The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1868-09-03
The Legal Tender Act.

From The ". Y. Evening Post
There are strong reasons for believing that
the act making United States notes a lawful
tender for the payment of debts, is legally in
consistent with the Constitution. While the
Constitution expressly forbids any State to
make anything legal tender except gold
and silver, it does not confer the power to do
SO upon Congress. Nor does such power seem
to be incident to any of the other powers ex-
pressly conferred upon Congress. If, then,
Congress has no powers except those emu
merated in the Constitution, and those which
are necessarily incident to these, will it not
follow that it cannot pass a Legal-tender act {?
A case directly involving it is now pending
in the Supreme Court of the United States.
The argument was postponed at the last term
for some reason not publicly announced; but
the case must probably be heard and decided
next winter, If the decision be that the act is
void, what will be the effect of it upon the
rights and obligations of debtors and Gre
ditors .
Il is mistake to suppose that such deci-
sion will suddenly unsettle the business of the
country. Some have supposed that IL would
destroy our banks, drive all debtors into
bankruptcy, put stop to trade for want of
metallic currency, and imperll the ultimate
solvency OF the Government. But there is no
reason to apprehend such evils from it.
In Great Britain specie payments were sus
pended during nearly the whole of the first
quarter of this century. The suspension was
an act of the Bank of England, sustained by
an "Order in Council, which had none of the
force of law, and followed by all the banks of
the kingdom. Parliament at various times
recognized the state of suspension by law; but
passed no legal tender act. The currency was
deprecated at times almost as much az our
money is now; but the force OF public oYinon
was found strong enough to regulate trade,
and the notes of the Bank of EHgland were
everywhere paid and received as the money Of
the nation, until the resumption of specie
payments.
Were the Legal-tender act repealed by Con-
gress to-day, there is no doubt that trade aud
business, the borrowing and lending of money,
and the payment of debts would 60 on as now.
Custom and public opinion would regulate the
currency practically, and quite as we'll as law
regulates it now. The chief change would be
in this, that contracts made for coin could
then be enforced according to the intention Of
the parties. Borrowers of gold or purchasers
of goods for gold, or bankers with whom gold
deposits are made, or trustees into whose handy
gold assets fall, would no longer be legally
encouraged and protected in cheating the true
owners of one-third of their money. Why
should decision that the law is unconstitu-
tional do more harm than its repeal
Such decision will necessarily be limited
in its practical effects to debts contracted
before the passage of the Legal-tender act, and
to debts since contracted which were under
stood by the parties to be payable in coin
The old debts of the State Governments, and
the old mortgages upon railroads and upor
real estates in private hands, make up the
largest part of the debts whore value would
be changed. The currency in common use
would continue to be United States notes
and bank notes exchangeable for these; bu
careful debtors would insert saving clause il
their obligations specifying that they shoulC
be payable only in the promissory notes OF tn
nation. Doubtless the effect onpublio opinion
of such a decision from an authority 30 higl
as the Supreme Court would be greatly Z
increase the anxiety for return to speoi