[449]

[450]

erty invested by individuals in such obligations,
and the burden of state taxation upon other pri-
vate property is correspondingly increased. The
ten per cent tax, imposed by Congress on notes
of state banks and of private bankers, not only
lessens the value of such notes, but tends to
drive them and all state banks of issue, out of
existence. The priority given to debts due to
the United States over the private debts of an
insolvent debtor diminishes the value of these
debts and the amount which their holders may

receive out of the debtor's estate.

So, under the power to coin money and to regulate its value, Congress may, as it did with regard to gold by the Act of June 28, 1834, ch. 95, and with regard to silver by the Act of February 28, 1878, ch. 20, issue coins of the same denominations as those already current by law, but of less intrinsic value than those, by reason of containing a less weight of the precious metals, and thereby enable debtors to discharge their debts by the payment of coins of the less real value. A contract to pay a certain sum in money, without any stipulation as to the kind of money in which it shall be paid, may always be satisfied by payment of that sum in any currency which is lawful money at the place and time at which payment is to be made. 1 Hale, P. C., 192–194; Bac. Abr., Tender, b. 2; Pothier, Contract of Sale, No. 416; Pardessus, Droit Commercial, Nos. 204, 205; Searight v. Calbraith, 4 Dall., 325. As observed by Mr. Justice Strong, in delivering the opinion of the court in the Legal Tender Cases, 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." 12 Wall., 549 [79 U. S., XX., 311].

66

of unusual and pressing demands on the re-
sources of the government, or of the inadequacy
of the supply of gold and silver coin to furnish
the currency needed for the uses of the govern-
ment and of the people, that it is, as matter of
fact, wise and expedient to resort to this means,
is a political question, to be determined by Con-
gress when the question of exigency arises, and
not a judicial question, to be afterwards passed
upon by the courts. To quote once more from
the judgment in McCulloch v. Md.: "Where
the law is not prohibited and is really calculated
to effect any of the objects intrusted to the gov
ernment, 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." 4 Wheat.,
423.

It follows that the Act of May 31, 1878, ch.
146, is constitutional and valid; and that the cir-
cuit court rightly held that the tender in treas-
ury notes, re-issued and kept in circulation un-
der that Act, was a tender of lawful money in
payment of the defendant's debt to the plaintiff.
Judgment affirmed.

Mr. Justice Field, dissenting:

disturbing the relations of commerce and the
business of the community generally, the doc-
trine will not and ought not to be readily accept-
ed. There will be many who will adhere to
the teachings and abide by the faith of their
fathers. So the question has come again, and
will continue to come until it is settled so as to
uphold and not impair the contracts of parties,
to promote and not defeat justice.

From the judgment of the court in this case, [451] and from all the positions advanced in its support, I dissent. The question of the power of Congress to impart the quality of legal tender to the notes of the United States, and thus make them money and a standard of value, is not new here. Unfortunately, it has been too frequently before the court, and its latest decision, previous to this one, has never been entirely accepted and approved by the country. Nor should this excite surprise; for whenever it is declared that this government, ordained to establish justice, has the power to alter the condition of contracts between private parties and authorize Congress, as the Legislature of a sovereign their payment or discharge in something differNation, being expressly empowered by the Con-ent from that which the parties stipulated, thus stitution to lay and collect taxes, to pay the debts and provide for the common defense and general welfare of the United States, and to borrow money on the credit of the United States, and to coin money and regulate the value thereof and of foreign coin; and being clearly authorized, as incidental to the exercise of those great powers, to emit bills of credit, to charter national banks and to provide a national currency for the whole people, in the form of coin, treasury notes and national bank bills; and the power to make the notes of the government a legal tender in payment of private debts being one of the powers belonging to sovereignty in other civilized Nations, and not expressly withheld from Congress by the Constitution; we are irresist ibly impelled to the conclusion that the impressing upon the treasury notes of the United States the quality of being a legal tender in payment of private debts is an appropriate means, conducive and plainly adapted to the execution of the undoubted powers of Congress, consistent with the letter and spirit of the Constitution and, therefore, within the meaning of that instrument, "necessary and proper for carrying into execution the powers vested by this Constitution in the Government of the United States." Such being our conclusion in matter of law, the question whether at any particular time, in war or in peace, the exigency is such, by reason

If there be anything in the history of the Constitution which can be established with moral certainty, it is that the framers of that instrument intended to prohibit the issue of legal tender notes both by the General Government and by the States; and thus prevent interference with the contracts of private parties. During the Revolution and the period of the old Confeder ation, the Continental Congress issued bills of credit, and upon its recommendation the States made them a legal tender, and the refusal to receive them an extinguishment of the debts for which they were offered. They also enacted severe penalties against those who refused to accept them at their nominal value, as equal to coin, in exchange for commodities. And previously, as early as January, 1776, Congress had declared that, if any person should be so lost to all virtue and regard for his country as to refuse to receive in payment the bills then issued, he should, on conviction thereof, be “ Deemed,

which the same mischief might be produced.
The Convention appears to have intended to es-
tablish a great principle, that contracts should
be inviolable. Sturges v. Crowninshield, 4
Wheat., 122, 206.

It would be difficult to believe, even in the ab

[452] published and treated as an enemy of his coun-
try, and precluded from all trade and inter-
course with the inhabitants of the Colonies."
Yet, this legislation proved ineffectual; the
universal law of currency prevailed, which
makes promises of money valuable only as they
are convertible into coin. The notes depreci-sence of the historical evidence we have on the
ated until they became valueless in the hands of
their possessors. So it always will be; legisla-
tive declaration cannot make the promise of a
thing the equivalent of the thing itself.

The legislation to which the States were thus induced to resort was not confined to the attempt to make paper money a legal tender for debts; but the principle that private contracts could be legally impaired, and their obligation disregarded, being once established, other measures equally dishonest and destructive of good faith between parties were adopted. What followed is thus stated by Mr. Justice Story, in his Com

mentaries:

subject, that the framers of the Constitution, pro-
foundly impressed by the evils resulting from
this kind of legislation, ever intended that the
new government, ordained to establish justice,
should possess the power of making its bills a
legal tender, which they were unwilling should
remain with the States, and which in the past
had proved so dangerous to the peace of the
community, so disturbing to the business of the
people and so destructive of their morality.

The great historian of our country has recent-
ly given to the world a history of the Conven-
tion, the result of years of labor in the examina-
tion of all public documents relating to its for-
mation and of the recorded opinions of its fram-
ers; and thus he writes:

"The history, indeed," he says, "of the various laws which were passed by the States, in their colonial and independent character, upon "With the full recollection of the need or this subject, is startling at once to our morals, seeming need of paper money in the Revolution, to our patriotism, and to our sense of justice. with the menace of danger in future time of Not only was paper money issued and declared war from its prohibition, authority to issue bills to be a tender in payment of debts, but laws of of credit that should be legal tender was refused [454] another character, well known under the appel- to the General Government by the vote of nine lation of tender laws, appraisement laws, install-States against New Jersey and Maryland. It ment laws and suspension laws, were from time was Madison who decided the vote of Virginia, to time enacted, which prostrated all private and he has left his testimony that the pretext credit and all private morals. By some of these for paper currency, and particularly for maklaws, the due payment of debts was suspended; ing the bills a tender, either for public or pridebts were, in violation of the very terms of vate debts, was cut off.' This is the interprethe contract, authorized to be paid by install- tation of the clause made at the time of its adopments at different periods; property of any sort, tion, alike by its authors and by its opponents, however worthless, either real or personal, accepted by all the statesmen of that age, not might be tendered by the debtor in payment open to dispute because too clear for argument, of his debts; and the creditor was compelled to and never disputed so long as any one man who take the property of the debtor, which he might took part in framing the Constitution remained seize on execution, at an appraisement wholly alive. History cannot name a man who has disproportionate to its known value. Such gained enduring honor by causing the issue of grievances and oppressions, and others of a like paper money. Wherever such paper has been nature, were the ordinary results of legislation employed it has in every case thrown upon its during the Revolutionary War and the interme- authors the burthen of exculpation under the diate period down to the formation of the Con- plea of pressing necessity." 2 Bancroft, History stitution. They entailed the most enormous of the Formation of the Constitution, 134. evils on the country, and introduced a system of fraud, chicanery and profligacy which destroyed all private confidence and all industry and enterprise." 2 Story, Const., sec. 1371. [453] To put an end to this vicious system of legislation which only encouraged fraud, thus graphically described by Story, the clauses which forbid the States from emitting bills of credit or making anything but gold and silver a tender in payment of debts, or passing any law impairing the obligation of contracts, were inserted in the Constitution.

"The attention of the Convention, therefore," says Chief Justice Marshall, was particularly directed to paper money and to acts which enabled the debtor to discharge his debt otherwise than was stipulated in the contract. Had nothing more been intended, nothing more would have been expressed, but in the opinion of the Convention much more remained to be done. The same mischief might be effected by other means. To restore public confidence completely, 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

And when the Convention came to the prohibition upon the States, the historian says that the clause, "No State shall make anything but gold and silver a tender in payment of debts," was accepted without a dissentient State:

So the adoption of the Constitution," he adds, "is to be the end forever of paper money, whether issued by the several States or by the United States, if the Constitution shall be rightly interpreted and honestly obeyed." Id., 137.

For nearly three quarters of a century after the adoption of the Constitution, and until the legislation during the recent Civil War, no jurist and no statesman of any position in the country ever pretended that a power to impart the quality of legal tender to its notes was vested in the General Government. There is no recorded word of even one in favor of its possessing the power. All conceded, as an axiom of constitutional law, that the power did not exist.

Mr. Webster, from his first entrance into public life in 1812, gave great consideration to the subject of the currency, and in an elaborate speech on that subject, made in the Senate in 1836, then sitting in this room, he said:

[455]

,"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 legal tend-
er for debts, and is the standard 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 gov-
ernment 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 constitu-
tional principle, perfectly plain and of the high-gave the prevailing opinion in that case, also
est importance. The States are expressly prohib-
ited from making anything but gold and silver
a legal tender in payment of debts, and although
no such express prohibition is applied to Con-
gress, yet, as Congress has no power granted to
it in this respect but to coin money and to reg-
ulate 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 con-
stitutional standard of value, is established and
cannot be overthrown. To overthrow it would
shake the whole system." 4 Webster's Works,

271.

And upon that ground the provision was adopted, some of the Senators stating that in the exigency then existing money must be had, and they, therefore, sustained the measure, although they apprehended danger from the experiment. "The medicine of the Constitution," said Senator Sumner, "must not become its daily food." Id., 800. A similar necessity was urged upon the state tribunals and this court in justification of the measure, when its validity was questioned. The dissenting opinion in Hepburn v. Griswold referred to the pressure that was upon the government at the time to enable it to raise and support an army and to provide and maintain a navy. Chief Justice Chase, who spoke of the existence of the feeling when the bill was passed that the provision was necessary. He favored the provision on that ground when Secretary of the Treasury, although he had come to that conclusion with reluctance, and recommended its adoption by Congress. When the question as to its validity reached this court, this expression of favor was referred to, and by many it was supposed that it would control his judicial action. But after long pondering upon the subject, after listening to repeated ar- [457] guments by able counsel, he decided against the constitutionality of the provision; and, holding in his hands the casting vote, he determined the judgment of the court. He thus preferred to preserve his integrity as a judicial officer rather than his consistency as a statesman. In his opinion he thus referred to his previous views:

When the idea of imparting the legal tender quality to the notes of the United States issued "It is not surprising that amid the tumult of under the first Act of 1862 was first broached, the late Civil War, and under the influence of the advocates of the measure rested their sup-apprehensions for the safety of the Republic port of it on the ground that it was a war meas- almost universal, different views, never before ure, to which the country was compelled to entertained by American statesmen or jurists, resort by the exigencies of its condition, being were adopted by many. The time was not fathen sorely pressed by the Confederate forces, vorable to considerate reflection upon the constiand requiring the daily expenditure of enor- tutional limits of legislative or executive aumous sums to maintain its army and navy and thority. If power was assumed from patriotic to carry on the government. The representa- motives, the assumption found ready justificative who introduced the bill in the House, de- tion in patriotic hearts. Many who doubted yieldclared that it was a measure of that nature, "one ed their doubts; many who did not doubt were of necessity and not of choice;" that the times silent. Some who were strongly averse to makwere extraordinary and that extraordinary ing government notes a legal tender felt themmeasures must be resorted to in order to save selves constrained to acquiesce in the views of our government and preserve our nationality. the advocates of the measure. Not a few who [456] Speech of Spaulding, of New York, Cong. then insisted upon its necessity, or acquiesced Globe, 1861-62, part 1, 523. Other members in that view, have, since the return of peace of the House frankly confessed their doubt as and under the influence of the calmer time, reto its constitutionality, but yielded their support considered their conclusions, and now concur of it under the pressure of this supposed neces- in those which we have just announced. These sity. conclusions seem to us to be fully sanctioned by the letter and spirit of the Constitution." 8 Wall., 625 [75 U. S., XIX., 526].

In the Senate also the measure was pressed for the same reasons. When the Act was reported by the committee on finance, its chairman, whilst opposing the legal tender provision, said: "It is put on the ground of absolute, overwhelming necessity; that the government has now arrived at that point when it must have funds, and those funds are not to be obtained from ordinary sources, or from any of the expedients to which we have heretofore had recourse and, therefore, this new, anomalous and remarkable provision must be resorted to in order to enable the government to pay off the debt that it now owes and afford circulation which will be available for other purposes." Cong. Globe, 1861-62, part 1, 764.

It must be evident, however, upon reflection, that if there were any power in the Government of the United States to impart the quality of legal tender to its promissory notes, it was for Congress to determine when the necessity for its exercise existed; that war merely increased the urgency for money; it did not add to the powers of the government nor change their nature; that if the power existed it might be equally exercised when a loan was made to meet ordinary expenses in time of peace as when vast sums were needed to support an army or a navy in time of war. The wants of the government I could never be the measure of its powers.

But

in the excitement and apprehensions of the war these considerations were unheeded; the measure was passed as one of overruling necessity [458] in a perilous crisis of the country. Now, it is no longer advocated as one of necessity, but as one that may be adopted at any time. Never before was it contended by any jurist or commentator on the Constitution that the government in full receipt of ample income, with a Treasury overflowing, with more money on hand than it knows what to do with, could issue paper money as a legal tender. What was in 1862 called the "medicine of the Constitution" has now become its daily bread. So it al-curity to the lender outside of property or rights ways happens that whenever a wrong principle of conduct, political or personal, is adopted on a plea of necessity, it will be afterwards followed on a plea of convenience.

[459]

the minds of the judges. Until some authority beyond the alleged claim and practice of the sov ereign governments of Europe be produced, I must believe that the terms have the same meaning in all instruments wherever they are used; that they mean a power only to contract for a loan of money, upon considerations to be agreed between the parties. The conditions of the loan, or whether any particular security shall be given to the lender, are matters of arrangement between the parties; they do not concern anyone else. They do not imply that the borrower can give to his promise to refund the money any sewhich he possesses. The transaction is completed when the lender parts with his money and the borrower gives his promise to pay at the time and in the manner and with the securities The advocates of the measure have not been agreed upon. Whatever stipulations may be consistent in the designation of the power up- made, to add to the value of the promise or to on which they have supported its validity, some secure its fulfillment, must necessarily be limplacing it on the power to borrow money, some ited to the property, rights and privileges which on the coining power, and some have claimed the borrower possesses. Whether he can add it as an incident to the general powers of the to his promises any element which will induce government. In the present case it is placed others to receive them beyond the security [460] by the court upon the power to borrow money, which he gives for their payment, depends upon and the alleged sovereignty of the United States his power to control such element. If he has a over the currency. It is assumed that this pow-right to put a limitation upon the use of other er, when exercised by the government, is something different from what it is when exercised by corporations or individuals, and that the government has, by the legal tender provision, the power to enforce loans of money because the sovereign governments of European countries have claimed and exercised such power. The words to borrow money," says the court, "are not to receive that limited and restricted interpretation and meaning which they would have in a penal statute or in an author-cupy a portion of their lands or their houses, and ity conferred by law or by contract upon trustees or agents for private purposes.' And it adds that "The power, as incident to the power of borrowing money and issuing bills or notes of the government for money borrowed, of impressing upon those bills or notes the quality of being a legal tender for the payment of private debts, was a power universally understood to belong to sovereignty, in Europe and AmerIca, at the time of the framing and adoption of the Constitution of the United States. The governments of Europe, acting through the monarch or the Legislature, according to the distribution of powers under their respective Constitutions, had and have as sovereign a power of issuing paper money as of stamping coin," and that "the exercise of this power not being prohibited to Congress by the Constitution, it is included in the power expressly granted to borrow money on the credit of the United States."

66

As to the terms to borrow money; where, I would ask, does the court find any authority for giving to them a different interpretation in the Constitution from what they receive when used in other instruments, as in the charters of municipal bodies or of private corporations, or in the contracts of individuals? They are not ambiguous; they have a well settled meaning in other instruments. If the court may change that in the Constitution, so it may the meaning of all other clauses; and the powers which the government may exercise will be found declared, not by plain words in the organic law, but by words of a new significance resting in

persons' property, or to enforce an exaction of
some benefit from them, he may give such privi-
lege to the lender; but if he has no right thus
to interfere with the property or possessions of
others, of course he can give none. It will hardly
be pretended that the Government of the United
States has any power to enter into an engage-
ment that, as security for its notes, the lender
shall have special privileges with respect to the
visible property of others, shall be able to oc-

thus interfere with the possession and use of
their property. If the government cannot do
that, how can it step in and say, as a condition
of loaning money, that the lender shall have a
right to interfere with contracts between pri-
vate parties? A large proportion of the prop-
erty of the world exists in contracts, and the
government has no more right to deprive one
of their value by legislation operating directly
upon them, than it has a right to deprive one of
the value of any visible and tangible property.
No one, I think, will pretend that individuals
or corporations possess the power to impart to
their evidences of indebtedness any quality by
which the holder will be able to affect the con-
tracts of other parties, strangers to the loan;
nor would any one pretend that Congress pos-
sesses the power to impart any such quality to
the notes of the United States, except from the
clause authorizing it to make laws necessary
and proper to the execution of its powers. That
clause, however, does not enlarge the expressly
designated powers; it merely states what Con-
gress could have done without its insertion in
the Constitution. Without it, Congress could
have adopted any appropriate means to borrow;
but that can only be appropriate for that pur-
pose which has some relation of fitness to the
end, which has respect to the terms essential to
the contract, or to the securities which the bor-
rower may furnish for the repayment of the
loan. The quality of legal tender does not touch
the terms of the contract; that is complete with-
out it; nor does it stand as a security for the