Lead Opinion
delivered the opinion of the court.
The notes of the United States, tendered in payment of the defendant’s debt to the plaintiff, were originally issued under the acts of. Congress of February 25th, 1862, ch. 33, July 11th, 1862, ch.' 142; and March 3d, 1863, ch. 73, passed during the war of the rebellion, and enacting that these notes should “ be lawful money and a legal tender in payment of all debts, public and private, within the United States,” except for duties on imports and interest on the public debt. 12 Stat. 345, 532, 709.
The provisions of the earlier acts, of Congress, so far as it is necessary, for the understanding-of the recent statutes, to quote them, are re-enacted in the following provisions of the Revised Statutes:
“Sect. 3579. When any United States notes are returned to the Treasury, they may be reissued, from time to time, as the exigencies of the public interest may require.
“Sect. 3580. When any United States notes returned to the Treasury are so-mutilated or otherwise injured as to be unfit for use, the Secretary of the Treasury is authorized to replace the same with others of the same character and amounts.
“ Sect. '3581. Mutilated United States notes, when replaced according to law, and all other notes which by law are required to be taken up and not reissued, when taken up shall be destroyed in such manner and under such regulations as the Secretary of the Treasury may prescribe.
.“Sect. 3582. The' authority given to the Secretary of the Treasury to make any reduction of the currency, by retiring and cancelling United States notes, is suspended.”
' “Sect. 3588. United States notes shall be lawful money and a legal tender in payment of all debts, public and private, within the United States, except for duties on imports and interest on .the public debt.”
The act of January 14th, 1875, ch. 15, “ to provide for the re
The act of May 31st, 1878, ch. 146, under which the notes in question were reissued, is entitled “ An act to forbid the further retirement of United States legal tender notes,” and enacts as follows:
“ From and after the passage of this act it shall not be lawful for the Secretary of the Treasury or other officer under him to cancel or retire any more of the United States legal tender notes. And when any of said notes may be redeemed or be received into the Treasury under any law from any source whatever and shall belong to the United States, they shall not be retired, cancelled or destroyed, but they shall be reissued and paid out again and kept in circulation : Provided,' That nothing herein shall prohibit the cancellation and destruction of mutilated notes and the issue of other notes of like denomination in their stead, as now provided by law. All acts and parts of acts in conflict herewith are hereby repealed.” 20 Stat. 87.
The manifest intention of this act is that the notes which it directs, after having been redeemed, to be reissued and kept in circulation, shall retain their original’ quality of being a legal tender.
The single question, therefore, to be considered, and upon the answer to which the judgment to be rendered between these parties depends, is whether notes of the United States, issued in time of war, under acts of Congress declaring them to be a legal tender in payment of private debts, and afterwards in time of peace redeemed and paid in gold coin at the TreaSr ury, and then reissued under the act of 1878, can, under the
Upon full consideration of the case, the court is unanimously of opinion that it cannot be distinguished in principle from the. cases heretofore determined, reported under the names of the Legal Tender Cases, 12 Wall. 457; Dooley v. Smith,
The elaborate printed briefs submitted by counsel in this case, and the opinions delivered in the Legal Tender Cases, and in the earlier case of Hepburn v. Griswold,
No question of the scope and extent of the- implied powers of Congress under the Constitution, can be satisfactorily discussed without repeating much of the reasoning of Chief Justice Marshall in the great judgment in McCulloch v. Maryland,
-The people of the United States by the Constitution established a national government, with sovereign powers, legislative, executive and judicial. “ The.government of the Union,” said Chief Justice Marshall, “ though limited in its powers, is supreme within its sphere of action;” “and its laws, when made in pursuance of the Constitution, form the supreme law of the land.” “Among the enumerated powers of government, we find the great powers to lay and collect taxes; to borrow money; to.regulate commerce; to declare and conduct a war; and‘to raise and support armies and navies. The sword and
A constitution, establishing a frame of government, declaring fundamental principles, and creating a national sovereignty, and intended to endure for ages and to be adapted to the .various crises of human affairs, is not to be interpreted with the strict: ness of a private contract. The Constitution of the United States, by apt w;ords of designation or general description, marks the outlines of the powers granted to the national-legislature; but it does not undertake, with the precision and detail of a code of laws, to enumerate the -subdivisions of those powers, or to specify all the means by which they may be carried into execution. Chief Justice Marshall, after dwelling upon this view, as required by the very nature of the Constitution, • by the language in which 'it is framed, by the limitations upon the general powers of Congress introduced in the ninth section of the first article, and by the omission to use any restrictive term which might prevent its receiving a fair and just interpretation, added these emphatic words: “ In considering this question, then, we must never forget that it is a cmstituiion we are expounding.” 4 Wheat; 107. See also page 415.
The breadth and comprehensiveness of the words of the Constitution are nowhere more strikingly exhibited than in regard to the powers over the subjects of revenue, finance, and currency, of which there is no other express grant than may be found in these few brief clauses
“ The Congress shall have power
“To lay and.collect taxes, duties, imposts and excises, to pay the debts and provide for the common defence and general welfare of the United States but all duties, imposts and excises' shall be uniform throughout the United States ; . . '
“ To borrow money on the credit of the United States ;
■“ To regulate commerce with foreign nations, and among the several States, and with the Indian tribes ; ”
“ To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures.”
“ To make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the government of the United States, or in any department or officer thereof.”
By the settled construction and the only reasonable interpretation of this clause, the words “necessary and proper” are not limited to such measures as are absolutely and indispensably necessary, without which the powers granted must fail of execution ; but they include all appropriate means which are conducive or adapted to the end to be accomplished, and which in the judgment of Congress will most advantageously effect it.
That clause of the Constitution which declares that “the Congress shall have the power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defence and general welfare of the United States,” either embodies a grant of power to pay the debts of the United States, or presupposes and assumes that power as inherent in the United States as a sovereign government. But, in which ever aspect it be considered, neither this nor any other clause of the Constitution makes any mention of priority or preference of the United States as a creditor over other creditors of an individual debtor. Yet this court, in the early case of United States v. Fisher,
In delivering judgment in that case, Chief Justice Marshall expounded the clause giving Congress power to make all necessary and proper laws, as follows: “ In construing this clause, it would be incorrect, and would produce endless difficulties, if the opinion should be maintained that no law was authorized
In McCulloch v. Maryland, he more fully developed the same view, concluding thus: “We admit, as all must admit, that the powers of the government are limited, and that its limits are 'not to be transcended. But we think the sound construction of the Constitution must allow to the national legislature that discretion, with respect to the means by which the powers it confers are to be carried into execution, which will enable that body to perform the high duties assigned to it, in the manner most beneficial to the people. Let the end be legitimate, let it be within the scope of the Constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the Constitution, are constitutional.”
The rule of interpretation thus laid down has been constantly adhered to and acted on by this court, and was accepted- as expressing the true test by all the judges who took part in the former discussions of the power of Congress to make the treasury notes of the United States a legal tender in payment of private debts.
■ The other judgments delivered by Chief Justice Marshall, contain nothing adverse to the power of Congress to issue legal-tender notes.
By the Articles of Confederation of 1 WI, the United States in Congress assembled' were authorized “ to borrow money or emit bills on the credit of the United States; ” but it was declared that “each State retains its sovereignty, freedom and independence, and every power, jurisdiction and right which is
The sentence soñietimes quoted from his opinion in' Sturges v. Crowninshield had exclusive relation to the restrictions imposed by the Constitution on the powers of the States, and especial reference to' the effect of- the clause- prohibiting the States from passing laws impairing the obligation of contracts, as will clearly appear by quoting the whole paragraph: “ Was this general prohibition intended to prevent paper money ? We are not allowed to say so, because it is expressly provided that no State shall ‘ emit bills of credit; ’ neither could these words be intended to restrain the States from enabling debtors to discharge their debts by the tender of property of no real value to the creditor, because for that subject also particular pro
Such reports as have come down to us of the debates in the Convention that framed the Constitution afford no proof of any general concurrence of opinion upon the subject before us. The adoption of the motion to strike out the words u and emit bills ” from the clause' “ to borrow money and emit bills on the credit of the United States” is quite inconclusive. The philippic delivered before the Assembly of Maryland by Mr. Martin, one of the delegates from that State, who voted against the motion, and who declined to sign the Constitution, can hardly be accepted as satisfactory evidence of the reasons or the motives of the majority of the Convention. See 1 Elliot’s Debates, 345, 370,376. Some of the members of the Convention, indeed, as appears by Mr. Madison’s minutes of the debates, expressed-the strongest opposition to paper money. And Mr. Madison has disclosed the grounds of his own action, by recording that “ this vote in the affirmative by Virginia was occasioned by the acquiescence of Mr. Madison, who became, satisfied that striking out the words would not disable the government from the use of public notes, so far as they could be safe and proper; and would- only cut off the pretext for a paper currency, and particularly for making the bills a tender, either for public or private debts.” But he has not explained why he thought that striking out the words “ and emit bills ” would leave the power to emit bills, and deny the power to make them a tender in payment of debts. And it cannot be known how many of the other delegates, by whose vote the motion was adopted, intended neither to proclaim nor to deny the power to emit paper money, and were influenced by the argument of Mr. Gorham, who “ was for striking out, without inserting any prohibition,” and who said: “ If the words stand, they may suggest and lead to the emission.” “ The power, so far as it will be necessary or safe, will be involved in that of borrowing.” 5 Elhot’s Debates, 434, 435, and note. And after the first clause of the tenth section of the first article had been reported in the form in which it now stands, forbidding the States to make anything but gold or silver coin a tender in payment of debts, or to pass
The words “to borrow money,” as used in the Constitution,to designate a power vestéd in the national government, for the safety and welfare of the whole people, are not to re'ceive that limited .and restricted interpretation and meaning which they would have in a penal statute, or in an authority conferred, by law or' by contract, upon trustees or agents for private purposes.
The power “ to borrow money on the credit of the United States ” is the power to raise money for the public use on a pledge of the public credit, and may be exercised to meet either present or anticipated expenses and liabilities of'the government. It includes the power to issue, in return for the money borrowed, the obligations of the United- States in any appropriate form, of stock, bonds, bills or notes; and in whatever form they are issued, being instruments of the national government, they are exempt from taxation by the governments of the several States. Weston v. Charleston City Council,
It is equally well settled that Congress has the power to. incorporate national banks, with the capacity, for their own profit as well as for the use of the government in its money transactions, of issuing bills which under ordinary circumstances pass from hand to hand as money at their nominal value, and which, when so current, the law has always recognized as a good tender in payment of money debts, Unless specifically objected to a.t the time of the tender. United States Bank v. Bank of Georgia,
The constitutional authority of Congress to provide a currency for the- whole country is now firmly established. In Veazie Bank v. Fenno,
By the Constitution of the United States,' the several States are prohibited from coining money, emitting bills of credit, or making anything but gold and silver coin a tender in payment of debts. But no intention can be inferred from this to deny to Congress either of these powers. Most of the powers granted to Congress are described in the eighth section of the first article ; the limitations' intended to be set to its powers, so.as to exclude certain things which might otherwise be taken to be included in the general grant, are defined in the ninth section'; ■the tenth section is addressed to the States only. This section prohibits the States from doing some things which the United States are expressly prohibited from doing, as well as from doing some things which the United States are expressly authorized; to do, and from doing some things which are
It appears to'us to follow, as a logical and necessary consequence, that Congress has the power to issue the obligations of the United States in such form, and to impress upon them sueh qualities as currency for the purchase of merchandise and the payment of debts, as accord with the usage of sovereign governments. The power, as incident to the power of borrowing money and issuing'bills or notes of the government for money-borrowed, of impressing upon those bills or notes the quality of being a legal tender for' the payment of private debts, was a power universally understood to belong to sovereignty, in Europe and America, at the time of the framing and adoption of the Constitution of. the-United- States. The governments of, Europe, acting through the monarch or the legislature, according to the distribution of powers under their respective constitutions, ■had and have as sovereign a power of issuing paper money as of stamping coin. This, power has been distinctly recognized > in an important modern case,, ably argued and fully considered, in which the Emperor of Austria, as King-of Hungary, obtained from. the. English Court of Chancery an injunction against the issue in England, without his license, of notes purporting'to be public paper money of Hungary. Austria v. Day, 2 Giff. 628, and 3 D. F. & J; 217 The power of' issuing chills-of credit, and' making them, at the discretion of the legislature, a tendér in ' payment , of private debts, had long been'exercised in this coun
This position is fortified by the fact that Congress is vested with the exclusive exercise of the analogous power of coining money and regulating the value of domestic and foreign coin, and also with the paramount power of regulating foreign and interstate commerce. Under the power to borrow money on the credit of the United States, and to issue circulating notes for the money borrowed, its power to define the quality and force of those notes as currency is as broad as the like power over a metallic currency under the power to coin money and to regulate the value thereof. Under the two powers, taken together, Congress is authorized to establish a national currency, either in coin or in paper, and to make that currency lawful money for all purposes, as regards the national government or private individuals.
The power of making the notes of the United States a legal tender in payment of private debts, being included in the power to borrow money and to provide a national currency, is not defeated or restricted by the fact that its exercise may affect the value of private contracts. If, upon a just and fair interpretation of the whole Constitution, a particular power or authority appears to be vested in Congress, it is no constitutional objection to its existence, or to its exercise, that the property or the contracts of individuals may be incidentally affected. The decisions of this court, already cited, afford several examples of this.
Upon the issue of stock, bonds, bills or notes of the United States, the States are deprived of their power of taxation to the extent of the property invested by individuals in' such obliga
. So, under the power to coin money and to' regulate its yalue, Congress may (as it did with regard to gold by the act of June 28th, 1834, ch. 95, and with regard to silver by the act of February 28th, 1878, ch. 20) issue coins of the same denominations as those already current by law,- but of less intrinsic value than those, by reason of containing a less weight of the precious metals, and thereby enable debtors to discharge their debts by the payment of coins of the less real value. A. contract to pay a certain sum in money, without any stipulation as to the kind of money in which it shall be paid, may always be satisfied by. payment of that sum in any currency which is lawful money at the place and time at which payment is to be made. 1 Hale P. C. 192-194; Bac. Ab. Tender, B. 2; Pothier, Contract of Sale, No. 416 ; Pardessus, Droit Commercial, Nos. 204, 205; Searight v. Calbraith,
Congress, as the legislature of a sovereign nation, being expressly-empowered by the Constitution “to lay and collect taxes, to pay the debts and provide for the common defence and general welfare of the United States,” arid “ to borrow money on the credit, of the United States,” and “ to coin money and regulate the value thereof and of foreign coin; ” and being clearly-authorized, as incidental to the exercise of those great powers, to emit bills of credit, to charter national banks, and
Such being our conclusion in matter of law, the question whether at any particular time, in war or in peace, the exigency is such, by reason Of unusual and pressing demands on the resources of the government, or of the inadequacy of the supply of gold and silver coin to furnish the currency needed for the uses of the government .and of the people, that, it is, as matter of fact, wise and expedient to resort to this means, is a political question, to be determined by Congress when the question of exigency arises, and not a judicial • question, to he afterwards passed upon by the courts. To quote once mop from the judgment in McCulloch v. Maryland: “Where the law is not prohibited, and is really calculated to effect any óf the objects entrusted to the government, to undertake here to inquire into the degree of its necessity would be to pass the line which circumscribes the judicial department, and to tread on legislative ground.”.
It follows that the act of May 31st, 1878, ch.,146, is constitutional and valid; and that the Circuit Court rightly held that the tender in treasury notes, reissued and kept in circulation under that act, was a tender of lawful money in payment of the defendant’s debt to the plaintiff.
Judgment affirmed.
Dissenting Opinion
dissenting.
From the judgment of the court in’ this case, and. from all the positions advanced ,iri its support* I dissent. The question of the power of Congress to impart the quality of legal tender to the notes of the United States, and thus make them money and a standard of valué, is not new here. Unfortunately it'’ has been too frequently before the court, and its latest decision, previous to this one, has never been entirely accepted and approved by the country. .Nor should this excite' surprise; for whenever it is declared that this government, ordained to establish justice, has the power to alter the condition of contracts between private parties, and authorize their payment or. discharge in. something different from that which the parties stipulated, thus disturbing the relations of commerce and the business of the community generally, the doctrine will not and ought not to be readily - accepted. There will .be. many who will adhere to the teachings and abide, by the faith of their fathers. So the question-has come again, and will, continue to come until it is settled so as to uphold and not impair the contracts of parties, to promote and not defeat justice.
If there be anything in the history of the Constitution which can be established with moral certainty, it is that the framers of. that instrument intended to prohibit the issue of legal tender notes both by the general government and by the States; and thus prevent interference with the contracts'of private parties. During the Revolution and. the period of the old Confederation, the Continental Congress issued bills of credit, and upon .its' recommendation the States made them a legal tender, and the refusal to receive them .an extinguishment of the debts for which they were offered. They also enacted severe penalties against those who refused to accept them at their nominal value, as equal to' coin, in exchange' for commodities. And previously, as early as January, 111% Congress had declared that, if any person should be “ so lost to all virtue and regard for his country ” as to refuse to receive in payment the biffs then issued, he should, on conviction thereof, be “deemed, published, and treated as an. enemy of his country, and pre-
Yet, this legislation proved ineffectual; the universal l'aw of currency prevailed, which makes promises of money valuable only as they are convertible into coin. ' The notes depreciated until they became valueless in the hands of their possessors. So it always will be; legislative declaration cannot make the promise of a thing the equivalent of the thing itself.
The legislation to which the States were' thus induced to resort was not confined to the attempt to make paper money a legal tender for debts; but the principle that private contracts could be legally impaired, and their obligation disregarded, being once established, other measures equally dishonest and destructive of good faith between parties Avere adopted. What followed is thus stated by Mr. Justice Story, in his Commentaries :
“ The history, indeed,” he says, “ of the various laws which were passed by the States, in their colonial and independent character, upon this subject, is startling at once to our morals, to our patriotism, and to our sense of justice. Not only Was paper money issued and declared to be a tender in payment of debts, but laAvs of another character, well known under the appellation qf tender laws, appraisement laws, instalment laws, and suspension laws, were from time to time enacted, which prostrated all private credit and all private morals. By some of these laws the due payment of debts was suspended ; debts were, in violation of the very terms of the contract, authorized to be paid by instal-ments at different periods ; property of any sort, however worthless, either real or personal, might be tendered by the debtor in payment of his debts ; and the creditor was compelled to take the property of the debtor, which he might seize on execution, at an appraisement wholly disproportionate to its known value. S.uch grievances and oppressions, and others of a like nature, were the ordinary results of legislation during the Revolutionary War and the intermediate period down to the formation of the Constitution. They entailed the most enormous evils on the country, and introduced a system of fraud, chicanery, and profligacy which destroyed all private confidence and all industry and enterprise.” 2 Story on the Constitution, § 1371.
“ The attention of the Convention, therefore,” says Chief Justice Marshall, “ was particularly directed to paper money and to acts which- enabled the debtor to discharge his debt otherwise than was stipulated in the contract. Had nothing more been intended, nothing more would have been expressed, but in the opinion of the Convention much more remained to be done. The same mischief might be effected by other means. To restore public confidence completely, it was necessary, not only to prohibit the use of particular means by which it might be effected, but to prohibit the use of any means by which the same mischief might be produced. The Convention appears to have intended to establish a great principle, that contracts should be inviolable.” Sturges v. Crowninshield, 4 Wheat. 122, 206.
It would be difficult to believe, even in the absence of the historical evidence we have on the subject, that the framers of the Constitution, profoundly impressed by the evils resulting from this kind of legislation, ever intended that the new government, ordained to establish justice, should possess the power of making its bills a legal teiider, which they were unwilling should remain, with the States, and which in the past had proved so dangerous to the peace of the community, so disturbing to the business of the people, and so destructive of their morality.
The great historian of our country has recently given to the world a history of the Convention, the result of years of labor in the examination of all public documents relating to its formation and of the recorded opinions of its framers; and thus he writes:
“ With- the full recollection of the need or seeming need of paper money in the Revolution, with the menace of danger in future time of war from its prohibition, authority to issue bills of*454 credit that should be legal tender was refused to the general government by the vote of nine States against New Jersey and Maryland. It was Madison who decided the vote of Virginia, and he has left his testimony that ‘the pretext for a paper currency, and particularly for making the bills a tender, either for public or private debts, was cut off.’ This is the interpretation of the .clause made at the time of its adoption, alike by its authors and by its opponents, accepted by all the statesmen of that age, not open to dispute because too clear f,or- argument, and never disputed so long as any one man who took part in framing the Constitution remained alive. History cannot name a man who has gained enduring honor by causing the issue of paper money. Wherever such' paper has been employed it has in every case thrown upon its authors the burden of exculpation under the plea of pressing necessity.”' Bancroft’s History of the Formation of the Constitution, 2 vol., 134.
And when the Convention-came'to the prohibition upon the States, the historian says that the clause, “ No State shall make anything but gold and silver a tender in payment of debts,” was accepted without a dissentient State:
. “ So the adoption of the Constitution,” he adds, is. to be the end forever of paper money, whether issued by the several States or by the United States, if the Constitution shall be rightly interpreted and honestly obeyed.” Id. 137.
For nearly three-quarters of a century after the adoption of the Constitution,, and until the legislation during the recent civil war, no jurist and no statesman of any position in the country ever pretended that a power to impart the quality of legal tender to its notes was vested in the general government. There is no recorded word' of even one in favor of its possessing the power. All' conceded, as an axiom ;of constitutional law, that the power did not exist.
Mr. Webster, from his first entrance into public life in 18Í2, gave great consideration to the subject of the currency, and in an elaborate speech on that- subject, made in the Senate in 1836, then sitting in this room, he said:
*455 “ Currency, in a large and perhaps just sense, includes not only gold and silver and bank bills, but bills of exchange also. It may include all that adjusts exchanges and settles balances in the operations of trade and business ; but if we understand by currency the legal money of the country, and that which constitutes a legal tender for debts, and is the standard measure of value, then undoubtedly nothing is included but gold and silver. Most unquestionably there is no legal tender, and there can be no.legal tender in this country, under the authority of this' government or any other, but gold and silver, either the coinage of our own mints or foreign coins at rates regulated by Congress. This is a constitutional principle, perfectly plain and of the highest importance. The States are expressly prohibited from making anything but gold and silver a legal tender in payment of debts, and although no such express prohibition is applied to Congress, yet, as Congress has no power granted to it-in this respect but to coin money and to regulate the value of foreign coins, it clearly has no power to substitute paper or anything else, for coin as a tender in payment of debts and in discharge of contracts. Congress has exercised this power fully in both its branches ; it has coined money, and still coins it; it has regulated the value of foreign coins, and still regulates their value. The legal tender, therefore, the constitutional standard of -value, is established and cannot be overthrown. To overthrow it would shake the whole system.” 4 Webster’s Works, 2Y1.
When the idea of imparting the legal tender quality to the notes of the United States- issued under the first act of 1882 was first broached, the advocates of the measure rested their support of it on the ground that it was a war measure, to which the country was compelled to resort by the exigencies of its condition, being then sorely pressed by the Confederate forces, and requiring the daily expenditure of enormous sums to maintain its army and navy and to carry on the government. The representative Avho introduced the bill in the House, declared that it was a measure of that nature, “ one of necessity and not of choice; ” that the times were extraordinary and that extraordinary measures must be resorted to in order to save our government and preserve our nationality. Speech of Spauld-
In the Senate also the measure was pressed for the same reasons. When the act was reported by the committee on, finance, its chairman, while opposing the legal tender provision, said:.
“ It is put on the ground of absolute, overwhelming necessity ; that the government has now arrived at that point when it must have funds, ;and those funds are not to be obtained from ordinary sources, or from any of the expedients to which we have heretofore had recourse, and therefore, this new, anomalous, and remarkable provision must be resorted to in order to enable the government to pay off the debt £hat it now owes and afford circulation which will be available for other purposes.” Cong. Globe, 1861-62, Part 1,' 764.
And upon that ground the provision was adopted, some of the senators stating that in the exigency then existing money must be had, and they, therefore,' sustained the measure, although they apprehended danger from the experiment. “ The medicine of the Constitution,” said Senator Sumner, “must not become its daily food.” Id. 800. A similar necessity was urged upon the State tribunals and this court in justification of the measure, when its validity was questioned.; The dissenting opinion in Hepburn v. Griswold referred to the pressure that was upon the government at the time to enable it to raise and support an army and to provide and maintain a navy. Chief Justice Chase, who gave the prevailing opinion in that case, also spoke of the existence of the feeling when the bill was passed that the provision was necessary. He favored the provision on that ground when Secretary of the Treasury, although he had come to that conclusion with reluctance, and recommended its adoption by Congress. When the question as to its validity reached this court, this expression of favor was referred to, and by many it was supposed that it would control his judicial action. But after lonar pondering upon the
“ It is not surprising that amid the tumult of the late civil war, and under the influence of apprehensions for the safety of the Republic almost universal, different views, never before entertained by American statesmen or jurists, were adopted by many. The time was not favorable to considerate reflection upon the constitutional limits of legislative or executive authority. If power was assumed from patriotic motives, the assumption found ready justification in patriotic hearts. Many who doubted yielded their doubts ; many who did not doubt were silent. Some who were strongly averse to making government notes a legal tender felt themselves constrained to acquiesce in the views of the advocates of the measure. Not a few who then insisted upon its necessity, or acquiesced in that view, have, since the return of peace, and under the influence of the calmer time, reconsidered their conclusions, and now concur in those which we have just announced. These conclusions seem to us' to be fully sanctioned by tbs letter and spirit of the Constitution.”8 Wall. 625 .
It must be evident, however, upon reflection, that if there were any power in the government of the United States to impart the quality of legal tender to its promissory notes, it was for Congress to determine when the necessity for its exercise existed; that war merely increased the urgency for money; it did, not add to the powers of the government nor change their nature; that if the power existed it might be equally exercised when a loan was made to meet ordinary 'expenses in time of peace as when vast sums were needed to support an army or a navy in time of war. The wants of the government could never be the measure, of its powers. But in the excitement and apprehensions of the war these considerations were unheeded; the measure was passed as one of overruling
The advocates of the measure have not been consistent in the designation of the power upon which they have supported its validity, some placing it on the power to borrow money, some on the coining power, and some have claimed it as an incident to the general powers of the government. In the present case it is placed by the court upon the power to borrow money,’and the alleged sovereignty of the United States over the currency. It is assumed that this power, when exercised by the government, is something different from what it is when exercised by corporations or individuals, and that the government has, by the legal tender provision, the power to enforce loans of money because the sovereign governments of European countries have claimed and exercised such power.
“ The words to borrow money,” says the, court, “ are not to receive that limited and restricted interpretation and meaning which they would' have in a penal statute or in an authority conferred by law or by contract' upon - trustees or agents for private purposes.” And it adds' that “the power, as incident to the power of borrowing money and issuing bills or notes of the government for money borrowed, of impressing upon those bills or notes the quality of being a legal tender for the payment of private debts, was -a power universally understood to belong to -sovereignty, in Europe and America, at the time of the framing and adoption of the Constitution of the United States. The govern*459 ments of Europe, acting through the monarch or the legislature, according to the distribution of powers under their respective constitutions, had and have as- sovereign a power of issuing paper money as of stamping coin,” and that “the exercise of this power not being prohibited to Congress by the Constitution, it is included in the power expressly granted to borrow money on the credit of the United States.”
As to the terms to borrow moneys where, I would ask, does the court find any authority for giving to them a different interpretation in the Constitution from what they receive when used in other instruments, as in the charters of municipal bodies or of private corporations, or in the contracts of individuals ? They are not ambiguous; they have a well-settled meaning in other instruments. If the court may change that in the Constitution, so it may the meaning of all other clauses ; and the powers which the government may exercise will be found declared, not by plain words in the organic law, but by words of a new significance resting in the minds of the judges. Until some authority beyond the alleged claim and practice of the. sovereign governments of Europe be produced, I. must believe that the terms have the same meaning in all instruments wherever they are used; that they mean a power only to contract for a loan of money, upon considerations to be agreed between the parties. The conditions of the loan, or whether any particular security shall be given to the lender, are matters of arrangement between the parties; they do not concern any one else. They do not imply that the borrower can give to his promise to refund the money any security to the lender outside of property or rights which he possesses. The transaction is completed when the lender parts with his money and the borrower gives his promise to pay at the time and in the manner and with the securities agreed upon. Whatever stipulations may be made, to add to the value of the promise or to secure its fulfilment, must necessarily be limited to the property, rights, and privileges which the borrower possesses. Whether lie can add to Ms promises any. element wMch will induce others
The argument presented by the advocates of legal tender is, in substance, this: The object of borrowing is to. raise funds, the addition of the quality of legal tender to the notes of tho government will induce parties to take them, and funds will thereby be more readily loaned. But the same thing may be said of the addition of any other quality which would give to the holder of the notes some advantage over the property of others, as, for instance, that the notes should serve as a pass on the public conveyances of the country, or as a ticket to places of amusement, or should exempt his property from State and municipal taxation or entitle him to tbe free use of the telegraph lines, or to a percentage from the revenues, of private corporations. The same consequence, a ready acceptance of the notes, would follow: and yet no one would pretend that the addition of privileges of this kind with respect to the property of others, over which the borrower has no control, would be in any sense an appropriate measure to the execution of the power to borrow.
Undoubtedly the power to borrow includes the power to give evidences of the loan in bonds, treasury notes, or in such other form as may be agreed between the parties. These may be issued in such amounts as will fit them for circulation, and for that purpose may be made payable to bearer, and transferable by delivery. Experience has shown that the form best fitted to secure their ready acceptance is that of notes payable to bearer, in such amounts as may suit the ability of the lender. The government, in substance, says to parties with Avhom it deals : lend us your money, or furnish us with your products or your labor, and we will ultimately pay you, and as .evidence of it we will give you our notes, in such form and amount as may suit your convenience, and enable you to transfer them; we will also receive them for certain demands due to us. In all this matter there is only a dealing between the government and the individuals who trust it. The transaction concerns no others. The power which authorizes it is a very different one from a
The power vested in Congress to coin money does not in my judgment fortify the position of the court as its opinion affirms. So far from deducing from that power any authority to impress the notes of the government with the quality of legal tender, its existence seems to me inconsistent with a power to make anything but coin a legal tender. The meaning of the terms “ to coin money ” is not at all doubtful. It is' to mould metallic substances into forms convenient for circulation and to stamp them with the impress of the government authority indicating their value with reference to the unit of value established by law. Coins are pieces of metal of definite weight and value, stamped such by the authority of the government. If any doubt could exist that the power has reference to metallic substances only it would be removed by the language which immediately follows, authorizing Congress to regulate the value of money thus coined and of foreign coin, and also by clauses making a distinction between coin and the obligations of the general government and of the States. Thus, in the clause'authorizing Congress “ to provide for the punishment of counterfeiting the securities and current coin of the-United States,” a distinction is made between the obligations and the coin of the government.
■ Money is not only a medium of exchange, but it is a standard of value. Nothing can be such standard which has not intrin
“ The circulating medium of a commercial community must be that Avhich is also the circulating medium of other commercial communities, or must be capable of being converted into that medium without loss. It must also be able, not only to pass in payments and receipts among individuals of the same society and nation, but to adjust and discharge the balance of exchanges be-tAveen different nations. It must bo something which has a value abroad as well as at home, by which foreign as well as domestic debts can be satisfied. The precious metals alone answer these purposes. They alone, therefore, are money, and Avhatever else is to perform the functions of money must be their representative, and capable of being turned into them at will. So long as bank paper retains this quality it is a substitute for money; divested of this, nothing can give it that character.” 3 Webster’s Works, 41;
The clause to coin money must be read in connection Avith the prohibition upon the States to make anything but gold and silver coin a tender in payment of debts. The two taken to
The opinion not only declares that it is in the power of Congress to make the notes of the government a legal tender and a standard of value, but that under the power to coin money and regulate the value thereof, Congress may issue coins of the same denominations as those now already current, but of less intrinsic value, by reason of containing a less weight of the precious metals, and thereby enable debtors to discharge their debts' by payment of coins of less real value. This doctrine is put forth as in some way a justification of the legislation authorizing the tender of nominal money in place of real money in payment of debts. Undoubtedly Congress has power to alter the value of coins issued, either by increasing or diminishing the alloy they contain; so it may alter, at its pleasure, their denominations; it may hereafter call a dollar an eagle, and it may call an eagle a dollar. But if it be intended to assert that Congress can make the coins changed the equivalent of those having a greater value in their previous condition, and compel parties contracting for the latter to receive coins with diminished value, I must be permitted to deny any such authority. Any such declaration on its part would be not only utterly inoperative in fact but a shameful disregard of its constitutional duty. As I said on a former occasion: “ The power to coin money, as declared by this court, is "a great trust devolved upon Congress, carrying with it the duty of creating and maintaining a uniform standard of value throughout the Union, and it would be a manifest abuse of this trust to give to the coins issued by its authority any other than their real value. By debasing the coins, when once the standard is fixed, is meant giving to the coins, by their form and impress, a certificate of their having a relation to that standard different from that which, in truth,
But beyond and above all the objections which I have stated to the decision recognizing a power in Congress to impart the legal tender quality to the notes of the government, is my objection to the rule of construction adopted by the court to reach its conclusions, a rule which fully carried out would change the whole nature of our Constitution and break down the barriers which separate a government of limited from one of unlimited powers. When the Constitution came before the conventions of the several States for adoption, apprehension existed that other powers than those- designated might be claimed ; and it led to the first ten amendments. When these were presented to the States they were preceded by a preamble stating that the conventions of a number of the States had at the time of adopting the Constitution expressed a desire, “ in order to prevent misconception or abuse of its powers, that further declaratory and restrictive clauses should be added.” One of them is found in the Tenth Amendment, which declares
There is, it is true, no provision in the Constitution of the United States forbidding in direct terms the passing of laws by Congress impairing the obligation of contracts, and there are many express powers conferred, such as the power to declare war, levy duties, and regulate commerce, the exercise of which affects more or less the value of contracts. Thus war necessarily suspends intercourse between citizens or subjects of belligerent nations, and the performance during its continuance of . previous contracts. ' The imposition of duties upon goods may affect the prices of articles imported or manufactured, so as to materially alter the value of previous contracts respecting them. But these incidental consequences arising from the exercise of .such powers were contemplated in the grant of them. As there can be no solid objection to legislation under them, no just complaint can be made of such consequences. But far different, is the case when the impairment of the contract does not follow incidentally, but is directly and in terms allowed and enacted. Legislation operating directly upon private contracts, changing their conditions, is forbidden to the States ; and no power to alter the stipulations of such contracts by direct legis
From the decision of the court I see only evil likely to follow. There have been times within the memory of all of us when the legal tender notes of the United States were not exchangeable for more than one-half of their nominal value. The possibility of such depreciation will always attend paper money. This inborn infirmity no mere legislative declaration can cure. If Congress has the power to make the notes a legal tender and to pass as money or its equivalent, why should not a sufficient amount be issued to pay the bonds of the United States as they mature ? Why pay interest on the millions .of dollars of bonds now due, when Congress can in one day make the money to pay the principal? And why should there be any restraint upon unlimited' appropriations by the government for all imaginary schemes of public improvement, if the printing press can furnish the money that is needed for them?