the United States," says Mr. Chief Justice
Marshall, speaking for the Court in
Martin v. Hunter's
Lessee, [
Footnote 5/20]
"can claim no powers which are not granted to it by the
Constitution, and the powers actually granted must be such as are
expressly given or given by necessary implication."
This implication, it is true, may follow from the grant of
several express powers as well as from one alone, but the power
implied must in all cases be subsidiary to the execution of the
powers expressed. The language of the Constitution respecting the
writ of habeas corpus, declaring that it shall not be suspended
unless, when in cases
Page 79 U. S. 665
of rebellion or invasion, the public safety may require it, is
cited as showing that the power to suspend such writ exists
somewhere in the Constitution, and the adoption of the amendments
is mentioned as evidence that important powers were understood by
the people who adopted the Constitution to have been created by it,
which are not enumerated and are not included incidentally in any
of those enumerated.
The answer to this position is found in the nature of the
Constitution, as one of granted powers, as stated by Mr. Chief
Justice Marshall. The inhibition upon the exercise of a specified
power does not warrant the implication that, but for such
inhibition, the power might have been exercised. In the Convention
which framed the Constitution, a proposition to appoint a committee
to prepare a bill of rights was unanimously rejected, and it has
been always understood that its rejection was upon the ground that
such a bill would contain various exceptions to powers not granted,
and on this very account would afford a pretext for asserting more
than was granted. [
Footnote 5/21]
In the discussions before the people, when the adoption of the
Constitution was pending, no objection was urged with greater
effect than this absence of a bill of rights, and in one of the
numbers of the Federalist, Mr. Hamilton endeavored to combat the
objection. After stating several reasons why such a bill was not
necessary, he said:
"I go further and affirm that bills of rights, in the sense and
to the extent they are contended for, are not only unnecessary in
the proposed Constitution, but would even be dangerous. They would
contain various exceptions to powers not granted, and on this very
account would afford a colorable pretext to claim more than were
granted. For why declare that things shall not be done which there
is no power to do? Why, for instance, should it be said that the
liberty of the press shall not be restrained when no power is given
by which restrictions may be imposed? I will not
Page 79 U. S. 666
contend that such a provision would confer a regulating power,
but it is evident that it would furnish to men disposed to usurp a
plausible pretense for claiming that power. They might urge with a
semblance of reason that the Constitution ought not to be charged
with the absurdity of providing against the abuse of an authority
which was not given, and that the provision against restraining the
liberty of the press afforded a clear implication that a right to
prescribe proper regulations concerning it was intended to be
vested in the national government. This may serve as a specimen of
the numerous handles which would be given to the doctrine of
constructive powers by the indulgence of an injudicious zeal for
bills of right. [
Footnote
5/22]"
When the amendments were presented to the states for adoption
they were preceded by a preamble stating that the conventions of a
number of the states had, at the time of their adopting the
Constitution, expressed a desire "in order to prevent
misconception or abuse of its powers, that further
declaratory and restrictive clauses should be added."
Now will anyone pretend that Congress could have made a law
respecting an establishment of religion, or prohibiting the free
exercise thereof, or abridging the freedom of speech, or the right
of the people to assemble and petition the government for a redress
of grievances, had not prohibitions upon the exercise of any such
legislative power been embodied in an amendment?
How truly did Hamilton say that had a bill of rights been
inserted in the Constitution, it would have given a handle to the
doctrine of constructive powers. We have this day an illustration
in the opinion of the majority of the very claim of constructive
power which he apprehended, and it is the first instance, I
believe, in the history of this Court when the possession by
Congress of such constructive power has been asserted.
The interference with contracts by the legislation of the
several states previous to the adoption of the Constitution
Page 79 U. S. 667
was the cause of great oppression and injustice. "Not only,"
says Story, [
Footnote 5/23]
"was paper money issued and declared to be a tender in payment
of debts, but laws of another character, well known under the
appellation of tender laws, appraisement laws, installment laws,
and suspension laws were from time to time enacted which prostrated
all private credit and all private morals. By some of these laws,
the due payment of debts was suspended; debts were, in violation of
the very terms of the contract, authorized to be paid by
installments at different periods; property of any sort, however
worthless, either real or personal, might be tendered by the debtor
in payment of his debts, and the creditor was compelled to take the
property of the debtor which he might seize on execution at an
appraisement wholly disproportionate to its known value. Such
grievances and oppressions and others of a like nature were the
ordinary results of legislation during the Revolutionary War and
the intermediate period down to the formation of the Constitution.
They entailed the most enormous evils on the country, and
introduced a system of fraud, chicanery, and profligacy, which
destroyed all private confidence and all industry and
enterprise."
To prevent the recurrence of evils of this character, not only
was the clause inserted in the Constitution prohibiting the states
from issuing bills of credit and making anything but gold and
silver a tender in payment of debts, but also the more general
prohibition from passing any law impairing the obligation of
contracts. "To restore public confidence completely," says Chief
Justice Marshall, [
Footnote
5/24]
"it was necessary not only to prohibit the use of particular
means by which it might be effected, but to prohibit the use of any
means by which the same mischief might be produced. The Convention
appears to have intended to establish a great principle -- that
contracts should be inviolable."
It would require very clear evidence, one would suppose, to
induce a belief that with the evils resulting from what Marshall
terms the system of lax legislation following the
Page 79 U. S. 668
Revolution, deeply impressed on their minds, the framers of the
Constitution intended to vest in the new government created by them
this dangerous and despotic power, which they were unwilling should
remain with the states and thus widen the possible sphere of its
exercise.
When the possession of this power has been asserted in argument
(for until now, it has never been asserted in any decision of this
Court), it has been in cases where a supposed public benefit
resulted from the legislation or where the interference with the
obligation of the contract was very slight. Whenever a clear case
of injustice, in the absence of such supposed public good, is
stated, the exercise of the power by the government is not only
denounced, but the existence of the power is denied. No one,
indeed, is found bold enough to contend that if A. has a contract
for one hundred acres of land, or one hundred pounds of fruit, or
one hundred yards of cloth, Congress can pass a law compelling him
to accept one-half of the quantity in satisfaction of the contract.
But Congress has the same power to establish a standard of weights
and measures as it has to establish a standard of value, and can,
from time to time, alter such standard. It can declare that the
acre shall consist of eighty square rods instead of one hundred and
sixty, the pound of eight ounces instead of sixteen, and the foot
of six inches instead of twelve, and if it could compel the
acceptance of the same
number of acres, pounds, or yards
after such alteration, instead of the actual
quantity
stipulated, then the acceptance of one-half of the quantity
originally designated could be directly required without going
through the form of altering the standard. No just man could be
imposed upon by this use of words in a double sense where the same
names were applied to denote different quantities of the same
thing, nor would his condemnation of the wrong committed in such
case be withheld because the attempt was made to conceal it by this
jugglery of words.
The power of Congress to interfere with contracts for the
payment of money is not greater or in any particular different from
its power with respect to contracts for lands or
Page 79 U. S. 669
goods. The contract is not fulfilled any more in one case than
in the other by the delivery of a thing which is not stipulated,
because by legislative action it is called by the same name. Words
in contracts are to be construed in both cases in the sense in
which they were understood by the parties at the time of the
contract.
Let us for a moment see where the doctrine of the power asserted
will lead. Congress has the undoubted right to give such
denominations as it chooses to the coins struck by its authority,
and to change them. It can declare that the dime shall hereafter be
called a dollar, or, what is the same thing, it may declare that
the dollar shall hereafter be composed of the grains of silver
which now compose the dime. But would anybody pretend that a
contract for dollars, composed as at present, could be satisfied by
the delivery of an equal number of dollars of the new issue? I have
never met anyone who would go to that extent. The answer always has
been that would be too flagrantly unjust to be tolerated. Yet
enforcing the acceptance of paper promises or paper dollars, if the
promises can be so called, in place of gold or silver dollars is
equally enforcing a departure from the terms of the contract, the
injustice of the measure depending entirely upon the actual value
at the time of the promises in the market. Now reverse the case.
Suppose Congress should declare that hereafter the eagle should be
called a dollar, or that the dollar should be composed of as many
grains of gold as the eagle, would anybody for a moment contend
that a contract for dollars, composed as now of silver, should be
satisfied by dollars composed of gold? I am confident that no judge
sitting on this bench and indeed that no judge in Christendom could
be found who would sanction the monstrous wrong by decreeing that
the debtor could only satisfy his contract in such case by paying
ten times the value originally stipulated. The natural sense of
right which is implanted in every mind would revolt from such
supreme injustice. Yet there cannot be one law for debtors and
another law for creditors. If the contract can at one time be
changed by congressional
Page 79 U. S. 670
legislation for the benefit of the debtor. it may at another
time be changed for the benefit of the creditor.
For acts of flagrant injustice such as those mentioned there is
no authority in any legislative body, even though not restrained by
any express constitutional prohibition. For as there are
unchangeable principles of right and morality without which society
would be impossible and men would be but wild beasts preying upon
each other, so there are fundamental principles of eternal justice
upon the existence of which all constitutional government is
founded and without which government would be an intolerable and
hateful tyranny. There are acts, says MR. JUSTICE CHASE in
Calder v. Bull, [
Footnote
5/25] which the federal and state legislatures cannot do
without exceeding their authority. Among these he mentions a law
which punishes a citizen for an innocent action; a law that
destroys or impairs the lawful private contracts of citizens; a law
that makes a man a judge in his own cause; and a law that takes the
property from A. and gives it to B. "It is against all reason and
right," says the learned justice,
"for a people to entrust a legislature with such powers, and
therefore it cannot be presumed that they have done it. The genius,
the nature, and the spirit of our state governments amount to a
prohibition of such acts of legislation, and the general principles
of law and reason forbid them. The legislature may enjoin, permit,
forbid, and punish; they may declare new crimes, and establish
rules of conduct for all its citizens in future cases; they may
command what is right and prohibit what is wrong, but they cannot
change innocence into guilt, or punish innocence as a crime, or
violate the rights of an antecedent lawful private contract or the
right of private property. To maintain that our federal or state
legislatures possess such powers if they had not been expressly
restrained would, in my opinion, be a political heresy altogether
inadmissible in our free republican governments."
In
Ogden v. Saunders, [
Footnote 5/26] Mr. Justice Thompson, referring to the
provisions in the Constitution forbidding the states
Page 79 U. S. 671
to pass any bill of attainder,
ex post facto law, or
law impairing the obligation of contracts, says:
"Neither provision can strictly be considered as introducing any
new principle, but only for greater security and safety to
incorporate into this charter provisions admitted by all to be
among the first principles of government. No state court would, I
presume, sanction and enforce an
ex post facto law if no
such prohibition was contained in the Constitution of the United
States; so neither would retrospective laws, taking away vested
rights, be enforced. Such laws are repugnant to those fundamental
principles upon which every just system of laws is founded. It is
an elementary principle, adopted and sanctioned by the courts of
justice in this country and in Great Britain whenever such laws
have come under consideration, and yet retrospective laws are
clearly within this prohibition."
In Wilkson v. Leland, [
Footnote
5/27] Mr. Justice Story, whilst commenting upon the power of
the Legislature of Rhode Island under the charter of Charles II,
said:
"The fundamental maxims of a free government seem to require
that the rights of personal liberty and private property should be
held sacred. At least no court of justice in this country would be
warranted in assuming that the power to violate and disregard them,
a power so repugnant to the common principles of justice and civil
liberty, lurked under any general grant of legislative authority or
ought to be implied from any general expressions of the will of the
people. The people ought not to be presumed to part with rights so
vital to their security and well being without very strong and
direct expressions of such an intention."
Similar views to these cited from the opinions of Chase,
Thompson, Story and Marshall, are found scattered through the
opinions of the judges who have preceded us on this bench. As
against their collective force, the remark of Mr. Justice
Washington in the case of
Evans v. Eaton [
Footnote 5/28] is without significance. That was
made at
nisi prius in answer to
Page 79 U. S. 672
a motion for a nonsuit in an action brought for an infringement
of a patent right. The State of Pennsylvania had, in March, 1787,
which was previous to the adoption of the Constitution, given to
the plaintiff the exclusive right to make, use, and vend his
invention for fourteen years. In January, 1808, the United State
issued to him a patent for the invention for fourteen years from
that date. It was contended for the nonsuit that after the
expiration of the plaintiff's privilege granted by the state, the
right to his invention became invested in the people of the state
by an implied contract with the government, and therefore that
Congress could not, consistently with the Constitution, grant to
the plaintiff an exclusive right to the invention. The court
replied that neither the premises upon which the motion was founded
nor the conclusion could be admitted; that it was not true that the
grant of an exclusive privilege to an invention for a limited time
implied a binding and irrevocable contract with the people that at
the expiration of the period limited, the invention should become
their property; and that even if the premises were true, there was
nothing in the Constitution which forbade Congress to pass laws
violating the obligation of contracts.
The motion did not merit any consideration, as the federal court
had no power to grant a nonsuit against the will of the plaintiff
in any case. The expression under these circumstances of any reason
why the court would not grant the motion, if it possessed the
power, was aside the case, and is not, therefore, entitled to any
weight whatever as authority. It was true, however, as observed by
the court, that no such contract with the public, as stated, was
implied, and inasmuch as Congress was expressly authorized by the
Constitution to secure for a limited time to inventors the
exclusive right to their discoveries, it had the power in that way
to impair the obligation of such a contract, if any had existed.
And this is perhaps all that Mr. Justice Washington meant. It is
evident from his language in
Ogden v. Saunders, that he
repudiated the existence of any general power in Congress to
destroy or impair vested private rights.
Page 79 U. S. 673
What I have heretofore said respecting the power of Congress to
make the notes of the United States a legal tender in payment of
debts contracted previous to the act of 1862 and to interfere with
contracts has had reference to debts and contracts between
citizens. But the same power which is asserted over these matters
is also asserted with reference to previous debts owing by the
government, and must equally apply to contracts between the
government and the citizen. The act of 1862 declares that the notes
issued shall be a legal tender in payment of all debts, public and
private, with the exception of duties on imports and interest on
the public debt. If they are a legal tender for antecedent private
debts, they are also a legal tender for such debts owing by the
United States, except in the cases mentioned. That any exception
was made was a mere matter of legislative discretion. Express
contracts for the payment of gold or silver have been maintained by
this Court and specifically enforced on the ground that, upon a
proper construction of the act of 1862, in connection with other
acts Congress intended to except these contracts from the operation
of the legal tender provision. But the power covers all cases if it
exist at all. The power to make the notes of the United States the
legal equivalent to gold and silver necessarily includes the power
to cancel with them specific contracts for gold as well as money
contracts generally. Before the passage of the act of 1862, there
was no legal money except that which consisted of metallic coins,
struck or regulated by the authority of Congress. Dollars then
meant, as already said, certain pieces of gold or silver, certified
to be of a prescribed weight and purity by their form and impress
received at the mint. The designation of dollars in previous
contracts meant gold or silver dollars as plainly as if those
metals were specifically named.
It follows, then, logically from the doctrine advanced by the
majority of the Court as to the power of Congress over the subject
of legal tender that Congress may borrow gold coin upon a pledge of
the public faith to repay gold at the maturity of its obligations,
and yet, in direct disregard of its
Page 79 U. S. 674
pledge, in open violation of faith, may compel the lender to
take in place of the gold stipulated its own promises, and that
legislation of this character would not be in violation of the
Constitution, but in harmony with its letter and spirit.
The government is at the present time seeking, in the markets of
the world, a loan of several hundred millions of dollars in gold
upon securities containing the promises of the United States to
repay the money, principal and interest, in gold; yet this Court,
the highest tribunal of the country, this day declares by its
solemn decision that should such loan be obtained, it is entirely
competent for Congress to pay it off not in gold, but in notes of
the United States themselves, payable at such time and in such
manner as Congress may itself determine, and that legislation
sanctioning such gross breach of faith would not be repugnant to
the fundamental law of the land.
What is this but declaring that repudiation by the government of
the United States of its solemn obligations would be
constitutional? Whenever the fulfillment of the obligation in the
manner stipulated is refused, and the acceptance of something
different from that stipulated is enforced against the will of the
creditor, a breach of faith is committed; and to the extent of the
difference of value between the thing stipulated and the thing
which the creditor is compelled to receive, there is repudiation of
the original obligation. I am not willing to admit that the
Constitution, the boast and glory of our country, would sanction or
permit any such legislation. Repudiation in any form or to any
extent would be dishonor, and for the commission of this public
crime no warrant, in my judgment, can ever be found in that
instrument.
Some stress has been placed in argument in support of the
asserted power of Congress over the subject of legal tender in the
fact that Congress can regulate the alloy of the coins issued under
its authority, and has exercised its power in this respect without
question by diminishing in some instances the actual quantity of
gold or silver they contain. Congress, it is assumed, can thus put
upon the coins issued
Page 79 U. S. 675
other than their intrinsic value; therefore, it is argued,
Congress may by its declaration give a value to the notes of the
United States issued to be used as money other than that which they
actually possess.
The assumption and the inference are both erroneous, and the
argument thus advanced is without force, and is only significant of
the weakness of the position which has to rest for its support on
an assumed authority of the government to debase the coin of the
country.
Undoubtedly Congress can alter the value of the coins issued by
its authority by increasing or diminishing, from time to time, the
alloy they contain, just as it may alter, at its pleasure, the
denominations of the several coins issued, but there its power
stops. It cannot make these altered coins the equivalent of the
coins in their previous condition, and if the new coins should
retain the same names as the original, they would only be current
at their true value. Any declaration that they should have any
other value would be inoperative in fact and a monstrous disregard
by Congress of its constitutional duty. The power to coin money, as
already declared by this Court, [
Footnote 5/29] is a great trust devolved upon Congress,
carrying with it the duty of creating and maintaining a uniform
standard of value throughout the Union, and it would be a manifest
abuse of this trust to give to the coins issued by its authority
any other than their real value. By debasing the coins, when once
the standard is fixed, is meant giving to the coins, by their form
and impress, a certificate of their having a relation to that
standard different from that which in truth they possess -- in
other words, giving to the coins a false certificate of their
value. Arbitrary and profligate governments have often resorted to
this miserable scheme of robbery, which Mill designates [
Footnote 5/30] as a shallow and impudent
artifice, the
"least covert of all modes of knavery, which consists in calling
a shilling a pound, that a debt of one hundred pounds may be
cancelled by the payment of one hundred shillings. "
Page 79 U. S. 676
In this country, no such debasement has ever been attempted, and
I feel confident that none will ever be tolerated. The changes in
the quantity of alloy in the different coins has been made from
time to time not with any idea of debasing them, but for the
purpose of preserving the proper relative value between gold and
silver. The first coinage act, passed in 1792, provided that the
coins should consist of gold, silver, and copper -- the coins of
cents and half-cents consisting of copper, and the other coins
consisting of gold and silver -- and that the relative value of
gold and silver should be as fifteen to one -- that is, that an
ounce of gold should be taken as the equal in value of fifteen
ounces of silver.
In progress of time, owing to the increased production of
silver, particularly from the mines of Mexico and South America,
this relative value was changed. Silver declined in relative value
to gold until it bore the relation of one to sixteen instead of one
to fifteen. The result was that the gold was bought up as soon as
coined, being worth intrinsically sixteen times the value of
silver, and yet passing by law only at fifteen times such value,
and was sent out of the country to be recoined. The attention of
Congress was called to this change in the relative value of the two
metals and the consequent disappearance of gold coin. This led, in
1834, [
Footnote 5/31] to an act
adjusting the rate of gold coin to its true relation to silver
coin.
The discovery of gold in California some years afterwards and
the great production of that metal again changed in another
direction the relative value of the two metals. G old declined, or
in other words, silver was at a premium, and as gold coin before
1834 was bought up, so now silver coin was bought up, and a
scarcity of small coin for change was felt in the community.
Congress again interfered, and in 1853 reduced the amount of silver
in coins representing fractional parts of a dollar, but even then
these coins were restricted from being a legal tender for sums
exceeding five
Page 79 U. S. 677
dollars, although the small silver coins of previous issue
continued to be a legal tender for any amount. Silver pieces of the
denomination of three cents had been previously authorized in 1851,
but were only made a tender for sums of thirty cents and under.
These coins did not express their actual value, and their issue was
soon stopped, and in 1853 their value was increased to the standard
of coins of other fractional parts of a dollar.
The whole of this subject has been fully and satisfactorily
explained in the very able and learned argument of the counsel who
contended for the maintenance of the original decision of this
Court in
Hepburn v. Griswold. He showed by the debates
that Congress has been moved, in all its actions under the coinage
power, only by an anxious desire to ascertain the true relative
value of the two precious metals and to fix the coinage in
accordance with it, and that in no case has any deviation from
intrinsic value been permitted except in coins for fractional parts
of a dollar, and even that has been only of so slight a character
as to prevent them from being converted into bullion, the actual
depreciation being made up by their portability and
convenience.
It follows from this statement of the action of Congress in
altering at different times the alloy of certain coins that the
assumption of power to stamp metal with an arbitrary value and give
it currency does not rest upon any solid foundation, and that the
argument built thereon goes with it to the ground.
I have thus far spoken of the legal tender provision with
particular reference to its application to debts contracted
previous to its passage. It only remains to say a few words as to
its validity when applied to subsequent transactions.
So far as subsequent contracts are made payable in notes of the
United States, there can of course be no objection to their
specific enforcement by compelling a delivery of an equal amount of
the notes or by a judgment in damages for their value as estimated
in gold or silver dollars, nor would there be any objection to such
enforcement if the legal tender provision had never existed. From
the general use
Page 79 U. S. 678
of the notes throughout the country and the disappearance of
gold and silver coin from circulation, it may perhaps be inferred
in most cases that notes of the United States are intended by the
parties where gold or silver dollars are not expressly designated,
except in contracts made in the Pacific states, where the
constitutional currency has always continued in use. As to
subsequent contracts, the legal tender provision is not as unjust
in its operation as when applied to past contracts, and does not
impair to the same extent private rights. But so far as it makes
the receipt of the notes, in absence of any agreement of the
parties, compulsory in payment of such contracts, it is, in my
judgment, equally unconstitutional. This seems to me to follow
necessarily from the duty already mentioned cast upon Congress by
the coinage power -- to create and maintain a uniform metallic
standard of value throughout the Union. Without a standard of value
of some kind, commerce would be difficult, if not impossible, and
just in proportion to the uniformity and stability of the standard
is the security and consequent extent of commercial transactions.
How is it possible for Congress to discharge its duty by making the
acceptance of paper promises compulsory in all future dealings --
promises which necessarily depend for their value upon the
confidence entertained by the public in their ultimate payment, and
the consequent ability of the holder to convert them into gold or
silver -- promises which can never be uniform throughout the Union,
but must have different values in different portions of the country
-- one value in New York, another at New Orleans, and still a
different one at San Francisco.
Speaking of paper money issued by the states -- and the same
language is equally true of paper money issued by the United States
-- Chief Justice Marshall says, in
Craig v. State of
Missouri, [
Footnote
5/32]
"Such a medium has been always liable to considerable
fluctuation. Its value is continually changing, and these changes,
often great and sudden, expose individuals
Page 79 U. S. 679
to immense loss, are the sources of ruinous speculations, and
destroy all confidence between man and man. To cut up this mischief
by the roots, a mischief which was felt through the United States
and which deeply affected the interest and prosperity of all, the
people declared in their Constitution that no state should emit
bills of credit."
Mr. Justice Washington, after referring, in
Ogden v.
Saunders, [
Footnote 5/33] to
the provision of the Constitution declaring that no state shall
coin money, emit bills of credit, make anything but gold and silver
coin a tender in payment of debts, says:
"These prohibitions, associated with the powers granted to
Congress 'to coin money and to regulate the value thereof, and of
foreign coin,' most obviously constitute members of the same
family, being upon the same subject and governed by the same
policy. This policy was to provide a fixed and uniform standard of
value throughout the United States by which the commercial and
other dealings between the citizens thereof or between them and
foreigners, as well as the moneyed transactions of the government,
should be regulated. For it might well be asked why vest in
Congress the power to establish a uniform standard of value by the
means pointed out if the states might use the same means, and thus
defeat the uniformity of the standard, and consequently the
standard itself? And why establish a standard at all for the
government of the various contracts which might be entered into if
those contracts might afterwards be discharged by a different
standard or by that which is not money, under the authority of
state tender laws? It is obvious, therefore, that these
prohibitions in the tenth section are entirely homogeneous, and are
essential to the establishment of a uniform standard of value in
the formation and discharge of contracts."
It is plain that this policy cannot be carried out, and this
fixed and uniform metallic standard of value throughout the United
States be maintained, so long as any other standard is adopted
which of itself has no intrinsic value and is forever fluctuating
and uncertain.
Page 79 U. S. 680
For the reasons which I have endeavored to unfold, I am
compelled to dissent from the judgment of the majority of the
Court. I know that the measure, the validity of which I have called
in question, was passed in the midst of a gigantic rebellion, when
even the bravest hearts sometimes doubted the safety of the
Republic, and that the patriotic men who adopted it did so under
the conviction that it would increase the ability of the government
to obtain funds and supplies, and thus advance the national cause.
Were I to be governed by my appreciation of the character of those
men instead of my views of the requirements of the Constitution, I
should readily assent to the views of the majority of the Court.
But, sitting as a judicial officer and bound to compare every law
enacted by Congress with the greater law enacted by the people, and
being unable to reconcile the measure in question with that
fundamental law, I cannot hesitate to pronounce it as being, in my
judgment, unconstitutional and void.
In the discussions which have attended this subject of legal
tender, there has been at times what seemed to me to be a covert
intimation that opposition to the measure in question was the
expression of a spirit not altogether favorable to the cause in the
interest of which that measure was adopted. All such intimations I
repel with all the energy I can express. I do not yield to anyone
in honoring and reverencing the noble and patriotic men who were in
the councils of the nation during the terrible struggle with the
rebellion. To them belong the greatest of all glories in our
history -- that of having saved the Union, and that of having
emancipated a race. For these results they will be remembered and
honored so long as the English language is spoken or read among
men. But I do not admit that a blind approval of every measure
which they may have thought essential to put down the rebellion is
any evidence of loyalty to the country. The only loyalty which I
can admit consists in obedience to the Constitution and laws made
in pursuance of it. It is only be obedience that affection and
reverence can be shown to a superior having a
Page 79 U. S. 681
right to command. So thought our great Master when he said to
his disciples: "If ye love me, keep my commandments."
[
Footnote 5/1]
75 U. S. 8 Wall.
603.
[
Footnote 5/2]
12 Stat. at Large 345.
[
Footnote 5/3]
2 Stat. at Large 766.
[
Footnote 5/4]
2 Stat. at Large 801.
[
Footnote 5/5]
Acts of Congress authorizing the issue of Treasury notes: 2
Stat. at Large 766, approved June 30, 1812;
id., 801,
approved February 25, 1813; 3 Stat. at Large 100, approved March 4,
1814;
id., 161, approved December 26, 1814;
id.,
213, approved February 24, 1815; 5 Stat. at Large 201, approved
October 12, 1837;
id., 228, approved May 21, 1838;
id., 323, approved March 2, 1839;
id., 370,
approved March 31, 1940;
id., 411, approved February 15,
1841;
id., 469, approved January 31, 1842;
id.,
473, approved April 15, 1842;
id., 581, approved August
31, 1842;
id., 614, approved March 3, 1843; 9 Stat. at
Large 39, approved July 22, 1846;
id., 64, approved August
6, 1846;
id., 118, approved January 28, 1847; 11 Stat. at
Large 257, approved December 23, 1857;
id., 430, approved
March 3, 1859.
[
Footnote 5/6]
The Federalist, No. 44.
[
Footnote 5/7]
2 Journals of Congress 21.
[
Footnote 5/8]
5 Journals of Congress, p. 351. This address was written by Mr.
Jay (
see Flanders's Lives and Times of the Chief Justices,
vol. 1, p. 256).
[
Footnote 5/9]
Pitkin's History, vol. 2, p. 157.
[
Footnote 5/10]
1 Blackstone's Commentaries 276; 1 Story on the Constitution §
1118.
[
Footnote 5/11]
Genesis 23:16.
[
Footnote 5/12]
Webster's Works, vol. 3, page 41.
[
Footnote 5/13]
Webster's Works, vol. 3, p. 395.
[
Footnote 5/14]
Madison Papers, vol. 3, page 1346.
[
Footnote 5/15]
Benton's Abridg., vol. 5, p. 361.
[
Footnote 5/16]
43 U. S. 2 How.
38.
[
Footnote 5/17]
50 U. S. 9 How.
567.
[
Footnote 5/18]
Davies' Reports 48.
[
Footnote 5/19]
2 Cranch 20 [not found].
[
Footnote 5/20]
14 U. S. 1
Wheat. 326.
[
Footnote 5/21]
Journal of the Convention 369; Story on the Constitution, §§
1861, 1862, and note.
[
Footnote 5/22]
The Federalist, No. 84.
[
Footnote 5/23]
Commentaries on the Constitution 8, sec. 1371.
[
Footnote 5/24]
Sturgis v.
Crowninshield, 4 Wheat. 206.
[
Footnote 5/25]
3 U. S. 3 Dall.
388.
[
Footnote 5/26]
25 U. S. 12
Wheat. 303.
[
Footnote 5/27]
27 U. S. 2 Pet.
657.
[
Footnote 5/28]
1 Pet.'s C.C. 323.
[
Footnote 5/29]
United States v.
Marigold, 9 How. 567.
[
Footnote 5/30]
Mill's Political Economy, vol. 2, p. 20.
[
Footnote 5/31]
4 Stat. at Large 699.
[
Footnote 5/32]
29 U. S. 4 Pet.
432.
[
Footnote 5/33]
25 U. S. 12
Wheat. 265.