The New York herald., 1870-02-08
all Outstanding Debts Contracted
Before February rs, 1cS2.
TO be Paid in Coin.
The Legal Tender Act Justified as o
Special Measure During
War Times.
longresS Cannot Make Further Issues Of Green.
backs Legal Tenders.

Chase
Susan r. Hepburn ana Henry A. Hepburn rs.
Henry A. Grislcold, Ia Error to The court OF Ap-
peals or the State or Eentucky.--The question pre-
sented for determination by the record In this
case 10 whether or not the payee or assignee OF a
note made before the 25tn Of February 1862 Is
obliged by law to accept IN payment United States
notes equal II nominal amount TO the sum due, &C
cording its terms when rendered by the maker or
other party bound to pay It, and this requires IN the
drst place, construction OF that clause OF the first
section OF the act OF Congress passed on that day
which declares the United States notes. the issue
OF which authorized by the statute, 10 be legal
tender in payment or debts. The entire clause ts In
these woTds--.And such notes herein authorized
shall be receivable in payment OF all taxes internal
duties exeises. debts and demands OF every kind due
10 the United States, except duties on imports and
demands against the United states. OF every Kind
whatsoever, except for interest upon the bonds and
notes. which shall be paid IN coin; and shall also be
lawful money and legal tender in payment Of all
debts puolc or private, within the United States,
except duties on imports ana interest as aforesaid
Twelfth United States Statutes 34sl. This clause
has already received much consideration here, and
this court has held that upon sound construction
neither taxes imposed by State legislation H.ane
county Oregon, Wallace, III, nor demands upon
contracts which stipulate In terms for the
payment or delivery Of coin or bullion Bronson vs.
Rodes, wallace, 229 Butler VS.. Hartwitz, Wal
lace, 25s) included by legislative intention under
the desci ption OF debts, public and private. We
are now 10 determine whether this description en-
braces debts contracted before well as after tho
date OF the act. 1t is an established rule for the
construction OF statutes that terms employed by
the Legislature are not TO receive an Interpretation
which con1icts with acknowledged principles OF
spns N
these principles, can be given to them But this
rule cannoS prevail where the intent clear except
In the scarcely supposaole where statute sets
ut naught The panest 2recepts OF morality and social
obligation. Courts must give effect to the clearly
ascertained legislative interests if repugnant to
the fundamental law ordained IN the constitution.
Applying the rule just stated TO the act under con-
sderation there appears to be strong for
strung the word "depts' as having reference only
10 debts contracted subsequent to the enactment or
the law for no one win question that the United
States notes, which the act makes legal tender in
payment are essentially unlike in nature, and being
rredeemabe in coin necessarily unlike In value.
The lawful money then IN use and made legal
tender IL payment consisted OF gold and silver coin.
The currency IN use under the act and declared by
Its terms TO be lawful money and a Legal tender
consists OF notes or promises to pay i'm
pressed upon paper prepared IN convenient
form for circulation, and protected against
countereiting by suitable devices and penalties.
The former possess intrinsic value, determined by
the weight and nneness of the metal; the latter
have no intrinsic yalue but a purchasing value,
determined by the quantity In circulation, by gen.
eral consent TO Its currency in payments, and by
opinion to the probability OF redemption in COIN
Both derive, In different degrees, certain addi-
tiona value from their adaptation to circulation by
Yha and IN NJ
authority, and from the acts making them respec.
lively legal tender. Contracts for the payment Of
money made before the act Of 1862 had reference TO
coined money and could nor be discharged, unless
by consent, otherwise than by the tender or the
sum due in coin. Every such contract therefore, was
In legal import contract for the payment OF coin
There ia well known law OF currency that notes
or promises 10 pay, unless made conveniently or
promptly convertible into coin at the VIII or the
holder, can never, except under unusual or abnor-
NAL conditions, be at par in circulation with coin.
IL Is an equally well known law that depreciation OF
notes must increase with the increase Of the guam
tity put circulation and dlminuon Of confidence
In the ability or disposition TO redeem. Theft ap-
probation follows the reversal Of thcse conditions
No act making them legal tender can change ma
terially the operations OF these laws Their force
has been strikingy eXempl1ed the history OF the
United States notes. Beginning with very slight
depreciation when first issued In March, 1862,
they sunk in July, 1861, to the rate OF two dollars
and eighty-fve cents for dollar in gold and then
rose, until recanty, when dollar and twenty cents
In paper became equal to 4 gold dollar Admitting,
then that prior contracts are within the intention OF
the act and assuming that the act Is warranted by
the constitution, 1t follows that the holder OF q
promissory note made before the act for thousand
dollars, payable rs we have Just seen according to
coin, was required when depreciation reached Its
lowest point to accept in payment thousand note
dollars, although with the Thousand coin dollars due
under the contract he could have purchased tnat
day two thousand eight hundred and fifty such
dollars. Every payment since the passage or the oct
OF anote Of earlier date has presented similar though
less striking features.
Now, II certainly needs no argument to prove
that an act compelling acceptance IN satisfaction OF
any other than stipulated payment alters arbitrarily
the terms OF the contract and mpairs It's obligation
and that the extent Of impairment Is IN proportion
70 the inequality or the payment accepted under the
constralnJ OF the law 10 the payment due under the
contract. Nor does 1t need argument to prove that
the practical operation OF such act is contrary to
Justice and equality. 1t follows that no construction
which attributes such practical operation to an act
OF Congress is to be favored, or indeed, TO
be admitted, II any other can be reconciled
with the manifest intent Of the legislature
What, then, is that manifest intent? Are
we at liberty upon fair and reasonable
construction Of the act say that Congress meant
that the word "debs," used In the act, should not
include debts contracted prior to its passagef In
The case OF Bronson vs. Rodes We thought ourselves
warranted in holding that this word, used In tho
statute, does not include obligations created by
press contract for the payment OF gold and silver,
whether coined or in bullion. This conclusion
rested. however, mainly on the terms OF the act
which not only allow but require payments In coin
oy or to the government and may be fairly con-
sidered independently OF considerations belonging
TO the law Of contracts for the delivery OF specified
articles as sanctIonng special private contracts
Tor like payments, without which, indeed, the
provisions relating to government payments