Perry v. United States

kеt available to the coin to which plaintiff for he claims to been entitled. Plaintiff insists have bought gold had an was intrinsic value and sold right markets. had no to resort plaintiff the world But coin, By gold' to such “ reason of the quality markets. limita- exchange,” and as medium of as a tender legal ownership, attached to its and the could tions regulate Ling use. Su prohibit exportation its its States, supra. United Fan v. question

The first submitted the Court Claims is unnecessary negative. in the to answer answered .It And, in shown, the circumstances question. second is academic also not be answered. question third need Question 1No. is answered No.” McReynolds, Van Mr. Mr. Justice Devan- Justice and Mr. Justice Butler Sutherland, ter, Mr. Justice post, p. 361. dissent. See

PERRY v. UNITED STATES.* February 18, 1935. January 11, 1935. Argued Decided No. 532. * note, p. 240. See Perry, pro M. se. Mr. Hersey Egginton

Mr. John was him the with on brief. MacLean, Angus

Mr. Assistant Solicitor General, for the opened argument United States in this case. Attorney Cummings General made a closing argument cases. preceding this the two Those who were them on the Government’s brief were with Solicitor Gen- Attorney Assistant General Biggs, Sweeney, eral Harry LeBoy Messrs. Alexander Jones. The Holtzoff brief is here summarized: Court, Messrs. Edward Gann

By leave E. filed a brief as amici curiae in sup- C. George Johnson contentions of the United States. port Hughes opinion delivered the Justice Mr. Chief the Court. from the Court Claims shows the

The certificate following facts: obligation as the owner an brought Plaintiff suit known as Fourth Lib- $10,000, States

the United Bond of 1933-1938.” This bond erty Loan Gold 4%% to the Act of pursuant September was issued amended, Treasury 288), Department (40 Stat. bond September 28, dated 1918. circular No. 347 “ principal interest hereof are provided: payable and in coin gold States of the of present United standard value.” alleged in his

Plaintiff that at the time the petition issued, acquired he it, gold bond was when a dollar in grains consisted of 25.8 of .9 fine gold ”; that the bond was called for on redemption April 15, on and, for May 24, 1934, was presented payment; plaintiff that “by 10,000 demanded its of redemption payment 25.8 gold containing grains dollars each of .9 fine gold ”; that comply defendant refused to with that demand, “ then 258,000 that plaintiff grains demanded of .9 gold of or value fine, gold equivalent any of or fineness, 16,931.25 gold containing dollars each 15 grains of 5/21 ” gold fine, 16,931.25 in legal currency .9 dollars tender ; “ that defendant refused to redeem the bond except in 10,000 of payment legal currency dollars tender ”; these refusals that were based on the Joint Resolution of of (48 June 5, 113), Stat. that but this was enactment unconstitutional as it operated to de- of prive plaintiff property process his without due of law; action of he that, defendant, this was dam- “ in aged $16,931.25, of sum the value of defendant’s which, with obligation,” interest, plaintiff demanded judgment. upon ground

Defendant demurred the petition state a cause against of action did United States. The Court Claims has certified the following questions: Is

“1. claimant, being holder and owner a Loan Liberty Fourth States, bond of the United 414% $10,000, in principal amount issued which was 15, 1934, payable April on and after and which bond a clause the principal ‘payable contained in United present States coin standard value,’ entitled from receive United States an amount in legal in currency tender excess of face amount of the bond? in a Fourth Lib- States, obligor 2. United as Is the 1933-1938, as stated bond, Series of Loan erty 4%% Question suit One, damages respond liable to contract, an express bond on such Court Claims of performance impossibility in or change by reason thereof, provisions due to the tenor in with accordance abrogating Congress, 73rd 10, Resolution No. Public of ” in obligations? all gold clause obligation. The bond suit import The First. of or of of States obligation parties, an private from differs necessarily contracts are made whose municipalities, or Congress. Nor- of subjection to dominant Co., ante, day, R. this decided man v. Baltimore & Ohio of the obligation an now before us is 240. The p. bond explicit. They The of the bond are States. terms United they were itself, in the but only expressed bond were Sep- The Act of definitely prescribed Congress. form, in its 24, original and amended 1917, tember both and the moneys borrowed, bonds authorized the to be in order of the United States” issued, “on the credit be security national expenditures meet “for the needed by law.” and other authorized public and defense purposes Treasury The circular of the Depart- 40 Stat. 503. 28, 1918, to which the bond refers of September ment of of the holders rights a the further “for statement series,” principal that the provided also bonds said coin of the in United States payable interest “are of value.” standard present must be The obligation fairly construed. “pres-

This to a ent value” stood contradistinction standard promise obviously The was in- lower value. standard That protection against protection to afford loss. tended setting secured a standard meas- sought up was be obligation. We that ure the Government’s think is that it was intended import promise reasonable money lent his to the Government assure one who through took its he suffer loss de- would not bond in the medium of preciation payment. un- Government states its brief that the total obligations

matured States interest-bearing United outstanding May 1933, (which on is understood it “ ” substantially contained a clause as that same suit,) of the bond in to about bil- twenty-one amounted bar, appears lions of From statements it dollars. at this to approximately amount has been reduced the in- present during twelve billions at the and that time, States has tervening period public debt United (making risen some billions total of approxi- seven mately millions) by hundred twenty-eight billions five millions the issue of sixteen five some billions hundred obligations.” of dollars of non-gold-clause binding obligation. Second. The The quality of question necessarily is presented whether the Joint Res olution of (48 113) June 1933 is a Stat. valid enact ment so far applies as it obligations of the United The States. Resolution provisions requiring declared that “ ” in payment or a kind of particular currency coin or “ “ were against policy,” provided and public every that or obligation, incurred, heretofore hereafter whether or not any therein,” such is contained be provision shall dis “ charged upon dollar, dollar for in coin or payment, any currency time is legal which at the of tender for payment private and debts.” This public expressly enactment was to obligations provi extended of the United States, “ in gold, contained payment any sions law author be under of izing obligations issued or authority States,” repealed.1 United were (b) of Joint 1And subdivision tbe Resolution of June § resolution, 'obligation’

1933, provided: used this the term “As obligation obligation (including every means an of and to United money currency) States, excepting payable States; the United Congress of the the power as to question no There is a mone- that to establish money, is, the value regulate of the currency to determine system tary thus can use Congress is whether country. question The obligations the terms of so as to invalidate power that in the exer- issued has theretofore the Government which of the on the credit money to borrow cise Joint justification In attempted United States. outstanding bonds of to the in relation Resolution Con- that earlier argues the Government States, United from Congress the 73rd validly restrict could gresses the value regulate powers constitutional exercising its and inter- foreign money, money, regulate borrow the Govern- premise, from this ”; and, state commerce with that proposition when, deduce the ment seems to money and borrows authority, the Government adequate to ignore it free States, credit of the United pledges the its case obligations and alter the terms of pledge finds their fulfillment inconvenient. Congress a later far question thus raises Government’s contention claim of the particular plain- than the greater importance if the terms of the Government’s reasoning, tiff. On that it be payment repudiated, can bond as to the standard of as to the amount to inevitably obligation follows that the neces- be The contention paid may repudiated. be also obliga- can sarily imports disregard that, at when of the Government its discretion tions credit the United money, the the Government borrows illusory pledge. an States is read the Constitution. There is a clear We do not so of to control Congress the the power distinction between they of when private parties interdict the contracts or authority, of constitutional interfere with the exercise its ‘ currency currency' of term coin or means coin or the and the circulating States, including 352 authority, constitutional States, with United the

When responsibilities and incurs contracts, rights it has makes are to such parties who individuals those of to simih.r Court in difference, said the There is no instruments. 15 377, 392, Pet. Metropolis, v. Bank United States of be without cannot sued States the United except 7 Wall. Acceptances, See, Floyd also, its consent. 396. In States, 389, U. S. 91 v. 666, 675; Cooke United 571, respect States, 580, 292 with U. S. Lynch v. United 20, Act of by the March 1933 attempted abrogation to an 11) outstanding of war risk insurance (48 certain Stat. States, were contracts of United policies, which in Sinking- with statement quoted approval Court Cases, “Punctilious supra, Fund and said: fulfillment is the mainte- obligations of essentiаl to contractual private as well as debtors. public nance of the credit of of econ- March, 1933, great No in need doubt there was In omy. government the administration of all business economy urgent had become because revenues lessened heavy hope issued in obligations be widespread distress. was free to reduce relieving Congress gratuities deemed excessive. But was without power to reduce expenditures by contractual abrogating obligations contracts, of the United States. To abrogate attempt lessen government expenditure, would power. respect with sanctity And to the the contracts Government, quoted, he approval, opinion with Mr. Hamilton January his (citing communication to the Senate of 1795 Works, 518, government 519), Hamilton’s that “when a enters into a individual, deposes, contract with an it as to the matter of the con- tract, authority, exchanges its constitutional the character legislator agent, for that of rights obliga- a moral with the same promises may justly tions an Its be individual. considered as legislate excepted out of its aid them. It unless theory impossible promise obliges, idea of which reconcile vary with power to make a law which can of it.” effect be not practice economy, the of but an act of repudia- tion.”

The in argument favor of the Resolution, Joint ap as plied government bonds, is substance that the Gov ernment by cannot contract restrict the of a exercise sov ereign power. But right the to make binding obligations is a competence attaching sovereignty.3 In the United States, sovereignty resides who people, through the act organs the established the Constitution. Chisholm v. 2 Georgia, Dall. 419, 471; Penhallow v. Doane’s Admin

istrators, 54, 3 Dall. 93; McCulloch v. Maryland, Wheat. 316, 404, 405; Hopkins, Yick Wo v. 118 U. 356, S. 370. The Congress as the instrumentality of sovereignty is endowed with certain powers to be exerted on behalf of the in the people manner and with the effect the Con stitution ordains. The Congress ‍‌​​​​​​‌​​​‌‌‌‌‌‌‌​‌​​‌‌‌​‌‌‌​‌‌‌‌‌‌‌‌‌​‌‌​​‌‌‌‌‍cannot invoke the sov ereign power of the people to their override will thus as declared. The powers conferred upon the are Congress harmonious. The Constitution gives to the the Congress power to borrow on money of the States, credit United an unqualified a power, power vital to the Government,—

upon which an extremity its life very may depend. The binding of the quality promise of United States is of the essence the credit pledged. which is so Having this to authorize the issue of obligations definite money payment borrowed, the Congress has not been with vested authority to alter or destroy those obli- 3Oppenheim, Law, ed., International 493, 4th vol. 494. This §§ recognized is in the field engagements. Although of international may judicial procedure by there be may no which such contracts be in the sovereign sued, enforced absence the consent of the to be engagement validly sovereign made legal state is not without force, readily appears jurisdiction if the controversy to entertain a respect with performance engagement upon is conferred an Hall, Law, 8th ed., international tribunal. 107; International § cit.; Hyde, ¿pc. Oppenheim, Law, International vol. 489. § may be The United States fact

gations. procedure a matter of which its consent is without sued its con- binding character of legal not affect does provide no duty under While tracts. contractual obligation through courts, remedies remains infirmities and, procedure, despite still exists sovereign. Lynch v. conscience binding upon 580, 582. States, supra, pp. United section, Amendment, its fourth The Fourteenth debt validity public declares: explicitly . law, . . by authorized shall not be States, United the undoubtedly was provision this While questioned.” beyond put question obliga- desire to the by the inspired War, Civil during issued the Government tions of the a connotation. We regard indicates broader its language fundamental which confirmatory principle, it as government question, as to the bonds well applies by the as those duly Congress, authorized to others we the Amendment was Nor can adopted. before issued for not expression reason any considering perceive ” public embracing what- validity debt as integrity concerns the of the public obligations. ever 5, 1933, conclude the Joint Resolution of June We far attempted obligation in so as it to override the created by suit, beyond congressional power. the bond went question The In damages.

Third. this view the of the Government’s we binding quality obligations, come question to the as to the to recover dam- plaintiff’s right ages. question. That is a distinct Because the Govern- liberty is not at ment to alter or its repudiate obliga- tions, it not does follow that the claim advanced plaintiff should be sustained. The for action is breach of contract. As a for remedy breach, can recover plaintiff no more than loss he has suffered of which he complain. may rightfully isHe to be en- not entitled

355 judgment $16,931.25, Plaintiff for in pres- riched. seeks legal currency, $10,000. on his ent tender bond extent, he has question damage is whether shown to that or as any actual the Court of has no damage, Claims an authority to entertain action for nominal damages. & States, Grant v. United Marion R. V. 7 331, 338; Wall. States,

Ry. United Co. v. 270 U. Nortz v. 280, 282; S. аnte, States, United decided day, this p. 317.

Plaintiff his computes $16,931.25 claim for by taking weight dollar as fixed by the President’s proclamation January 1934, 31, under the Act of May (48 12, 52, 53), 1933 Stat. as amended the Act of (48 January is, 342), Stat. at 15 grains 5/21 fine, nine-tenths compared with weight fixed by (31 the Act of March 45), Stat. 25.8 grains nine-tenths fine. But change the weight of the dollar did not necessarily cause loss to the plaintiff question the amount claimed. The of actual loss can fairly be determined without considering economic at the situation time Government offered to him pay $10,000, bond, the face of his in legal tender currency. gold The case not the if is same as had in coin remained That was the circulation. situation at the time of the de legal under tender cisions the of 1862 acts and 1863. Rodes, Wilson, Bronson v. 7 229, Wall. 251; Trebilcock v. 695; Thompson Butler, 687, 12 v. 696, Wall. 95 S.U. 694, the in change weight 697. Before of the in gold dollar 1934, coin had been gold withdrawn from circulation.4 had authorized prohibition of the expor tation of coin of gold placing upon and restrictions in foreign transactions of March exchange. 9, 1933, Acts 4 May Report 27, 1933, In its of it was stated the Seriate Com- “By Banking Currency: Emergency on and Banking mittee Act existing gold paid, Executive is now or Orders obtainable obligations public or payment, private.” Rep. 99, on Sen. No. Cong., 73d 1st sess. dealings Such January Stat. 337. 1; 1934, 30,

48 Stat. and under liсense. only purposes had for limited could be August 28, 1933, 1933, of April 20, Orders Executive Secretary 15, 1934; Regulations of the January action 31, 30 and 1934. That January Treasury, authority take by virtue of its entitled to Congress was exchange. of And the coin as a medium with deal gold-coin holders of was inci- imposed upon thus restraint ownership inhered their limitations to the which dent right gave Ling them no of action. Su that coin of States, 311. The Court 218 U. S. v. United Fan “Conceding the title of the owner of that case: said those ownership there is attached to such coins, yet such may require by reason public policy limitations which a medium of legal a tender and as ex- quality their as are fact that public due to the change. These limitations coinage a which does not attach as value to such gives law Their quality as consequence intrinsic value. a mere their an of law aside from bul- tender is attribute legal bear, sovereign therefore, impress They value. lion their use and fixes and authorizes which value power may be, unwise a law aimed at . . However exchange. . face of the axioms coins, such the exportation commerce, flow of there can obstructing the free against money includes doubt the power no that be coin serious from its outflow its prevent country imposi- to the reasoning aрplicable The same origin.” in foreign transactions upon exchange. of restraints tion existed, say, in view of conditions cannot We this it power, arbitrarily having exercised Congress, obligation, bond, the holder an or And capriciously. coin of the former States, payable the United upon right far the restraint export so standard, in in transactions foreign exchange to engage coin or gold gold no case than the concerned, was in better holder of coin itself. if has considering any, plaintiff what damages,

In bond, it alleged breach his is hence sustained gold that he was entitled to obtain inadmissible to assume in markets, or foreign dealings coin for recourse to for exchange, purposes contrary or other to foreign Congress which had the gold control over coin exerted, and had in its monetary regulation. to exert, not without damages regard could be assessed Plaintiff’s country at the of the time economy to the internal of gold occurred. The discontinuance alleged pay- breach legal currency establishment of tender ments and on “ ” all money unit of value with which forms of a standard “ at of the United States to be maintained a parity,” were economy. had a influence domestic controlling upon A new adjusted It was to the basis. free domestiс mar- was non-existent. ket for “ ” Plaintiff equivalent currency demands of the ” equivalent coin But mean cannot more promised. money than the the promised gold amount of which coin would be worth to the bondholder for the purposes for be That legally equivalence which it could used. or worth properly could light not be ascertained save and restricted domestic market which the had In lawfully established. the domestic transactions plaintiff which the limited, was the absence of special license, determination of the value of the gold coin would have necessarily regard legal its use tender and aas medium exchange single under a monetary system with currency an established of all parity And and coins.

view of control export foreign exchange, use, restricted domestic the question value, in rela- tion legally to transactions available to the plaintiff, would require consideration of purchasing power of which the plaintiff dollars could have received. Plain- tiff shown, attempted has show, that in relation he has buying power any sustained loss whatever. On internal adjustment in of the of the contrary,

the view by to the measure of value as established economy single avail- Congress, the of the and the universal legislation tender country legal ability throughout and use in all to the meeting engagements, рayment currency which he would appear the amount demands plaintiff of in any a sense recoupment proper to constitute not loss unjustified but an enrichment. his solely theory

Plaintiff seeks to make case upon change in by weight that reason of the dollar he is entitled to dollar and cents in the sixty-nine one present currency every promised by bond, dollar actual he regardless any respect loss has suffered with may in any transaction which his be used. We dollars think that is untenable. position

In the view that the facts alleged by petition fail to show a cause of for actual damages, ques- action the first by tion submitted the Court of Claims is answered It negative. necessary is not to answer ques- the second tion. “ Question 1 is answered No. No.” Stone, concurring.

Mr. Justice I agree that question No,” answer the first I opinion but think our should be to answering confined question and essay that that it should an answer to no other.

I do not doubt clause the Government just like that the private considered, contracts bonds, calls for payment of value money, measured stated of gold number of the standard defined in dollars Feist clause, Belge v. Société Intercommunale d’Elec tricité, ^[1934] A. C. 170-173; Serbian and Brazilian Cases, Bond P. C. I. series A., 32-34, Nos. J., 20-21, pp. In any 109-119. absence further exertion of gov power, obligation plainly еrnmental could not be dollars, either of the same number of by payment satisfied dollar of lesser weight, a measured specie paper, our or the state of their regardless purchasing due date. economy at the internal the to contend that understand Government

I do not than a obligation private the any less bound it is the to disregard that it is free it or individual would be, “ to power coin in of constitutional the exercise the except ” In any the thereof.” regulate case, value money and from apart of default the question us no is before there of gold currency. use as of the regulation "by Congress to make the stipulated the Government’s refusal While in exercise of power, a measure taken the that payment to the that its action is that disguise does not fact this As much I undertaking. a of its as repudiation extent fulfill of promise refusal to solemn bonds deplore this the I States, escape conclusion, United cannot the of the in now pre- the that the situation Court, announced for sov- the of its Government, through exercise sented, the ren- money, value of has regulate the ereign power liability for To from its action. that immune dered itself of of domes- obligation itself its it relieved extent has it of obligors has relieved bonds, precisely tic Co., & Ohio R. v. Baltimore in Norman private bonds ante, p. 240. dаy, decided this and I unnecessary, it is of case

In this posture say that undesirable, the Court undertake to think for gold of the clause Government bonds is obligation individuals, in the bonds or that private than greater manner described, some in some situation undefined, it has imposed measure restrictions in some future of the regulate exercise upon needlessly I that currency. persuaded am not we should implies obligation which that any opinion intimate example, as to serious may operate, interpose so adoption obstacle measures for stabilization think it wise to dollar, accomplish should gold by resumption payments, that dollars purpose gold other content than any ‍‌​​​​​​‌​​​‌‌‌‌‌‌‌​‌​​‌‌‌​‌‌‌​‌‌‌‌‌‌‌‌‌​‌‌​​‌‌‌‌‍less present clause, specified gold re-establishment exportation. a free market for and its free no occasion now to I doubts, There is resolve which entertain, respect to these questions. with At present they are academic. Concededly they may be transferred wholly to the realm of speculation by the exercise of the undoubted power of the Government to withdraw the privilege upon of suit its clause obligations. We have just held the Court of Claims was without States, Nortz v. United power to entertain the suit in ante, p. regardless because, the nature of obligation gold certificates, there was no Here it damage. is declared that there is no Congress, by damage because the exercise of its power the regulate currency, to has made it impos sible for the plaintiff enjoy to the benefits of gold would, payments promised by the Government. It seem that this would suffice to dispose the present case, without to attempting prejudge rights of other bond holders and the Government under other conditions may which never occur. It will not benefit this plaintiff, to whom deny we any remedy, to be assured that he has an inviolable right to performance of clause.

Moreover, if the gold clause be a gold viewed as value & contract, as it is Norman v. Baltimore Co., Ohio R. supra, it is to be noted that the Government has not pro hibited free use the bondholder of the paper money equivalent of the gold clause it obligation; is the prohi bition, by the Joint Resolution of Congress, payment of the increased number of depreciated dollars required to make up full equivalent, which alone recovery. bars In that case it seem to be would in our implicit decision at least prohibition, present situation, itself a constitutional the power regulate exercise to of money. value

I join therefore do not so much of the opinion may be suggest taken to the exercise of the sovereign рower money to borrow on which credit, does not override the sovereign immunity may from suit, nevertheless pre- clude or the exercise of another impede sovereign power, regulate value of or to money; suggest that al- there though present is and can be no cause of action upon the repudiated gold its clause, obligation is nevertheless, in some manner and to extent, some not stated, superior regulate currency which we now hold superior to be obligation of the bonds. McReynolds, Justice

Mr. Mr. Justice Van Devan- ter, Sutherland, Mr. Justice Justice Mr. Butler dissent. See below. Cases,” the four preceding Gold Clause Nor-

In viz., Co., man Baltimore & Ohio R. United States v. v. Co., ante, Bankers States, Trust Nortz v. United 240; p. ante, Perry States, United ante, p. 317; v. p. dissenting

single opinion delivered, was immediately after Perry handing down of the opinion case. It is as follows: McReynolds, dissenting.

Mr. Justice Mr. Mr. Justice Devanter, Van Justice Suther- I Mr. Justice Butler and given conclude if that, land, the challenged enactments here will effect, bring about rights property repudiation confiscation of and of national in obligations. Acquiescence just' an- decisions state- demand impossible; is circumstances nounced easy let slide “To oneself down ment of our views. and dull one’s of events to slope offered course pre- . is . . that against danger, mind extent in obligation responsibility.” fail cisely to one’s citizens regard spoliation men and repudiation Just but we asked to sovereign abhorrence; with are their accom- granted power affirm to Constitution has exists; a delegation of such plish both. No definite framers, labored farseeing and believe the who we cannot bless- establishing justice securing hope with ings expected government liberty, intended own authority obligations have to annihilate its should they endeavoring were destroy very rights which ac- is there for such protect. only permission Not no plenitude no of words they are inhibited. tions; And can them to our charter. conform delegated is and limited government one of Federal “It can powers derive from the Constitution. which only it.” claimed powers granted Powers exercise writ- and, with other granted; must be denied unless whole of the Constitution is consideration ings, the meaning any part. when to ascertain the one seeks gold clause—promise pay so-called By the present States coin standard “ United “ weight of or to the standard of value,” equal present or very many private public and fineness”—found and the debtor agrees accept the creditor obligations, equivalent. loaned or thing undertakes to return the its against one decrease Thereby protection, each secures other an against increase. currency, value of the by any new or obscure discolored The clause years citizens more than 100 our For purpose. sinister During like the War be- employed agreement. have ” States, equivalent aided payable its coin tween

363 From surmounting housetop financial difficulties. men its merits while bonds billions were proclaimed Treaty sold World War. The of Versailles support just. It in the recognized appears it as and appropriate great which have rendered our under- obligations possible railroads, buildings. takings—public-works, Under the here for interpretation accepted many years, a expresses this clause definite enforceable contract. Both use the United States have long statute approved it. again they enjoyed Over over have the added which it gave May value to their late obligations. So as 2, they public 1933 issued to the more than $650,000,000 of their notes each of which carried a solemn promise pay (Before standard coin. gold this coin day had in fact been withdrawn circulation, from but statutory measure of value gold dollar of remained 25.8 grains.)

The Permanent Court International Justice inter- preted the clause as Court had done upheld it. this Cases of Serbiаn and Brazilian Loans, Publications P. C. A, I. 20-21 J., Nos. (1929). Series It was there declared: “ prevents clause merely the borrower from availing itself a possibility discharge of the debt depreciated currency,” and The treatment as clause indicating modality mere of payment, without a gold reference to standard of value, be, would not to destroy construe but to it.”

In Feist Société v. Belge d’Electricite, Intercommunale (1934), A. C. House of Lords like expressed views.

Gregory Morris, (1878) v. 96 U. 619, 624, S. 625—last of similar causes—construed and this stipula- sanctioned In all, tion. behalf of Chief Justice Waite there said: “ The obligation secured mortgage lien under which Morris held was for the payment of gold or, coin, ‘ was said Rodes, Bronson v. an Wall. [1869] gold, to weight a of standard certain to deliver

agreement is coins, of which of each by a count be ascertained ’ weight definite of that proportion a contain certified to ‘ ,a an from to deliver contract distinguishable not and We fineness.’ ... equal bullion equal weight under it was with- circumstances, such that, think it clear, far concerned, was Gregory in of the Court so the delivery much as one for the of so contract to treat judg- a accept to and, willing if Morris was gold bullion; to have his discharged currency, in might be ment which value of according currency to estimated damages bullion.” Rodes, 7 v. 229; v. Wall. Butler

Earlier cases—Bronson 11 Sеars, v. Horwitz, 258; 379; Wall. Dewing 7 Wall. Wilson, 687; Thompson Butler, 12 Wall. v. v. Trebilcock need not be important, dissected. 95 U. S. 694—while in with them harmony opin- Morris is and v. Gregory finally definitely stated doctrine which there ion apply. we should “ say gold to clauses were intended It is true value, or measure of a definite standard and thus to afford against currency depreciation to protect obligation discharge against payment prescribed.” Furthermore, they furnish less than computing payable for the sum in if currency means unobtainable. The become borrower gold agrees should 25.8 containing grains in coin to repay gold dollar; if this cannot be secured the is to promise discharge for obligation by each dollar paying loaned cur- Thus, value of that number of rency grains. the purpose will be out. parties Irrespective carried of any .the currency, thing equivalent loaned or change an will returned—nothing more, nothing be less. The present currency promises pay dollars consists 5/21 procures gold the Government on that grains; bullion The calculation determine the damages for basis. pay gold Gregory failure to would be difficult. v. way. points Morris statutes appropriate many Under the United States certificates, in the

years following issued form: This certifies that there have been deposited Treаsury of The States of United America One Thousand Dollars payable coin the bearer on This demand. cer- tender in the amount in legal tificate is thereof payment of all debts dues and public private.” and

The certificates here involved—series 1928—were issued 6, 14, § under Act Mar. 31 1900, 47, Stat. as amended. Title 31, § See U. S. C. 429.1

In of statutory view gold direction that coin for are which certificates issued shall held be for their pay- “ ment on and used for demand no other purpose,” it argue (as seems idle to counsel for the United did) States is permissible that other use under ancient Act of 3, March 1863. various orders of

By the President and the Treasury 5 to April 28, from December 1933, persons holding gold required certificates were to deliver them, and “an accept equivalent any amount form of of coin currency or coined

1 Report, 1926, 80, 81, In his Annual Secretary Treasury of the and said: “Gold silver certificates are in fact mere ‘warehouse re ’ by ceipts exchange gold issued Government in for coin or bullion case, deposited the one in or standard deposited silver dollars in the against gold case, or or other standard silver dollars, respectively, general from fund Treasury. withdrawn of the . .. -Gold cer tificates, notes, Treasury United States notes 1890, of and Federal directly gold.” notes are reserve redeemable In his letter with the 1933, 375, Report, Annual for he showed on 30, June $1,230,717,109 against in trust gold was held certificates Treasury and Treasury of The notes of twenty dollars, not less than in denominations of therefor Treasury shall be retained the deposited coin so and the of such certificates payment demand, the on held for and See U. purpose.” 31, no S. Title C., for other and used 314, 429. §§ February 1910, 25, 192, 36 c. 4, Stat., p.

The Act of of bonds and certificates indebted- “ any directed hereafter issued shall pay- of United States be ness the coin of interest, gold and United States able, principal of value.” standard the present Orders, 5, April 20, and the April 1933, Executive By require gold coin, to owners of gold undertook President certificates, to deliver them or be- gold and on bullion, Bank, to May to a Federal Reserve and pro- 1st fore gold coin, gold of bullion or gold the exportation ‍‌​​​​​​‌​​​‌‌‌‌‌‌‌​‌​​‌‌‌​‌‌‌​‌‌‌‌‌‌‌‌‌​‌‌​​‌‌‌‌‍hibit As a the consequence certificates. United were States gold off the standard their money began and paper rapid the markets of the coin, decline world. Gold gold certificates and no gold bullion were obtain- longer “ able. Gold is now nor for paid is it available public private or payment upon debts” was declared of Treasury May statement still 27, 1933; this is gold true. All coins been into have melted bars. Adjustment Agriculturаl May 1933, Act of 12,

Stat., “An 25, pp. c. 53—entitled to relieve act emergency the national economic existing by increasing agricultural raise purchasing to revenue for power, expenses extraordinary by incurred reason of such emergency, provide emergency relief with respect agricultural indebtedness, orderly for provide liquidation joint-stock land for banks, of other pur- “ by 43 poses,” provides § that Such notes States [United other and all coins and currencies heretofore or notes] by hereafter coined or issued or authority under shall legal United States be tender all pub- debts private.” lic and Also, President proclama- “ fix may tion dollar weight ... he from finds his necessary investigation to stabilize domestic or to prices protect foreign against commerce foreign adverse effect And depreciated currencies.” further, gold dollar, such which is so weight fixed, shall be standard unit of value, and all forms money issued coined the United shall States at a parity be maintained with this standard it duty be the Treasury shall Secretary in no shall parity, weight maintain such but event dollar be fixed so as to reduce present its weight by per more than 50 centum.” Reserve of January 30, 1934, Gold Act 48 Stat., 342, 6, p. 337, ratify undertook to preceding c. Presiden- proclamations and surrender requiring gold tiаl orders 368 him of the establishing weight from prohibited

but than of.its per present “at more 60 centum gold dollar By 31, he directed January 1934, weight.” proclamation, grains the standard should contain that thereafter 6/21 26.8 (The weight fine. had been nine-tenths gold, has coined at 1837.) No such dollar been since grains any time. “a On Joint Resolution 5, 1933, passed June and currencies assure uniform value to the coins to recited that Stat., 48, p. c. 112. This United States.” and dealing public in affect the interest holding gold subject provisions are to regulation; therefore obligee right give which to obligations purport in in amount of gold any coin or payment to require thereby United measured obstruct money of the States regulate money the value of power Congress equal with the to maintain the policy are inconsistent It dollar coined or issued. declared every then value of any obligation give every provision purporting in a is require payment gold against obligee right “ every here- obligation, and directed that public policy, or not such any whether or hereafter incurred, tofore there- respect therein or made with is contained provision for dollar, dollar discharged upon to, payment, shall be payment at time of currency which any coin debts.” legal public private tender for arise аre here for decision. Two of them Four causes gold obligations containing clauses—rail- corporate out a Fourth is based on United States road bonds. One April Liberty payment Loan called bond States 1934, containing promise pay United ” interest present of value with standard coin gold certificates, series like coin. Another- involves $106,300. 1928, amounting to As to corporate the the bonds defense the is that clause destroyed by was the Resolution of June 5, 1933; and this view is sustained the by majority of the Court.

It is agreement insisted that in the Liberty Bond, pay in gold, destroyed to also was by the Act of Juxie 5, rejected 1933. This view is but majority; they to seem conclude that because of action Congress in declaring holding gold unlawful, no appreciable damage resulted when payment therein or equivalent was denied.

Concerning the if gold certificates it ruled that upon is presentation for redemption gold coin had paid been to holder, promised, he required would have been to return this He Treasury. could not have exported it or with Consequently dealt it. he no actual sustained damage. There no challenge here of power Congress ”

adopt proper Monetary Policy may such as it deem provide in order to for national necessary obligations and an adequate exchange furnish medium use. public plan under review Tender Legal Cases was within the limits of the but declared Constitution, dissent. The there strong without a conclusions an- questioned; are not now any nounced and abstract dis- Congressional cussion of over money only would befog real tend to issue.

The fundamental now problem presented is whether re- passed respect money cent statutes credits, designed legitimate to attain a were end. Or whether, monetary under the guise pursuing policy, inaugurated a Congress really plan primarily designed has obligations, national destroy private repudiate debts Treasury into all within drive the country, promises exchange for inconvertible of much pay, less value. we must conclude circumstances, all1

Considering descrip- latter is of the disclosed plan that the they show before parties deprive its enforcement would tion Consequently Constitution. under the rights of their us relief. adequate it can afford the should Court do what the will to indicate has said suffice already What been views general of our something of these causes and nature A detailed concerning presented. the intricate problems elab- require much time and of them would consideration Considering this greatly opinion. would extend oration; commerce, legitimаte result to importance also the the be an- Court’s decision should it seems desirable under- only we will Accordingly, nounced at this time. with brevity in what follows to outline our replies take majority suggest and to the conclusions reached some of reasons which lend to our support position. The authority exercised and the President in Treasury demanding all gold coin, bullion and certifi- cates is not now challenged; neither is the right prescribe former to for the standard dollar. weight These we' things have not considered. to coin Plainly, however, money and calls regulate the value thereof for legislative action.

Intelligent requires recog- dollars respecting discussion may fact that word nition refer to differ- very Formerly the things. gold ent standard dollar weighed weight now grains; prescribed 25.8 is 15 grains. 5/21 Evidently, promises to one or the other of these differ pay and this must be greatly value, kept mind. 1792 1873 gold From both the and silver were dollar and legal tender, coinage standard was free and unlimited. efforts were made to Persistent both circulation. keep prescribed Because the relation between them got out harmony exchange gold with coin values, disappeared freely country and did not in fact for circulate this to 1834. years prior During that time business trans- actions were based on In dеsiring silver. to restore re- parity bring gold back into circulation, somewhat coin weight duced (6%) exchange The equalized thus and the values. coinage changed. purpose silver dollar was not The was to restore up the use of force currency—not prices destroy apparent There was no obligations. profit to cred- Treasury. the books was done injury No none, itors; spe- The without legislation was intended. Currency. cial here. on significance Hepburn See moneys under consideration in the Legal Tender Cases, 1871, 1, May decided 457, Wall. and March 1884, 110 U. S. were promises to pay “bills dollars, “ They of credit.” were a pledge of the credit,” national promises “by Government to pay dollars,” “the standard of is not changed.” value The expectation, ulti- mately realized, was that they due time would be re- deemed standard coin. The Court careful was to show they that were issued to meet great a in time emergency when the war, overthrow of the Government was threatened and specie payments been suspended. had Both the end in view and the means employed, the Court thing held were lawful. The actually done was the issu- of bills ance endowed with the quality legal tender in carry order to on until the United States could pos- find it obligations sible to meet their in standard сoin. This accomplished in 1879. they The purpose was to meet obligations—not honorable to repudiate them.

The there opinion rendered declares—“ The legal tender not attempt acts do to make paper a standard of value. not rest We their validity do upon the assertion that their is or coinage, any emission regulation of the value money; nor we do assert Congress that may make any- is, What we do assert money. has no value

thing which government’s enact power has to being, be, the time money shall pay to promises deter- of value representative in value to equivalent What thereof.” multiples or to coinage acts mined read course, must be causes, in those said was sup- no gives The opinion the circumstances. of all light here. attempted what has been to port Congress may not heretofore ruled that has This Court to accept payment obligation the holder an require the Govern- coins, promises subsequently devalued legislation us at- before ment to in such coins. The pay very If this then a thing. permissible, tempts this gold may become the stand- containing grain one dollar on rights fall, huge profits appear ard, all contract $2,800,000,000 recently Treasury books. Instead enough can- maybe $20,000,000,000, reported, perhaps mоre! debt, maybe public cel ” “ values regulate to issue of coin bills power action, as to enlarged arbitrary so authorize cannot be necessary effect is destruc purpose whose immediate said, As this rights.2 tion of individual Court has destroy.” is not a 154 U. regulate power S. governmental The Fifth Amendment limits all 362, 398. dealing standard, here a debased We are with powers. destroy obligations. adopted purpose with definite arbitrary any within oppressive and action is not Such congressional power recognized. heretofore may society well doubted whether

2“It be the nature of and of prescribe government legislative power; does some limits any prescribed they property and if be where are to be found if the honestly may fairly acquired an individual be seized without of Peck, in Fletcher compensation.” Chief Justice Marshall 6 Cranch v. 87, 135.

373 authority of The to create tender legal obli- gations in times of peace derived from the to bor- row money; this cannot be extended to embrace the de- struction all of credits.

There in coin—specie—in general was no circulation the United States between 1862 gold and 1879. Both in The silver were treated as business commodities. Legal Tender Cases during period. arose Corporate Bonds— gold

The in and in entire сlauses these bonds were valid harmony public They with are policy when executed. property—Lynch States, 579. v. United 292 U. S. 571, destroy validly acquired taking To right is the of prop- erty—Osborn Nicholson, v. 662. es- They Wall. measure re- supply tablished a of value and a basis for if covery broken. Their purpose were policy stamped by with affirmative the Government approval in when inserted its bonds.

The intent parties clear was that case be withdrawn, standard of should and a new and one up, less valuable set the debtor could be required pay the value of the contents old standard terms of the new whether coin or If currency, paper. by declined,

measured had prevailing currency the debtor have received the Ad- Agricultural would benefit. The 12th justment May purpose Act discloses a fixed raise farm products depleting the nominal value of dollar. It re- standard authorized President standard, provided duce ‍‌​​​​​​‌​​​‌‌‌‌‌‌‌​‌​​‌‌‌​‌‌‌​‌‌‌‌‌‌‌‌‌​‌‌​​‌‌‌‌‍and further currency all forms legal should be tender. The result expected to follow was increase nominal values depreciation commodities and obligations. contractual purpose 43, incorporated by § the Senate an to the Bill, clearly amendment House was stated of was the destruction it.3 It presented Senator who lawfully acquired rights. (cid:127) of the Aсt

In the after existing just circumstances by of dollar May 12th, depreciation the standard not have decreased Presidential would proclamation obligations containing meet required amount to of the standard clauses. As to the depreciation them of in the dollars would have caused an increase number of all of General reduction debts depreciated currency. destroying first contracts by could be secured only Resolution of gold clauses; and this the evidenced directly It aimed June 5th was accomplish. undertook to had no definite relation to at those contracts and regulate the of to issue bills or to coin or value power money. out the as above shown in the carry plan

To indicated Senate, followed—January Act 1934. Reserve Gold from of fixing weight This President inhibited the existing of its then the standard dollar above 60% given had been reduction weight. (Authority 50% May of On he that 12th.) January the Act 31st directed gold. If grains contain 15 the standard should 5/21 all was the this reduction debts within 40% Congress if, necessary accomplish as a means to destroy end, power by had resolution purpose bringing This has down He said—“ amendment for its dollar, being necessary raise cheapening in order commodity part agricultural prices. . . first . being precedent has to do with conditions actiоn taken amendment later. my it prevail It will task show that if the amendment shall be may class potentialities follows: It transfer from one to another has $200,000,- value to the extent almost class these United States first, 000,000. transferred, those This value will be from who own deposits. Secondly, be transferred from who bank this value will those Cong. April Record, 1933, pp. own bonds and fixed investments.” 2004, 2216, 2217, 2219. gold clauses, the holders of corporate these' bonds are with- out remedy. But we if forget must not power that this Congress exists, may readily destroy obligations other which present obstruction to the of further desired effect depletion. The destruction of all obligations by reducing gold standard dollar to one grain of or brass or gold, nickel or or copper lead, easy will become an possibility. Thus we reach the question fundamental which must control the of result controversy respect corpo- of rate bonds. Apparently opinion majority of the gold Liberty clause bond withstood the June 5th Resolution notwithstanding definite to purpose de- We think stroy them. circumstances power destroy had no the obligations gold in private clauses The do obligations. attempt this plain was usurpation, arbitrary oppressive. validity

The oft rule which repeated statutes must be tested this—“ Let legitimate, the end be let it be within scoрe Constitution, all means which are which are appropriate, plainly adapted to that end, which not but prohibited are consistent with the letter and spirit Constitution, are constitutional.” objective The end or of the Joint Resolution was not “ The real uni- “ legitimate.” purpose was not assure value to the coins and form the United currencies States,” destroy but to certain rights. valuable contract The not recitals do with then harmonize circumstances The Act of existing. prescribed 1900 which a standard grains dollar of 25.8 in force; remained but its command all forms of money issued or coined the United shall be maintained at a parity States value with this ” obeyed. was not being currency standard Our pass- was discount; all ing at a material had sequestrated; been none attainable. The was Resolution made no provision restoring parity standard; for with the it old established no new one. into carrying appropriate was not Resolution

This clauses Congress. entrusted any power effect with the coin- interfered way in no substantial an uniform providing its or regulating value ing money many circum- with other existence, Their currency. of the in- the effect have circumscribed stances, might of it. the unwisdom and disclosed depreciation tended any granted the exercise prevent they But did any with pоlicy not inconsistent They were power. contrary assert is To declared. theretofore appropriate- must see the The Court be able enough. to de- permitted done before it can be thing ness of a statute is stroy agreements. purpose lawful recitals—certainly they are not by mere not determined of the facts evidence stated. conclusive effective, direct, if and intended re- primary Again, of valid Resolution will be the destruction of the sult here question There is no lawfully acquired. rights And cita- power. of lawful exercise indirect effect indirect effects are such upheld which opinions tions not work harm and mark. This statute does beside indirectly,” destroys directly. it Such loss to individuals is no Amendment; Fifth violates the there interference If the destruction said compensation. provision benefit, proper compensation is essen- public for the to be due clause bars process private benefit, if for tial; way. money but this cannot be has coin power Congress Congress of metal. Can possession without exercised of the compensation, without appropriation, authorize to regulate has com- Congress power necessary gold? plan approved &c. Some post roads, merce, to establish land or private destruction of A’s use or involve the may de- appropriation authorize way. May Of adequate without things payment? of these struction by the prescribed Constitu- The limitations not. course all power. exercise tion restrict the 302, supports States, v. United U. S. Su Fan Ling exportation to prevent legislature of the the power saying far from But this is compensation. without coins ordered might have destruction legislature could they or that the owners compensating without coins what- accept up to deliver them required have been 188 U. Lynah, States United In S. offered. v. ever was can If one any proposition said—“ 445, 471, this Court of this court it by the decisions considered as settled be of its the Gov- discharge in the duties although is that do so with- it cannot may property, appropriate ernment the fifth amend- cast obligation out liable to being compensation.” just paying ment of Bonds—

Government money. money; may coin also it borrow Congress may destroy other; exercised so as may be Neither ,as effect so construed to give clauses must be two borrowed can- repay money Valid contracts to to each. destroyed coinage under the by exercising power not be to majority The seem hold that the Resolu- provision. in gold of 5th not affect the clauses bonds tion June did оf United we are told that no the States. Nevertheless to holder now damage through resulted the before us the them in of pay gold desig- to one of coin the kind refusal equivalent. nated or its This amounts a declaration to take may give that the Government with one hand and Default away easy with the is thus made both other. and safe!

Congress brought about the in of respect conditions which existed Having when the matured. obligation in payment made this metal the impossible, Government if by cannot defend the had been saying obligation met the creditor have could not retained the gold; con- of damage because the nonde- he suffered no

sequently by be legally prohib- cannot avoided Obligations livery. thing receiving promised. from the creditor iting the to to standard of otherwise pay gold, was promise by thing prom- debt the value of discharge paying currency. of these was things prohibited. ised One not may escape The Government not mak- obligation of loss incident ing good repudiation by prohibiting of be- gold. Payment by fiat of kind is holding any yond recognized no power. its would be serious There difficulty in of estimating grains value 25.8 of currency now in circulation.

These bonds are held men by in many women parts they of the world; relied upon have honor. Thou our of of every sands our own degree, doubting сitizens good faith their sovereign, purchased have them. It not be easy would for this multitude to appraise the form of words which establishes they have suffered no appreciable but damage; perhaps no more for difficult them for than us. their And will difficulty not be as suaged they when reflect that ready calculation by exact loss suffered the Philippine government moved Congress satisfy it appropriating, in June 1934, $23,- 862,750.78 be paid out the Treasury of the United May States.4 And see Act 1934, 48 Stat. 817, appro- relating Philippine 4An currency Act deposit reserves on in the United States. Be it enacted Representatives Senate and House United States America in assembled, Secretary That Treasury of the and directed, authorized when the funds therefor available, are made to establish on the books the Treasury a credit Treasury Philippine favor of the Islands $23,862,750.78, being equal an amount to the increase in (resulting value from weight gold dollar) reduction of of gold equivalent of the at opening January 31, business on 1934, of of the balances main- in banks

tained at that time in the continental United by States by losses officers $7,438,000 xo meet sustained priating to appreciation countries due employees foreign and currencies their relation to the American foreign dollar.

Gold Certificates—

These were left gold contracts to return on deposit; currency. gold its value in the pay otherwise to Here the returned; was not there Gov- obligation arose of the ernment to value. The Court pay juris- its of Claims has impos- over such made it diction contracts. for the holder to receive and retain gold prom- sible him; prohibited delivery ised the statute him. The broken being obligation contract was to in cur- pay rency of 25.8 gold the value for dollar grains each by called for certificate. For the say, Government our we have violated contract but have escaped the conse- through our own would be quences statute, monstrous. obligation In matters of contractual can the Government legislate not so as excuse itself.

These words Alexander ought Hamilton to be forgotten— government When a enters into a an contract with it individual, deposes, contract, as to the matter of the its authority, constitutional exchanges the character of legislator for that a moral agent, with the same rights as an obligations individual. promises may Its be Philippine Government of the Islands for its standard fund Treasury its certificate fund less the interest received it on such balances. hereby authorized to appropriated, Sec. 2. There is be out

receipts Treasury under covered into the section 7 of the Gold Reserve 1934, by weight Act of virtue of the reduction January 1934, proclamation dollar of the President on necessary provided establish credit amount section Approved, this Act. June 1934. power out of its

justly excepted legislate, considered as to recon- impossible unless in of them. It is theory aid with a obliges, cile the idea of a which promise effect of it.” 3 Hamilton's vary make a law which can Works, 518, 519.

. questioned These views have not heretofore been here. Cases, In the Chief Sinking-Fund 99 U. S. Justice for majority Waite “The United speaking declared: much their by States are as bound contracts as are indi- If they viduals. their repudiate obligations, it is as much wrong with all repudiation, reproach term it implies, repudiator as would be if the had been State aor or a citizen. No can municipality change be made in the by grant lands, title created contract for the subsidy without the bonds, consent All corporation. indisputable.” this is And cause, in the same (731, 732) Mr. Justice Strong, speaking himself, affirmed: It is beyond as much power of a legislature, under any pretence, to alter a con- tract into which the government has pri- entered with a vate it individual, any as is for party other to a contract change its terms without the consent of the person con- tracting with him. As to its contrаct the government all its departments has laid aside its sovereignty, and it stands on the same with footing private contractors.”

Can Government, obliged though as a private per- son to observe the terms of its contracts, destroy them by legislative changes the currency statutes for- one to bidding hold the thing which it agreed has to de- liver? If an individual should undertake to annul or obligation lessen his by secreting or manipulating his assets with the intent to place them beyond the reach of creditors, the attempt would be denounced fraudulent, wholly ineffective. for the Government and railway companies

Counsel incalculable financial emphasis asserted with disaster ‍‌​​​​​​‌​​​‌‌‌‌‌‌‌​‌​​‌‌‌​‌‌‌​‌‌‌‌‌‌‌‌‌​‌‌​​‌‌‌‌‍refusal to as authorized the Con- uphold, would follow stitution, repudiation obliga- impairment private Their forecast tions and debts. discredited public is exaggeration. But, manifest whatever be the situa- may confronting it the outcome of us, attempts tion now is undertakings by legislative action; lawful destroy to uncertain disapprove think the Court should in no this we terms. challenged statutes it is said the United

Under $2,800,000,000.5 to profits amounting realized States have that gain may generated by legisla But this assumes be To such counterfeit there profits fiat. would be no tive they with each new debasement the dollar limit; would Two billions be ballooned expand. might indеfinitely— you or what twenty, thirty, will. reputation dealing Loss of honorable will bring us humiliation; unending impending legal and moral is appalling. chaos concerning plans August

5Ina radio address Treasury, of the Secretary Treasury, reported by the Commercial September 1, 1934, Financial Chronicle of stated: “ we have cash drawer in Treasury, But another in addition to working which carries our balance. the drawer This second drawer I ‘ ’ gold In very large will call the drawer. it is the $2,800,- sum of ' representing profit' resulting 000,000, change from the in the ‘ Practically profit' of the dollar. all of this Treasury content holds in the form of and silver. The rest inis other assets. propose $2,800,000,000 here to I do not subtract this from the net $4,400,000,000 national debt—thereby reducing increase figure $1,600,000,000. why And the reason I do not subtract it is present $2,800,000,000 for the this: this is under key. lock and Most it, authority Congress, segregated in stabiliza- so-called fund, present propose keep and for the tion we it there. But I call ’ your ultimately expect attention to the fact profit we ‘ this flow back into our thereby the stream of other revenues and reduce debt.” national notes and notes Federal Reserve United banking banks and national associations.” Federal Reserve of 351 Congress and the to alter power repudiate the of or the of own when engagements substance its it hаs borrowed authority under the money the which Constitution con- In to authorizing Congress fers. the borrow the money, fix amount Congress Constitution the the empowers be By borrowed the terms of payment. virtue money to borrow on credit the United States,” Congress is authorized to credit pledge that highest as an as payment stipulated,—as assurance can give, plighted assurance Government its faith. To that or say Congress ignore withdraw that may is to that contemplates assume Constitution pledge, a vain a no promise, pledge having other sanction than the pleasure and convenience of the pledgor. This Court has given conception obliga- no sanction to such a of the our tions of Government. The binding quality obligations of the of the Govern Sinking-Fund Cases, ment was considered in the 99 U. S. 719. The question the Court before those cases whether was certain action was a warranted reservation to the of the right amend charter of a railroad company. particular While the ac tion sustained right amendment, was under this Court took occasion state emphatically the obligatory character of the contracts United States. The said: “The Court United States are as much bound If their contracts are repudiate individuals. their they it is as obligations, repudiation, much with all the wrоng term as it if reproach implies, would be had a or repudiator been State a municipality a citi 2 zen.” Strong, opinion Mr. Justice who had written the majority legal (Knox 457), Lee, the Court cases tender v. Wall. Sinking-Fund Cases, p. 731, dissented 99 U. S. because he thought Congress was the action of the with the consistent legislative transgression engagement hence Government’s was

Notes

notes 1890 then outstanding 1890. did not $1,350,000. Rep. 1926, exceed about Tr. 80. designated States the United issued under laws Heavy penalties were Secretary Treasury.” of the by comply. failure to provided owner of holder of one of these certificates was That the States to gold the United deliver an express promise by statute fineness established weight and coin of the issued, or if such demand was when certificate currency holder the then value honored to pay design This was the obvious use, enough. seems clear of the contract. c. 14, 1900, 45, 47, Act March Stat., January until 31, 1934, provided: in effect amended, “ consisting twenty-five eight- dollar and That . . fine, nine-tenths . shall grains gold be the tenths value, all forms issued or money unit of standard United States be maintained at a coined shall also The standard,” with this Secre- parity value is authorized directed to receive Treasury tary ... with the Treasurer sums of deposits coin dollars, and to twenty than issue certificates not less

Case Details

Case Name: Perry v. United States

Court Name: Supreme Court of the United States

Date Published: Feb 18, 1935

Citation: 294 U.S. 330

Docket Number: 532

Court Abbreviation: SCOTUS