PROHIBITIONS ON THE STATES.
§ 1347. THE
tenth section of the first article (to which we are now to proceed)
contains the prohibitions and restrictions upon the authority of the
states. Some of these, and especially those, which regard the power of
taxation, and the regulation of commerce, have already passed under
consideration; and will, therefore, be here omitted. The others will be
examined in the order of the text of the constitution.
§ 1348. The first clause is, "No
state shall enter into any treaty, alliance, or confederation; grant
letters of marque or reprisal; coin money; emit bills of credit; make any
thing but gold and silver coin a tender in payment of debts; pass any bill
of attainder, ex post facto law, or law impairing the obligation
of contracts, or grant any title of nobility." 1
§ 1349. The prohibition against
treaties, alliances, and confederations, constituted a part of the
articles of confederation, 2 and
was from thence transferred in substance into the constitution. The sound
policy, nay, the necessity of it, for the preservation of any national
government, is so obvious, as to strike the most careless mind. If every
state were at liberty to enter into any treaties, alliances, or
confederacies, with any foreign state, it would become utterly subversive
of the power confided to the national government on the same subject.
Engagements might be entered into by different states, utterly hostile to
the interests of neighbouring or distant states; and thus the internal
peace and harmony of the Union might be destroyed, or put in jeopardy. A
foundation might thus be laid for preferences, and retaliatory systems,
which would render the power of taxation, and the regulation of commerce,
by the national government, utterly futile. Besides; the intimate dangers
to the Union ought not to be overlooked, by thus nourishing within its own
bosom a perpetual source of foreign corrupt influence, which in times of
political excitement and war, might be wielded to the destruction of the
independence of the country. This, indeed, was deemed, by the authors of
the Federalist, too clear to require any illustration. 4
The corresponding clauses in the confederation were still more strong,
direct, and exact, in their language and import.
§ 1350. The prohibition to grant
letters of marque and reprisal stands upon the same general ground; for
otherwise it would be in the power of a single state to involve the whole
Union in war at its pleasure. It is true, that the granting of letters of
marque and reprisal is not always a preliminary to war, or necessarily
designed to provoke it. But in its essence, it is a hostile measure for
unredressed grievances, real or supposed; and therefore is most generally
the precursor of an appeal to arms by general hostilities. The security
(as has been justly observed) of the whole Union ought not to be suffered
to depend upon the petulance or precipitation of a single state.
5 Under the confederation there
was a like prohibition in a more limited form. According to that
instrument, no state could grant letters of marque and reprisal, until
after a declaration of war by the congress of the United States.
6 In times of peace the power was
exclusively confided to the general government. The constitution has
wisely, both in peace and war, confided the whole subject to the general
government. Uniformity is thus secured in all operations, which relate to
foreign powers; and an immediate responsibility to the nation on the part
of those, for whose conduct the nation is itself responsible.
§ 1351. The next prohibition is to coin
money. We have already seen, that the power to coin money, and regulate
the value thereof, is confided to the general government. Under the
confederation a concurrent power was left in the states, with a
restriction, that congress should have the exclusive power to regulate the
alloy, and value of the coin struck by the states. 8
In this, as in many other cases, the constitution has made a great
improvement upon the existing system. Whilst the alloy and value depended
on the general government, a right of coinage in the several states could
have no other effect, than to multiply expensive mints, and diversify the
forms and weights of the circulating coins. The latter inconvenience would
defeat one main purpose, for which the power is given to the general
government, viz. uniformity of the currency; and the former might be as
well accomplished by local mints established by the national government,
if it should ever be found inconvenient to send bullion, or old coin for
re-coinage to the central mint. 9
Such an event could scarcely occur, since the common course of commerce
throughout the United States is so rapid and so free, that bullion can
with a very slight expense be transported from one extremity of the Union
to another. A single mint only has been established, which has hitherto
been found quite adequate to all our wants. The truth is, that the
prohibition had a higher motive, the danger of the circulation of base and
spurious coin connived at for local purposes, or easily accomplished by
the ingenuity of artificers, where the coins are very various in value and
denomination, and issued from so many independent and unaccountable
authorities. This subject has, however, been already enlarged on in
another place. 10
§ 1352. The prohibition to "emit
bills of credit" cannot, perhaps, be more forcibly vindicated, than
by quoting the glowing language of the Federalist, a language justified by
that of almost every contemporary writer, and attested in its truth by
facts, from which the mind involuntarily turns away at once with disgust
and indignation. "This prohibition," says the Federalist, "must
give pleasure to every citizen in proportion to his love of justice, and
his knowledge of the true springs of public prosperity. The loss, which
America has sustained since the peace from the pestilent effects of paper
money on the necessary confidence between man and man; on the necessary
confidence in the public councils; on the industry and morals of the
people; and on the character of republican government, constitutes an
enormous debt against the states, chargeable with this unadvised measure,
which must long remain unsatisfied; or rather an accumulation of guilt,
which can be expiated no otherwise, than by a voluntary sacrifice on the
altar of justice of the power, which has been the instrument of it. In
addition to these persuasive considerations, it may be observed, that the
same reasons, which show the necessity of denying to the states the power
of regulating coin, prove with equal force, that they ought not to be at
liberty to substitute a paper medium, instead of coin. Had every
state a right to regulate the value of its coin, there might be as many
different currencies, as states; and thus the intercourse among them would
be impeded. Retrospective alterations in its value might be made; and thus
the citizens of other states be injured, and animosities be kindled among
the states themselves. The subjects of foreign powers might suffer from
the same cause; and hence the Union be discredited and embroiled by the
indiscretion of a single member. No one of these mischiefs is less
incident to a power in the states to emit paper money, than to coin gold
or silver." 11
§ 1353. The evils attendant upon the
issue of paper money by the states after the peace of 1783, here spoken
of, are equally applicable, and perhaps apply with even increased force to
the paper issues of the states and the Union during the revolutionary war.
Public, as well as private credit, was utterly prostrated. 12
The fortunes of many individuals were destroyed; and those of all persons
were greatly impaired by the rapid and unparalleled depreciation of the
paper currency during this period. In truth, the history of the paper
currency, which during the revolution was issued by congress alone, is
full of melancholy instruction. It is at once humiliating to our pride,
and disreputable to our national justice. Congress at an early period
(November, 1775,) directed an emission of bills of credit to the amount of
three millions of dollars; and declared on the face of them, that "this
bill entitles the bearer to receive — Spanish milled dollars, or the
value thereof in gold or silver, according to a resolution of congress,
passed at Philadelphia, November 29th, 1775." And they apportioned a
tax of three millions on the states, in order to pay these bills, to be
raised by the states according to their quotas at future designated
periods. The bills were directed to be receivable in payment of the taxes;
and the thirteen colonies were pledged for their redemption.
13 Other emissions were
subsequently made. The depreciation was a natural, and indeed a necessary
consequence of the fact, that there was no fund to redeem them. Congress
endeavoured to give them additional credit by declaring, that they ought
to be a tender in payment of all private and public debts; and that a
refusal to receive the tender ought to be an extinguishment of the debt,
and recommending the states to pass such tender laws. They went even
farther, and thought proper to declare, that whoever should refuse to
receive this paper in exchange for any property, as gold and silver,
should be deemed "an enemy to the liberties of these United States."
14 This course of violence and
terror, so far from aiding the circulation of the paper, led on to still
farther depreciation. New issues continued to be made, until in September,
1779, the whole emission exceeded one hundred and sixty millions of
dollars. At this time congress thought it necessary to declare, that the
issues on no account should exceed two hundred millions; and still held
out to the public the delusive hope of an ultimate redemption of the whole
at par. They indignantly repelled the idea, in a circular address, that
there could be any violation of the public faith, pledged for their
redemption; or that there did not exist ample funds to redeem them. They
indulged in still more extraordinary delusions, and ventured to recommend
paper money, as of peculiar value. "Let it be remembered," said
they, "that paper money is the only kind of money, which cannot make
to itself wings and fly away." 15
§ 1354. The states still continued to
fail in complying with the requisitions of congress to pay taxes; and
congress, notwithstanding their solemn declaration to the contrary,
increased the issue of paper money, until it amounted to the enormous sum
of upwards of three hundred millions. 16
The idea was then abandoned of any redemption at par. In March, 1780, the
states were required to bring in the bills at forty for one; and
new bills were then to be issued in lieu of them, bearing an interest of
five per cent, redeemable in six years, to be issued on the credit of the
individual states, and guaranteed by the United States. 17
This new scheme of finance was equally unavailing. Few of the old bills
were brought in; and of course few of the new were issued. At last the
continental bills became of so little value, that they ceased to
circulate; and in the course of the year 1780, they quietly died in the
hands of their possessors. 18 Thus
were redeemed the solemn pledges of the national government!
19 Thus, was a paper currency,
which was declared to be equal to gold and silver, suffered to perish in
the hands of persons compelled to take it; and the very enormity of the
wrong made the ground of an abandonment of every attempt to redress it!
§ 1355. Without doubt the melancholy
shades of this picture were deepened by the urgent distresses of the
revolutionary war, and the reluctance of the states to perform their
proper duty. And some apology, if not some justification of the
proceedings, may be found in the eventful transactions and sufferings of
those times. But the history of paper money, without any adequate funds
pledged to redeem it, and resting merely upon the pledge of the national
faith, has been in all ages and in all nations the same. It has constantly
become more and more depreciated; and in some instances has ceased from
this cause to have any circulation whatsoever, whether issued by the
irresistible edict of a despot, or by the more alluring order of a
republican congress. There is an abundance of illustrative facts scattered
over the history of those of the American colonies, who ventured upon this
pernicious scheme of raising money to supply the public wants, during
their subjection to the British crown; and in the several states, from the
declaration of independence down to the present times. Even the United
States, with almost inexhaustible resources, and with a population of
9,000,000 of inhabitants, exhibited during the late war with Great-Britain
the humiliating spectacle of treasury notes, issued and payable in a year,
remaining unredeemed, and sunk by depreciation to about half of their
§ 1356. It has been stated by a very
intelligent historian, that the first case of any issue of bills of credit
in any of the American colonies, as a substitute for money, was by
Massachusetts to pay the soldiers, who returned unexpectedly from an
unsuccessful expedition against Canada, in 1690. The debt, thus due to the
soldiers, was paid by paper notes from two shillings to ten pounds
denomination, which notes were to be received for payment of the tax,
which was to be levied, and all other payments into the treasury.
20 It is added, that they had
better credit than King James's leather money in Ireland about the same
time. But the notes could not command money, nor any commodities at money
price. 21 Being of small amount,
they were soon absorbed in the discharge of taxes. At subsequent periods
the government resorted to similar expedients. In 1714, there being a cry
of a scarcity of money, the government caused £50,000 to be issued in
bills of credit, and in 1716, £100,000 to be lent to the inhabitants
for a limited period, upon lands mortgaged by them, as security, and in
the mean time to pass as money. 22
These bills were receivable into the treasury in discharge of taxes, and
also of the mortgage debts so contracted. Other bills were afterwards
issued; and, indeed, we are informed, that, for about forty years, the
currency of the province was in much the same state, as if £100,000
sterling had been stamped on pieces of leather or paper, of various
denominations, and declared to be the money of the government, receivable
in payment of taxes, and in discharge of private debts. 23
The consequence was a very great depreciation, so that an ounce of silver,
which, in 1702, was worth six shillings and eight pence, was, in 1749,
equal to fifty shillings of this paper currency. 24
It seems, that all the other colonies, except Nova Scotia, at different
times and for various purposes, authorized the issue of paper money.
25 There was a uniform tendency to
depreciation, wherever it was persisted in. 26
§ 1357. It would seem to be obvious,
that, as the states are expressly prohibited from coining money, the
prohibition would be wholly ineffectual, if they might create a paper
currency, and circulate it as money. But, as it might become necessary for
the states to borrow money, the prohibition could not be intended to
prevent such an exercise of power, on giving to the lender a certificate
of the amount borrowed, and a promise to repay it.
§ 1358. What, then, is the true meaning
of the phrase "bills of credit" in the constitution? In its
enlarged, and perhaps in its literal sense, it may comprehend any
instrument, by which a state engages to pay money at a future day (and of
course, for which it obtains a present credit;) and thus it would include
a certificate given for money borrowed. But the language of the
constitution itself, and the mischief to be prevented, which we know from
the history of our country, equally limit the interpretation of the terms.
The word "emit" is never employed in describing those contracts,
by which a state binds itself to pay money at a future day for services
actually received, or for money borrowed for present use. Nor are
instruments, executed for such purposes, in common language denominated "bills
of credit." To emit bills of credit conveys to the mind the idea of
issuing paper, intended to circulate through the community for its
ordinary purposes, as money, which paper is redeemable at a future day.
This is the sense, in which the terms of the constitution have been
generally understood. 27 The
phrase (as we have seen) was well known, and generally used to indicate
the paper currency, issued by the states during their colonial dependence.
During the war of our revolution the paper currency issued by congress was
constantly denominated, in the acts of that body, bills of credit; and the
like appellation was applied to similar currency issued by the states. The
phrase had thus acquired a determinate and appropriate meaning. At the
time of the adoption of the constitution, bills of credit were universally
understood to signify a paper medium intended to circulate between
individuals, and between government and individuals, for the ordinary
purposes of society. Such a medium has always been liable to considerable
fluctuation. Its value is continually changing; and these changes, often
great and sudden, expose individuals to immense losses, are the sources of
ruinous speculations, and destroy all proper confidence between man and
man. 28 In no country, more than
our own, had these truths been felt in all their force. In none had more
intense suffering, or more wide spreading ruin accompanied the system. It
was, therefore, the object of the prohibition to cut up the whole mischief
by the roots, because it had been deeply felt throughout all the states,
and had deeply affected the prosperity of all. The object of the
prohibition was not to prohibit the thing, when it bore a particular name;
but to prohibit the thing, whatever form or name it might assume. If the
words are not merely empty sounds, the prohibition must comprehend the
emission of any paper medium by a state government for the purposes of
common circulation. 29 It would be
preposterous to suppose, that the constitution meant solemnly to prohibit
an issue under one denomination, leaving the power complete to issue the
same thing under another. It can never be seriously contended, that the
constitution means to prohibit names, and not things; to deal with
shadows, and to leave substances. What would be the consequence of such a
construction? That a very important act, big with great and ruinous
mischief, and on that account forbidden by words the most appropriate for
its description, might yet be performed by the substitution of a name.
That the constitution, even in one of its vital provisions, might be
openly evaded by giving a new name to an old thing. Call the thing a bill
of credit, and it is prohibited. Call the same thing a certificate, and it
is constitutional. 30
§ 1359. But it has been contended
recently, that a bill of credit, in the sense of the constitution, must be
such a one, as is, by the law of the state, made a legal tender. But the
constitution itself furnishes no countenance to this distinction. The
prohibition is general; it extends to all bills of credit, not to bills of
a particular description. And surely no one in such a case is at liberty
to interpose a restriction, which the words neither require, nor justify.
Such a construction is the less admissible, because there is in the same
clause an express and substantive prohibition of the enactment of tender
laws. If, therefore, the construction were admissible, the constitution
would be chargeable with the folly of providing against the emission of
bills of credit, which could not, in consequence of another prohibition,
have any legal existence. The Constitution considers the emission of bills
of credit, and the enactment of tender laws, as distinct operations,
independent of each other, which may be frequently performed. Both are
forbidden. To sustain the one, because it is not also the other; to say,
that bills of credit may be emitted, if they are not made a tender in
payment of debts, is, in effect, to expunge that distinct, independent
prohibition, and to read the clause, as if it had been entirely omitted.
31 No principle of interpretation
can justify such a course.
§ 1360. The history of paper money in
the American colonies and states is often referred to for the purpose of
showing, that one of its great mischiefs was its being made a legal tender
in the discharge of debts; and hence the conclusion is attempted to be
adduced, that the words of the constitution may be restrained to this
particular intent. But, if it were true, that the evils of paper money
resulted solely from its being made a tender, it would be wholly
unjustifiable on this account to narrow down the words of the
constitution, upon a mere conjecture of intent, not derivable from those
words. A particular evil may have induced a legislature to enact a law;
but no one would imagine, that its language, if general, ought to be
confined to that single case. The leading motive for a constitutional
provision may have been a particular mischief; but it may yet have been
intended to cut down all others of a like nature, leading more or less
directly to the same general injury to the country. That the making of
bills of credit a tender was the most pernicious of their characteristics,
will not authorize us to convert a general prohibition into a particular
§ 1361. But the argument itself is not
borne out by the facts. The history of our country does not prove, that it
was an essential quality of bills of credit, that they should be a tender
in payment of debts; or that this was the only mischief resulting from
them. Bills of credit were often issued by the colonies, and by the
several states afterwards, which were not made a legal tender; but were
made current, and simply receivable in discharge of taxes and other dues
to the public. 33 None of the
bills of credit, issued by congress during the whole period of the
revolution, were made a legal tender; and indeed it is questionable, if
that body possessed the constitutional authority to make them such. At all
events they never did attempt it; but recommended, (as has been seen,)
that the states should make them a tender. 34
The act of parliament of 24 Geo. 2, ch. 53, is equally strong on this
point. It prohibited any of the New-England colonies from issuing any new
paper bills, or "bills of credit," except upon the emergencies
pointed out in the act; and required those colonies to call in, and redeem
all the outstanding bills. It then proceeded to declare, that after
September, 1751, no "paper currency or bills of credit," issued,
or created in any of those colonies, should be a legal tender, with a
proviso, that nothing therein contained should be construed to extend to
make any of the bills, then subsisting, a legal tender.
§ 1362. Another suggestion has been
made; that paper currency, which has a fund assigned for its redemption by
the state, which authorizes its issue, does not constitutionally fall
within the description of "bills of credit." The latter words
(it is said) appropriately import bills drawn on credit merely,
and not bottomed upon any real or substantial fund for their redemption;
and there is a material, and well known distinction between a bill drawn
upon a fund, and one drawn upon credit only. 35
In confirmation of this reasoning, it has been said, that the emissions of
paper money by the states, previous to the adoption of the constitution,
were, properly speaking, bills of credit, not being bottomed upon any fund
constituted for their redemption, but resting solely, for that purpose,
upon the credit of the state issuing the same. But this argument has been
deemed unsatisfactory in its own nature, and not sustained by historical
facts. All bills issued by a state, whether special funds are assigned for
the redemption of them or not, are in fact issued on the credit of the
state. If these funds should from any cause fail, the bills would be still
payable by the state. If these funds should be applied to other purposes,
(as they may be by the state,) or withdrawn from the reach of the
creditor, the state is not less liable for their payment. No exclusive
credit is given, in any such case, to the fund. If a bill or check is
drawn on a fund by a private person, it is drawn also on his credit, and
if the bill is refused payment out of the fund, the drawer is still
personally responsible. Congress has, under the constitution, power to
borrow money on the credit of the United States. But it would not be less
borrowing on that credit, that funds should be pledged for the re-payment
of the loan; such, for instance, as the revenue from duties, or the
proceeds of the public lands. If these funds should fail, or be diverted,
the lender would still trust to the credit of the government. But, in
point of fact, the bills of credit, issued by the colonies and states,
were sometimes with a direct or implied pledge of funds for their
redemption. The constitution itself points out no distinction between
bills of the one sort or the other. And the act of 94 Geo. 2d. ch. 53
requires, that when bills of credit are issued by the colonies in the
emergencies therein stated, an ample and sufficient fund shall, by the
acts authorizing the issue, be established for the discharge of the same
within five years at the farthest. So, that there is positive evidence,
that the phrase, "bills of credit," was understood in the
colonies to apply to all paper money, whether funds were provided for the
repayment or not. 36
§ 1363. This subject underwent an ample
discussion in a late case. The state of Missouri, with a view to relieve
the supposed necessities of the times, authorized the establishment of
certain loan-offices to loan certain sums to the citizens of that state,
for which the borrowers were to give security by mortgage of real estate,
or personal property, redeemable in a limited period by instalments. The
loans were to be made in certificates, issued by the auditor and treasurer
of the state, of various denominations, between ten dollars and fifty
cents, all of which, on their face, purported to be receivable at the
treasury, or any of the loan offices of the state, in the discharge of
taxes or debts due to the state for the sum of — with interest for
the same at two per centum per annum. These certificates were also made
receivable in payment of all salt at the salt springs; and by all public
officers, civil and military, in discharge of their salaries and fees of
office. And it was declared, that the proceeds of the salt springs, the
interest accruing to the state, and all estates purchased under the same
act, and all debts due to the state, should be constituted a fund for the
redemption of them. The question made was, whether they were "bills
of credit," within the meaning of the constitution. It was contended,
that they were not; they were not made a legal tender, nor directed to
pass as money, or currency. They were mere evidences of loans made to the
state, for the payment of which specific and available funds were pledged.
They were merely made receivable in payment of taxes, or other debts due
to the state.
§ 1364. The majority of the Supreme
Court were of opinion, that these certificates were bills of credit within
the meaning of the constitution. Though not called bills of credit, they
were so in fact. They were designed to circulate as currency, the
certificates being to be issued in various denominations, not exceeding
ten dollars, nor less than fifty cents. Under such circumstances, it was
impossible to doubt their real character and object, as a paper currency.
They were to be emitted by the government; and they were to be gradually
withdrawn from circulation by an annual withdrawal of ten percent. It was
wholly unnecessary, that they should be declared to be a legal tender.
Indeed, so far as regarded the fees and salaries of public officers, they
were so. 37 The minority were of a
different opinion, upon various grounds. One was, that they were properly
to be deemed a loan by the state, and not designed to be a circulating
currency, and not declared to be so by the act. Another was, that they
bore on their face an interest, and for that reason varied in value every
moment of their existence, which disqualified them for the uses and
purposes of a circulating medium. Another was, that all the bills of
credit of the revolution contained a promise to pay, which these
certificates did not, but were merely redeemable in discharge of taxes, &c.
Another was, that they were not issued upon the mere credit of the state;
but funds were pledged for their redemption. Another was, that they were
not declared to be a legal tender. Another was, that their circulation was
not enforced by statutory provisions. No creditor was under any obligation
to receive them. In their nature and character, they were not calculated
to produce any of the evils, which the paper money issued in the
revolution did, and which the constitution intended to guard against.
§ 1365. The next prohibition is, that
no state shall "make any thing but gold and silver coin, a tender in
payment of debts." This clause was manifestly founded in the same
general policy, which procured the adoption of the preceding clause. The
history, indeed, 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 laws of another character, well known under the appellation of
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 instalments 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. 42
Such grievances, and oppressions, and others of a like nature, were the
ordinary results of legislation during the revolutionary war, and the
intermediate period down to the formation of the constitution. They
entailed the most enormous evils on the country; and introduced a system
of fraud, chicanery, and profligacy, which destroyed all private
confidence, and all industry and enterprise. 43
§ 1366. It is manifest, that all these
prohibitory clauses, as to coining money, emitting bills of credit, and
tendering any thing, but gold and silver, in payment of debts, are founded
upon the same general policy, and result from the same general
considerations. The policy is, to provide a fixed and uniform value
throughout the United States, by which commercial and other dealings of
the citizens, as well as the monied transactions of the government, might
be regulated. For it may well be asked, why vest in congress the power to
establish a uniform standard of value, if the states might use the same
means, and thus defeat the uniformity of the standard, and consequently
the standard itself? And why establish a standard at all for the
government of the various contracts, which might be entered into, if those
contracts might afterwards be discharged by a different standard, or by
that, which is not money, under the authority of state tender laws? All
these prohibitions are, therefore, entirely homogeneous, and are essential
to the establishment of a uniform standard of value in the formation and
discharge of contracts. For this reason, as well as others derived from
the phraseology employed, the prohibition of state tender laws will admit
of no construction confining it to state laws, which have a retrospective
operation. 44 Accordingly, it has
been uniformly held, that the prohibition applies to all future laws on
the subject of tender; and therefore no state legislature can provide,
that future pecuniary contracts may be discharged by any thing, but gold
and silver coin. 45
§ 1367. The next prohibition is, that
no state shall "pass any bill of attainder, ex post facto
law, or law inpairing the obligation of contracts." The two former
require no commentary, beyond what has been already offered, under a
similar prohibitory clause applied to the government of the United States.
The same policy and principles apply to each. 46
It would have been utterly useless, if not absurd, to deny a power to the
Union, which might at the same time be applied by the states, to purposes
equally mischievous, and tyrannical; and which might, when applied by the
states, be for the very purpose of subverting the Union. Before the
constitution of the United States was adopted, every state, unless
prohibited by its own constitution, might pass a bill of attainder, or
ex post facto law, as a general result of its sovereign
legislative power. And such a prohibition would not be implied from a
constitutional provision, that the legislative, executive, and judiciary
departments shall be separate, and distinct; that crimes shall be tried in
the county, where they are committed; or that the trial by jury shall
remain inviolate. The power to pass such laws would still remain, at least
so far as respects crimes committed without the state. 47
During the revolutionary war, bills of attainder, and ex post facto
acts of confiscation, were passed to a wide extent; and the evils
resulting therefrom were supposed, in times of more cool reflection, to
have far outweighed any imagined good.
1. In the original draft of the
constitution, some of these prohibitory clauses wore not inserted; and,
particularly, the last clause, prohibiting a state to pass any bill of
attainder, ex post facto law, or law impairing the obligation of
contracts. The former part was inserted by a vote of seven states against
three. The latter was inserted in the revised draft of the constitution,
and adopted at the close of the convention, whether with, or without
opposition, does not appear. 3 It
was probably suggested by the clause in the ordinance of 1787, (Art. 2,)
which declared, "that no law ought to be made, &c., that shall
interfere with, or affect private contracts, or engagements, bonâ
fide, and without fraud, previously formed."
2. Art. 6.
3. Journal of Convention, p. 227,
302, 377, 379.
4. The Federalist, No. 44.
5. 1 Tucker's Black. Comm. App. 310,
6. Article 6.
7. The Federalist, No. 44; Rawle on
Constitution, ch. 10, p. 136.
8. Article 9.
9. The Federalist, No. 44.
10. 1 Tuck. Black. Comm. App. 311,
312; Id. 261. Ante, Vol. 3, p. 16 to 20.
11. The Federalist, No. 44; 2
Elliot's Debates, 83. — See in Mr. Webster's Speeches on the Bank of
United States, in Senate, 25th and 28th of May, 1832, some cogent remarks
on the same subject. See also Mr. Madison's Letter to Mr. C.J. Ingersoll,
2d of February, 1811.
12. See Sturgis v. Crowninshield,
4 Wheat. R. 204, 205.
13. 1 Journal of Congress, 1775, p.
186, 280, 304.
14. 2 Journal of Congress, 11th
January, 1776, p. 21; 14th January, 1777; 3 Journal of Congress, p. 19,
20; 2 Pitk. Hist. ch. 16, p. 155, 156.
15. See 4 Journal of Congress, 9th
Dec. 1778, p. 742, and 5 Journal or Congress, 13th Sept. 1779, p. 341 to
353; 2 Pitk. Hist. ch. 16, p. 156, 157.
16. In the American Almanac for
1830, p. 183, the aggregate amount is given at 357,000,000 of the old
emission, and 2,000,000 of the new emission; upon which the writer adds, "there
was an average depreciation of two thirds of its original value." Mr.
Jefferson has given an interesting account of the history of paper money
during the revolution, in an article written for the Encyclopédia Méthodique.
1 Jefferson's Corresp. 398, 401, 411, 412.
17. 6 Journal of Convention, 18th
March, 1780, p. 45 to 48.
18. 2 Pitkin's Hist. ch. 16, p. 156,
157; 1 Jefferson's Corresp. 401, 402, 411, 412.
19. The twelfth article of the
confederation declare, "that all bills of credit emitted, &c. by
or under the authority of congress, &c. shall be deemed and
considered, as a charge against the United States, for payment and
satisfaction whereof the said United States and the public faith are
hereby solemnly pledged." When was this pledge redeemed? The act of
congress of 1790, ch. 61, for the liquidation of the public debt, directs
bills of credit to be estimated at the rate of one hundred dollars for one
dollar in specie. In Mr. Secretary Hamilton's Report on the public debt
and credit in January, 1790, the unliquidated part of the public debt,
consisting chiefly of continental bills of credit, was estimated at two
millions of dollars. What was the nominal amount of the bills of credit,
which this sum of two millions was designed to cover at its specie value,
does not appear in the Report. But in the debates in congress, upon the
bill founded on it, it was asserted, that it was calculated, that there
were about 78 or 80 millions of paper money then outstanding, valued at a
depreciation of 40 for 1. 3 Lloyd's Deb. 282, 283, 288.
20. 1 Hutch. Hist. ch. 3, p. 402.
22. 1 Hutch. Hist. ch. 3, p. 403,
note; 2 Hutch. Hist. 208, 245, and note; Id. 380, 381, 403, 404.
23. 1 Hutch. Hist. ch. 3, p. 402,
403, and note ibid.
24. Ibid. — Hutchinson says,
that, in 1747, the currency had sunk to sixty shillings for an ounce of
silver. 2 Hutch. Hist. 438.
25. 1 Hutch. Hist. ch. 3, p. 402
403, and note ibid.
26. 4 Peters's Sup. Ct. R. 435.
27. Craig v. State of Missouri,
4 Peters's Sup. Ct. R. 410, 432.
28. Craig v. State of Missouri,
4 Peters's Sup. Ct. R. 432, 441, 442.
29. Craig v. State of Missouri,
4 Peters's Sup. Ct. R. 432, 441, 442.
30. Id. 432, 433, 441, 442, 443. An
act of parliament was passed, (24 Geo. 2, ch. 53,) regulating and
restraining the issues of paper money and bills of credit in the
New-England colonies, in which the language used demonstrates, that bills
of credit was a phrase constantly used and understood, as equivalent to
paper money. The prohibitory clauses forbid the issue of "any paper
bills, or bills of credit of any kind, or denomination whatsoever," &c.,
and constantly speak of "paper bills or bills of credit," as
equivalents. See Deering v. Parker, 4 Dell. (July 1760,) p. xiii.
31. Craig v. State of Missouri,
4 Peters's Sup. Ct. R. 433, 434.
32. Craig v. State of Missouri,
4 Peters's Sup. Ct. R. 433, 434.
33. The bills of credit issued by
Massachusetts in 1690 (the first ever issued in any colony) were in the
following form: "No. — , 10s. This indented bill of ten
shillings, due from the Massachusetts Colony to the possessor, shall be in
value equal to money, and shall be accordingly accepted by the treasurer,
and receivers subordinate to him, in all public payments, and for any
stock at any time in the treasury, Boston, in New-England, Dec. the 10th,
1690. By order of the General Court: Peter Townsend, Adam Winthrop, Tim.
Thornton, Committee." So, that it was not, in any sense, a tender,
except in discharge of public debts. 3 Mass. Hist. Collections, (2d
series,) p. 260, 261. The bills of credit of Connecticut, passed before
the revolution, were of the same general character and operation. They
were not made a tender in payment of private debts. The emission of them
was begun in 1709, and continued, at least, for nearly a half century. The
acts, authorizing the emission, generally contained a clause for raising a
tax to redeem them.
34. Craig v. State of Missouri,
4 Peters's Sup. Ct. R. 434, 435, 436, 442, 443.
35. Craig v. State of Missouri,
4 Peters's Sup. Ct. R. 447.
36. See 2 Hutch. Hist. 208, 381.
37. Craig v. The State of
Missouri, 4 Peters's Sup. Ct. R. 410, 425 to 438.
38. Some of these grounds apply
equally to some of the "bills of credit," issued by the
colonies. In fact, these certificates seem to have differed in few, if any
essential circumstances, from those issued by the Province of
Massachusetts in 1714 and 1716, and had the same general objects in view
by the same means, viz. to make temporary loans to the inhabitants to
relieve their wants by an issue of paper money. 39
The bills of credit issued by congress in 1780 were payable with interest.
So were the treasury notes issued by congress in the late war with Great
Britain. Yet both circulated and were designed to circulate as currency.
The bills of credit issued by congress in the revolution were not made a
legal tender. 40 It has also been
already seen, that the first bills of credit ever issued in America, in
1690, contained no promise of payment by the state, and were simply
receivable in discharge of public dues. 41
Mr. Jefferson, in the first volume of his Correspondence, (p. 401, 402,)
has given a succinct history of paper money in America, especially in the
revolution. It is a sad but instructive account.
39. 1 Hutch. History, 402, 403, and
note; 2 Hutch. History, 208.
40. Ante, § 1361.
41. 3 Mass. Hist. Collection, (2d
series) 260, 261. Ante, § 1353, 1361. See 4 Mass. Hist. Coll. (2d
42. 3 Elliot's Debates, 144.
43. See Sturgis v. Crowninshield,
4 Wheat. R. 204.
44. Ogden v. Saunders, 12
Wheat R. 265, per Washington J.
45. Ogden v. Saunders, 12
Wheat. R. 265, 269, 288, 289, 305, 306, 328, 335, 336, 339.
46. See The Federalist, No. 44, 84.
47. Cooper v. Telfair, 4
Dall R. 14; S. C. 1 Peters's Cond. R. 211.
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