Year: 1863

1t is known to our readers that Congress, by its
recent legislation, has perfected the policy neces
sary for the Inauguration of the National Banking
system recommended by Mr.. Secretary CHASE
And it would seem that the new banking law if it
goes into operation, will at be subjected to ju-
Commerce quotes the following from the annual
report of Mr. III. II. Van Dyck, the present super
intendent of the Banking Department of New York,
made to the Legislature and just published:


Whatever may be the action Of Congress the pre-
misses have full faith that the Legislature of New York
will protect it's honor and the interests of
stituency with dignity and frmness Under the existing
laws no association person ISSUE within this State
notes TO circulate money without depong the required
securities in this department Without legislative nsruc-
ton to the contrary, it will bs my duty, during my
tnuance In Office to enforce this provision against all
Citations or individuals claiming authority from any other
source lfoccasion require shall not hesitate to bring
the question to the test of Judicial decision that may
learn authoritativey what powers local institutions
are still left to the States"


There would perhaps be some advantage result
ing from such question as Mr.. Van Dyck threat
ems to bring up, for it would lead to re-examina-
tion of some very important disputed points as to
the respective powers of the General and State Co
vernments in the matter of currency. Several
questions under this head have been previously de-
cided by the highest judicial tribunal in the coun-
try, but it may be doubted whether defnitive con-
cusiops have been reached on all branches of this
delicate and important subject.


Iu the year 1919, in the case of Nc Cul och vs.
the State Of Maryland, it was decided that the
States had no right to tax the issues of the Bank
of the United States. Judge Story did not over
estimate the bearing of this important decision
when he held that Gin political point of view"
it was of the deepest consequence to the naton be-
cause it tended /" to establish the Constitution upon
its great original principles" in respect to the ma
tonal currency


1t is known that Judge Story was clear in the
opinion that, under the Constitution, the States
have right to tissue bills of oredi in the shape
of bank bills uttered by State authority. In the
case of Briscoe the Bank Of the Commonwealth
act Of the Legislature of Kentucky, establishing
this State Bank and authorizing it to issue bank
notes in the usual FORM was unconstitutional, be-
cause infringing the clause of the Constitution
which declares that no State shall "emit bills of
credit" or make any thing but gold and silver
coin tender in payment of debts"


1t is known that in this case the court held (Mr.
Justice Mclean delivering the opinion) that the
act of incorporation was constitutional and that to
constitute !" bill of credit" in the sense excluded
by the Constitution, it must be issued directly by
State in its own name, and contain a pledge of
its faith and be designed to circulate as money.


In this case Judge Story delivered separate
opinion, dissenting from the decision of the court
In the course of his argument he went into his
to1ical review of the origin and significance of the
term " bill of credit" as it was known in colonial
times and during the period of the Revolutionary
war, for the purpose of proving that ebill Of
credit" as the term is employed by the trainers OF
the Constitution, "signifes paper medium in
tended to circulate between individuals and be-
tween Government and individuals for the ordinary
purposes Of society" According to the definition
of the term given by Chief Justice Marshall in the
case of Craig VS.. The State of Missouri, Judge Sto
ry maintained it was not essential that such bank
bills should be legal tender, that they should
contain any express promise by the State to pay
them, which credit is given nor that they should
be issued directly by the State in its own name.
He, therefore, held that the issues of the Bank of
the Commonwealth of Kentucky, under the charter
it had received from the State, were "bils of Gre
dit," and, as such, unconstitutional.


We do not know how far the same constitutional
questions as to the respective powers of the State
and Federal Governments over the currency of the
country will come up for review under the recent
acts of Congress, but whatever shape they may
sumo they will be exceedingly important and
delicate.