Delaware gazette and state journal. (Wilmington, Del.) 1883-1902, 1896-09-24
FREE SILVER and
THE NATIONAL DEBT.


City has given an elaborate legal opinion
published In the Financial Chroniclc) in
answer to the question, Would the re-
quotation Of the national debt, contem-
plated by the clause of the Chicago plat
form making the new silver dollar n
legal tender for all debts public and pri-
vate, be constitutional? His answer is
that Congress has no power under the
constitution TO pay the public debt in
silver dollars worth less than gold. and
that the creditor can compel payment in
gold. The opinion, If well founded, is so
important that it deserves careful exnmi-
nation. II Is based entirely on the fourth
section of the fourteenth amendment,
adopted in 1865:
The validity of the public debt of the
United States authorized by law, inelud-
ing debts incurred for payment of PEN
sions and bounties for services in sup
pressing insurrection or rebellion, shall
not be questioned.
This amendment seems never to have
been considered by the courts, but it is
matter Of history that its object was to
prevent Reputation of war obligations,
and whenever it has been discussed, it
has been taken to be directed against
amy attempt to weaken, impair, or violate
the obligation of government bonds.
Scaling down the debt by lowering the
value of the currency in which it is paya-
BILE is just such violation.
With regard to the suggestion often
matte that the government bonds are
coin" bonds, and hence may, at its OPP
ton, be discharged either in gold or sill
yer, there Is no difficulty in showing that
the word "coin" means gold and nothing
else. Originally, when silver was a tri-
fe more valuable than gold 1t undoubted-
uly meant either metal. at the option of
the government; but in 1873 the govern
ment itself made the gold dollar the unit
of value, and from that time to this it has
In every way in its power recognized its
liability to pay in gold, that is, in money
SIS good as that which it received. This
is what maintaining ''the parity" between
the two metals means. Finally, the legal
teuder decisions do not stand in the way,
because these cases were not contests
between the government and its creditors,
''" involved merely the rights of parties
" Sc. This is the reason why the
amendment was not considered or even
adverted to.
If, then. Congress should make any at
tempt to repudiate the debt by authoriz-
ing the payment os principal or interest
in silver dollars, the creditor would resort
to the Court of Claims, which has juris-
dictiop of contracts with the government,
and obtain redress. The decisions of the
Court of Claims are renewable by the
Supreme Court. The difficulty about this
remedy is that the Court of Claims de-
rives It's jurisdiction from the very same
Congress which is asked to furnish Il
means of reputation, and has no author.
ity by virtue of the constitution. We
may be very sure that Congress would
never pass a free-silver law without al
the same time taking away the jurisdic
tion of the Court of Claims over suits OF
the sort suggested. In other words, the
| constitutional amendment contains in It.
| self no means for its own enforcement.
But, even surprising that the matter
| might be brought in some way before the
| Supreme Court, would that court decide
| n free-silver law, in so far as ii affected
| government obligations, unconstitutional,
| IL so, we have evidently been living under
a system affecting contracts of which the
courts have failed to inform us. Accord
| ing to the decision in the legaI-tendel
cases az Wall, 457, and Juiliard VS.
Greenman Q10 U. s., 421), private con
tracts can be discharged in any currency
the government chooses to provide; nc
cording to Mr.. Dos Passos. public debt,
must be paid in gold, and the only reason
why we have not heard of this before il
that the legal-tendcr cases only affected
private debts.
But Mr.. Dos Passos is mistaken. w,
have not heard before of the theory which
he advances of distinction between pub
lie and private debts because the Suprem,
| Court has gone out of its way to repudiat t.
it. and to lay 1t down that while Congress
has no general or direct power to yiolat,
the obligation of any contract, it has
power to change the value of the cur
rency In which any contract may be dis
charged. This may sound like contra
kdiction, but that is the fault of the courts
reasoning, not ours; and whatever fore,
the reasoning has, applies to public ant
to private debts alike.
The fact is that the two are inextrica
bly, bound UP together and cannot bt
| separated. The Supreme Court ha.
never, even in the legal-tender cases, as
serted that Congress has a general right
TO inyalidate private contracts. On the
contrary, even Judge Strongs opinion
~ Wall :, 451, 429) admits that Congress.
mas no right to impair the obligation OF
private contracts except such as il gets di
rectly or by necessary implication from
some express power in the constitution
what he insisted was that 1t was neces
sarily implied in the gram of powe,
to borrow money on the credit OF
the United States;" that il a wal
was raging. the issuing of paper mon
ey and making it legal tender might be az
appropriate" exercise of the power
though it would be inappropriate al
other times" and that il this scaled dowr
every debt in the country, there could b.
no objection, because the effect on con
tracts was necessary result of the power
TO borrow money. 1t was wholly ON tn,
strength of this argument that the court
overrtiled its own decision in Hepburn
VS.. Griswold Is Wall, 603), to the effect
that the legal-tender acts were uncon
stitutional. In Juilliard VS.. Greenmar
tll0 U. s., 42D the court went a ster
further and decided that the power t1
borrow money of itself involved the rieht
10 issue paper currency and make Il
legal tender, even in time of peace. anf
that whether as a matter of fact II was
wise and expedient to use the power, wa,
political question:" to be determined
wholly by Congress, and mot a judicia
question to be afterwards passed upon b,
The courts" Up. 450. But both cases MS
sumo that the validity of private con
tracts is unquestionable by Congress. ant
| Judge StrOng's opinion contains an alubo