Briscoe v. President of the Bank of the Commonwealth

TERM, Zbl others v. The John President and Directors Briscoe Kentucky. of of of the Bank the Commonwealth November, act, Kentucky passed On the of the of an esta- legislature 29th bank, Kentucky.” of of by a the name of The Bank the blishing Commonwealth “ “ act, name The first section the declares the bank be established in the of shall ” Kentucky; president of the of and behalf of the Commonwealth under direction a enacts,- directors, by to bo legislature. chosen the The second section twelve president corporation, capable suing, being shall that the and directors of sued, description sec- purchasing, selling every of of The third property. be, exclusively, tion the bank to the of the The property declares commonwealth. to capital of issuing fourth section authorizes the notes: and the fifth the declares dollars; paid paid- the trea- by moneys be two millions of afterwards into the lands arid so sury capital vacant of the much of the stock as was the in the Bank of state by Kentucky; owned state and as the treasurer required he moneys, pay received those into bank. bank- was them the The . money on authority deposite, personal had to receive loans on good make mortgage; prohibited or on its increasing beyond was debts security, loans, imposed Limitations were on of bank capital. the accommodations the was, by apportioned among the different counties of the The bank were state. ; act, authorized to issue of the subsequent three millions dollars and dividends ' paid to be the bank were treasurer of the state.' The notes of the bank notes; promised common form of the bank the bank issued which were demand, bearer on the the sum stated on the face of pay The note.. part considering capital excluded the Court from had pleadings state; case., stated, of by the but in the the and not paid argument it was been been'issued, had denied, that all the notes which of which had been the demanded, By legislature had redeemed of of Ken- bank. an act required on notes the bank be received all execu- tucky, it was should execution, on plaintiffs,and if failed endorse such would tions received, delayed years. two proceedings judgment were further sobe for. plain- Kentucky against instituted suit the. The had error, been.given,- note for the notes of the bank promissory on a which tiffs suit note. defendants in the claimed-tbat loan, drawers to, aas void, given them as the"same notes of was was given note “ Kentucky; bank, issued-by against bills of state credit” which prohibits States, the issuing of the constitution of the United provisions óf : and that the act legis- credit" of the United States states “ ’ bank, Kentucky, unconstitutional and void.' established lature the Commonwe'alth incorporating act the Bank'of the Court.—The By Ken. Kentucky; tucky, power, a constitutional exorcise the’ credit, meaning not bills of within con- in a sense. limited Description of the bills of credit which were issued in early the history of the colo- nies, afterwards, the United States of America. Peters, The case of Craig Missouri, v. The State of 4 cited. The definition credit, of a bill of which includes all classes of bills of emitted credit by stales, the paper colonies and is a by issued the sovereign power, a containing pledge faith, of designed its to circulate as money. If the of legislature attempt a state tc make the notes of any tender, bank a the act unconstitutional; attempt will but such affect, could not any degree, in the constitutionality of the bank. The act to which related the receiving the notes of the Bank of the Commonwealth of Kentucky, was not connected the with charter. government powers The federal delegated powers : not delegated, it, one.of states, or inhibited to people. the are to the states or to the reserved credit, cannot words, A state emit bills of or in other it cannot issue that description paper to purposes money, answer the of which was denominated before the adoption constitution, of the bills of credit. But a state grant acts of incor- poration objects, for the attainment of theso which are essential to the interests of society.' power This sovereignty; is incident to there no limitation on its by states, respect incorporation banks, exercise to the in the federal con- stitution. “ adoption constitution, At the time of the America,” Bank of North “ Bank," others, the Massachusetts and some in operation. were It cannot there- supposed fore be that the banks by notes these were intended to be inhibited constitution, credit,” they that were considered as “bills within the meaning :ny of that instrument. distinguishing characteristics, In n- of their most they credit, essentially any different from bills of one of the various forms they powers which were issued. If delegated govern- then the the federal ment, ; states, nor denied to by people are retained the states or the and by a “ credit,” constitution, fair construction of they the terms bills of as used in the do notes; not in follows, -lude ordinary powers incorporate that banks issue these notes may by be exercised a state. action, uniform important A course of involving right to the of an exercise power by ques- the state government almost century, for half a and this without ; tion is no unsatisfactory power is exercised. rightfully evidence that the do that, A state cannot which do. the federal constitution it shall not It can- declares “ money.” they not coin Here is on cannot precise, act in terms so inhibited be mistaken. susceptible it is but of one And certain construction.. a state cannot incorporate any individuals, and authorize them to number money. constitution, coin Such an act would be as much a if violation money.were anby coined authority. being officer of the The act state under prohibited, cannot be done by state, applies a same rule directly indirectly. to bills of credit by issued a state. constitution, state, constitute a bill of To credit within a on it must issued ' the. faith of state, must be a designed money. to circulate as state; which circulates ordinary on credit of the and so used In the .the received and TERM, 259 The Bank Commonwealth it, power business of life. The individual or committee who. issue must have state; any bind act as and of agents, must course not incur personal individuals, responsibility, impart, any paper. nor credit These are the credit, a bill of leading state cannot characteristics emit. notes Kentucky the Bank of Commonwealth of have not these character- istics. law; When a stadeemits bills of the amount be issued is fixed as also paid, any fund are to be pledged redemp- out which fund be for their tion: on the appears are issued credit which .in some form notes, person the face of signature issues who them. No to be sovereign átate is liable sued her without consent. Under articles confederation, a state could be sued boundary. cases It is believed that there suit is no case has time, been brought, whefe at on a bill of credit could, against state; and is certain that no suit have been' maintained this ^t ground, prior to the constitution. Missouri, case of Craig Peters, 410, v. The State authority is not to sustain the claim case, £) the Bank of The of the United States v. The Planters of Bank Ge.opgia, 904, Wheat. cited. case of the Bank of the others, Peters, 315, The 2 Commonwealth v. Wister an.d cited. the court of error to of the of appeals Kentucky. IN In the Mercer circuit court of the state of the Kentucky, presi- dent and of the Bank the of Commonwealth of Kentucky, directors 1831, on the 15th of debt, filed of petition that April, stating, hold defendants, the Briscoe, note H. upon Abraham Ful- George kerson, Mason and Briscoe, John in follows, substance as Vannoy, “2,048 to wit: dollars 37 cents. One hundred and after twenty days date, we and the severally jointly promise and pay president .di- rectors of the the of or Kentucky, order, 2,04S dollars 37 cents, and at the branch bank at negotiable payable our Witness Harrodsburg, hands, value received. 1st of February,

“ G. H. BRISCOE, A. FULKERSON, MASON VANNOY, JOHN BRISCOE.” SUPREME'COURT. The Bank of the Commonwealth of Kentucky.] [Briscoev. “ defendants filed the de and appeared following pleas: note, and fendants, after the sanie read craving oyer being the was executed on no them, note other or con further ,say, s that of note which had than another exe ideration been previously for a them to the certain sum, plaintiffs, cuted negotiable at branch of said bank the Harrodsburg, payable executed, was executed them no other or so in previously note than that of the renewal consideration of another note further ; aver, and the time of defendants to the previous like 'tenor mentioned, note last legislature executing common name and on the' behalf of the said com-' Kentucky, wealth an act monwealth, November, on the 29th of passed bank, stock of which was declared capital established re dollars, stock said bank .which never capital 2,000,000 said thereof, as aver; or these that by defendants ceived, any part said'act, arid of the said bank directors president provisions office, were declared madé a successors corporation their " fact, law and the name and .by style politic, body the Bank of the and Directors of Commonwealth Ken President also, that, by said and directors president act, tucky;” to the of the con contrary illegally, provisions said States, authorized, the United for arid on empowered stitutiori commonwealth, credit; said to make her bills 'behalf 2,000,000 amount to wit:1 or to an commonwealth, on and on her and said, for credit, behalf , credit, of wit: notes various made-various denominations pf dollars, one one hundred the from by signed president amount cashier, bank, and by countérsigned principal promising the said note thereby mentioned, and each or person pay therein demarid, amount therein and on bearer, money, .mentioned and that for of circu delivery; purpose transferable for its community said through ordinary purposes SUPREME COURT. 262 v. The Bank of tho of Commonwealth Kentucky.] [Briscoe because maintain, the say only consideration for which the in executed, mentioned was the'petition note was the of renewal which, note, had been by them .previously executed to the plaintiffs of 2048 cents, sum dollars 37 and the at negotiable payable the Bank of branch of the Commonwealth located at Kentucky, that, -And aVer to the Harrodsburg. the previous date of note ,so as aforesaid, the under the plaintiffs, and by provisions, renewed^ of the act of the the'authority legislature. commonwealth the Bank of the Commonwealth Kentucky, establishing Kentucky, 29th March, the day to that and contrary approved provi- constitution of the the United States which inhibits sion credit, had, on behalf of the emitting said common- credit, her made and various bills of wealth, upon credit, signed by Bank of and said coun- Kentucky, president cashier principal therein; and tersigned thereby promising in of said each bills mentioned, to the person bearer, on de- pay amounts each of bills said mand, respective mo- expressed, made and bills so said; and the said and ney; signed president afterwards, wit: on cashier, the date plaintiffs, day of aforesaid, last for note the' said bills of purpose circulating made, as credit, community so through did, aforesaid money? said commonwealth, behalf of the for benefit, her for credit, to the .her aforesaid illegally, contrary provisions and Upon of the United States, emit and issue said bills of the constitution aforesaid, made as amount 37 dollars cents, so credit bills, the same said to the defendant, loaning dfelivering interest, loan, Briscoe, at reserved secured said upon said commonwealth, the rate of six centum per per benefit aforesaid; the amount fact, and the defendants, aver annum consideration which the note last abovementioned them, was emission loan of said executed aforesaid, issued as defendant, so plaintiffs so consideratión of the said last' And men- they say Briscoe. invalid, and in of the constitution note tioned illegal, violation States; that the on, consideration of the note sued of the United these defendants renewal of the said last mentioned executed invalid, the con- aforesaid, likewise illegal, contrary note States; and the United ready verify stitution &e. wherefore they pray judgment, prove: demurred, joined and the defendants pleas To plaintiffs these «63 JANUARY-TERM, of the Commonwealth of The Bank of-Mercer The circuit court county demurrer. gave judg- to the court and the defendants ment for the plaintiffs; appealed of Kentucky. appeals errors were

In the court' of the following by assigned appeals, the appellants.

1. The court the demurrer defendant in erred sustaining error, to the in error. first plaintiffs plea

2. The court erred in the demurrer to the second sustaining plea. demurrer, 3. The decision of court each as well as in upon the. in error, final is erroneous and plaintiffs rendering judgment against illegal.

On of the 5th the court of affirmed the day May, appeals of the circuit court. judgment

That court delivered opinion:— the following in this case to “We are called upon readjudicate question Commonwealth; of the bank of the and its constitutionality right to maintain an action an in consideration of a upon obligation given We loan of its notes. consider this been settled question having Bank, in the case of 2d Litt. 300. If it be Lampton against true, as contended in on behalf of the that the argument appellants, is on the of the charter, face that case has been question presented an that have hundred cases incidentally recognised .confirmed this since court.” passed through “ Missouri, Peters, The has been on as case v. relied Craig this. We do not think that- it does. are ruling distinguish- able in at least one and essential important particular.”

The writ of error. prosecuted appellants The case White Southard, was Mr. and Mr. for the argued by and B. Hardin and Mr. for the appellants; Clay, appellees. Mr. White for in error. the'plaintiffs instrument, void, The suit-is on an to be as the brought alleged consideration for it was'a the-consti- currency given prohibited by tution notes of the Bank United States. It was given the Commonwealth and the which pre- question Kentucky; record, sented be decided this Court which is now to by bank, is, whether the law state Kentucky establishing constitution United not violation of the provision 264' SUPREME COURT. The

States, which states of the United States from prohibits issuing “bills of credit.” Court,

The case one and the decision of this great importance, solicitude, Coubt it, is looked for wit-h before deep directed term, former was then at The Court argued large. a re-argument. on which the error established

The facts rely, fully plaintiffs county, the court Mercer pleas pleadings. of the institution established the act of the nature incorporation; funds of the notes and that had no provided the law never it; and that the funds provided by paid thus the facts stated demurred bank. plaintiffs generally; are admitted. pleas, is stated in the and the of the law un'constitutionality pleas, thus' on the decided question pre- Kentucky court- appeals 25th sec- sented; the case is then within-the fully provisions act of 1789. tion judiciary ease, of- the before establish the

It will be proper jurisdiction in it. to the other matters involved proceeding bank is a assert, the charter the violation The plaintiffs claim of a States. It is the exercise of the United constitution the which; for the uses to establish corporation; of Kentucky the state has authority, the for its exclusive benefit state,-and profit, the money. notes, to circulate them charter, issue bank its the suit in the court in which asserted, in error This the plaintiffs court of and in the them, appeals, issuing was brought against with the state, and in direct conflict the prohibition of credit by constitution. to the consti- charter, the a law of the The repugnancy the and the decision allegation. tution, was.against was alleged, the con- .misconstrued say, the error Kentucky, plaintiffs courts say, they The court of expressly the decision. appeals stitution by the law; the constitutionality on called upon adjudicate law, as it was the alleged constitutionality certainly, meaning, States. of the United the constitution to'be opposition on jurisdiction, this Court question decisions of All the up by brought to decide questions of the court sustain right reviewed carefully decisions of error. These this writ reference Peters; a 10 Randal, v. term, in the case Crowell last asserted. now jurisdiction sufficient to sustain the case, to that TERM, 265 the,Commonwealth The Bank of v: of Kentucky.] [Briscbe whether Court has Upon question, decided that a corpo- ration, such as that which is the error, defendant in in this case, can existence, constitutional for which it was purposes enacted,-has decided; it is submitted that no such decision has been made.' The case the Planter’s Bank of 9 Wheat. Georgia, 794; 304; 5 Cond. contains no such decision. Rep. In that casé, the state of had but a of the stock Georgia part bank; of. bank had an actual and was conducted for the benefit capital, whole stockholders.. This held, Court that a state become a might stockholder, with other stockholders in the institution; and that by so did not bank become doing, suits, on the exenipt sugges- tion that the suit the state was-against Nor did the Georgia. of. decision of case of Wister the same defendants as in this against ease, determine that the Bank of the Commonwealth was a constitu- tionál body,-because court sustained a the bank. suit‘against The charter that the provides sue, and be sued. may n The action of the court in case, was in with the law. harmony If the state of was, as she Kentucky was, and is, now certainly interested bank; party a suit yet authorized her own law could be the bank. has, The bank brought against char- ter, to take for debts due right it; and under a mortgages judg- it, ment those against made to an mortgages execu- might subject tion or a obtained judgment bank. The against of exe- process not, cution would need not the state. go''against' bank, and of question constitutionality the right under the act it to issue bills, had establishing which the note which this suit was is now first given, presented While it is asserted that Court. Court, decision of this case of The State of Missouri, Peters, 439, will in Craig sustain the taken position error, respects plaintiffs notes of the Commonwealth credit; Bank are bills of it is admitted case, the bills of credit issued the state of Missouri, in by different from those were the defendants. The by obligations of the state Missouri bore interest; a circumstance to which great was- Mr. who importance Justice by delivered assigned Thompson, a in that case. opinion dissenting

The 1S20, Commonwealth Bank of was established in Kentucky vas, for which during period great pecuniary'distress; who While it it, those created to afford relief. was de- expected founded on to it it,- clared funds for bv assigned provided XI.—2 L Yol. ' COURT. SUPREME of the The Bank lands to it. declared that certain The act

state, none were delivered bank; it directed the the notes of the property paid might embarrassment, bank, then in another great held state should be to the payment, paid which had suspended con- bank of the commonwealth had'no but the the.commonwealth; state in the of the old land, and the trol property over bank. business of the new available to the made was never Kentucky, funds, and all the officers appointed the bank had Thus state, to conduct the business of the were the the state.' agents was, of the state. Its bank, nominally, benefit capital of the cer- dollars; and notes millions promise pay two purporting loans; in the form of circulation, sums, tain were issued put interest, As- on loans. of the state profit charged having TERM, 267 1837. The Bank of the Commonwealth v. [Briscoe ruin issue- were the causes of produced, extravagant constitutional prohibition. banks,

It is not intended to the charters of derived from place laws, the stockholders, a furnished or the capital having banks, notes of such in this case. rest in question, may construction, on other and the safety principles; practical given the states of the Union to the of the constitution which is provision under in this case, examination may questions put validity at rest. such charters bill

What is of credit within the a constitution? meaning Our courts Seem have considered the of these interpretation terms a matter some “The term ‘bill of difficulty. credit’ seldom books,” occurs says judge Huger; delivering opinion court of South Carolina, of the constitutional in the case of James. State, term, 1822, 2 M‘Cord, Billis January v. .15: p. “ adds: but when.used, learned it is always judge synonymous this' letter be its technical appears only signifi- cation.” 4 Missouri, Peters,

In the case of v. 442, the late Craig distinguish- and lamented associate of Court, ed Mr. Justice Johnson, says: ‘ “ The terms credit’ are in themselves vague general, almost dismissed from present day our In language.” “ case, Mr. Justice the same Thompson precise says: meaning of the terms ‘bills of credit,’ has no Where interpretation or, has, it has not fallen settled; within my 4 knowledge.” Mr. Justice M‘Lean Peters, 447. declares: “it will be found some- ‘ ” definition of a bill what difficult give satisfactory credit.’ p. be the in the face of would such height presumption, authori- nevertheless, there is no

ties, to we say difficulty; entertain that the terms conviction clear and strong precise meaning. that the It is the term used in evident our own meaning consti- most to be tution, for, first, in our own naturally sought history. Yet, on heretofore, two arguments question historical been made. references have We to submit references from the of each propose history state; “ to, were, show what bills of credit” merely but what evils from them. The

resulted mischief is an essential past part what and interpretation remedy. By whence learning future SUPREME COURT. Kentucky'.] Bank of the intended suffered, shall the convention we leárn what the country to prevent. to the court a on the White, printed argument part

Mr. submitting after the former himself, Mr. of prepared Wilde plaintiffs, went into a examination the-case; of pro- particular arguments afterwards the of the United colonies, the different of ceedings states for credit, of bills of in relation obligations States issuing for the use of the states: of several colonies money, acts, works, and from historical from the pro- legislative citing the laws on the of of actions subject, governments visions in such measures. It was shown these those states reference Massachusetts, Connecticut, New New references, that Hampshire, Carolina, North South York, New Pennsylvania, Virginia,' Jersey, had resorted measures to Carolina, supply tempo- and Georgia, continued “bills and sometimes currency, by long issuing rary, bills, bills called bills.” credit,” bank credit,”'“paper “paper of bills of before the Nor-was adoption issuing , but the term confined states: was em issues constitution emitted money designate paper congress. ployed emissions, different were cited resolutions authorizing congress The issues commenced on the 22d from the congress. journals exceeded four hundred and millions June, 1776, and fifty on the 1781; to circulate 31st money, ceased May, "dollars. They on afterwards various bought speculation, prices, although dollar, for one dollars in one four specie,'up paper hundred for one. thousand no 1786, 18th resolved payments

On the September; congress should be in bills of credit, the states received on of requisitions credit also resolved that bills of should They specie. any thing on and that paid not received postage, postage- should office. 4 Vol. Journ. Con. 699. into the letters when of. put ruinous to the of this money The effects system of circulation, out and all was driven community.. Specie whole confusion, deterioration value. great placed was property or carried on intercourse of business was 'suspended, common introduced, with distrust suspicion. Batter impe- almost became diments to all transactions insuperable. exchange, are, in bills and bi’ls of credit contended, bank every, substantially the same. particular, essentiallv important TERM, 1837. 'JANUARY of the Commonwealth The Bank the different colonial to examine then proceeded Mr.-White credit; Court, before bills of asking'the for the emission laws, the material sup- made, points to note distinction the same bills of credit. He said they to exist between posed were, are the state. 2. directly by They not issued bills are

1. Bank 3. A fund is of the state. certain mere credit issued are not tender. 5. legal They for their redemption. pledged specie. payable of tl3P bills the character to remark provided Court are to be reference, cited. In acts intended especially, different found-, it will be distinction, those supposed points directly more of credit were That the bills 1st. Kentucky. Bank of bills of Commonwealth’s than the not a That of credit were 2d. the bills very frequently legal tender. credit were sometimes

3d. That payable (nominally) (cid:127)in specie. issued on mere credit That the bills of credit were rarely

4th. state. of the a certain fund was for their that,

5th. And almost always, pledged redemption. Court,

If the find such distinctions scrutiny, by disappear; that, it will taken, others result and sub- essentially the bills of the Commonwealth’s Bank of anc stantially, Kentucky credit, are the And it in to each same. reference bills making read, it.is the trouble of a act as of each law instituting comparison afterwards, will be each both to the Court point, spared counsel. White Mr. then cited the various acts of the states, several pro- of‘such “bills viding issuing “paper money,” “obligations,” “ “ “ bills,” credit,” or and notes,” and notes.” treasury if it be contended, then, he Common- said, that the notes wealth’s credit, are because Kentucky not issued or emitted a we answer: directly' by

1st. That in of credit instance the bills anti-revolutionary every committee, commissioners, and issued prepared, signed, or trustees.

2d. That as follows, a state can act her it that only through agents, she does her herself. what she does agents througn 3d. We of one of avail ourselves forcible expressions SUPREME COURT. 270 v. The Bank of the Commonwealth Kentucky.] Court, learned in the case of and others v. Mis- Craig judges souri, Justice (Mr. who, Johnson,) from the though dissenting judg- ment of the Court in case, that on other was in our favour points, on this. “ The instrument (the is a dead letter, constitution) unless its effect be to invalidate act done the states every violation the con- stitution United States. And as the universal modus operandi states, free must their through follows that the legislature, under act is done, laws which any violation of the con- importing dead letter. stitution, must be a is, constitution language credit;’ ‘no state shall emit bills and this, if it means any thing, mean no state shall must a law which has pass for its an object emission of bills of credit. “ when follows, It the officers of a state undertake to act upon law, act without such a and that the contracts entered authority; incidental, direct or to such into, are mere illegal proceedings, nullities.” leads to the main

“This ‘Was this- an emission of question: in the sense of the constitution?’ And here the difficulty itself, is to determine loan, whether it presents or an emission whether it was paper money; an emission of perhaps “ under a loan.” money, There cannot be a paper disguise that this latter view of doubt examined; must subject always that which- it is not to do cannot be permitted directly legalized of names or forms. Acts done in change legis, fraudem ‘in of law.’”' Peters, are acts violation cannot, we doubted, that the constitution was in- presume, all those tended prohibit substitutes whatever money, forms or were their shades of difference, had, before particular time, name of bills of credit. It intended gone general a hard make this so; money government; pérhaps entirely certainly the states were If, some, far as concerned. and in- as by omitting of the forms, others or attributes peculiarities, serting properties, bills of credit issued different before the of the constitu- adoption could be formed one dissimilar in tion, many important particulars which had contend, ever not- issued; from we yet humbly such variation, it still within credit, would be a bill of withstanding ask, then, constitution. not in what meaning weMay do the bills of essential Bank differ particular Commonwealth’s anti-revolutionary credit? TERM, 1837. Commonwealth of v. The Bank emitted,” answer the latter issued purposes were value, and án medium, a measure instrument a money; circulating former. So wrerethe exchange. for a fund bills credit Do the particular pledge payment? bills of credit re- Commonwealth’s Bank. The were So do the public. So were the notes of the Com- debts due the ceivable monwealth’s Bank. sometimes, a bills credit though always, legal Commonwealth’s Bank were a

tender. The bills of the qualified his them, If did not execution tender. receive plaintiff n stayed. The bills of credit through instrumentality benefit The bills the Bank of the colony. agents, Commonwealth were issued by agents, appointed by the benefit state. cannot, the term emitted” there in this case, be raised

Upon “ question. certificate,

With a loan office respect might, perhaps, an loan, bona fide actual as authentic evidence of the given and of creditors’ the state’s right, obligation; question might “ raised, such an whether instrument could be said to be emitted,” emitted, is, as a bill of credit' is act a substitute for, and the functions But that the bills of the perform money. Common- intended, Bank were wealth’s so does not admit of a doubt. It is preamble. so expressed

If it be contended, the constitutional court of South Caro- credit, that this is not bill of lina, because a fund is particular and set apart bills, we redemption answer: pledged These- funds are state; 1st. the revenues of the is the pledge faith the state. These resolve at last into themselves the credit of Credit is to her, the state. because of her faith' given and revenue. 'If her faith, she break her revenue, she squanders loses her Almost all 2d. bills of credit anti-revolutionary had funds for their Lands or redemption. taxes were pledged set always apart, as a fund. Yet the bills of sinking credit, so secured, were found as rest, as the mischievous the constitution there is no' exception; denunciation as to all bills of credit. general other distinctions taken at different times are: That these are not to be considered credit, because are redeemable- on SUPREME COURT. 272 Kentucky.] Bank of the The Cgmmomvealth [Briscos difference, The cannot make a demand. term of credit whether ten or a is essence it a day¿ days, year. promise pay It is the obtains and credit is of the contract. which promise given promise. before the of credit issued of the colonies revo-

The bills many admitted the were, fact, on “demand.” lution, payable -The bill was to be as money, debt be due colony. &c. &c. contents, its and to amount of payment, accepted Connecticut, 1709, of these bills the Laws Vide forms 8 1710, 9 60. 145. Island, Anne, of Rhode Laws Anne, p. p. .Laws 1702, 171. Laws of Pennsylvania, Massachusetts, Anne, p. 1 230, Anne, pp. 8 that, now bills of essentially, shown substantially We bank bills are- the same. We have shown all the credit and that are distinctions fallacious: supposed and bills credit bills are by agents

That states, can act but which never were issued by agents is, that the are called dif- agents difference agents; names. ferent tender; that bills of were not always credit legal

That state; that had mere-credit of the almost on the were not issued them; that a'fund frequently pay- always support able specie. intended to secure constitution was the fu-

The prohibition was intended to The.remedy the evils of past. ture against not intended to reach It was names with the mischief. coextensive but also. things merely, those kinds of merely was not prohibit particular

The object or emitted had been issued currency, paper .heretofore had which, borne states; time, colonies, up every thing character, assume thereafter name, or should possess of bills credit. and mischief and be within the principle the place, it is said identical: we are-not contended, is terms Still it -have ever bills credits bills and shown that bank have not terms. We have-shown convertible used as synonymous-or the; not are same. things be snown It will the names are different.

But it is insisted that name; bank-bills then, no difference even that'there . re once are, were, bills of credit least synonymous it- hard, but we attempt somewhat will quisition-is JANUARY TERM, 1837. v. The Bank Commonwealth of credit. that on necessary the fact shall note it be called a bill of credit. In form, ais note. money before

promissory con- adoption was not on its face stitution, called a bill of- credit, it was in va- terms, rious but in all money; promises pay acts legislative them, are called of they bills credit. demonstrated, creating a therefore, that, make particular instrument á o.rder bill it not be credit, need so on denominated its face. bill is, form, But the bank note. Where do a-promissory you “

find notes called bills credit?-” promissory Promissory .notes bills of as it exchange, negotiable paper generally, appears debt, from called bills of or bills Malyne; originally obligatory. bills, were called from the form it-is evident They though, given, debt, were notes.' were denominated bills of they They being evidence indebtedness. either because were not they always evidence

B.utj'subsequently, time, 6n debt, but were came be called bills génerally they ' called bills credit. also They obligatory; though-it appa- form context, Indeed, from the were not rent, they sealed. law, rather than the common the law-merchant. the-seal belonged write; was for those could not which Its use merchants usually who. could do, could barons not. though court, of Carolina, then, The constitutional South. are mistaken “the term ‘bill of seldom occurs bonds, when credit’ they say used, is with letter of credit; but'when and this always synonymous 2 M£Cord, to be its technical appears signification!” do, indeed, old- the form a letter Some books .give a Credit, call Bill credit. Diet. tit. Bill .of 4 -Postlethwaite’s tit. Merchant, P. 3. But a similar form, Comyn’s Malyne gives Dig. letter of it, calls what it has sinee called—a credit,, always a-bill; while the term “bill of with the least not credit” indus- might, in a been found the constitutional court hundred try,.háve places; Commerce, 3, 612, in the p. Annals of vol. M£Pherson’s library Chamberlain, Dr. .“’.This Congress. year, Hugh physi- cian, and one Robert both made a' Murray, great projectors, mighty for bills bank, stir their scheme of a of-credit on circulating therein, to be money merchandise pawned lending cent, interest; it industrious six came to poor, per yet pawns, nothing.”

Mr. referred Wfiite to a number authorities in trea- mercantile

Voi. M XI.—2 COURT. 274 SUPREME v. The Bank of the Commonwealth tises, historical, works; and other show bills of origin bills, of these treated pro- credit. Many exchange, bills and instruments of that notes, missory obligatory, description, were substituted for “as bills of credit.” conve- specie often to i' nience, and deficiency supply specie. Proceeding he said:— the argument, time, us, to we far towards appears gone showing

By bills that bank are merely, substantially essentially but that credit; same. Bills of credit is the identically for bank use, old name bills. name has worn out of longer principle .conciseness, seeks philosophical language, Men of business words, never use three perpetually. habitually, when the same can be two. thing expressed by however,

Our are not exhausted. Let us proofs, interrogate banks What are their themselves. bills called in those charters, from whence derive the them? issue right

The 28th section of the first charter of the Bank of England, and 6 William 20, ch. 28, sec. to be Mary, speaks paper bank, circulated as “bills of or credit.” The obligatory, of the Bank charter of of 1793, uses the same Pennsylvania terms. In the charter of “the New Jersey Manufacturing Company,” 1823, credit,” terms or of are used. In granted “obligatory, the charter of Code, the Bank of 2 13, Revised sec. Virginia, “ bills credit,” of are So, also, mentioned. obligatory, same terms- are of North, charters banks in and in South employed “ terms, Carolina. The bills credit,” of are obligatory, employed charter the Bank Prince’s Augusta, granted Georgia; So, 32. also, in the charter of Bank,” “the Planter’s Prince’s Dig. 39; and in Bank,” “The State 43; Prince’s Dig. Dig. terms are used in reference to the issues of those institutions. paper

If it is contended that these terms the seal of refer to bills under banks, letters of credit them; th&answer is ob- given by no other There are clauses in vious. their which can be charters “ an authority into issue bills at tortured all. If bills obligatory do not signify notes, of credit” the banks have been issuing any authority whatever. without bank, of all of the the of the of the redemption paper sufficiency was This is shown of the the capital proved. fully provisions by seventeenth section-of the the of law. lands of state east the river, which, Tennessee and a the valuable large body, by agreed line between of Tennessee; the state amounted to Kentucky about acres, value, two millions of and also other lands of owned great the state; by were made-liable for the notes of the bank. In money, these lands from six All were worth five to millions dollars. interest in the old had was Kentucky, pledged, SUPREME COURT. Qommonwealth v. The Bank of Kentucky.] law, for of the bank. The redemption, obligations allowed to issued amount of was to that paper eqüal permit- iii banks, to other proportion ted for such security given to a want therefore, this objection is, issues. capital foundation; for an equál capital, without amount property equal the institution, for operations not, has in- security stance, been exceeded. the bank below

It is said the fell This is not in par. should influence, be allowed an record; fact have to. matters should introduced. The value of the notes was di- other the conduct borrowers of minished who .had bank; them for their had used who used par private purposes, them measures, No their full which could for value. notes into bring discredit, were attributable to the bank; and the paper .amount was constantly diminution, progressive being destroy- for taxes and for when lands. The ed laws of the paid state direct- of the bank should lands, ed the notes be received for the public manner, and as of' notes, same the same value as the of other in. banks, silver. The receivers the' paying gold proceeds lands south of the Tennessee, sales was directed to public take the notes of the bank for Laws of lands; Pamphlet Kentucky 1824, sec. Under the of these operation was' provisions, there taxes, lands, received and for for the bank, and the old State Bank of the notes of the Kentucky, Bank' of the Common- wealth, to the amount of six hundred thousand nearly dollars, which were cancelled and burned. manner,

In almost the thi§ whole of the of the bank issues to it; been returned and it is believed that before the suit be- now the O’ourt fore all the brought, paper, .exception thousand had dollars, about been forty returned to bank. Paper bank, amount about thousand dollars forty cannot found; to be lost. Thus all supposed irretrievably notes, with the lost, of those have been redeemed. exception By acts, numerous successive directed Kentucky the legislature bank, notes of the redeemed, burned, should be done; cited Session of 1825, 1826, Laws of Kentucky, 1830, 1832. After- all the notes wrere thus satisfied, or redeemed other banks established state; under charters lands, the public which had them, wefe distributed pledged and road school purposes. TERM, 1837. 277 Bank of the Commonwealth of v. The [Briscoe there the of charter having ground The objections exist; bank, does not therefore provided no capital Court, for of the is alone consideration presented question constitutional, as the state of Kentucky the bank was is, whether in this It differs from other banks many was the only corporator. is the or In the state alone stockholder. many only; corporator, stockholders, are institutions, other states corpo banking joint rators. Commonwealth,

In charter of the Bank there is no for the notes of faith of state institu- pledge liable; suable, and the barik was tion. and' capital sued; and in the could The bank was case Wister sue. v. The 4 Peters, this Court Commonwealth, held, against well the suit was corporation, brought. If for a state to be a corporator, it is unconstitutional how can she a be a for the bank? If the corporator part state capital cannot alone be a to issue she cannot corporator paper, part such; violated, the United is and the constitution of States as well for dollar, thousand; the issue notes one as for one issue a notes, state is one many among corporators them, bound to well as she had alone pay become bound for - their payment. What is the difference between a being or corporator, a bonus for bank; taking establishing authorizing corpora- tion so erected, issue notes. The sale a charter a bonus, sale notes; to issue which, if privilege the state not, had she could not she the bank thus grant; gives established issue benefit; states, inhibitions to. the are the which forbid their express there laws, tender and money, credit. making coining issuing them a claimed that a tender, is of the cha making portion credit, a bill of as the same was of intended the constitu racter by If tion. Each the states could make prohibition .separate. d a tender but coins, silver be confusion. would gold Em thing “ meant a bill of credit,” What was is not stated in the constitu by is thus left undefined: we and must tion, look for the of meaning We must look to elsewhere. terms uses of the terms in past and on search we find times; difficulties, from their differ great to different ent of and money, application obligations payment characteristics 'of those when issued states the'peculiar obligations by We communities. look to colonial and to political legislation, states; of and we are unable to ascertain from these, practices of information, true sources what those who accuracy, constitution intended. framed the Sometimes the bills issued under colonial made a authority tender, state or and sometimes were- they This is Mr. said Chief Marshall, not. Justice of were case State of Missouri. In The of bills v. first issue of credit Craig were Massachusetts, not made a tender in debts: this character was afterwards,' to them. In South expressly given Hist, made a Carolina, were 2 tender; Ramsay’s Ca South rolina, a

But there was universal feature in all- issued the bills the formation and of the United before the constitution adoption faith States. The or of the issued government them, was their was always This ever pledged redemption. fact. was, that

Another feature and of credit characteristic these bills no the state issued them and in its always capital capacity, soyereign or in for their were issued never pledged redemption. They of a the name bills of the Commonwealth’s The corporation. a suits, capable corporation, subjected, suing. This, fix the is the first time this Court has been called upon consideration; under words of the eonsitution precise meaning a states now, decision, their or take from to save TERM, Bank of The same time and at tire preserve of their sovereignty; little remaining Union. the constitutional and faithfully rights guard as sound will do so Court, judges, powers, their exercising plaintiffs and 'as sound statesmen politicians. lawyers; will states, on the them ask, deprive restraints error impose tQ the their essential to prosperity, business powers citizens. at a true-construction

In order constitutional 'to arrive at the to be it is proposed' reme- provision, look proper mischiefs into the "died its introduction instrument. Tírese the exces- b-y issues them made sive a tender. paper, authorizing be. the bills a without tender; this, evil it was making great refuse thein; act to hut voluntary accept such injury, to, could as was ensue. This should be consented freely test a bill A ‘'credit, as intended constitution. state can borrow or-, note, bond, certificate, transferable money; give potes sum borrowed. The amount or bonds for a given loan made determined her the lenders'; may by the holders-think The form circulate they proper. maybe that of note, bond, the same as other bank precisely or evi- an}r dence debt; and she and her her faith may pledge for property If of such or bonds notes engagements. given by tender, state are not will made a not be said be bills of they credit. Another case of the of the consideration of part deserving Court. The debtors, notes tbd bank her by law given by taken, them to are made authorizing payable absolutely. Suppose bank to be unconstitutional, yet notes given by individuals, bank, must be and held were value, paid. They given them; and used, those who for the they gave purpose purchasing- lands,the them notes received from the This bank. was a valua- contract, ble consideration an imposes obligation pay the notes other matter. independently Whatever is a benefit tq one, or an another, is a consideration. injury has Court of thmease under the 25th This section jurisdiction of the act. The of the question consideration judiciary given by notes, bank for the and the question constitutionality the, law, were both before court of That court could appeals. have given without judgment, the constitu- given, deciding tional question.: The construction of constitution of United .States was not necessarily given involved this judgment COURT; SUPREME (cid:127) of Kentucky.] v. The Bank feature in case This is an essential here under every cause. brought act of 1789. the judiciary in érror, said, for the defendants

Mr. also counsel he was Clay, research of the counsel for the plaintiffs. learning gratified commercial, into an historical and He had sta- investigation gone authorities, were were con- highly interesting; tuary him, to the decision of the case before this Court. sidered, essential established, bank was concurred had, when the many He with citizens of the state of were, him, with others, Kentucky, who and its that it was inexpedient; inexpe- impolitic opinion But those who admitted. now among promoted diency generally institution, none went further than some establishment of to be this Court to ask relieved who now come before those and for which re- it; into entered the obligations and after- of the bank was gradual, depreciation The. state, that credit But it is the proper to wards'became very great. in rose, and became topar; afterwards equal of the paper So it monied institution. other as that of the notes any as good Bank of notes of the The value- depression continues. which sus- of all other banks Commonwealth, was similar to that of other It than the notes was not greater specie-payments. pended ’ banks, in similar circumstances. Two are' in case. questions presented this 28 ! n " TERM, ' of Kentucky.] The Bank of the .1st. Were the notes issued the state by Kentucky? issued, If

2d. so bills of credit within the they meaning United'States? constitution

The in error must establish both these plaintiffs propositions: both, do not sustain will fail in their to the they application - of this Court. constitution both power requires properties note, features in the formed the consideration offtbc obliga- error, tion which the suit was in brought, against plaintiffs 1st. state of did not issue these notes, Kentucky' aby corporation. This Wister, has decided in the point already case of Peters, Thé defence set in was, that suit that the bank and up 31S.. the state of same, were the Kentucky the stale was alone in the so, defendant suit. That the suit could not be being maintained, the Court had jurisdiction. very question in the case the bank identity state; and the and whether the emissions of notes were the state or by by bank. This is declared Mr, Johnson, Justice expressly opinion Court.

It is not important, case, considering what inquire por- tion of the state was sovereign power the bank given the state of the officers appointment who it. The conducted of the officers was of no number If the consequence. argument error as to plaintiffs of all good delegation power, it is as to as if the state good part; represented officers of extent, it will sufficient; so far- as this is. point consideration, under to-make the state the actor in the operations the institution. The defendants can show, error'must so, do issues that the of the bank were not those of It is the state. contended that whole of the operations were those .bank of a under the law of its corporation, acting creation; and managing funds and. set provided distinct and apart by positive appropriations, security of operations: which the state was not acting’ or interfering. is said-by in-error, the'plaintiffs COURT. SUPREME

282 Bank of the Commonwealth v. The [Briscoe the Bank of the Common- to include can stretched rule asserted extent banks; will to the same 'it will take in all wealth, operate it goes in error of the counsel The plaintiffs on all. argument state banks are unconstitutional. to show'that all state banks. Other obligations But cannot stop you Are medium. form a circulating money part payment en- laws, their payment authorized bills of exchange circulation, and thus into aré state laws? forced by brought So notes.of community. form a currency part they which the state the laws of owe their credit to individual a private drawer. issued, laws their as those compel then The on state laws. these issues are founded argument Thus constitution; intention far. It should at the too stop plain goes it at the accomplish. proposed object rules should and the are the govern What principles in this case? Court such a violation Court, case, that only say,

This Géorgia its call into action should as is constitution palpable, plain (cid:127) The instrument. under the provisions language powers use, wel1 understood by which is common constitution 'as to those whom intended known community, por laws or be called should the aid of usages foreign operate; would involve This is not ncccssa1/, for its interpretation. The consti- a.id in doubt. it, difficulty understanding proper with a to these is to be construed view principles. tution will be will be whatever adopted, certain interpretation proper laws Courts have sustained an interpretation the consequences- them, had been regretted given although to its to do so. not this Court limit constitution Will obligation If and its evident provi- interpretation? viewing meaning, plain rules,-defects it, are found in Court has no these power sions them; but provided ample purpose to remedy powers are. it. of the rules which are to the construction The application applied inter- statutes, is constitution is not' to be protested against. rules.;- instrument, such and the framers preted it, the ex- did not it to intend when adopted subject people the' same which courts ercise powers interpretation; properly enactments. exercise over legislative constitutiQn states, prohibits, issuing TERM, of Kentucky.] v. The Bank the Commonwealth does not other' or to corporations; apply issuing action of a state. This is the clear plain sovereign language constitution;

of and confined to the of a state, action there is difficulty. Missouri,

In the case of v. The:State of the issues were by Craig state, its officers authorized by specially expressly and com issue the Whatever were manded doubts entertained paper. upon the issues bills credit, existed, whether of were none question of that the state. No paper person suable responsible forth when were was put obligations given. notes,

The counsel for the has failed show that the plaintiffs of Bank of the Commonwealth were issued state of Ken- tucky. notes were the notes of a The

The name of the state corporation. mentioned in binds itself them.: The for corporation only of their the funds were answerable payment; corporation this then, for can it be How, said redemption pledge. they issued and that were of credit of the in their state? appears emission Nothing lánguage, nothing an them, sanction such assertion. If a state owns the whole or bank, of a she part capital a. be a It cannot be she be a may corporator. said may corpo- stock, for be for On rator cannot the whole. part capital established, this limitation be be how shall it what can principle A be may constitutional, ascertained? operations legal a state shall take an in its interest and its unconstitution- until capital; will when a shall assume the full ality begin complete a oí fair the stock its whole Such purchase ownership, capital. character cannot it can never take sanctioned; a change place. bank, that a state a The fact as was may'own part capital of a. this Court'in' the case of the held Planters’ of Georgia; bank; a a state become a decisive corporator herself, (cid:127) a state to a sd'le The decision corporator. make right to, Wister, Court in the case last referred cited this in the-case Peters, has closed doubt upon point. Bank of Kentucky. monwealth’s in

1. That was issued and name of states, the in- currency the dividually, byor congress. of

2. office of a medium. performed money, the circulating existed 3. There no to enforce its compulsory power payment. no There was for its and, adequate provision redemption; redeemed. fact, it not

All of currency the prevented mischiefs can paper of exist, the or silver payment gold enforced; and of this kind existed in reference to the nothing bills revolutionary of credit. of

If the notes the Commonwealth’s Bank were of this descrip- will be abandoned. tion, defence and money, the offices of They were to money. performed subjected power compel an payment by appeal state; .tribunals case, and, as done Wister’s a successful the courts appeal of the United States. issued bank is described in the seventeenth paper sec- of

tion of act It was assembly. declared that all expressly notes’ should be redeemable in and first silver. In the gold of act, the bank is section declared corporation capable sued, of of of suing, being being compelled anffi. pay fheir notes, undeniably, or silver. In gold instance the revo- every lutionary there was anti-revolutionary an paper, inadequacy TERM, 1837. v. The Bank of show, These statements there was no co- funds. individually, that bank,' between notes bills of incidence credit of the1 that both revolution; the office only, except,- performed money. e These ar bank redeemable, notes redeemed by specie, notes, on demand and are not bills of credit. Such payable were, are these evidence and such representatives specie; Byt is like note á.-check for the bank notes were payment money. revolution; not the and the words of the constitution do them. It is that those notes, redeemable in. and on which specie, suits bemay brought; should be to their tenor. paid not credit of aL according such.bills into should the Court brought question, decide this case the defendants.- against plain Keep terms meaning construction, of the constitution, do not to include seek,..-by in its such as that prohibitions which is brought ipto ^question -.case, this all and will be safe.

Mr. Southard for the in error. plaintiffs There are two it is not questions, to discuss. proposed SUPREME COURT. v. The Bank are, Has the of the case? Court The plea, jurisdiction .words, denies the of the law constitutionality Kentucky, creating of the Court therefore bank. apparent upon jurisdiction re record, 368, in 10 Peters, and the case carefully clearly all the decisions on this views point. ? It is un- unconstitutional,

2. If contract void the law the. Missouri, of the that the Court derstood opinion Craig unanimous, in such a contract. affirming illegality nearly I that it is tome, cannot myself attempt persuade proper, To has so decided. what this Court recently sustain by argument, that it will alter its year year, change opinion, suppose there when decisions such questions, happens change upon tribunal; members, would not be to such of its respectful true, our would, country, if it were application justify ubi aut aut est. servitus, est truth, vaga incognita lex misera I to combat the my Nor shall argument allegations postpone Such are clients. my easily fraud and against charges wrong discussions, used to aid in out, and are thrown unfrequently legal cannot, here, to such discussions. They very inappropriate although and con- cannot-be evidence explanations; be met persuasive Court; of this and are no more appli- judgment trolling others, has case, where defendant received- in this than cable, cause, refuses to refund it. easily and, for They might money, just but I do not feel the the adverse necessity party, be retorted laws to in the constitution it. There is justify and. enough doing I Court, and to them clients claiming' judgment my observations. my apply “an to es- act

I to maintain that law the entitled am Bank of the Commonwealth Kentucky,” approved tablish'the November, 1820, was' a violation constitution 29th and its bills were bills credit within the States; prohibion United constitution There are two constitution. provisions .of with, and one connected cbntrol subject. gives the other restrains the states. power congress; power &c. to coin 5; 1, 8, sec. item shall power, “Congress Art. coins; and fix thereof, and of the value foreign regulate money, adds, “to measures: and item provide standard weights current coin the securities and counterfeiting the punishment to the Union. States.” This the power United gives TERM, 1837. 287 Kentucky.] Commonwealth v. The Bank of the [Briscoe declares, that no state shall article enter 10th section same confederation; letters alliance or marque into treaty, grant any credit; make but emit bills any and money; thing coin reprisal; debts; bill and coin tender pass any silver payment gold law, facto or law attainder, ex obligation post impairing cop- title This restrains the tracts; or any nobility. authority grant of the states. form of these items con- phraseology expression similar,

stitution deserve attention. both in They grants Union; of our that of the to one power government, portion And other, restrictions that of the states. phrase- upon are the must' same, form construction expression ology Each and each restraint is correspond. power distinct' separate others; from the combined in sentence, the same although they were of the same nature and because character. simply, Thus, this is coin one money;” “congress may power substantive and different from the rest. “May thereof,' value regulate coins,” is another fix the standard of foreign “may power; measures,” is still another. Each be exercised weights may without the rest. coin without Congress may money, regulating coins, value of the standard of and mea- foreign fixing weights sures. So it do either one or both of latter, may two without are, the former. and were intended to be acts of separate one all of at such performed times government; which.might conditions, under such as the discretion of those who adminis- tered it should select. The nature the acts and the. form of ex- both this pression, construction of require understanding instrument. The same remark to the restrictions applies states, in ' 10th section. of it which is Taking part in- directly discussion,

volved we see that “not coin they may money.” That one power, states, as-independent they possessed be- union; fore their but which is denied to now them. They “emit bills of credit.” That is another power, antecedently pos- and exercised them, sessed which is now forbidden. They may, not “make but and silver coin a tender in thing gold of debts.” That is a third power, frequently practised, now prohibited. character,

These same powers, though general affecting SUPREME COURT. v.. interests, used the' states. same separately They might credit, or coin money, emitting without making thing a but tender. and did emit of credit, bills specie legal- might, or a tender. without if coining money creating legal They might, chosen, had so have created a without they legal tender- coining The or credit. acts were distinct in their money, issuing bills [wo, but or nature, them, and all of have separately performed; might time, the same and same act of been performed legislation. constitution, thus them, framers of the united them The regarding sentence; them, but restrained each of whether com- clearly in one states; disunited, in the action framed they bined the.ir mode and form as in the same correla- they granted prohibition to the general government. tive powers instrument, therefore, we -must same apply In construing must the acts clauses. We keep separate; to.both principles we also the re- must which we- apply grants, apply rules ¡and the value If, to coin money in.the authority regulate strictions. on the- control find full and exclusive coins, given we subject restraint restrictions, must also in the complete we find congress; The of this of the states. exercise on propriety part in the illustrated, and be various enforced) examples might itself. constitution second; a then, is bills, to emit one power;

To coin money, and in the nature, in their tender, a third: language amake other. And of each constitution, distinct res independent act, a or exercise to each as states apply separate trictions of power. to emit bills of will my powers perceive object.

The Court treated, in tender, to make credit, argument, it has been that the the same one and urged were thing; they forbidden, emission- which was was that bills of credit emission with, its character from the and received was connected were and that unless tender; they bills were made .fact forbidden. There is was not emission tender, nothing their amade constitution, nature nor words phraseology violate one A state may or sustain the argument. acts justify void, because will be its restraints, and of these legislation both not they bills, issue and yet require It may unconstitutional. bills, not issue It may of debts. in payment be received shall received, to be like specie require something and yet JANUARY TERM, 1837. v. The Bank of the Commonwealth of debts.

citizens, in Both would be discharge improper, so. equally

In .the acts two have not been the practice, same. Previous to all the states issued revolution, credit. In a proportion cases, not A tender. they reference to the made books, made, on this has been not be need This point, repeated. Court, in 4 the fact Peters, stated with historical accuracy. gene ral, has also issued bills without them a tender. government making war of 1812, notes of the were bills of treasury were not a tender. The had to issue authority them; government But it its necessities emission. did require justified of the United States should received people pay debated ment Will it be that they not, of debts. seriously credit; that, if the states had issued therefore, bills' them, constitutional? would have been in Court, in the case before issue The constitu- puts plea and, be found to law; of -the whole if it either of violate tionality It void. could not must declared authorize prohibitions, state; nor could it make credit either issuing else, a tender. issued, or specie, any thing legal with is in those conformity opinions That the view presented I refer early the constitution to the days, who best understood Mr. Madison. the number written Federalist, 193; Mr. in his letter to is conveyed If Ingersoll, a different opinion and we must admit, it can regretted; which I do appeal commentator, to 'the constitutional lawyer, inattentive from' the is awake. when every faculty sitting judgment Peters, Missouri, 4 where the Chief I also v. refer Craig and the distinction; the clear Court, draws Justice, dissenting it. do not deny judges relieved one diffi- then, already consider myself

I might, IBut this cause. venture which has interposed urge'" culty all these coin- powers The separation further consideration. standards; tenders; and.the bills; fixing making legal issuing ing; exclusion Union, total states; on the to the of them bestowal ends which great to accomplish necessary was indispensably was to make the Its object was formed. leading the constitution as to the cur- and especially one for many purposes; people, people, free privileges immunities One; so far rency.. high of holding, One; purchasing, in the rights are concerned. (cid:127)-citizens XI.—2 0 Von. SUPREME COURT. Bank of the Commonwealth of One; property. domi- transferring privilege changing One;

cil residence at in the modes and pleasure. of trans- means and commerce. It break business intended to down di- acting .the the.states; far, visions between so and so far as to you please, only, remove all obstacles between their intercourse and respec- dealing tive citizens.

To do this, one dollar and was necessary. currency eagle must be-the dollar of Maine. That which' Georgia, eagle debt must would purchase property pay Virginia, purchase á debt in or. Massachusetts. property pay Hence the was power currency creating regulating Union, One withdrawn from the states. given power, common will decide shall be. whole, is to what currency shall coin states not. shall shall Congress money Congress —the shall coins, value domestic and states foreign regulate —the Union, not. The authority fully absolutely given restriction or do which without limitation. states can nothing uniform, shall interfere with of a common cur- establishment standard and with' uniform standard value—a rency, have, resides, citizen is to where he or with whom every matter deals;- resident each state shall his trans- he employ other state. actions those every united This transfer of was Be- powerto body indispensable. there no common standard of the revolution currency, fore to those of mother as the colonies value; subject except none; none there was the confederation established country. During state, with an Each unrestrict- authority. by competent and regulated one the attributes To do will, made one for itself. ed themselyes assumed, independent when declared which they attribute sovereign- natural, inalienable, a is, indeed, indispensable it, exercised the states How nations, and in all civilized savage. ty, ex- their national first moments confederation, in the during this in inquiry but not necessary istence, is matter interesting confederation when they passed But stage argument. A confedera- ceased. in this necessarily union, their respect, right, exercised ac- with the union could not exist power an tion might, The con- members.. will or to the caprice different cording others, and Switzerland, Greece, Holland, Germany, federacies one currency The Union required existed with such exercise. had innúmera- obviate same platform its citizens on the all place —to TERM, 1837. of the Commonwealth v. The Bank to the common dislike —to and of dissatisfaction give go- ble causes was enable absolutely indispensable which the authority vernment which it and benevolent was it to purposes accomplish great created. . it To is exclusive. reason

Hence the conferred upon power view; and as the restrictions must this upon we keep safely, must so of that we states, are meant as the construe power, guards or interfere with as not to. them to encroach them permit and must and stand power. power guards together, may each other. destroy What then is the -to create a currency power regulate law, Union? It is to that which all shall receive, establish by value, in the transactions which shall at a fixed all money; pass, sanction, created the national society, having nothing interfere others, shall to defeat it. is make a tender. To legal pontracts the material and standard establish shall otherwise which do not themselves provide agree- governed; ment between the To what the debtor parties. prescribe satisfaction of his what the debt, and creditor compelled pay from him. shall receive a

Such under currency proper a altogether indispensable time, in the which for the first of free system, history governments, “ it as a fundamental the citizens established each principle shall,be' entitled to all immunities privileges citizens impossible out the several states.” It was carry principle it. without 1789, commenced, immediately

Congress, after government a law in coins; relation'to certain ...?.in foreign long passed Court, 1834; from time acts, familiar to time ending them, convenience, discretion, condition our regulated mint, In established d own cau- coinage required. made, coins which should be the standard tiously prescribed the citizens value at which governed, should the Union receive them.

This law created a It has been called Union. currency constitutional, constitutional It is because cre- currency. law in,that but it is not so constitution; authorized ating alone. The to create sense constitution authorized legal congress and this is its currency, proper currency, designation; legal— current created cur- by law. money legal Congress 'might SUPREME COURT. 292 v. The Bank of the of Kentucky.] Commonwealth [Briscoe not of and rency silver. issued They notes, and char- gold treasury tered bank. had the to They make the and ban'k power treasury notes a a-lawful tender, currency, because the is without legal power restriction the constitution. itBut would have been most injudi- and discretion, cious .an exercise of inexpedient; then, and unjustifiable which, will not and not to be exhibited hereafter. Power ought and are not the same. and are often duty always Policy opposed. power remark, The Court not define, will that I do labour to Ibut desire to and or medium. distinguish between'currency money, circulating is currency what de- Legal government by authority .rightful clares shall a fixed value, in the as pass transactions of society, here; silver or medium is that gold money circulating consent and otherwise, in contracts and busi- passes agreement, ness transactions. may silver, or bills gold creditor notes, even promissory are as received debts. discharges former amount, countries is small in in ours not more than latter, millions; if all kinds seventy-five are em- eighty braced, reach one nearly thousand millions. The probably former the standard of the latter. is regulator former is entirely under the disposal general it government; avowed of the constitution to the states prevent purpose from interfering" it; The latter with them. prohibited But it was that they formep, not touch the or do that which should it, might destroy credit was inserted. prohibition They money had the credit and faith of the currency, state stamped upon them; interfere, their circulation would with injuriously, intercourse and common the various obligations parts Union each other. medium are circulating found, the

Among comm’on bills, issued as banks, by corporations, and promissory individuals; of the constitution without. them violation deal receive may s it do But are forbidden to such laws, precisely unles they so. from to states intended emit Union prevent separate which the credit And for most reasons, faith and obvious on their own ting, seen. be further as will presently to contest the the bills

It is not .constitutionality my purpose who autho- individuals, or have issued by by banking incorporations, them. I their to issue do charters printed concur rity not Court, been handed to the so far it seems which has as to argument all these state banks are nor is it neces- unconstitutional; declare that or I to that cause, should my sary my agree posi- argument, tion. The states to create' to invest them have power corporations; . terms, to issue notes on such and with with promissory right as seem to shall them this security such proper; place respect But the states not the power on individuals. have to footing them make the notes issued or their citi- money, compel .current them. This would be an zens to receive of the assumption authority been which has vested Union alone. solemnly is to and to create a common cur- duty congress protect of the" create, Union. The embraces rency power power and the means of regulate, The means and the cha- regulation. of this need racter not be at this regulation, explained stage found, But will' be that the admission of the argument. right banks, states to will create afford an in denial of the argument of the states themselves to issue their own credit. on. right should notes be these and used as a received of the cir- Why part medium? from the Solely unavoidable current culating scarcity circulation, more than money? country requires can specie afford. for the business of possibly necessary society. The same existed for notes, and notes of a bank of apology treasury United Bills of credit, times, States. at all this have justifica- tion, no other; and received, but must legalized as currency No general government. public agent Union, no as them representative currency ought recognise act of legislation.

I then, that has the entire control of the urge, congress currency, and with it, as a necessary consequence; power regulate medium; that, until there is an absolute restriction circulating tolerated, bills are a by competent authority, ordinary legál, SUPREME COURT. v. Tlie Bank of Commonwealth of constitutional medium; no part circulating part .but currency. legal no can,

This view constitution diffi- create possibility, on is, the states. them trespass The rule culty, rights cannot issue bills which shall rest on funds and their own ’credit, and circulate as There money by governmental authority. for them 'to all the it; do to them duties which remain necessity it; can without governments, readily performed great created, countries, have and in causes-which neces- always exertion, of from their action'. power, removed sity with, intercourse, had connexion causes from the Those sprung nations; hostile, with other almost war. universally peaceful was created enable that nation to The bank carry England, York, Massachusetts,-Connecticut, New rival. a war great in, first bills .to aid Jersey,- New obtain struggle to, Carolina raised the South means by process Canada. carry both Indians; the the and and confederate on her war ‘against state to But all independence. sustain'the war were issued bills foreign states; no or is taken the they foreign intercourse away wage therefore the of such dif- not in case they wars: power, Indian need to this to resort fieulties, expedient.

While, is war it disas- it would unnecessary, peace produce If were to would bills, issue such they they trous consequences. their distinction between own and those a' direct citizens draw or states, and if other discredited they by states: rejected other Union, the .ensue, distrust and and would or dissatisfaction by and be weakened itself Union endangered. individuals, or bills, to or by. promises pay, incorporations

Bank or, their circulation on the faith in other in, reposed depend for who not the credit of those issue them. And it matters words, on or at demand, is on or at a future day, whether promise pay . or time of payee payment convenience the discretion A bill to to do with their character bills of credit. has nothing it fixes a more a bill.of than if day is no when presented, pay or six It still rests be as a months hence. year it is paid, when so, This is even if a fund is mentioned of maker. credit on the . funds be or In cases it secured may protected which private by so almost In always. gene are seldom specified. public, be states; in the bills credit not universally rally, though or without But whether during,the fore revolution. TERM, 1S37. of the Commonwealth v. The or who the individual party fund, and must the credit given is sa binds himself to who, promise, makes the promise; is dif there In this for the amount. respect the holder tisfy citizens, makers; corporations, whether’private ference between bound see bill who is paid; states. We look to the or person it is It is who is not the his bill of credit. agent sign; bill is found, And if but the he substitute, not principal. him. credit'; his, trust is and upon demand; bills often issue issue on payable Banks generally interest, at a future sometimes notes, notes, day, bearing post payable credit; notes; Yet are still their their sometimes not. , are medium. So the treasury circulating government a future interest. notes, day, bearing payable circulation, medium, as a bills credit government; also, credit of the if a its So, on the state by government. depended not bills, for which is issue individually agent responsible, agents states; must be out funds it is not but which paid provided by but of the state. The is bill form is who nothing; agent, out of funds is the is the made, whose pay, matter. decisive otherwise,.issue or

Now, a state pass agents on the credit of the but of not money, they pass, agent, is it is who itself. If that credit disgraced rejected, agent and, suffers, but the state. If the bills refused feels other is states, the state affected. general government, impeded her impeached. Imputation cast, Her separate sovereignty Union, her Hence, credit and will solvency. equals, to a ours, a train of evils Union like arise will strike instantly the aid of without the mind constitu- description argument. such results. This will Court not coun- prevent tion designed this -isnot all. These bills are the teract money But design. If it, of the state. other citizens’of Union of the' citizens reject is arises. And exhibition conflict immediately strange private a one have one made in a Union people, part currency, among emits another. And citizens state which another part medium, in one one which they may have two pay governments, medium; the .must in a cities satisfy the other diflerent they receive them, other or arc avoid compelled dealing states This de- train of reflection what not current where reside. they the constitution consideration, sought serves meaning when SUPREME COURT. Bank of the Commonwealth of Kentucky.] Those who made were it, not blind to such effects. The prin- great is, that the Union has- the ciple over the power common currency. interfere, and, The states cannot faith, their sovereignty, establish which is to have that any thing may character. They bills, authorize their citizens to issue but those bills not may they give of their or 'credit. The- moment any portion power authority, character; do this, become invested with a new be- they they they national; so as a come far state is public money; national separate state far as a has so existence. They separate independent own, cur- create their different from that which is currency elsewhere. rency

It has been that this power supposed grant general had inflicted arose from the evils which the states on government intended to them themselves and was by paper money, guard their these evils.' These appalling; a repetition great doubtless led is one history imposition oppression; so surrender the but was to a states willingness power: .not states, over to create prevent much guardianship inserted difficulties, that the local, as confederate provision constitution. and for of future evils for prevention remedy pre-existing was sufficient And that conferred power congress. power not But'this is if it exercised. wisely place its had( object, in- Difficulties out and secure proper management. to point laws, formation and administration of are conveniences this tribunal. from the appear preceding suggestions positions resulting be, can establish and currency. alone regulate 1. Congress citizens, which, like may 2. create individual States, Corporations bills of credit. issue may ybll, the citizen. be received

3. These may rejected, cur- far shall be treated as determine how Congress tender. rency —as uniform. must make the this, currency

5. In doing we further have been If these explained, may inquire principles their are violation. prevent into provided guards funds, credit and sove- two; states, in are virtue of any not to emit make a tender bills, thing nor reignty, and silver gold

JANUARY TERM, 1837. 297 v. The Bank of the Kentucky.] Commonwealth of [Briscoe Both these had been done the colonies by the states, by .and instance's; innumerable incalculable .evils, some producing others rather beneficial than In New injurious. Jersey, her example, had bills been so secured, regulated to, although they'amounted if not two millions of nearly, dollars, quite that their credit and pay- ment were and the evils protected; felt her were rather people, money than from paper her own: confederacy, this account for her on part vote some questions relating Debates, of the constitution. 4 provision Elliot, “ The is in the most absolute prohibition terms. No state shall emit of credit.” It did not so stand in the draft the constitu- “ tion There, committee. reported by it was conditional. No state, without the consent of the of the United States, shall legislature Elliot, emit bills 4 Debates, of credit.” 123. The condition was ex- so punged. prohibition also as to peremptory. coining a tender; the other acts money two making inter- might fere with the And it is general powers granted congress. apparent, that one of is no more taken them than the others. The states away the same to coin as to emit bills. right money,

These bills and were one and the same paper money thing. of the colonies and of the new states were called bills money paper credit;- because states, simply authority them, created and which -werebound to redeem.

This or reference to because it is requires authority, argument counsel, and is admitted adverse not denied. fully by the bills of and there was no other. Now paper money js forbidden, all bills credit then forbidden. money it is to If be shown those who maintain there any exception, issues. of the state the validity (cid:127) the habit of the states were in is then Whatever prohibited. issuing I refer to the multitude of acts which What-were they? shall cited, to which the Court have references. have been They'were . character; one and one substance. all of one object, having officers, commissioners, committees, persons signed state, not for who were and acted them- agents selves. .be Commentary

The Court cannot but familiar with Story’s Constitution; clear, condensed, and accurate the'most gives bills, which is within effects, of these com- view nature Von. XI.—2 P COURT. SUPREME The Bank of the Commonwealth in this I one use my argument. guides my reading.

pass * 222. 3 Com. Story’s the that the state would the pay by agent were They promises demand, on or at fixed mentioned, day. amount who which those for their a fund redemption, They provided had to their sufficient secure payment; them considered authorized gene- to state. the revenue the taxes, or some portion belonging rally to no as their cha- this was of fund importance, sufficiency failed, in case almost except of credit. It always racter as in all cases the resort referred; I before have to which state, the of the state. and the credit to funds was the them; estimate the should to citizens were They permitted pass ten- command, by into circulation or by were forced legislative they der laws. instance which can and in as money, every were circulated silver,'in or specie, found,

be Ihey gold promised In all cases were w'hich meant and silver. they current money, gold the now emit states cannot money; bills of credit all In their forms resemblance, or in their having object. thing be See Mis- the remedied. within mischief Craig were they souri. counsel, the to enable bills of the Commonwealth’s

The adverse tests, us four denunciation, the given escape tried; which, and without are to be taken are to they they within as bills of Constitution. meaning 1. That were issued are, These the name of the would be, true were issued state. A more- description officers for and on behalf of the state. or agents Peters, 453, 4 was form It was the general. certificate given officer; his that the state I admit would that the promise pay. an officer of the state, them must be or person signing agent state; must the'state,-but he the form in promise represent it, does no at the he Due importance. treasury dollars,” 20 state authorized is as it; person and-signed-by sign state, as much a bill on the credit of the if the most form was precise used; matters And it not what where it treasury place bank, or the treasurer’^ house. It -is where paid,.is; place funds of the and that is call it What kept; treasury, name you will. does not cease to be because you the treasury, it call a bank. will if the he is made promise agent, A»d it state; does not cease to be pay, thereby binding TERM, 1837. Comjnonwe&lth of Kentucky Bank of the v. The ] is the the state, out of which he was to and not money pay, money conceal substance of the transaction, his own. Forms cannot real from the debtor. nor divert its obligation 2. That of a medium. place supply circulating is, case, in this this test. It is in debating emphati- There object admitted that the notes in to circulate cally question designed as money, place. supply was no to enforce Is There it compulsory process payment. . was cases, that there in all these the same

not perfectly apparent Besides, other contracts state? when the process constitution, was the states inserted could be sued. provision doctrine, This the constitution early amended of states. But take ca'se suability away present to.relieve shown, of this must test, that the officers. application between the holder of who have interposed agents sued, be to itself, the state can whether compelled pay, the n A will it or suit them is not. the against- mockery,' unless can be those who the enforced own funds. When against judgment examined, is the this law value effort to evade the constitution will be apparent. Thai the bills of credit before constitution, no adequate for their was made This was not

provision redemption. believed to case, be at time of A emissions. fund any was almost Whether sufficient or not was matter always provided. of opinion; to of its who they only authorized them. judge sufficiency, excises, to taxes, It arise from imposts, specified property, some source revenue state: That were found to fail, alter It does not the fact. will be scarcely that the cha- pretended as credit, racter on the paper, depended accuracy who set those fund. Much apart less would judgment sinking that character be the fund should fail. This changed, unexpectedly would convert them into bills of as the value -of’the according fund was enhanced will counsel find it difficult depreciated. to sustain this to reference and if position by history; the in- any fund is to be decided sufficiency depreciation it; which is the we test which or this Court paper resting can then the defendant in error can little have apply; hope. notes of the Commonwealth’s cent., Bank not- depreciated fifty per the fund for them. provided withstanding The result of tests these is. that .the ques- qualities paper COURT. SUPREME Kentucky v. The Bank ] to be confined us. Their true points' .tion cannot .the urged against is, on the money funds, faith, and paper resting description —bills state, the state —issued agents promising credit out of a or not; shall be whether fund specific paid, having state, means to enforce other contracts same and. to to relieve the wants of the pass money, designed government, (cid:127) citizens; its be It at once nor perceived, will neither description, with, now can interfere or be made urged, argument deny to borrow of asíate its money acknowledgment'of right give (cid:127) be loan, If it the acknow- honestly the debt. truly and. to secure its intended exists.- The payment, ledgment objection loans, the colonies were bills credit of nor loans. certificates medium of the limes. money circulating —the of a real business court and mere look object; mat-, form, or the name or instrument ters of any paper them, its not, decide character! not in called, will If it. It .the of its and mode accomplishing develops object, preamble “Whereas, and beneficial words: it is-deemed these expedient inis on the funds thereof, to bank state, and the citizens establish a the. to loans and of making for the paper, purpose discounting of-the and the relief than has been-customary, periods for longer enacted,” be it &c. therefore, of community; distresses This cover, state. for the not to borrow was money The object Missouri, cannot in v. was Craig be unsuccessfully attempted which debt; no had no of The Kentucky to here. resorted government to her wants. to borrow necessity money supply community; distresses of the was the relief of the The object to of with money, to loans to them relief, of make mode was JANUARY.TERM, of The of Her was motive to that and make similar debts purchases. pay She not as had an the old money. all paper good apology produced had,, at the the other colonies commencement as Massachusetts bills issued their to enable them They century. of the eighteenth the battles with or country; the forces fight to raise which.to return from their often on their unsuccessful them gallant, to pay to motive was a debt Their pay government: enterprises.' Here it was to. provide to meet obligations. money people state. to bank; The mode relief issue providing money form of all other bank and to answer paper, precise purposes it was no mode And new of all other bills paper. issuing There is and that not the least one.example, credit. objectionable of its before South multitude, Carolina, use this. I think, among Tuscaroras, mode; this very in the war created a adopted Hist, 1See of S. C., 204. The bank, and two money. paper in all essential no man has are alike ever particulars; yet sup- Carolina Bank the notes the South were not the kind posed which are admitted here, of credit to be argument, unconstitutional. be money, the law and its show that the

The supplement, plan provisions was to money, money, equalize among people. counties, section divides eleventh capital proportion among 165; section, and the taxes. twenty-first supplement, p. each bank, branch of the dis- creates a judicial congregational section the amount which should trict. eighteenth prescribes loaned, and that not be lor than one year; shall nor longer but to debts stock loaned purpose pay purchase pro- words, it was duce. In issued and money; loaned plain money bank, to used money. my deny duty purpose government .the constitutional use means relieve the state to appropriate felt; such distress as then when under but to deny people, then The Bank use the means had Kentucky adopted. right before, the state was o' many one-half owner been created yeans 1812, it, others, the war like suffered.- It the stock. During was in order payment by specie stopped government; the state more than new' condition, when, chartered forty them make their banks,

302 SUPREME COURT. v. The Bank of the [Briscoe in 1819 their charters were taken The away. pressure distress of the were almost community The unsupportable. virtue and ta- lents her best citizens put requisition; during sitting Frankfort, legislature met-in in the capítol, hall of to devise -the legislation, means for relief. If proper I have history one of learned correctly, adversaries, my (Mr. was Clay,) there; and, as he has done on other many occasions, so to the gave members and his legislature, other fellow citizens, the coun- true wisdom. sels of But were not to create such a bank as that now under consideration; the of which constitutionality was, at denied day, large proportion the ablest citizens of the state. other, and, as I legislature adopted insist, unconstitu- advice; tional and created for the relief-of money people; whose we contest. money legality at once us, meet whose was it? inquiries money by whom

was it issued? on whose credit did it whom was the rest? fund owned? for its An answer to these must redemption settle questions If the fund our if the controversy. state; credit belonged state; if those was that of who issued it were the mere agents state, without interest or then it was the personal responsibility; the bills of the state: were bills of emitted money within the constitutional state, and fall denunciation. It is suscepti- demonstration, state and not the ble corporation, the. was not to relief of itself. corporation provide every thing. but the instrument used the state effect its object, and resources. The means was the mere own form of corporation action; and if this form shall be found sufficient to cover and le- her on this act, is, the constitution worth the point, parch- galize which it is written. It does even ment not' require ordinary state to enable it, when- every trample upon defy ingenuity interest or dictate. caprice may ever as to the stockholders. Sec. 1. “That a bank

1. Then shall be, established, name and is, same in the on behalf hereby &c.” Sec. “The whole commonwealth Kentucky, capital bank shall be commonwealth exclusively of said property and no shall individual Kentucky, corporation permitted bank.” of said Sec. 5. The own, any part capital pay of dollars, of said bank be two millions (increased stock shall capital millions of December, 1820, 22 to three dollars,) by supplement wit: —“All manner, ihoneys raised paid following JANUARY TERM, 1837. v. The Bank of the Commonwealth of Kentucky.] into the for the paid treasury the purchase

hereafter vacant lands commonwealth; the all hereafter moneys into the paid treasury ' warrants; the of land all which purchase moneys hereafter may be raised for the sale of the vacant lands west of the Tennessee river, and so much the stock owned capital the state in the by Bank of as to the Kentucky, may state, after the affairs of belong said bank shall be settled with the thereof, not up, profits heretofore shall lav/; pledged appropriated by exclusively appropriated the the bank;” stock of said making up capital treasurer, as the he should receive these money sources, to it over to the pay cashier, &c. Sec. 24. All the interest from the loans and arising discounts, which be made bank, the said may after the by payment of the shall constitute and necessary expenses, be considered as part of the annual of the state, revenue to the subject disposition the legislature.

Sec/28. The treasurer towas furnish seven thousand dollars to &c. to the bank into procure plates, put operation.

Sec. 35. “That the notes of the Bank of present shall Kentucky be receivable- of all debts due payment the bank esta- hereby blished, and the revenue this commonwealth, unappropriated the close of the session of the present also, the general assembly; collected, hereafter remain revenue .in the un- treasury shall constitute a annually, appropriated part stock capital institution, and shall be said over to the paid cashier the bank,, treasurer; to such by may be made from appropriations subject time time law. by to the examination of

Preliminary particular character of the bank, charter, under this a. further dis- it is case; cussion call the important attention of -the Court to the state of in this case, as questions they presented the. In no decided, can the cause be propriety pleadings. them; will therefore look to them with their accustomed care Cour[ discrimination; before the decision is pronounced. of' the defendants, in the courts of pleas are, that Kentucky was furnished to the bank capital Kentucky: state while the refer to the pleas charter, provision direct lands, certain the funds of proceeds the state in the Bank of shall be over to the Bank Kentucky, paid Commonwealth, aver was ever nothing paid. aver, also that the whole of the of the bank profits belonged'to state, and were the state. demurred plaintiffs received SUPREME COURT. v. The Bank Commonwealth of d admit and thus the facts Set forth

these an every pleas, onthe them. The case is therefore a bank was pleadings: the sole benefit of state of establishedfor and exclusive Kentucky, the state: and no was furnished for the exclusive profit capital was into bank. The none state appointed paid bank, and issued notes in form of bank officers of the notes. These were the consideration the lands,, and the funds of state in the Bank of the of ceeds public handed the over to and directors' actually president Kentucky, and thus the'Commonwealth, become the Bank have capital, the of the this the institution; for debts is not case before answerable The defendants the the and the pleas "contrary, the Court. allege the the truth had admits Even those funds allegations. demurrer existed, if' such and any this Court been so does no£ appropriated, exist; did still these would know have been re- appropriations the state. the legislature vocable by over the state to is the sub- controlling power Where prevent, by fund, the withdrawal of all the at any subsequent legislation, sequent the for should direct. any Could the purpose legislature period, been called the Kentucky upon, impairing obliga- state Before tribunal "could such contracts? a claim of these tion . .what Thus, the .faith of the state alone the have been preferred. bank, for their pledge redemption- basis of is not intended or to The faith, impeach, it question. argu- A or such purpose, has design. ment with the

To general argument. proceed law, it is clear: the provisions By of' name, bank'was established in the behalf That-the 1st. nor in the name on behalf any Not corporation, state. ' to or it. the only men belonging composing in it. one interested stockholder; the only bank; of the stock, funds, belonged That all the profits 3d. TERM, of the Commonwealth v The revenue, treasure, fact, .state; were, in property, of the state. treasury this could over absolute control property; had the state

3d. That and, section, the 29th of it’ at dollar pleasure; every appropriate alter and time, to very time to change from it had the power, held it. which nominally of the bank constitution and directors, owned individual, even president 4th. No receive, in form, stock, could one' of the cent capital it than it; or otherwise dispose regulate profit slightest legislature. pleasure according a more It to conceive perfect property. corpo- is impossible used as the ration owned nothing, except agent nothing. of the state. representative circumstances, can notes issued

Under these pretended, it, were the notes of bank, and secured by. property, circulated on the faith and and not of the state? credit of the They fund. To fund, owner of the call them the or of the notes of tbe truth. is a plainest were perversion gross corporation, issued out of the state, and actually successors, lands, rents, and to themselves their tenements, heredita- of what ments, chattels, kind, nature, and or goods soever, quality alien, sell, same to demise and of.” dispose But grant, when or was their in this satisfied how or respect capacity used? Were the lands from which the was-to arise ever capital transferred to them? Was the state’s the bank of capital Kentucky? Never. The cor- owned either. It not never intended that poration was. they should. to be of' was created out their after capital profits, wants of the state were owned never supplied. They any property. Even the arise under the profits loans and which.might the mort- secured, were to be was, they after gages “ to be to necessary expenses, subject disposition legisla- Q VoL.XI.-2 SUPREME COURT. v. The Bank of the See 24th ture.” sect. And their whole-capacity acquiring was to nevertheless, rules, holding property, “s.ubject, regu- lations, restrictions in this act.” In other sub- words, provisions, to the absolute control to the- wants of ject legislature; subject to the annual law. None government; subject appropriations was ever vested in the owners, as but property corporation trustees, too, or trustees of the state: to act agents compelled at all times, trust, not covenants command of Checestui trust. que

As to the value fund, but little need be said. sufficiency is, It best, at counsel; founded proved only by allegations no evidence' before the Court. The lands were most uncertain in or proceeds; funds might might produce pay notes, or form a And moment capital. any might transferred as is the fashion of up; day, given elsewhere, 500,000 to actual settlers. The dollars in capital were, and its in a worse con- profits, possible, Kentucky, dition. It was law, encumbered re- previously according my collection, to its amount; two-thirds of and was liable to further bur- dens; The bank had and its stopped payment; very incompetency occasioned charter of this bank.

But if the fund was so did the notes ample, why depreciate? They fell, as informed, cent.; the Court has been fifty were at that per when were loaned to the in error. point plaintiffs The truth is, that the bank point never had funds. any into went before operation was or any could be part capital in; its notes, and issued and took its paid and other secu- mortgages rities from the borrowers. It was created on the 29th November, 1821; into never, went 1st operation May, during existence, received, from an hundredth quarter, three part millions which it was authorized to emit. The position plead- said, as has been determines this fact. The denies that the ings, plea real, or the fund sufficient, and the demurrer capital admits the makes, this, truth and it no admission allegation; contrary truth. The bank had its own notes; any capital never except these, it is absurd to pay: its own too promises quite regard and silver. constituting capital, ability giving pay.gold silver; and the promise pay promise Again. gold riptes has been be, and enforced. In this these are only respect, might all, former of credit. to all without pro- exception, equal 1837. TERM, 307 The Bank of the v. Commonwealth of ^Briscoe and silver; mised substance bore this pay gold they under- But did face. do it? Was it not the they taking promise, and failure to that covered them with the perform, mantle of denunciation, fraud and created the bitter imposition, their, and the constitutional people, prohibition And government? silver, if this bank how it that its notes paid gold de- happened It run the so career all its preciated enormously? predecessors. Court, The reference to the enforced is to the’ case of Com. Bank in 2 Wister, v. Pet. That was the case of not of the loan its notes. It was the deposit, payment money received; not of silver its bills of credit promises, gold if, And after and execution, it had declined to out of judgment pay, what would the been have made? Of the money property presi- dent directors? This touched. Of could not been have capi- tal of the bank? It had no existence. Of the These profits? might (cid:127) state, have and removed out of the appropriated by way even of the of this Court. Could the creditor take lands; process the stock of the Bank; He would Kentucky money deposit? come, cases, last, at as' in all other like on the ho- depend, nour, faith, and credit of commonwealth good Kentucky. He have found himself without a re- might possession right, In this medy.' of this of the common- respect, promises agent wealth stand on the of. the old of credit. precisely ground and as safe funds protected by respectable quite these. And were better; some of the old those of congress, recollect, Court will instance, in one the colonies. pledged I consider, next which am- has called relation to argument whom the notes or bills were issued. said persons It.is state; must be officers and I understand it to they be admit- ted, denied, least not these notes had been issued auditor, treasurer, commissioner, or a or commission- governor, ers, as of old times, for the and to act for the appointed, purpose, state, state; as bills of the and, course, might regarded bills of credit. does this -what admission

Upon rest? officers principle named; auditor, treasurer; officers for this are not governor, If bills, of their of- purpose.' issue it is not in they sign virtue fices; it their official do it- special part duty: as. . to them law. duty, duty not the same as- assigned Might signed other persons represent SUPREME COURT. " of Kentucky..J The Bank of ob- sense, and with the same in the same binding its precisely agents It would to define on their puzzle principal? ingenuity ligation distinction.' I then, maintain answer,

In president objection, officers, the Commonwealth’s were the directors special for this of the state duty. selected agents óffi-. as all other annually by were They appointed legislature, act, 35, 3. of 1, of and sec. were. Sec. principal page supple- cers 166. ment, page as other bonds, not to the but to

They corporation, gave were office, took an oath of do. like others. They officers They minutes or records of before acts, their to be laid to keep required creators, or of that body, before committee any legislature, known; that their official conduct be 16,) (sec. might the resolution of the removable by legislature. is, made a united into one corporation, body, But them to and be sued. this was enable solely sue

they might á state; or not to them to act as the right act officer agent give others, 'or interest any for themselves give property, had. other than the or auditor have any might Sup- rights treasurer state, for the time the treasurer of the had been com- pose being, and been made a tó issue these notes and manded, corporation, 'per- duties, these and to sue and be sued; form what would been his have how character, and would the notes' been He would have regarded? the officer of still, the'state notes, the notes of the demand, then, I to have the state. difference explained: judgment, in error, and the constitu- pronounced against plaintiffs of this law affirmed this tionality tribunal. The these officers had to duty was little more discharge “

than to issue the notes from what the law calls small change,” dollars, for-them; amount to 100 and. take sec. up security 170; 16 and 17 and sec. and to of,sup. page keep treasury, this, And all not themselves, account for the but for the profits. state.

Their loans were to citizens government and these loans were to be ; Kentucky negotiable payable sec. 22. money, another feature which this But there still makes law unconsti-

tutional, The made' a tender money by se.c. TERM, 1837. of the Commonwealth The Bank are to be considered. as of for loans of money, taken securities of all and con- date, and have mortgages from their priority record be sold in recorded. property might previously veyances thus became for this in; money the debts days, sixty bought The notes were first were to be paid. debts superior dignity, and for dues to county for taxes'and to be received government, an act of 25th Decem- And officers’ fees and salaries. levies, ber, 1S20, which contemporaneous regarded the. unless credi- charter, executions for two years, were suspended be received in that these notes would tor would endorse thereon with a credit of two and if it must be a sale took payment; place, bills of credit -as these law thus enforced years. receipt to forbid The constitution intended currency. prohibition legal for two made with the A years, interference stay currency. legal two, could do this for it a tender for two which years. power to these could do it for But referring twenty years. my object them, the state meant which is to draw from. the character provisions notes as ánd to to the It these money; money. give clearly regarded citizens, in to make them a its virtue meant currency among legal all the old of own laws its and the powers precise object'of do this in to bills of credit. When did regard authorizing any been the of Had property individuals? corporations Would it the would been thus corporation, protected? have of the consti- have been a violation that of plain provision gross Indeed, if the tution, two forbids the of contracts? impairing acts of 29th as December, 25th can con- November, and regarded and of of the same the provision temporaneous, pans system; force. constitution to this law with irresistible applies has thus been of made to attempt investigate meaning the constitution and law and Kentucky, .of provisions them; and to been reached the result which have compare seems submitted. United States The constitution for- respectfully .the bids a state to credit; issue bills its funds and and is not resting upon names; evaded mere finesse, forms, and It looks to the substance. The the in error of

her issue plaintiffs refusing depreciated paper, more, after more than already still have what pay paid is to which be was worth. The morality received orily regarded tribunal; is that decision, or in before, its this by high in argument in is, the country.' constitution and laws of prescribed where. morality, safe every this day, fear no .vindication, for their consequences. I ask depicted, which most The disastrous day my eloquent opponent enforced when restraint shall not constitutional found, will any con- but the commands states; on when either individuals and this last shield its protection stitution shall be disregarded; are hurled weak to bear show too weapons itself shall TERM, Sil the Commonwealth of v. The arrived, that time not I confi- it. has yet Believing against of the Court in favour its anticipate support, by dently judgment in error. of the plaintiffs M'Lean,

Mr. Justice delivered the of the Court. opinion is This case before this Court, writ of error from the brought court state of under the 25th section of' appeals Kentucky; act of judiciary An action was commenced the Bank of the Kentucky, against error, in plaintiffs in Mercer circuit court 2,048 on a note for Kentucky, cents, dollars 37 to the pre- payable sident and directors of bank; and the defendants filed two special first of which pleas, was oyer note on which prayed suit was that the brought, they say not to have, plaintiff ought because the note &c. was note, given renewal a like given bank; to the said .and refer thé act the bank, and establishing that it never received allege, stock part capital specified act; in the that the bank was authorized to issue bills of credit, on state, faith violation the constitution of the United That, States. various statutes, the notes issued were made re- of executions, ceivable and if discharge not so received, the col- of. the lection should money delayed, &c.; and the defendants aver, note on a given loan its bills, and consideration, that the was void. illegal, being The second the same plea presents, facts. substantially, To both filed; demurrer was and the pleas, general court sustained the demurrer, and favour the bank. gave judgment This judgment removed, court of by appeal, which is appeals, the high est court in the where the judicature judgment the cir affirmed; cuit court was before this being brought Court by writ error, is whether question presented the notes issued bank are bills. emitted state, in violation of the of the United States. constitution

This under cause a full sense of approached, its magnitude. as have been the Important great questions before brought this tri- bunal for and decision, none have investigation exceeded, if they of that which arises equalled, importance this case. The amount involved property principle, very large; amount, could however to the case great, give the deep interest is connected political aspect. SUPREME COURT.

312 v. The Bank of the of Kentucky.1 on which the sensibilities There is principle communities excited, as that which acts are so none easily currency; so are as that which is which states of the exer- restrictive jealous, (cid:127) are, These to powers. extent, cise some topics sovereign involved in case. the present this Court to

It does not select the their de- belong subjects cannot shrink liberations; but from the performance laws. constitution and imposed duty terms of credit, The definition bills as used in the constitu- in the is the first tion, requisite investigation this!subject; it will be found a of no small diffi- be not work impracticable, sciences, works on used in standard the exact terms Even culty. so definite as to the idea In intended. áre not always express only is, there less of lan- on still works generally, precision philosophy construction, in left for But more often political compacts, guage. other in most compositions. than in a from the elements results, employed

This great degree, are to be conciliated of such certain interests compacts; formation must be met and the forcé of local over- prejudices and protected; are modes of the most come; and habits and action opposite, This' the case in formation was peculiarly reconciled. it, And instead of United States. objecting constitution terms; seme of its its excel- general of the vagueness account should excite our as it lence, principles language, both regards admiration. credit, sense, their mercantile comprehend bills terms in commercial debt, which circulate evidences variety

great banks, it their notes were seems In early history country. credit;,but modern times they denominated generally bills, either called, bqnk now lost designation; notes. credit, constitution inhibition applies But-the limited sense. a more were is- the-bills be difficult classify would designed of this country. the early history

sued the laws respective under money, being circulate colonies, and in the different colonies; but the forms were various the same colony. often interest, in others without cases

In some payable TERM, of Kentucky.] v. The Bank Commonwealth [Briscoe from certain- sources of Funds taxation interest. were arising instances; for their in some in others were redemption, pledged such a were They issued without sometimes made a pledge. legal tender, instances, at others not. In some a refusal to receive them ¡of others, the debt; as a it.of a-discharge postponement operated demand; sometimes on times, were other at some

They payable At all times the bills were taxes, future receivable for period. of debts due to the in some in- payment public; except, perhaps, stances, had so of where as become little depreciated or. no value.

These bills were sometimes by-committees, and frequently an officer of or an individual for by government, designated purpose. credit

The bills of emitted the states, revolution, during of the constitution, were hot dissimilar prior adoption very those which colonies had from been in the of practice issuing. characteristics, There some which were were common to all these were issued state, bills. on its credit. They colony in cases where funds For the bills to be redeemed pledged, at a future as the of means should period, gradually redemption the, In some instances, accumulate. of congress guaranteed payment ' a bills emitted state. were, never into silver, convertune and- im- pernaps, gold emission; on their as were issued to mediately supply press- wants their pecuniary government, ing circulating money indispensable. necessity emission, required their immediate possibility precluded redemption. al.

In case et Missouri, Peters, v. State of 4 410; Craig Court was called for time, first determine what upon, con a bill of' credit, stituted within the of the constitution. A meaning case, in that in the of the Chief majority judges language Justice, “bills medium, of credit a say, intended to signify paper individuals, circulate between between and"indi government viduals, for the ordinary society.” purposes so

A as this, would embrace definition de- general certainly every circulates scription money. occasion,'

Two of the defi- on more gave'a dissenting judges nite, less a accurate terms though, perhaps, meaning, credit. “ of them one it bill of By said, may, therefore, a credit XI.—2 R

Yol. SUPREME COURT. The Bank of the bill on drawn the credit of merely resting considered a fund drawer, as constituted or contradistinguished pledged, And, bill.” other, opinion payment “ a bill said, to constitute within meaning constitution, state, circulation, it must be issued It enforced must contain pro- as money, statutory provisions. the state when no fund has been mise generally, holder to it into to enable the convert money. appropriated state; will be circulated on the credit of not that it must but that the at some future ori period, presentation, paid discretion, fixed or in its will a time own resting provide payment.” cover a class the bills of issued These definitions credit large which, do not there are classes money,

and circulated definition, of a and it is believed that no embrace; short descrip- class, would be free from unless it of each entirely tion objection; terms used the and lamented be in the Chief venerable general Justice. definition, then,

The- which does include all of bills of classes a states; is, the colonies or the credit emitted by a faith, of its to containing sovereign power, pledge designed circulate money. at this the next arrived case is point,

Having inquiry of the Bank the notes of the whether Commonwealth were bills of credit, within the of the constitution. meaning

The first section the that the shall provides, .charter bank name and behalf established the of Ken- commonwealth under the direction of directors, a to twelve tucky, president ehosen ballot both houses of the by joint assembly, general The second &c. the provides directors president bank,-and their pffice, successors in shall be and body corporation a. law fact, and in the name and style president politic, and directors of the Bank of the Commonwealth Kentucky, in law, shall be to sell sued, sue and be to capable, purchase every description-of property.

In the third section it is declared, of the bank that the stock shall be the of Ken- exclusively the commonwealth property and that no tucky, individual shall own of it. any part The fourth section issue to authorizes the and directors president notes, &c.; and in the fifth stock section it declared, the capital TERM, 1837.

JANUARY. ' The Bank of Kentucky.] Commonwealth dollars, shall be two millions of to be as follows: “all paid moneys hereafter into for the treasury paid vacant purchase land commonwealth; all into the moneys paid treasury pur- warrants; of land received the sale moneys chase vacant river, lands west of the Tennessee so much of the stock capital state in the Bank of owned and as Kentucky:” treasurer time, received these from to time he was moneys required to into bank. same pay bank to was authorized receive on moneys to make deposite,

loans on or on security, the ninth good personal mortgages; section, the bank was its debts prohibited- increasing beyónu double amount of its capital. to

Certain on individuals, and imposed limitations loans bank accommodations apportioned dmong dif- ferent counties-of state.. to make* each session president report required The notes were be made payable legislature. gold

silver, taxes and and were receivable other debts due bank, to the state. All mortgages gave .executed . act it was By supplementary that the priority. provided, presi- dent and -directors issue three millions dollars. might an In act the state passed, authorizing treasurer.of bank. to receive the dividends notes issued bank were in the form usual

notes, in which Bahk of.'the promised pay sum demand, on the face of the the bearer note. specified is no of the There any evidence part capital having paid bank; and as the to which the demurrers pleas, into the were filed, the aver that capital paid, the fact averred admitted part on the record. is to be technical on

It the any point regretted arising plead- case; be relied on in this should involves principles ings Had the .bank of such interests over and deep pleaded importance. it into under stated the amount the charter; actually paid the have been on which it stands would the strengthened. ground in land, the notes of the bank were receivable payment As warrants, constituted no inconsiderable land the part perhaps the would state; the natural be for circulation the operation them bank, of the over to it, treasurer receive notes pay COURT. SUPREME of the Commonwealth v. The Bank bank to a This would be to the payment of its equal a capital. part it; banks, as lessen demand in notes of it/would against other discounts. on the bank the securities original leaving bank, of Kentucky, notes of the bank -The of this as also the TERM, 1837. y. of Kentucky.] Bank of. the Commonwealth under the silver, is exclusive of .control is placed congress, gold contended, is from the inhibition on and it the states to clear; emit credit, medium was intended that the to be bills made sub- paper to the same power. ject correct, and the

If this that a state cannot position argument it is be a what sound indirectly, do prohibited doing directly, follow, must as a that all one; then it banks necessary consequence, this, are unconstitutional. And state incorporated printed maintained; is it admitted is not to argument, earnestly though assumed for the to sustain necessary plaintiffs. ground bar, who case at do pláintiffs, argued not .counsel this extent. to carry argument as it strikes a blow

This doctrine fatal startling, state against four banks; of near hundred which have a capital dollars, millions almost the entire and which the' supply, circulating coun- medium üs it But, let for a moment examine try. dispassionately.

The federal is one All powers. delegated government powers states, to the- it, 'not or inhibited reserved to the delegated states, or people. credit; or,

A in other words, state emit bills of cannot cannot issue that to answer- description purposes money, denominated, before the of the constitution, adoption But a of credit acts incorporation attain- grant of those which are ment essential interests objects society. incident, This and there is no limitation power sovereignty; constitution, on states, the federal its exercise respect banks. incorporation At the time of North .the constitution adopted, Ame- others, rica, Bank, and the Massachusetts some were opera- cannot, therefore, SUPREME COURT. 318 v. The Bank of the Commonwealth of Kentuekj [Briscoe to that the banks to issue power incorporate these notes be ex- ercised aby .state? of action, A uniform course involving exercise of right the state an power by half a important governments, century; without this almost is no question; unsatisfactory evidence that the exercised. But this power rightfully inquiry, embraced though does not to case, and is printed-argument aban- belong at the bar. doned that, cannot do which the

A state federal constitution declares it do., cannot coin Here shall not is an act money. inhibited in cannot be mistaken. so terms precise They susceptible -And it is a one construction. certain that state cannot of but incor- individuals, number authorize them to coin any porate money. would be as much a of the constitution, act violation as Such an state, were coined an officer its under authority. the money cannot be state, done either The act directly, being prohibited, indirectly. as to same rule the emission of bills of credit applies And used here are less than those terms specific, a state. latter,' Whilst no one can mistake the there are relate coinage. as to the construction of the former. If opinion differences great definite, were case were each susceptible terms equally be no construction, there could more difficulty one applying in the other. case than the one rule admitted, cannot, that a state argument The weight be emit bills credit. But that may adopted, ques- device any is bill of the consti- what credit within arises, meaning tion this, answer of must depend constitutionality On tution? of the act unconstitutionality question. and it would absurd to its act only can through agents;

A done a state which was au- was not done act that any say, agents. thorized constitution, it must bill of within credit To constitute circu- state, on the faith designed aby on the credit of circulates be a It must money. as late business of life. in the ordinary received and used sois state; and bill, must have the who issue or committee individual of course do state; act as mpst agents, bind power individuals, any nor impart, responsibility, incur personal TERM, of the- Commonwealth of v. The are the of a These characteristics bill credit leading paper. a state cannot emit. credit, which Bank of the Commonweálth, the notes of

Were the state? issued by of the bank and directors were incorporated, president all the usually

vested with powers given banking institutions. to make loans on and 6n personal security, .authorized made, of real estate. Provisions mortgages regulations, banks; common are other which, but'there charter parts contendedj- it is show and directors acted president merely of the state. agents act, In it the the is declared to be and preamble, “expedient thereof, and citizens state, beneficial to the the to establish bank-on state, the funds the the purpose ma- discounting paper than loans has periods king customary;- for the longer relief of the of the distresses community.” were elected directors the president legislature. to state, of the the it bank capital the belonged received divi- dends. charter, it

These and other the is show, parts argued, the mere of the to was a instrument state issue bills; that, if .by device, such a the the constitution provision bemay evaded, it must become nullity.

That is and some there much force in this plausibility argument, be in denied; cannot be and would to vain assert on this head, the case is clear of difficulty. to act the bank, shows preamble iiicorpbrate the object

of its establishment. It was intended to “relieve the distresses of the and the same reason was community;” it is said, assigned, truly for the numerous emissions the paper money, revolution, during to prior period.

To relieve the distresses or the wants of community, has been the common reason government, increase assigned of a medium, at all times all and in countries. When a mea- sure of on, relief determined it is never difficult to find plausible- reasons for its And it would seem in adoption. to this sub1 regard that the has but little ject, present generation the ex- profited perience past ages.

The notes of this with bank, common notes of other banks indeed, state, Union, some ex- throughout in. SUPREME COURT. v. The Bank Kentucky ] This arose from various ceptions, depreciated. causes greatly then which, under similar circumstances, must existing; always pro- duce result. samé

The intention of legislature bank, ex- establishing .the w;ith must be in- considered connection pressed preamble, every. must act; answered, and the question whether the part credit bank were bills of notes within the inhibition of the constitution. the state?

Were notes issued these do.not to be face, state, issued but they purport Upon and directors bank. to president -They promise pay sums stated. on demand bearer the faith of

Were on the state? issued faith of the contain form. The notes pledge been issued on the credit of the funds of to have purport They been so received bank, and must haVe community. said, state; it is and the funds,

But these belonged promise fund if of which are to they the fund out law, paid, also issued.on the credit -and redemption; be pledged the notes, the face of form some appears which' of the who issues them. of the person the signature Commonwealth, were, in. the Bank of the funds toAs to true, was from the state. The it capital, derived only, part to loans, bank was state; required but making be paid which, fund, the hold- and these securities; constituted take good be made which could look could payment, notes ers responsible. legally different essentially time, state; at on bills of credit, a any and- is certain against Vox,. S XI.—-2 COURT; SUPREME Bank of Kentucky.], could no suit have maintained, on this to the con- ground, prior stitution. 1769, In the the colonial of year legislature an Maryland passed

“ of act bills credit;”' in emitting which bills to the amount of were 318,000 struck, authorized dollars under the direction of commissioners, whom the should two. governor appoint. .These to be were commissioners for styled, of persons bills “ emitting credit;” that name to by succession, to sue sued, or be in all to their cases relative trust. The commissioners were authorized on to make loans to draw bills security, on Lon good exchange circumstances; under don, certain were authorized to re they issued issue bills them.

In it is stated in Hewit’s year of South History Caro lina, of that established colony bank; and legislature a public credit, issued thousand bills of in forty-eight pounds, called bank bills. The was to be lent out at interest On landed or money personal sec urity. bills under acts emitted these are believed bé peculiar, unlike other emissions under the colonial But governments. acts will examination that the show, bills slight respective them, on were emitted the credit of

authorized colonies; from notes in were different essentially question. bills could .not

The holders these convert them into specie; could suit. The' bill Maryland follows: they bring “ bill of six dollars shall entitle the hereof, This indented bearer London, Or payable receive at silver exchange gold and six dollar, the rate of four for the said pence per bill, ac shillings to the directions an act cording assembly Maryland, Conden R. and J. Annapolis:- dated signed Clapham.” Of the If the Com properties TERM, 323 Bank of the Commonwealth of v. The [Briscoe of this in the that the case settled insisted It is were principles The State of Missouri. et al. v. suit Craig that the issued case paper, In that following Courtxdecided bill of within Missouri, act of was a under legislative constitution: of the meaning “ shall be receivable' at the This certificate treasury, any in the Missouri, the state of taxes or loan offices of discharge dollars, in the sum interest state, due to the debts cent, annum, two from the date.” at the rate of same, per per form, amounts, this act, in various were certificates By of all taxes the state;' in debts and were receivable discharge due in of state officers. of salaries payment considered that these Four certificates were of the seven judges were issued on the credit as that they 'circulate money; designed were to the constitution. state; of the and consequently repugnant These were loaned on certificates different loan security,, good auditor and of the and were state; offices treasurer signed by salt, were receivable at the salt state. They public “ works, and the of the salt the interest proceeds springs, accruing state; and all estates officers under to-the purchased provi- the. due, then or which should act, and all the debts become sions were and constituted fund for the due pledged redemp- .certificates;” faith of the state was also tion pledged for the same purpose. these certificates with the notes

It is necessary compare Commonwealth, to see the Bank of the two issued by things common, could be unlike. more property account; as receivable public both circulated money, different. other essentially every particular credit, either the form or If a bill of substance of the to constitute is it is clear that the notes of the Bank certificate Missouri requisite; Commonwealth, be called bills of credit. To cannot include would im- confound most both under one papers designation, distinctions; substance, as to their form and but also not only portant effect. origin to. is no in the case of There decided Court principle Craig Missouri, The State of which at all conflicts with the here views of the Court are sustained Indeed the and-strength- views presented. ened, case with- that one. present contrasting in the

The state of Bank exclusive stockholder Kentucky SUPREME COURT. 324 v. The Bank of the Commonwealth of Kentucky.] the Commonwealth:-but does this fact the character of change Does it the bank corporation? identical with the make state? And of the bank operations operations state? Is the bank, mere instrument to effectuate de- sovereignty, the state for its acts? signs; responsible to these will answer inquiries given language Court, used in former adjudications.

In the case the United States v. The Planters’ Bank, Wheat. the Chief Justice, opinion giving “ Court, think, it we is, a sound says. when a principle, govern ment becomes a partner any trading company, itself, divests so far concerns the transactions of that of its company, .sovereign character, takes that of a citizen. Instead of private commuiri ajid its its eating the it descends company privileges prerogatives, a with to level those whom itself; with it associates and takes the character which to its associates and to the business belongs which bé transacted. of the Thus, states Union many who an in in banks, terest are not suable even their own courts; yet they never sued. The exempt corporation state of Geor the. being to the bank the. sue gia, giving capacity sued, volunta itself character, so far rily its strips sovereign the trans respects actions the bank'; waives the of that privileges character. As a member of a a never exercises its corporation, government It acts as a merely exercises no sovereignty’. corporator, other the affairs power than management arc corporation, act.” expressly given by incorporating “ The a down its government becoming corporator lays sovereign so far as the transactions of the ty, respects and exer corporation; cises no .or which is not derived from power privilege timecharter.” “The not, state does a corporator, itself becoming identify corporation.”

In the case the Bank of the Commonwealth Kentucky v. Wister and others, 3 Peters, raised was whethef a question suit could be bank, on the that it was maintained against ground a substantially state. against suit a defendants bank; sum in agents deposited large

and when the demanded, was offered to deposite pay amount in its notes, own át a The notes were discount. refused, a and suit was on the commenced certificate deposite. circuit, court bank; in the judgment being'entered A against TERM, 1837. ot the Commonwealth to this Court. In the was court a writ of error brought Kentucky; to the below, the defendant ground pleaded jurisdiction, of the stock of the was alone proprietor the state Kentucky the suit was reason, insisted bank; for which it virtually state. a against sovereign Court, Johnson, after Justice opinion Mr. giving “ in the case above If a used quoted, says, the language

copying in or a bank, other over to it did exercise impart state power attributes, hardly would possible distinguish sovereign from a direct of such banks issue the issue constitution, no doubt the credit; violation of the here' to avoid.” intended

Can and more more than mis, to explicit appropriate language under consideration? points “ defendants Court further This say, pleaded jurisdiction- on the was sole that the state of Kentucky proprietor ground insisted bank, stock of the for which reason it wras that the suit was state. But the Court is of virtually against sovereign opinion The case of the here. United -the longer open States question Planters’ Bank of was a Bank v. The much case Georgia, stronger for there than the the state defendants present; of Georgia Here the state is not a only proprietor, corporator. act, the terms of since, corporator; directors president alone body metaphysical liable corporate, constitute person to suit.” pf

If the bank acted as the the state under an agent unconstitu charter, tional the be held liable, although in persons.engaged might could held dividually; have been as a responsible corporation? It is true the raised the only was, whether question plea could sued, be its stock was owned the state? But it would be difficult to decide without, this extent, some question consider- of the charter. And, indeed, it ihg constitutionality appears this the attention of the point-did Court; for “if escape they say, a state of its attributes to a bank in imparted any which it sovereign was a stockholder, it would be hardjy possible distinguish pa- credit;” such a bank from bills of per this, the Court say, “ the state in that case intended to avoid.” These extracts almost material in this cover raised in- every point, vestigatior state, bank, show that a when it becomes a stockholder in a SUPREME COURT. The Bank of the Commonwealth of Kentucky.] its none of attributes of

imparts sovereignty institution; and is the case, that this whether it own a equally whole or a of the part bank. stock the counsel for the

It is admitted by plaintiffs, that a state be- may in a bank; stockholder come a contend that it cannot be- owner exclusive come the stock. They ho rule which give of a state such an the interest institution be shall’ graduated; nor at limit the exact shall be fixed. what a state point own May one-fourth, three-fourths of the stock? If orie-half, limit be proper, ex- ceeded, the charter become does and is its unconstitutional; constitu- restored, if the state recede within tionality the limit? The Court at a loss to fix the much are as supposed constitutional boundary can as the counsel be. this possibly right, must short of If state entire stop stock, the owning precise be ascertained. It be may surely cannot point so supposed, a constitutional contended for principle important exists without' limitation. own a stock of a part bank, we know of no

If it from -the whole. prevents As a owning stock- principle Court, holder, above cited, it can language exercise no in the affairs of than more the. corporation, power expressly given act. has no more .incorporating than power any other to the same extent.-' stockholder consider, Court did not that the

This character of the incorporation affected was at all exclusive the stock ownership' ' And say, case Plantérs’ Bank state. presented defence, than the suit Stronger ground against That in the former, Commonwealth. the state of was not Georgia tlje but a and, that in corporator; latter, only proprietor, presi- constituted the dent directors corporate And body. yet Bank, Planters’ the Court decided the case of the state could as an both as it ordinary considered corporator; regarded powers responsibilities. correct, If these there not an end to this contro- positions If the Bank of the Commonwealth is not nor the versy? state;.-if more than is to it in power possess given agent.of act as if the stock were incorporation; precisely same individuals, contended, can'it be that the how by private owned the bank can called notes of contradistinction notes of other banks? TERM, Bank of the of Kentucky.] v. The bank, an in this If, in exclusive stockholder the state becoming of its none attributes of to it imparts sovereignty; it-holds it; would other stockholder hold how can it be stock said to any it not credit, bills of credit? Is essential to a bill of emit constitute constitution, should within the be emitted a..-state? Under by' that.it charter the bank has bills its to emit which have the power which contain its faith. impress sovereignty, pledge is á within its simple corporation, acting sphere corporate can more nó transcend them than other any powers; banking state, as a institution. The the same relation stockholder, bears ~ bank as other stockholder. The funds of -the bank and its are property, .every description, debts; held of its be reached responsible In it can claim no ex- equitable process. legal respect, under the of the state. emption prerogatives And, if in the of its course its notes operations, depreciated circumstances; the notes of banks, like other under the pressure it must stand or fall its still In this its charter. are de- powers fined; and its it, who those credit to rights, rights give are And even an abuse of its guaranteed. powers, through credit has been and the cannot be community impaired injured, considered this case.

We are of the that the act the Bank of the opinion, incorporating Commonwealth, was a constitutional exercise the state power by and, COURT. SUPREME 328 of Kentucky.] The Bank of the Commonwealth v. was made for the bills; so issued, redemption provision' state, medium of taxation, as the through far might promise for But this the means was illusory, be to payment. said provide The bills be enforced. in no always and could way signed face, their act in the who, character some upon appeared person, not, course, be made and who could state; personally agent the state was not suable under payment; and responsible confederation, constitution, nor under the before even the old present state; citizens of the in that same amendrnent respect, tire who be the those would likely persons principal most would state, of which wére citizens. holders of the they therefore; bills, no means of of such There enforcing payment being, faith and will of voluntary solely their credit depended upon But is'not bills of credit. that therefore state; and were purely bank in There is the bills of the question. or character situation are issued by for their redemption; fund an provided ample in-the enforced courts sued, which can a corporation debts. mode recovering ordinary of justice, credit, as bills of within the sense these bank notes If I considered I could not concur in of the constitutional prohibition; and meaning Court, were not with the emitted majority opinion bank; is the sole owner the stock of The state the state. in it is excluded. The state has interest .expressly private all its direction of concerns. and exclusive the sole management mere sub- is the creature entirely The corporation conclusion, I cannot control; and myself to its bring ject in the be evaded by such an constitution provision important- form. mere

Mr. Justice dissenting. Story, Court, before this this cause formerly a majority When argued that the it, were then heard decidedly opinion who judges, void; bank, was unconstitutional act Kentucky establishing be for and on emit authority as amounting to.an the, of the constitution state, within half of the prohibition case decided it was States. In thought United principle to.be R. 410. Missouri, Among Peters’ State of v. The of Craig 4 never a name Marshall; Mr. Chief Justice was the late majority argued, The cause has again Be without reverence. pronounced A at the former argument. the same upon precisely grounds TERM, of Kentucky.], The Bank of the Commonwealth ^Briscoe now act of have my pronounced Kentucky majority brethren^ I dissent from that constitutional. opinion: retaining I which held at the first same common with the opinion argument, I shall now to state the reasons on Justice, Chief which fit proceed I offer no for this is founded. apology apparent exception I l when have had the misfor course generally pursued, brethren, in silence; to differ from my tune truth maintaining all, it is no constitutional I exception questions ever my duty give public thought expression my opinions, differed from that of when the Court. first is, case what is the true question náturally arising “ of the clause of the constitution, that no state

interpretation shall bills of credit.” In other a bill of words, credit, emit ivbat is of the constitution? After the sense decision the case of Craig Missouri, I had State of this a matter was supposed, could be into which least contestation, at unless the author- brought overturned; of that case was and to the Court were be set ity to.be adrift from its former Justice, The Chief in moorings. delivering the Court occasion, answer to the opinion upon very said; “To emit bills of credit, to the mind the idea inquiry conveys intended to circulate for paper, community issuing through as at a fu- is redeemable ordinary purposes money, paper This is the sense ture in which it under- day. has been always “The stood.” term has an Again: acquired appropriate meaning; bills, medium, and of credit a to intended circulate be- signify paper individuals, tween individuals, between for the government ordinary “If purposes society.” means Again: prohibition words are not any sounds, it must thing, empty comprehend emission medium for government, of common circulation.” One should that this purposes suppose was exact and definite to remove all sufficiently language possible doubt and it has the it because came point: more'weight, one, who frorq an himself actor in the times when very constituted the credit of the whole and whose currency ex- country; him in this justified exposition. perience But, seems, that this definition is not now deemed satisfactory, to; or to be adhered which, hew in its exposition sought, shall not the bills in predicaments, comprehend question. argu bank, ments learned counsel for the on the occasion present have, itas to appears shall me, definition, for a exclude sought T XI.—2 Vol. COURT. SUPREME v. The Bank of the Commonwealth than a definition founded the inten case; to their rather

any perils of the constitution. tion language nature and me, that the true prohibi- objects appears be ascertained as its

tion, only by as wéll can properly language, mischiefs and which had existed existing, reference history; formed; and to then attached the constitution meaning when “ qf the United States. credit,” people phrase into the as it found in the If we look phrase meaning laws, own as to the concerns of laws, British or our applicable we shall find that there individuals, or corporations, private private and that when bills of credit are matter; about the is no mystery words mean intended as cur of, the paper, pass negotiable spoken sense, In or indorsement. as delivery or money, by rency, is, bills, the more common bank are' bills of notes, or, bank as phrase them, are the bills of the on his party issuing credit. They funds; circulation as the credit his purposes currency know, bank notes for as we all Thus, example, payable money. order, indorsed in bearer, (or when payable blank,) pass circulate, life, intercourse money; business ordinary not, indeed, in a money. are treated legal sense, but, common at purposes, they exact money; possess Mansfield, the functions of Lord tributes, and money. perform 1 Burr. on the Rice, notes, Miller v. speaking subject notes are not like bills of observed, “that these mere secu exchange, debts, and are not esteemed; so rities, but are documents in and the course transactions of credit as money, ordinary treated consent of business, mankind: and on of by and pay general a is whenever are them, required, of receipt receipts always ment And, for securities or notes.” indeed, as for not as money, given as are treated will which money, they much they pass by so. cash, or or testator’s money, property. bequeaths stated, of has been it be re already In confirmation what in the charter of the Bank of in 5th and 6th marked, that England, provision 28, made, sec. an is and ch. by Mary, express William credit, bank, are de bill or bills and of the obligatory, which of be Similar are to to and assignable negotiable. expressions clared States, acts of the American many incorporating found be in as has been shown the citations at banks; abundantly bar.* * in 1791; Albany, York, Acts the Bank of establishing See the the Bank of New 1823; York; 1793; Pennsylvania, Jersey, the Bank of Bank of New New TERM, of The Bank Cbmmonwealth [BriScoe credit; is are reason obvious called are they they why intended to as or are issued pass currency, money; they pf bank, credit of the are other who bound Not them. persons by but for, that there is a fund or stock for their capital redemption; all banks have such still but that the is general, a.fund: credit given and not fund. In- corporation, exclusively any particular' fu,nds deed, cases, (as many Massachusetts) .private are made res- law, extent, credit to a limited corporators, by for the notes tif ponsible banks.

Such then the true and of to bills being ordinary meaning applied credit, issued banks other by corporations, negotia- ble as and issued oh the credit paper, designed pass currency, there is no the same in the. corporation; mystery application terms to the transactions of states. nature of is not the thing is not whether the changed; object thing negotiable changed, de te fá- nomine, isissued state. Mutato paper corporation A bula bill of credit,then, narratur. a state, is pa- negotiable as and to It circulate as pass currency, dis- per,designed money. from the evidences debt issued a state tinguishable money borrowed, or debts otherwise incurred; not form, in sub- merely the instrument is stance. form immaterial. wholly is the to; are to look substance we whether issued, it is questioa’is, and is circulate If that is its in- negotiable, designed currency. tent, either on the face bill, manifested or on the face the act, is in and it issue of a it is reality state; within the paper prohibition exists, If the constitution. no such intent then it is a constitutional the state. test; and, exercise This is the sure, power my test, sincere we can ascertain whether judgment, be within or without the the constitution. paper prohibition tests, which hitherto other All all other tests applied; can will mere applied, illusory, exercises human its evade force. vary prohibition, Surely, ingenuity, that the will constitution intended not pretended, prohibit to hold names, and the solemn up mockery things; warning shadows, To realities to suffer escape suffering grasp? credit, own to issue states, on their floods cur- money if do not call them do not rency: 1795; Baltimore, Carolina, State Virginia; Bank Bank of North pf 1810; &c. &c. Georgia; Kentucky, the Bank the Bank of COURT. SUPREME of v. Bank of the Commonwealth of a the state, form and impress promise by them very give form, current, state; so and so disastrous in very in behalf within the then are not Let the times; prohibition. former in Mr. Chief Justice Marshall on this very point, language impressive State of Missouri: a v. The voice now case speaking Craig to the admonition, its own and answer dead: let it convey from Is make real And can this difference? (said he) any “ argument. that the to maintained, constitution meant pro- proposition to ? names; act, and not That very important big hibit things forbidden words mischief; ruinous which expressly great the sub- for its be performed by most description; may appropriate im- constitution, ? That the one of its most of a name stitution name new evaded; openly giving portant provisions, think so.” We cannot an old thing? is, need not be here rested here. The But question argument sense; bills of is meant in a mere theoretical what which show, I shall that the trust, I that

But definition abundantly Missouri, in the case The State of Craig given I maintain, one; is the true of all mystery, definition stripped one; extraneous is the true confirmed by and all ingredients of bill that the true whole history country: meaning and the as well known and understood from the credit past just constitution, time of the events adoption passing bill of trial terms, habeas corpus, process impeachment, jury, to be other found in the technical vocabu attainder, any phrase I insist, of the constitution. And mean to that history lary to the colonies, revolution, before and down during constitution; time of the constitutes the adoption highest' very evidence, resort, most authentic which we can interpret instrument: and be to blind it, would this clause disregard meant to ourselves mischiefs which it was suppress; practical I all the it was to be and to forget great purposes applied. I shall be able further to from that trust, show, this very history, the Su other definition than credit given Missouri, Court the case of State of is in v. The op Craig preme tenor of as well-as to the mani position general history; intention of the framers of the fest constitution. further, I

Before let me proceed quote passage single 44; Federalist, No. writer, which the denuncia terms of strong money tion and the ruinous exposes effects of indignation, TERM, 1837. 333 JANUARY. Kentucky Commonwealth of Thb ] v. .Bank [Briscoe called in those the name of revolution, days (universally of to no was attempt character;) for there credit, disguise of bills “ these it to considerations in adds, persuasive addition then reasons, which of de show necessity the same observed, be coin; of prove regulating equal the states power to nying to be at to substitute a me liberty paper force, that they ought shows clear sense of the This coin.” passage of dium instead thew medium, was aimed at a writer, prohibition to that alone. as currency; intended to circulate was in credit, bills of of said, been sense the con- But it has which are made the act are those them a stitution, creating To this of debts. be sufficient argument, tender might payment Justice, Chief to the answer delivering opinion quote “ of of v. State Missouri. Court in the case Craig itself,” “furnishes countenance to this dis- (said he) constitution It extends to all bills of tinction. The prohibition general. credit; That not to bills of credit tribu- particular "description. without the aid of bold, indeed, which, other nal must explanatory construction. It is the on this less admissible words, could venture clause of the the same constitution contains a case, in this because to the enactment tender substantial laws. The con- prohibition the emission of bills of credit and stitution, therefore, considers as laws; distinct each enactment tender operations; independent Both are forbidden. other, be separately performed. which may it is not also the other; because that'bills one, say, To sustain the emitted, debts; be not a is in .credit may .tender and to read that distinct effect, to independent prohibition, expunge omitted. We are not at as if it had been clause, entirely liberty do this.” of that our But, history country independently reasoning, it is not a that it is not of the part essence proves be a tender in of debts. definition, that should of their in the so often instances, this, opinion Many proof given alludes to. Not a historian to any alluded single subject essential or such indispensable. ingredient, that the first Said, it has been (and denied,) very never has colonies, of bills of credit by any province issue in was; “this in 1690. The form of these Massachusetts, due from the Massachusetts colony dented bill of ten shillings, value, ac be in and shall shall money, possessor, equal SUPREME COURT. The Bank of the Kentucky.,] the treasurer and receivers him, subordinate to accepted cordingly and for stock at time any all public payments, in the trea Then followed the date of the committee signatures sury.” emit them.* were not made a authorized tender in payment Anne, of those due to the state. In 1702, 3 debts, ch. except of bills of credit for fifteen emission another thousand pounds, same form: not made tender authorized the then duties excise were act; impost directed to bills, those also a tax of ten thou discharge be applied estates, real to be levied polls personal, sand pounds into the collected, and 1705. A treasury act, paid subsequent them a tender in 1712, in made of debts. payment private passed 1, 6, Geo. ch. a of 3d further emission of one 1716, art. hundred In credit,” in “bills of was au thousand pounds expressly fifty form; in the like to be distributed be made thorized to among in a of certain stated province counties in proportion different the hands of to be into five trustees in each act; and put county, be let out the trustees on by by to be legislature, appointed in certain in the for the county, specified real security sump, space cent annum. The were to be per ten five.per mortgages of years, trustees, and to be sued for them'; to the made profits These support general government. were applied Now, this made a tender. act is most not were important bills the bills of credit were to fact, be let out on mort show deemed the material to the essence hot of slightest degree was gage, for of of credit, the emission bills bills. An act materially such 1714, of its had substance in provisions, passed different of 2. Another act emission thousand 1, ch. fifty 1 Geo. in 1720, 1, 9, 7 Geo. ch. con credit, passed pounds, similar; that the trustees were to nearly except provisions taining towns, and the were to be received profits appointed estates, tax of thousand on and a towns, fifty pounds polls 1720, In of raised to redeem the same. colony to be authorized the Mas credit, in the form of issued bills nearly Island Rhode a bills; and were made tender they payment sachusetts 1710, ones; and similar bills were issued debts, special excepting authorized, to be let out 1715, In another issue was 1711. for ten There committees of towns on years. mortgage, trustees Comment, 231, Constitution, note Story’s *See3 on the [2.] TERM, Kentucky.]' The Bank of the Commonwealth the act them a tender. The clause in same ano is no declaring year was authorized. emission ther authorized 1709, the Connecticut an of bills

In emission colony a tax for form; in a similar of credit appropriating redemption. a tender. no clause Numerous other acts There was them making nature, 1731; like were between some period passed and others not. tender, made them a of which credit, in a form 1709, In York bills New colony were made atender in the the same: and substantially payment bear interest. other emissions debts, and these were to Many to be made were time to time authorized of bills of credit tender; made forms; were similar generally generally their due funds were provided redemption. credit,

In issued bills 1722, Pennsylvania province states; form not different from those the New England substantially land, trustees, to be loaned on delivered mortgages, of all rents: and were made a tender in debts. ground payment emissions, Other were authorized like by subsequent purposes, In the emission of bills was authorized 1739, laws. an credit year form, and in a similar Delaware, the state for similar purposes, loaned on made tender in to be mortgages. debts, and a fund was provided. sinking

In emission authorized an of bills Maryland amount of to be issued and under the thousand ma ninety pounds, who were commissioners, of three incorporated nagement trustees or Bills the name "The Trustees for Commissioners emitting all real sued, that sue and be and sell Credit;” and by name might bills in These estate them &c. personal granted mortgage, of. interest, credit, out, with were to be lent certain exceptions, or cent., or trustees, commissioners at four upon mortgage per per a for- their sonal fund was security; redemp provided sinking a-tender in of debts. Ano tion, &c., were made payment 1769; were ther emission was in and two commissioners authorized for be called Commissioners bills, to.emit emitting appointed “ succession, to have sue Credit;” Bills of name that be let the commis and be These weré to out by sued. bills also their sioners, on and a fund was for redemption. security; provided These bills a tender.* were made

act ^[*] I have been Maryland, favoured of 1769. with a It is as sight follows: This indented bill of one of the “ original bills issued of six dollars, shall under the SUPREME COURT. 336 v. The 1755, as of credit were issued bills under early In Virginia, notes; interest, which bore and Were made the name of treasury made debts. Emissions were subsequently a tender payment 1769, 1771, and These at and especially other periods, 1778, In emission of tender. not made a last were another three tender; a and a fund was were made authorized, which them was subse other issues were their Many for redemption. pledged that What demonstrates these were a tender: made, which quently fact, is the an credit, bills of notes were deemed treasury for made 34, any it was 1777, person ch. penal act passed credit, note, or for bill of any offer in any or “issue 1779, ch. and that the act bearer;” to the of money sum payable credit, or bill of to steal for any it a any makes 24, felony person States, United or any “loan office certificate note, or treasury after 1780, 19, the act of ch. them;” reciting, &c., money, the war emission requires exigencies notes, of new emission proceeds treasury punish authorizes “ bill of who shall credit or treasury, death any person forge North Carolina 1748, of this act.” In virtue note, to be issued by of bills of which were made emission authorized tender, many and a fund redemption; provided authorized, were with similar emissions proyisions. subsequent bills of credit. Carolina first issued 1703, They South In for their re Funds cent. provided an interest of twelve bear per to have been made a tender. not seem do originally demption. were, of credit from time to the emission acts for other Many made, if not all of which were a ten some, time, colony; passed nature; of a acts, of these peculiar One passed der. to it it, I can refer not been able copy I procure as have 204; S. Car. who Hewitt, Hewitt, Hist. of says: stated by it is to establish public proper time the legislature thought “At this credit, called in bills of thousand bank, pounds forty-eight and for the bills, for the exigencies government, answering lent out was to be This money of domestic commerce. convenience tenor and, according on landed security; at interest personal gold and exchange, hereof to London, bearer receive entitle the payable said bill; "sterling, shillings four and six dollar, per pence silver, rate.of dated at of an act of Annapolis, to the direction according assembly Maryland, ” gentle These J. C. A. D. 1770. R. Conden,’ Clapham. 4th March, this day the act. under the commissioners were, men doubtless, appointed TERM, Bank of the of Kentucky.] v. The same; it act for was to be sunk gradually by four issuing to thousand which sum was ordered pounds year, pqid annually the borrowers the hands of the into commissioners for appointed 1760, In authorized an emission of bills of purpose.” Georgia interest, credit to be let out at were to be taken mortgages These bills made a commissioners. tender. Subsequent acts of credit were but it is bills passed; issuing necessary them. recite war, issued more than three revolutionary

Congress, during The first issue was 1775, hundred millions of bills of credit. in the confederated colonies were for their None redemption. pledged tender; of credit issued were made a bills by congress probably doubt whether make them possessed power congress “ a tender. The form of those first issued was as follows: This bill , milled dollars, entitles the bearer receive Spanish thereof, silver, in resolutions con value gold according under 1780, The last emission made guarantee gress.” “ The of this in the form: possessor congress, following bill milled dollars the 31st of De shall paid Spanish the rate of cember, 1786, interest, in like five money, per cent, an act of annum, the state of according per 1780.” day of the state of legislature “ United States insure the was, The indorsement pay by congress bill, ment of the within draw exchange annually, will 18th of demanded, to a resolve congress according March, 1780.” These bills were expressly required congress for that on the funds of the states established issue individual pur for their and the faith of States was the United pay pledged pose; ment. were made public payments. receivable I my will close judgment, unavoidably prolix, though, colonies; review of of bills of credit very important history to the act of 24th Geo. with a reference revolution, during the issues 2, ch. 53, paper and restraining regulating clause, ex act, That New money prohibitory England. “ bills, or bills forbids the issue of pressly any paper for-certain whatsoever,” purposes, kind or except denomination constantly speaks certain specified emergencies; thus de credit,” bills, expressions; or bills of “paper equivalent ot credit was the true monstrating meaning or, enrrenev; in other emitted pass intended XI -2 Vox' U COURT. SUPREME

338 Kentucky The Bank of the <(cid:127)] [Briscoe that the acts It further as words, money. requires, authorizing paper “ credit,” shall funds for bills or bills of provide issues of paper such where, thereof; makes for cases such and provisions the payment loaned out on and bills of credit” had been security; bills or paper “ credit,” or bills of issued under that currency declares paper “ no pr tender in debts act, any shall payment private legal whatsoever. contracts review furnishes a answer to

This historical complete every argu occasions; or former has used on the on present ment of bills of credit other made the nature any depend upon and one of than the for money simple being negotiable, quality, is as or When it to money currency. pass paper paper designed “ credit,” the essence of that should that it is of said find that of them never a tender. tender, we were many Nay, a legal issues were alto the enormous revolutionary congréss that of this When it is to constitute stripped quality. gether said/ as must be enforced statu their circulation money bills find, cases, that in from the we nature many very table provisions; acts, no such circulation character was con compulsory form, did not in their ex contain generally, any templated. state, them, to whether on funds pay part promise press not; or and the same form was used both cases. were provided indeed, in an was, case my There judgment, every implied obligation them; of the state whether funds were pay provided promise said, When it is that it is not a hill of not. credit unless on its own is express promise pay, credit given declared to be receivable in not when the only state; that there must be a due to the and not debts promise pay, find, we first á to receive: issues of bills very merely promise character, of this and contained no promise; credit very name, to them the the colonial appropriated very legislatures yet which, said, it is that a bill When their true payable designation. no credit; is not a bill of nor a bill which contains demand, pro all the find, at a future we that-on their face nearly mise to day; pay were re time, issues were without limitation of colonial any their state, immediately ceivable payments upon presenta funds for their were not tion; provided except redemption though were, with futuro. The issues exception, congress single out limitation of time as to and were to paid payment, gold or silver. TERM, v. The Bank of the Commonwealth stated, emission was to be at a already future paid

time. But made congress express promise pay any their issues; other the colonies for simply pledged redemption; said, called them bills credit. When it is' yet congress interest, bills of credit cannot bear for that them for a disqualifies find,,that fact, we such paper currency; in.point both the colonies indeed, revolutionary congress; since, form of United States in the notes. When treasury is said, that bills credit such are issued mere credit of the and fiot bottomed real substantial upon any find, cases, fund for their that in we most the colonial' redemption; funds; bills of credit were issued such the upon provided by very 2, terms of the Geo. ch. in acts. The statute of 24 also terms ap not bills the to on the mere credit plies very phrase, resting the state, but also to bills suitable funds having their provided further, the colonies, in redemption. prohibits future, goes from such without suitable funds. In providing short, issuing colonies, in of bills credit history conclusively establishes, distinctions, that none of these and defi ingenious suggestions nitions, could were or been in the minds of the framers have facts, constitution. known and not acted theories; and They meant, from bills of credit, states to by prohibiting emitting pro form, hibit to or issue, any currency any pass paper paper-mo funds, debts, or credit, whose basis was the or ney, promises states. to looked to the mischief intended be They guarded against in the future, past. knew light experience They . states, that the had money, paper constantly depre ciated, funds were whether for its redemption not; provided was or a whether there to to .receive; promise pay, promise interest; whether were with or without whether payable or in were futuro. knew payable, that nominally presentí, whatever not currency directly immediately, paper silver, is, mere/will holder, redeemable for gold ever must know the be liable to constant We same depreciation. facts as

establishing bank, in of bank bills or notes of that of the the shape of bills credit is, the constitution. The that within the prohibition argument do it cannot that cannot consistently state indirectly, the do and that here the the constitution the bank directly; is corporation state; its and exclusive instrument of exclusive sole the managing benefit, for its exclusive funds, under exclusive management. the in this obvious that state cannot Even principle, permitted do, what it is the to do constitu directly directly prohibited occasion; has been denied on the what tion, present upon grounds That a I profess myself reasoning, incapable comprehending. , evade the of the may state rightfully prohibitions constitution evasion, instead of the in the acting through instrumentality agents constitu name, in its own direet and thus from its escape acting tional is a I doctrine to which can never obligations; subscribe: which, the integrity honour of faith and the country, good TERM, 341

JANÜARY of the Commonwealth The Bank v. morals, and of and civil of sound states, for the cause political of the I find warrant never be established. any I hope liberty, Missouri; either v. State in the case of doctrine in Craig such of the dissentient in that Court, of the judges. the opinion from which the conclusion is of the other argument, part a more unconstitutional, extended con requires the act is that drawn it that, notice the But before proper sideration. proceeding of this act bar, constitutionality at the that statement point so, If I bow to its Court. authority. this decided hás been already could, I decisions the solemn shake, I even am not disposed law; fortiori, not and, a that Court, any great principles But I of the constitution itself. which respects interpretation has assent that I point shall before my require proof yield Bank of the is the so The case relied on decided. R. 318. Wister, 2 Peters’ In that Kentucky my judgment, not made or no such It was

ease conclusion. even suggested, justifies It was not touched Court. judgment argument. that case? Wister suit the circuit court of What was brought bank, States in to recover a sum Kentucky, against United bank. The bank filed a plea deposited jurisdiction Court; bank was a established body alleging corporate, “ an act of the the whole Kentucky, legislatúre capital of the said stock corporation, exclusively solely property and that her the state in political sovereign capacity state, is the sole and member of the corporation.’? exclusive decided, Court that the suit was rightfully against brought and was of the circuit within court. corporation, jurisdiction ? Because the Court were of Why opinion, corpora though tion was created state was state, the a member of even “ The alone, and directors Mr. president (said Justice corporation. Johnson, in constitute the delivering opinion Court) body liable to suit. Hence corporate, metaphysical person by the itself, laws the state from the of a it is excluded character party, ” law, of a the sense And when body speaking corporate matter, confirmation of this was cited from view of the passage the United v. The opinion States Bank Planters’ Georgia, R. said, Wheat. 904. The then and this is the com learned judge ment, on which so has been much reliance placed —“To bemay added, in or that if a did exercise other over power a bank, or to it attributes, its it would impart hardly sovereign SUPREME COURT. Bank of the v. The Kentucky;] the issue of such banks from distinguish possible issue of which violation of direct constitution here intended to Now doubt the state avoid.” this language imports, would, that a existed, case have most, only might have constitution, but which was admitted a violation not to be the Court; is, before where the state case imparted sovereign to the Court attributes do corporation. not the con say, of the United States had not stitution been violated the issue of bills; the bank for that was never for their consi question presented : but that the deration state did not intend to say, violate constitution, and did not intend to communicate its attri sovereign Neither the facts of the confession, butes. the declaration, nor the manner, raised to the or could raise any such plea jurisdiction, any such, corporation, Was capable question. suing and being lang the laws of sued, by Kentucky. then, However proper, been as an have admonition of the bank, to the might uage danger was maintainable; did ground objection jurisdiction the Court in commit not manner slightest definitive opi as to of its nion issues of constitutionality bank paper. now to. the us

Let consideration of the proceed charter ascertain bank, and whether it is a mere of the state, and what agent and authorities which are powers it as to the issues given of bills. The act of bank declares section, in the first be, and is established, bank shall thereby “in the name and on behalf of the Commonwealth under Kentucky;” the direction of a presi directors, to be and twelve chosen dent from time legislature ballot both houses. to time The second section declares by joint and directors a corporation, name, president &c., corporate on the the usual The third corporation section conferring powers. whole that the stock of the declares capital shall be exclusively of the Commonwealth of and no property Kentucky; individual. shall be to own or corporation permitted pay any part of the bank. The fourth section capital declares that the president directors shall to issue the denomi power TERM, 343 of the of Kentucky.! v. The Bank' in and stock of redeemable silver. thé and gold capital be payable dollars, two millions to be raised and as is to consist paid bank into the vacant treasury follows: all moneys paid purchase state, much of the and so stock owned the state capital lands of it seems had (which the Bank of then Kentucky, in stopped pay state, to the affairs baiik after the of that were ment) may belong not the thereof or settled heretofore profits appro up, pledged And the treasurer the law. from priated by required, or time, accounts, time to as he of these received moneys, any pay sections, to the other the bank was them bank. authorized to By notes, and and discount bills and to exchange deposites, receiv.e estate, on loan real their loans in money mortgage distributing the citizens the different counties,; certain among proportions and all loans and discounts, the interest after arising payment to be Considered as of the was' annual of the expenses, part revenue state, and the The notes of disposition subject legislature. also the were of all debts Kentucky recei.vable due to the Commonwealth Bank.

Such are the the clear, charter. It is principal provisions there fores,"that the was a mere artificial or bank created body corporation, state; for solé benefit of the and in no other had person could or share or . have and any director president interest s state, were mere of the appointed removable at agents . The whole stock consisted of pleasure capital provided, of the and other lands public state, proceeds property to, bank ’from should be over time time paid treasurer lands themselves, other funds public were state.^ but'were, not vested ; conveyed, or originally corporation in the free of the state itself. The possession, left president and di . no rectors had interest but .institution, whatsoever had it,of tc control of the state. management subject were not liable for bills, of.the or personally non-payment üny notes, or bank; debts of the' tííeir only-for personal misconduct any excess of issues or-debts double the beyond amount of the capital The state stock. was entitled to all the And profits. though bills and notes of the bank were declared payable silver,' gold human, it seems was made directly being responsible not payment; and directors in their president private capacity, for they contracted no state, not the personal responsibility; (as we told not, at the because the state had in its argument,) SUPREME COURT. Tiie Bank of Kentucky.], Commonwealth of [Briseno name, said, pay nay, them: that these bibs promised

own even issued on the credit state. charter; the and annihilate and sovereign repeal legis- pleasure facto, owner, the itas was in become, the legal ipso part act lative I franchise. know of no of the property prin- owner equitable constitution, which would have been the violated law, or of cinle would have been it the course; for upon conferring such to his own estate and title the property, owner legal equitable the of the funds the business principal, on the part resuming, to his agents. confided bank were to circulate of the as state, funds,

dit to the can ultra these be inferred. But the surely case the old colonial credit that answers had position. They - funds for their had cases redemption; they many mort assigned loans authorized to be the made, are in gáges upon present' charter; and the called them bills of yet credit. legislature did not them; to promise and deemed pay colonies yet they them their bills of credit. truth, fact, Because in' and in and Why? not fictions, .authoi’ities upon and. any metaphysical the credit of the upon state: the funds general fell pledged short state was bound to payment, .of redeem them. The on this head assumes the matter in argument very controversy. assumes the state that itself never or held directly, ultimately, out as for the responsible bills; but that the payment holder trusted, and trusted to the for him in the exclusively, funds charter. provided Now, I this inference a deny Because funds altogether. assigns for the payment its it debts or bills, follow, does that .holder trusts to a exclusively a takes those funds? When creditor pledge, XI.—2 X

Vol. SUPREME COURT. v. The Bank of the of Kentucky.] for or of his debt, has he security payment does exonerate thereby debtor from If personal is autho responsibility? agent rized to certain funds of his for the payment pledge principal debt, that exonerate the from all principal personal liability? does has No such doctrine ever been established to yet my knowledge, law; and, all, .of least of code the common law. any On the is at common law held incumbent on who those contrary, has been fund, insist there exclusive credit to a any given clear and irresistible fact, establish that proofs. circulated, in this case had had as it very corporation

Suppose dollars; bank bills to the do, its own amount of right 5,000,000 state, the funds hands of funds assigned them; had been to redeem would wholly inadequate the corporation in reason, been and in have hound not the state equity, justice, moment, Would a court of for a tole the deficiency? equity, to pay circumstances, under from his such escape person rate private of his au for acts conduct fully agent, own-responsibility commodum, Would it not sentit sentire say, him? qui thorized by faith, for it be consistent with a-state to Would onus? good debet et the solemn of its own bound by that it obligations proclaim interest, own benefit and for its exclusive officially agents, acting funds; to debts thus honestly payment justly own upon me it seems to these because that they I questions, contracted? put is, one and that answered way; affirming positive can in foro The citizens state, must be justitiae. responsibility cases, in all credit and trust, such general good presumed state; and not fund merely contemplated pro faith cases, in similar the colonies So, under their redemption. vided So the continental and so own congress, obligations. stood own have understood their States United constantly obligations. their bills fund have provided 'Although no direct those bills of credit contained credit; promise although form, the acts of state; although-they purported, trustees, under commissioners, or committees authority acting eredit of the well understood that state; the-general yet bills, was necessarily implied; redemption not, could silent necessary pledge, without all; circulated at yxcept compulsion, would not irresistible power government. obvious,that consti- not, cannot whether state be suable or

If TERM, 1S37. Bank of the v. The of Kentucky.] [Briscoo tute a test, an whether instrument of issued or on behalf currency of a state, be a bill credit or not. be a bill of may credit, al- is not thereon; was, suable as in fact, the though case with all the bills of credit: for the colonies were anti-revolutionary never hand, suable. On the other the state allow itself to may expressly behalf; be sued on an instrument in its it not be yet may a bill of credit. for As, .a state suits to be example, authorize for debts due itself: issue, and if it should its of- brought through ficers, a for certificate loan borrowed; if it not in- were money tended to would bill pass not be a currency, credit.

But it is said that here the state was not these suable on only bills, bank but that the itself under corporation suable expressly charter, and the was made promise pay corporation; and the made it, effect, in promise excludes being corporation, on the words. state. There is no in obligation part magic What was this a mere fact? A mere corporation entity; legal state, for state, with funds agent existing belonging derived state, and these bills the credit which' wholly upon dealing for from the and directors who were state. president persons I liable not, the time were (as said,) personally already being, bills. of those metaphysical personage .The delu- mere if it be treated as a is not' to liable; and the promise, itself, of the state was the through sion and promise phantom, in his of- treasurer, state had authorized its personage. Suppose these issue very liability, without any personal ficial capacity, “ &c., and treasurer, asB.,A. bills, I, promise pay,” saying-, to be benefit these were bills the whole proceeds state, the funds of out paid were would, truth, be the doubt that the state abe there could treasury; issued on its That would be credit? real debtor? That conscience, in common re- honesty, justice, state would, in If true, case, this would be in such a sponsible’for their payment? in what know that case substantially respect I should be glad the Court? case, before It is precisely very from the one differs as the bills of credit issued by Mary- same predicament There the commissioners were created a land in bills, to issue and were authorized to sue corporation, dreamed, no one ever and least of all, the state sued; not the of credit of the state. It a state itself, as the creation of a own device corporation, can, so simple COURT. sCFSEME 348- Commonwealth of v. The Bank the. [Briscoe and thus funds, own on its escape emit currency paper agent, the.constitution; a dead is prohibition solemn prohibitions If the consti- we mean than a give letter. It is worse mockery. must behind we look on rational ariy interpretation subject, tution forms, benefit, must for whose We ascertain and examine things. of cur- funds, for what with whose credit, purposes, bn! whose created, esta- is otherwise, the instrument or agency rency or of a state, of a treasurer of a be it the issue blished. Whether must or other official state, personage, any -corporation of.a be, whether, in all cases; must The-real immaterial. question wholly of the state? is the substance, currency it unconstitutional, bank be if this But it that has been argued, That are unconstitutional. capital, state banks founded private a from is not It I deny. utterly legitimate-conclusion proposition The constitution to the case. present applicable just reasoning any credit, of all bills of but only not the emission does prohibit I I state, a state: when say, by bills of credit emission of form issued. It in behalf of a whatever mean or does or cor 'private not or private partnerships, prohibit persons, private bills of credit. No evils; so called,) (strictly issuing porations, evils, ever flowed from such a or, least, source. no permanent no, furnished sort, had examples history country And if extended mischief. should a durable widely public .-or be within of the state exist, would competency legislatures it furnish, such an issues by adequate remedy private against persons. fact, now exist states prohibitions, many In point against issue against banking, private paper, private it shall The mischief was pass the intent not there. currency. felt in that direction. It was the issue had never authorized on its funds, own currency; which constituted the real evil to own for its purposes; provided of such a constituted history darkest currency against.. annals, and had been written the American the ruin of pages faith; had staked their who thousands, public property upon and but too often violated. The grossly freely great always given, constitution, was not whether at the adoption private inquiry exist; or should banks, whether they incorporate, corporate not; whéther issue paper currency permitted should issue on its own account. The should anxious inquiry the state was, eustodiet custodes? The found answer quis then TERM, v. The Bank of the of Kentucky.] constitution; ¿m But it has,.in I sure my judgment, (though my brethren think become a name. -Stat nominis otherwise,) .mere umbra. banks,

The states create as well as other may corporations, upon and so as this private concerned, far capital: prohibition notes, authorize them to issue bank bills or rightfully as currency: extend, to the control of always whose subject congress, powers the entire When regulation currency banks country. are created stand upon private capital, they capital; credit is limited personal corporate responsibility stockholders, as the for in the If the provided charter. "corporate that stock, and the only, charter is made liable for the debts of that bank, the and stock is holder of capital in; its paid .every must be trust to the thus and presumed exclusively provided, fund credit of the And a case, in such a state general corporation. a funds, in its portion share owning, paid having stock, is treated like stockholder; other and is under capital every stood to incur no It descends to public responsibility whatsoever. the character of a mere in does not act the character corporator, Court, of a That was the doctrine of this The United in sovereign. , States Bank v. Planters’ Bank of 9 Wheat. R. 904. Georgia “It is, the Court oh that (said think, we occasion,) principle, a sound when becomes a in partner government trading company itself, it far divests so as concerns the transactions of that company, of its character, and takes that of a citizen.” In sovereign private case, present legislature expressly prohibited any partner with other in this ship, bank. It set it participation persons up, of the state, as the exclusively upon capital exclusive property exclusive subject state; management its exclusive therefore, in acted, its through agents. sovereign not, character and for an capacity; instant, even could even in law, intendment of divest itself the transactions of the bank of that character and capacity.

I have not in the' I views which have thought necessary, taken case, of this to resort to the state of the pleadings, though they fortify endeavoured, which I have every portion to main reasoning tain. One of the averments in the is, first that the plea president directors of the authorized, hank and on “for behalf illegally credit, of the commonwealth, and credit, her to make bills of upon to emit notes, bills or to an amount not exceeding millions aso COURT. SUPREME Bank of the v. Tlie made, &c.; emit, dollars, &c., issue, and when so circulate ordinary community through purposes, money.” that the had before on to directors allege, president plea goes on, “for, and on sued, of the note behalf the commonwealth date bills, credit, her made and on various viz: Kentucky, denominations, ainount, from one dollar to one who dissents to know opinion every judge lic have right I- Court, the reasons his dissent. have of .the the opinion affection for motive; reverence profound and strong another my for him- Marshall is not here to Chief Justice speak Mr. dead. I in which of his full self; grounds opinion, and knowing well I earnest de- unconstitutional; felt an concurred, act have that.this rashness, or his from the memory imputation to vindicate sire would, he Had he been reflection. spoken living, deep want I I am sensible that have done of both of us. names in the joint his own mind exalted to his opinion, great that justice with all the own But would have done. imperfections my talents there, efforts, solid I shown that that have I grounds hope His saltern accu- of the constitution. his rest exposition muñere. donis, et inani fungar mulem of, of Kentucky, oi tne state court appeals judgment affirmed, with costs. notes United States. stitution credit,” as used constitution-of of the terms “bills of definition the’ States, impracticable, difficulty. of-'no small if not found a will be work Unitod K Yol. XI.—2 SUPREME COURT. v. The Bank of the Commonwealth of Kentucky.] credit, sense, terms in their comprehend mercantile a great variety of debt, evidences which circulate in a commercial country. In early history banks, it seems their notes generally denominated “bills of creditbut in modern times have lost that designation, and are now called either bank bills, or bank notes. But the inhibitions of the constitution apply to bills of

Notes

notes Bank of the credit. applied The decisions in that case to obligations of an entirely different cha- racter. Court,'in principle There is no decided of Craig case State of v. The Mis- souri, presented all conflicts views the Court this case. Indeed the views of the Court are sustained strengthened, by contrasting the present .case with that.

notes exceeding arid dollars, president principal signed countersigned or cashier, payment money any person persons, promising bearer; order or notes arid the said bills her, his, constitution, emit, said made violation illegally, were so^ for its circulate community, ordinary purposes; arid .issue, through that under the said authority legislature, act money; States, the said United the. violation constitution had, arid before the note last directors date of afore said president

notes lating 261 .TERM, 1837. of of the Commonwealth Bank commonwealth, an act by of the said as money, legislature 1820, had, December, amongst year on the 25th passed all exe substance, that declared, in upon and other provided things, thereafter issued facias which should cutions of fieri commonwealth, that notes on the endorsed, the said the courts of Bank of the or notes on the branches, its or Kentucky Bank officer or its branches,might, Kentucky from the defendant in execution, such discharge .received holding executions, endorsed, so should only replevied Such thereof.” months; of three for the in their colléction space and delayed facias, which should thereafter be issued' of fieri all executions d commonwealth, without en said of the courts of the apy from any notes on Bank' Kentucky orsement. for the reception Commonwealth of Ken branches, notes on the in its should be collec branches, or its replevied, delayed tucky or, if not of two replevied, property tion so space years, be sold a credit two under the same should upon years. levied upon directoi's for the like said purpbse, president ' wit, afterwards, to on the intent, day the like t hat note last the date of the executed above- defendants being said behalf of the did, commonwealth, for and on mentioned,) her to the said benefit, and on con contrary her illegally, States, emit and issue the notes or bills of of the United stitution made as aforesaid directors said so president credit cents, interest, to the amount of dollars 37 bank, by loaning And the same to’ defendant Briscoe. the defend and delivering that the the note ants in fact aver consideration last -which them, was executed was the emission and loap abovementioned credit, so said bills of made and issued aforesaid to said who are and directors of the president plaintiffs, Briscoe aforesaid, whereof that the consideration of the they say said note, them, invalid, executed' illegal, last'abovementioned States; the United constitution each violation aforesaid, notes thereafter them as of re executed by by way aforesaid, note, last newal as the said abovementioned was also invalid, founded and insufficient consideration afore illegal, ready said, none and this other; verify prove; to. &c. wherefore'they pray judgment, behalf, And for further in this defendants, that the say, plea them not to have and action plaintiffs, against ought .aforesaid

notes bank, these were‘taken no funds were in possession state;, only. the faith on the credit .exclusively, issued, of a which the notes were The corporation, intervention If had been did not affect the character transaction. p.ut that the officer, it would not be denied into circulation aby be- difference them; but there no substantial or valid state issued issues, such a mode of and that tween adopted managing The notes were made the bank. in fact a tender. chartering in an to receive execution, law of plaintiff Kentucky obliged re- of his them satisfaction to submit a deferred judgment, his de- of his debtor. procee against sult lings property at an fendant to be taken or it. be sold could not appraisement, if the for a considerable notes of the Bank of the Common- period, refused, when tendered in wealth satisfaction of debt. Thus the notes of the Commonwealth Bank were in all respects “ same, substance, as form, were in credit;” pro- in. the constitution hibited United States. was the promise of the state- promise pay, Kentucky, by bank; cashier or bills the notes president agent were circulated as made money, also, effect, they might It is not tender some cases. be a essential that the notes should them of cted tender make bills it. The Court are referred Federalist, Madison, 44th number of the Mr. as to views nature of constitutional provision issue .the against credit; and as to the construction of the in the constitution. provision Bills credit and The abuse áre money paper synonymous. money war, difficulties of revolutionary during

notes decisions have treated the notes for Judicial the payment of money M‘Cord, '2 credit; 16,-17,18; v. Craig The State of Mis Peters, 425. 4 souri, the third point respect With appellees—that the bank TERM, v. The Bank of the Commonwealth of Kentucky.] unconstitutional, and bound to their yet appellants pay note: A contract made to law The answer contrary obvious. an It is act, void, in fraudem and will be en- nevér consequently legis. of that forced in the courts whose laws country attempted settled, This is so well as to be stored evaded. principle away among the established maxims jurisprudence. case of in 3 Eve, Cranch, 247, is as a one Hannay strong as can well Missouri, that de- follows imagined. Craig up 4 Peters, 425. cision. Mr, B. Hardin, for in error, stated, defendants that was he pre- sent when law was passed by Kentucky; legislature it, he did not he was a took approve witness all that although the time of its enactment. place had been There into the large importations States, United goods Britain; after the late war with Creat many persons Kentucky embarrassed, had become made by having of those purchases large In this state remedies and were re- things, goods. expedients to, which, medicines, sorted like effects; failed their quack it, left the disease where found or in a worse condition. It has said, that old laws colonial for the provided issuing were resorted- to who currency, those drew the law This, this bank. most was not the fact. The establishing probably, framers intended to law provide issuing paper by bank; used which would into language carry object those, the, know laws; effect. did not .did not certainly re- them. sort to purpose legislature, establishing bank, to' it a substantial to” give competent capital, discharge all the liabilities it assume; as sufficient could be might capital institution for ultimáte provided By the. banking purposes.

notes her power to a benefit she has secured in ad- vance, of the bonus to her. It is submitted, that if the notes of the Bank of the Common- “ wealth are bills of credit,” and the issue of them was prohibited the constitution of States, the United the notes of all state banks are Before equally prohibited. approached, is de- question sirable to it before place the Court, on its true grounds. of the constitution are: —“No provisions state shall enter into any alliance, or treaty, confederation; letters of grant marque coin reprisal-; credit; emit bills money; make thing but gold tender; silver coin bill attainder, pass any ex.post facto law, or law contracts; impairing obligation grant any title of art. I. sec. 10. nobility;” SUPREME COURT. v. The Bank Commonwealth Kentucky.] States, United powers government granted exclusive; so are the to establish money, powers coining post in addition to roads; offices, of thése post grant powers,

notes all been of the bank. Those ceived, and used the notes borrowed of those who answered redeemed; they fully purpose them; them from the solicited .were of them. value It is doubted if the cause of them. received bank, and voluntarily from their release would be most morals promoted, allowing Court; before the contracts, of those who are by sustaining it is unconstitutional. bank, even dollars; one million of had a' Bank of capital The old Kentucky half, state, which the state af- of which reserved by one state, lands for. Besides property terwards paid the Bank of the in the notes'of and taxes were payable 'pledged, (Commonwealth. authorized; of real estate Loans mortgage and could for real a substitute became property, these mortgages had also The bank extra- of the bank. liable for the debts made full Thus, it. of dcbts.due to pro- for the collection ordinary powers the institution. solvency was made preservation vision

issues the notes state, created is but corporation an indirect action by of that, constitution of the prohi- United-States bits done, to be This directly. is not admitted: If the position true, assumed is all banks states are obnoxious incorporated by censure, same for all laws; and derive their if the' powers under state N You. XI. — 2

notes of credit? of the Commonwealth’s Bank bills Ahre and the authorities relied argument counsel error, have been listened to with profound plaintiffs of, of bill attention, anxious definition purpose finding.a ,has This credit. been done without success. COURT. SUPREME 2S4 Bank of v. The [Briseoe the Court, is submitted to on the definition'which part which, error, defendants if seems any can given, approach than the constitution other hearer which has meaning is, on that it is a bill credit offered, alone, with no other resting it. of bills of credit have varied; basis’to forms support but.the -the state was always faith of pledged pay- redemption ment.’ formed The convention constitution of the United evils of the issued States the revo- paper currency, had during contest, it; before and the provision introduced in lutionary evils, and to the state of those which they things pro- reference intended, Under these views duced. bill on is no one for the which there adequate provision; resting faith for its if definition, But we cannot public redemption. get look what we can were the properties currency revolution, see the same as the notes of the Com-

not then established notes comprehend clearly not were not affected constitutional bills prohibition. It is true that the the bills of states credit before constitution, for those adoption be sued bills. The could citizens of other suits, states could institute but not their own citi- zens; and thus the limited those states not a like liability feature which.existed .the notes of the Commonwealth’s Bank. The of all the of a state would be held larger portion its own citizens, and as to that portion, liability suit-existed. The Commonwealth’s Bank of is, like the banks -of Kentucky states, other created for the benefit of the state and its'citizens; and made full provision having its obligations, to suits; and all its bills and notes have been subjected redeemed. when other banks Although suspended specie payments, their notes were, credit; yet the bank to liability temporarily, suits for the sums them, due them a distinct gave character. be disastrous -to will day when country this Court-shall throw itself on the ocean of uncertainty, adopt an interpretation of the constitution which prohibition will to a apply construc- tive bill credit. The large prosperous operations commercial oyr are carried on of' country by'bills notes, and bank exchange,

notes Morris Nicholson,x>f former times; firm, and the Nashville others of more recent date. .They . No currency are not man is legal receive them for compelled e due, or on contracts. debts No them man’s refuse can b right lawNo them to requires current; of' questioned. matter pass convention. credit of individuals They and are corporations, on the faith and received those credit who at the issue, and hazard those who receive them. form, assent of a sub parties, for current Indi have no money; stitute such. legal validity TERM, 1837. v. The those with whom them; issue corporations viduals

notes

its notes debt, not money obligations, issues wanting discharge owes, does this to its relieve citizens create admitting circulation, shall the finesse succeed? Shall the constitu- money be and mere names tion of the Union overthrown by chicanery; themselves, Or rather shall it not acts to acts? operate upon given to its This enforced obvious according import meaning? before this Court. not to reasoned is a matter I now to examine law of am Kentucky creating prepared Commonwealth, and the con- apply provisions emission of It will found authorize the stitution. Its of the bills of of former days. characteristic credit every

notes requiring capital specie, failed, as Bank. Kentucky expected; might

notes money, .circulated suit directed, The lav/ for the note which brought. should handed which were over -certain funds corporation, law but the with. credit form the complied capital, charter, of the' provisions pledged directing funds, was, therefore, these the only pledge appropriation of the bank. the bills redemption in a had would stand more favourable If the case aspect, pro-

notes treasury is too thin eyes. state. The judicial covering there is not one In the whole case history more credit are concerned. bald, funds and so far as that the funds were vested in the But it has been argued corpora- secure the tion, notes, ample silver; corporation payable gold might vested ? How were corporation sued. president section, the 2d made a were, and directors corporation, “able and have, receive, law, possess, purchase, capable, enjoy-and ¡retain,

notes the Commonwealth Bank were the notes issued, state, state; its officers for the for.redemp- relying tion on the state; and faith of the ánd circulated for the property state, bank, and not or of individual citizens. profit The law then constitution-, was in and is violation void.- But does the case on rest and.illustration? lias argument already SUPREME COURT. v. Bank of the Commonwealth of I have been decided. the case Missouri, as regarded Craig of this conclusive of Court question involved judgment Not is that here. Chief Justice judgment, pronounced by Marshall, but the assumed explicit; clear the dis- grounds confirm now advocated. principles senting judges That and I add Court, case is before can hope nothing dis- force; I of doubt with may suggest grounds not exist in this case. do senting judges the cases, I a between am unable distinction perceive of the Missouri will the condemnation support paper, justify unless it be that the of that former Kentucky; signed called law, under the auditor authority by- persons issued under treasurer; and the latter was authority signed Bank of a The Commonwealth Kentucky: law called by persons state, a difference. Both were by distinction without agents I am the acts thus acts state. state; acting do that how state can corporation, to understand yet If its annuncia- do that be the cannot other principle, by. agency. will new constitutional tion from tribunal light upon justice, give country. law people in- and do I not now turn aside have presented argument, made she into the conduct gains quire had mort- If taken her she paper. burning issuing all her citizens for her paper, the lands depreciated- gages it is a did in to her them all Joseph Egypt; granaries, brought If she has made her and them. matter be settled between them, satisfaction. out of must seek money appropriate between moral results Nor do I detain Court by balancing

notes dis- in to be received weic an act required legislature, to endorse failed executions by plaintiffs; charge executions, received; further on would be so proceed- that they two on the were delayed years. ings judgments error, contended, pro in it is On the part plaintiffs “ “emit coin constitution, money,” no state shall vision'in the r a but coin credit,” silver o make any thing gold distinct- debts,” in are three lowers tender Com of the states; of the Bank and that if the bills inhibited act of tender, legis made a anby monwealth substantially the bank in action of lature of it must fatal to the Kentucky, case. head, the above pro- on this whether is- consider unnecessary these notes receivable vision of the act of the legislature, making law; as such a tender executions, ques- substantially discharge obli- execution, cannot reach the tion, it on the however arise might If a state to the bank. attempt legislature given gation unconstitutional; will be tender, the act the notes of make such, affect, constitutionality could not any degree, ¡attempt con- case, was hot referred to in the of the bank. The act present So far as this act has of the bank. bearing nected with charter tend to show their bank, this' and' proper on the bills issued by may character, it be considered. which the counsel for rely, main plaintiffs But grounds Commonwealth, the bills ques emitting that tire is, the bills state; that, consequently, as the tion, acted agent the state. issued by cannot from That, issuing as a state is prohibited it is directly. what prohibited doing indirectly, do of the cur- intended regulation the constitution pl^ce That that the act control federal’government; under rency constitution, spiriCof is not violation Kentucky its letter. but repugnant printed in a bar, the' discussed have been ably These topics on behalf plaintiffs. argument .of so far'as it is constitution, composed the currency, That

notes tion. of these banks supposed constitution; were intended be inhibited they within the of that credit, considered as instrument. meaning fact, many characteristics, In their most distinguishing credit, in different from bills of various essentiálly forms in which were issued. If, then, not the federal nor powers delegated government, denied to states, are retained the states people; bills, fair terms as used construction in the consti- do tution, not include notes: does it follow ordinary bank

notes was -made and di- the face president pay state. rectors, as agents there is no law which assume act as do hot agents, charters, all' bank in, the state. As bind, them perhaps, authorizes notes; de- amount issue certain had power these and circumstances which should the time regulate termined issues. to be credit, the fixed emits bills of amount When á .

notes this this In respect to have which are believed class from any issued. demand; on nptes silver, in. gold not only payable fund, to redeem a sufficient fund, in all and, probability, there was a. TERM, v. The Bank of the Commonwealth of This fund was in bank, them. and under the con- possession trol of But directors. whether the fund was ade- president notes.issued, not; is immaterial'to redemption quate existed, It is that the fund present inquiry. independent enough state, and was sufficient to some credit give degree of the bank. paper is not whether the iBank.of the Commonwealth had question or a small or whether its notes were in one, large capital good credit or bad: but whether state; were issued on the faith and credit of the state. The notes were received in payment and in taxes, state; this, all debts to the aided by discharge the fund from notes discounted, arising prudent management, under circumstances, favourable sustained, and it is be- might' did sustain to a extent, lieved considerable of the- bank. credit The notes of this bank which are value, still in circulation are equal said, to it is specie. But there is another these notes from quality distinguished bills of credit. holder of them could not look to Every only of the bank for had, funds but he in his the means payment, power, it. of enforcing The bank could sued; and the of this records Court show, that while its was a suit was depreciated, prosecuted judgment it, and who bank, obtained from the depositor; against ad- the full mitted,, amount of his in specie. judgment, means of state What had the holder enforcing payment of a bill of credit. It is said the counsel for the. plaintiffs, he’could have sued the state. But was a state liable to.be sued? In the case of Chisholm’s Executor The State of Georgia, decided, that a could be sued before Court; this and this led to the of the amendment of the constitution, adoption But the bills of credit emitted, which were subject. prior constitution, are those that show the mischief which the against inhibition, intended And we must look operate. to that pe as of riod, done, we have for the definition necessity and character bill of of a credit. No state is liable to be sued without her consent. sovereign -Un- confederation, der articles of a state could-be sued in eases of boundary. It is believed that there is no case where a suit has been brought,

notes leading were essentially different numerous monwealth credit, colonies; the states classes state, not emitted on credit, nor but the credit bank; if funds silver payable gold demand, bank; and the holder and if to constitute could sue it must be issued and on the credit of the bill not, means, holder could State, and the by legal compel bill; how can character two these descriptions as identical? were both circulated money; considered name, form, substance, differ.

notes Kentucky: consequently, not credit, bills of within the of the federal constitution. meaning therefore, is, affifnied, with in- court appeals judgment .and terest costs. Mr. Thompson, Justice concurring. I concur in that Court which considers opinions part bank, the bills issued under the denomination as. coming States, constitution United prohibited by emitted two states. The infirmities which attended great of credit which circulated as come within the money, mischief intended to be constitutional -guarded prohi- against bition; were, of- some fund want real and substantial pro- being for their no mode vided payment-and redemption, provided-for same. enforcing payment of the It is true, that most cases where many, perhaps

well as notes We know that United they. treasury States, cent.; war, the late fifty per during during depreciated our private period suspension specie payments, banks, to at the ample; same period, capitals supposed though cent., their below bank bills to their sunk from fifteen twenty-five per nominal of the Commonwealth value. The bills of this very SUPREME COURT. The Bank of the heard so' we have of whose solid extensive capital Kentucky, cent, sunk at the have admitted much; fifty per argument,.to not, The framers of the constitution could nominal their value. to use a irreverence, (not phrase) presumed stronger without aim a blow at the forms artificial names and things; prohibit clothed, and leave the substance currency might unredressed; the states at untouched and leave the mischief to inundate a flood of with which to issue paper money, liberty so own sole funds and responsibility; community, upon did not use certain forms expression. that they prescribed always; these attributes in states were it ample sovereignty, possess If in the front of the useless to such worse than place prohibition solemn delusion and mockery It was out á constitution. holding ear, faith of the constitution keeping people, . such is, to the sense My interpreta judgment breaking unsound, as it would be mis would be as constitution tion of the contend, is for which I precisely interpretation chievous. case of v. The maintained Court Craig distinctions Missouri; where all these ingenious suggestions, State I alluded, definitions, to which I overruled. directly researches, some labour in these indeed have myself spared might that case as in some measure assailed in not considered had I if, decision; indeed, it is not shaken to its foundation. very present is, whether.the act of next case Kentucky question unconstitutional, an this bank is emission by authorizing

notes under dollar, of one nation nor over one dollars, hundred signed the cashier. bills or notes president, countersigned These are, sections, authorized to be to order subsequent made payable bearer, or to and to be are declared negotiable accordingly; to be at the receivable officers in treasury, by public payments of taxes and other debts to are to and for levies; and county

notes clear; is, quite thing the'bank Another existed state, benefit and all its sole officers were appointed at its removable the state pleasure, an possessed . over The whole corporation. fund unlimited power possessed stock, debts, or capital securities, it, whether real notes, in fact to the state. The belonged state was estate, or owner; time, without might any violation the equitable which was its own corporation, exclusive agent, rights itself, these funds to at its own might and appropriate resume

notes That currency. bills or charter, of the as not face to have been on the even sois palpable then, were] mere tech- at the argument. stripped questioned the state, of the state of the bills on forms, the agent nical state, the’ for benefit and. funds profit the exclusive state, within the and without currency state; any to circulate of the state. In what than that then do respect other responsibility I state? can none. credit the perceive differ from they that were not issued On the it is said credit they In the first place, the state is not or indi- state; directly, responsible, that confess, I I until heard for payment. argument rectly, such would be that any. I not bar, proposition had supposed If bills maintainable. these were not issued be maintained, or could state, credit were issued? It on whose they credit on the credit and what issued on the corporation; were said, that they the creature and A mere metaphysical is the being, corporation? existence, state, per incapable, having personal agent con- and directors The president se, responsibility. of any personal members; were its sole and they and were stituted corporation, called the entity, liable. The official president not legal personally stock then? The be sued. But directors, capital what might 1S37. TERM, of Kentucky.] of the Commonwealth The Bank vested, in a be liable to-be taken in execution them, so.as tó not or sell a creditor of the seize them. Could corporation suit against them? No land, on his execution one pretends against public choose, as well assume the state should that. might, Suppose itself; and funds of the the credi- could whole corporation agency redress the state? It is admitted that he could tor have any against redress, the state is not suable. not because state; that the not taken the credit of the be bills are on It is said If it had terms, so cause state has promised, pay them. suable, state not the holder could here have no promised, being . that, But I insist and in redress state. against equity, justice, state; the bills bills must treated as the state suable, a bill in were would lie state, the real equity against real and I debtor; as the this say upon eternal principal: principles ás old as the foundations of the common upon principles justice, .How can it said, law itself tlmso bills were not truly taken of the state? Were the credit not to out paid pror lands, ceeds of the other state? public property .Were .the not receivable state, debts payment- very state, issues of reason that its own benefit? credit And was not given very ground? has been at the said that funds argument, provided pay ment of the charter; and therefore no provisions cre

notes various &c., therein, and dollars, hundred thereby, pay per promising mentioned, demand, or bearer on the amount there son on each note transferable and were by delivery.” in mentioned money, averments; technical admits the truth these upon demurrer I how their conclusiveness in the do not see pleading, principles do the state But I rely can be avoided. question present presented I found my upon principles judgment pleadings. bank bills are bills of facts, that these admitted state constitution; intent the true credit, within méaning credit of state; behalf upon were issued by, and is a violation its authorized and that issue state; agents; constitution. I deal of time in the that have conscious occupied great I am humble of this question, my judg- grave question; discussion Court,' in its to this none which was ment, second ever presented I I so, (as I done am of because opinion, have importance. intrinsic constitutional intimated,) pub- questions, already

Case Details

Case Name: Briscoe v. President of the Bank of the Commonwealth

Court Name: Supreme Court of the United States

Date Published: Feb 11, 1837

Citation: 36 U.S. 257

Court Abbreviation: SCOTUS