Court Opinion

ID: 3594309
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:42:09.675457+00
Date Added: 2024-06-11T13:58:57.104631
License: Public Domain

The notes tendered were issued under and by virtue of the act of Congress approved February 25, 1862 (Laws of U.S., vol. 12, p. 345), which authorized the Secretary of the Treasury of the United States to issue, on the credit of the United States, $150,000,000 of United States notes, not bearing interest, payable to bearer, at the treasury of the United States, in denominations not less than five dollars; and the act declares that such notes "shall be lawful money, and a legal tender in payment of all debts, public and private, within the United States," except duties on imports and interest on certain bonds of the United States.
The principal point made by the defendant's counsel is, that Congress had no authority to pass this act; and the principal questions in the case are, whether Congress has power to make anything but gold and silver coin a tender in payment of debts, or to pass any law impairing the obligation of contracts.
I agree that Congress does not possess this power, if it is not conferred upon it by the Constitution of the United States; for whatever power or authority it has is granted to it by that instrument.
The Constitution expressly confers power upon Congress "to borrow money on the credit of the United States;" "to coin money, regulate the value thereof and of foreign coin;" "to declare war, grant letters of marque and reprisal, and make rules concerning captures on land and water;" "to raise and support armies;" "to provide and maintain a navy;" "to lay and collect taxes, duties, imposts and excises, to pay the *Page 464 
debts and provide for the common defence and general welfare of the United States;" "to regulate commerce with foreign nations, and among the several States, and with the Indian tribes;" "to provide for calling forth the militia to execute the laws of the Union, suppress insurrections, and repel invasions;" and "to make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the Government of the United States, or in any department or officer thereof." (Const., art. 1, § 1.) It declares that "the United States shall guarantee to every State in this Union a republican form of government, and shall protect each of them against invasion." (Art. 4, § 4.) Also, that "this Constitution and the laws of the United States which shall be made in pursuance thereof, and all treaties made or which shall be made under the authority of the United States, shall be the supreme law of the land, and the judges in every State shall be bound thereby; anything in the constitution or laws of any State to the contrary notwithstanding." (Art. 6, sub. 2.)
The Constitution authorizes the formation or erection of new States within the jurisdiction of others; and also the formation of new States by the junction of two or more States or parts of States, by the consent of the legislatures of the States concerned as well as of the Congress. (Art. 4, § 3.) All the States (subject only to this exception) must forever remain in the Union in the same shape they were admitted. No right of secession is reserved to any State, or its citizens, by the Constitution, and none can be implied or spelled out from its provisions or history, or by the application of any principle of public law. The Union is indissoluble, except by an amendment of the Constitution, or its abrogation, in a legal manner.
The doctrine, that the Federal Constitution is but a compact between the States, and that any State can lawfully withdraw from the Union by a legislative act of such State, or a resolution of a convention of its people, needs no special notice. It is almost as absurd as the idea that the Constitution of a State is a mere compact between counties, and that a county can *Page 465 
secede from the State Government at the pleasure of the inhabitants of such county.
I have enumerated but a small number of the powers specifically granted to Congress and the Government of the United States by the Constitution. But I have mentioned enough to show that the Constitution provides a strong Government, which has the right of self-preservation against all unlawful combinations or revolutionary proceedings for its overthrow. And no one can doubt that an army and navy, as well as the militia of the several States, are lawful and constitutional means, when others are insufficient, for putting down a rebellion and preserving the Union. The authority to call forth the militia to execute the laws of the Union, suppress insurrections and repel invasions, implies no prohibition against employing the army and navy for such purposes; nor does it imply that the militia cannot be used for suppressing a rebellion as well as a mere insurrection. A contrary doctrine would make the government of the United States almost as feeble as the old Confederation was, which was abandoned by reason of its weakness.
These views are entirely consistent with all legitimate State rights. They only make such rights subordinate to certain great powers that the people granted to Congress and the national government, by the adoption of the Constitution of the United States, in order to form a more perfect union, establish justice, ensure domestic tranquillity, provide for the common defence, promote the general welfare, and secure the blessings of liberty to themselves and their posterity. (Preamble to Const.)
No State can coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts; or pass any law impairing the obligation of contracts. (Art. 1, § 10, sub. 1.) But Congress is not prohibited from doing either of these things, although it is prohibited, as well as the States, from passing any bill of attainder or ex post facto law, or granting any title of nobility. (Art. 1, §§ 9, 10.)
The colonies commenced, as early as 1703, to make their *Page 466 
notes a legal tender (see Briscoe v. The Bank of Kentucky, 11 Peters, 333-338); and there is some authority for saying that tobacco in one colony, and beaver skins in another, were once declared to be such a tender.
Some of the states, under the confederation, made their notes or bills of credit a tender in payment of debts. But such notes or bills of credit were of little value out of the particular state that issued them. (See Story on the Con., § 1371-1372.)
The fair inference from these facts is, that the states were prohibited by the Constitution from emitting bills of credit, or making anything but gold and silver coin a tender in payment of debts, and from coining money, in order to rid the country of every circulating medium or currency which had no intrinsic or legal value beyond the lines of the states that authorized it; and so Congress would provide money, or a currency, that would be of value throughout the Union. And to enable Congress to provide such a circulating medium, for all ordinary purposes, the power was expressly conferred, "to coin money, regulate the value thereof and of foreign coins."
The Constitution does not declare, in so many words, that Congress may prescribe what shall be a tender in payment of debts; but this power is included in those expressly conferred, and especially in the authority "to make all laws which shall be necessary and proper for carrying into execution" the powers enumerated in the Constitution, and the other powers vested by it "in the government of the United States, or in any department or officer thereof." And Congress has exercised such power, in respect to metallic money, from the organization of the government; and that it has rightfully exercised this power, in respect to such money, is not questioned.
But has Congress authority to make anything but gold and silver coin such a tender? The inference is very strong that, if the people had intended to deprive Congress of the power to do such an act, they would have expressly prohibited it, as well as the states, from making anything but gold and silver coin such a tender. *Page 467 
The trying times of the revolutionary struggle had taught them the evils as well as the temporary benefits that flow from the use of paper money; and if they had intended to deprive Congress of the power of making bills of credit or government notes a legal tender at any future time, it is highly probable they would have expressly inhibited such acts in the Constitution. The sagacious statesmen who framed the Constitution probably believed the United States would be one government under that instrument, until the States should contain hundreds of millions of inhabitants; and that there might be times and emergencies when there would not be sufficient gold and silver money for the maintenance of the government and the carrying on of the commercial and other dealings of the people; and that, in certain exigencies, it might be necessary and proper for Congress to make something besides such money a tender in payment of debts in order to carry into execution some of the powers expressly granted to Congress by the Constitution, and therefore omitted to prohibit Congress from doing such an act. This probability is strengthened by the limited amount of the precious metals which had been discovered when the Constitution was framed. And it is much easier to believe, the authors of the Constitution foresaw the certain increase of population in the United States and acted in reference thereto in shaping that instrument, than that they anticipated the discovery of such inexhaustible mines of gold and silver, as would at all times prevent any necessity for a paper currency.
The fact that there is no clause in the Constitution declaring, in so many words, that Congress may make anything besides gold and silver coin a tender in payment of debts, falls far short of establishing that Congress can make nothing but such coin such a tender; for it is very clear that Congress may make something besides such coin a legal tender, whenever necessary and proper for carrying into execution any power that is expressly granted to Congress by the Constitution. But whether there was a necessity for such an act, at the time the one in question was passed, requires consideration. *Page 468 
When this act was passed, the legislatures and conventions in nine States of the Union had adopted pretended ordinances of secession from the Union; and a large portion of the inhabitants of such States, if not a majority of them, were in open rebellion against the government of the United States, and at least three hundred thousand of them were armed and doing all they possibly could to overthrow such government; and their numbers were rapidly increasing.
So formidable a rebellion had never been known; and the means to be provided for its suppression were necessarily greater than any government, ancient or modern, had ever furnished suddenly for any purpose. It forebode the greatest and bloodiest civil war the world has ever seen. The very existence of the Union was imperiled and at stake; and the question that agitated all minds was, can the federal government be maintained, or must it be overthrown by the wickedest and most groundless rebellion ever organized in any age or country.
These facts show that a navy of unprecedented magnitude and an army of at least half a million of soldiers, besides the militia of the several States, were necessary to preserve the government, maintain the Constitution, and execute the laws of the Union.
Congress had the authority, and it was its duty, to provide and maintain such a navy — to raise and support such an army, and to provide for calling forth the militia. But such a navy could not be provided and maintained, or such an army raised and supported, and the expense of calling forth and supporting the militia defrayed, without adequate pecuniary means, and without the expenditure of vastly more money than could have been borrowed in coin in the entire world.
Could Congress have been justified, by the Constitution, if it had permitted the Republic to be overthrown, because enough gold and silver coin could not be borrowed to save it? I answer no; and it seems to me every person must answer this interrogatory the same way who concedes that the national government possesses the right of self preservation. *Page 469 
The Constitution plainly required Congress to pass all laws which were necessary and proper for raising, maintaining and supporting a navy and armies, large enough and powerful enough to put down the rebellion, and preserve the Union and the Constitution. And when Congress could not do all this without making the notes of the United States a legal tender in payment of private, as well as public debts, it was its duty to do that, even though the act impaired the obligation of contracts.
It seems to me to be very plain, that the Constitution authorizes Congress to pass such a law whenever necessary and proper for raising, maintaining and supporting a navy and armies to maintain the Union, preserve the Constitution and execute the laws of the United States. And the Supreme Court of the United States has decided, in McCulloch v. The State of Maryland (4 Wheat., 316), that the word necessary, in this connection, may mean needful, requisite, essential, or conducive to.
Whether the act in question was necessary and proper at the time it was passed, was for Congress to determine. But I do not doubt that it judged correctly and wisely when it determined this act was necessary and proper in view of the then existing condition of our national affairs. That it judged wisely in passing this act the astonishing success that has attended its execution fully proves. No nation has ever succeeded so well financially, in any great war, as the United States have in this, by reason of this law. All loyal citizens have prospered pecuniarily from the time it was passed. Such a thing as pecuniary distress, in the loyal states, on account of the war, or by reason of the financial measures of the government, has not been heard of.
Without this law there must have been the most terrible distress throughout the land. We should have had the most frightful intestine commotions; anarchy would have taken the place of law and order in our cities and most populous towns. And it is probable the republic itself would have been subverted ere now, or have become too weak to be respected by other nations, if this law had not been passed. *Page 470 
I cannot doubt, as the states only are prohibited by the Constitution from making anything but gold and silver coin a tender in payment of debts, or from passing any law impairing the obligation of contracts, that Congress may enact that the notes of the United States shall be a legal tender in payment of debts, and designate such notes lawful money, and also pass laws impairing the obligation of contracts, whenever such laws are necessary and proper for carrying into execution any of the powers expressly conferred upon Congress, or vested in the government of the United States by the Constitution. And as this act was necessary and proper for carrying into execution powers expressly granted to Congress by the Constitution, to wit, the powers to borrow money, to raise and support armies, to provide and maintain a navy, to provide for calling forth the militia to execute the laws of the Union and suppress insurrections, Congress had power to pass it.
This act is constitutional, because it is a means of carrying into execution the power conferred upon Congress, "to borrow money on the credit of the United States." It provides for the conversion of the notes, issued under it, into bonds of the United States, which are to be paid in coin with interest at six per cent. (U.S. Statutes at Large, vol. 12, p. 345.)
That Congress could pass this act, as a means of carrying into execution the power to borrow money, may properly be inferred from the reasoning of the judges of the federal court, who delivered the opinions in McCulloch v. The State of Maryland
(supra), and The People, ex rel. The Bank of Commerce, v.The Commissioners of Taxes of the City of New York (2 Black's U.S. Rep., 620.)
It is not probable such an act as this will ever be deemed necessary or proper in time of peace; and the one in question will undoubtedly be repealed, and the notes under it called in, and a metallic currency restored, as soon after the present rebellion shall have been suppressed, as the interest of the people shall require, or as such a course will conduce to the general welfare.
If this act impairs the obligation of contracts, it is, nevertheless, *Page 471 
valid; for Congress may pass laws, having that effect, whenever necessary and proper to carry into execution any power specifically conferred upon that branch of the government. Declarations of war and embargo acts impair the obligation of innumerable contracts; yet they are constitutional. (2 Story on the Con., §§ 1289-1293.)
I will not say this law could not be sustained on the broad ground that the government of the United States has the right of self-preservation, and that it was necessary for that purpose. Nor shall I hold that Congress was not authorized to pass it, by virtue of the power granted to it to coin money and regulate the value thereof. A very able argument has been made by one of the defendant's counsel, to show that this power authorized the passage of this law, in which he quotes from Blackstone, that "money is an universal medium, or common standard, by comparison with which the value of all merchandise may be ascertained; or it is a sign which represents the respective values of all commodities." (1 Blk. Com., 276.) But it is unnecessary to determine these questions and I will not express any opinion respecting them.
This act is not an ex post facto law. For it is well settled that the phrase "ex post facto laws," is not applicable to civil laws, but only to penal and criminal laws. (Watson v.Mercer, 8 Peters' Rep., 89.)
It can hardly be said that this act impairs the obligation of contracts, though it compels creditors to receive notes of the United States in payment of debts which they might have exacted in gold and silver coin if this law had not been passed. It certainly is not in conflict with the constitutional inhibition against depriving persons of property without due process of law. (Amend. Con., art. 5.) It does not deprive any person of property, for it makes the notes issued under it as valuable as gold coin, in the hands of every person receiving them, for all commercial purposes, and for the payment of all debts, except those for duties on imports; and this exception is too insignificant to justify a holding that the act deprives persons of property in any legal sense of the term. I of *Page 472 
course lay out of view the difference created by brokers and speculators between the value of gold coin and such notes, as having no legitimate bearing upon the question. That difference cannot be regarded, because it is not recognized by law; and all agreements to pay any such difference are utterly void.
A judgment cannot be recovered for more than one thousand dollars, besides interest, for the wrongful conversion of one thousand gold dollars, whatever premium may be paid therefor at the board of brokers in the city of New York or elsewhere; and such a judgment may be paid, dollar for dollar, in notes of the United States.
Each five dollar note, issued under this act, is precisely of the same value, in legal contemplation, as a piece of gold coin of the denomination of five dollars; and if all citizens would strictly observe this law, as they should, any person could obtain five dollars in gold coin for one of these notes at any place where such coin is to be had.
If a promissory note should now be given for one hundred dollars, for a loan of twenty of these notes, and this law should be repealed before the repayment of such loan, the person making the loan could exact one hundred dollars and interest, in gold and silver coin, in satisfaction of the debt.
This law must be judged as if every person lived up to it, and had full faith in the ability and willingness of the federal government to pay these notes in coin, and to maintain itself under all conceivable circumstances; and when it is judged in this manner, it does not deprive any person of property in any legal sense of the term.
I have not deemed it either necessary or expedient to go into the history of the Constitution, or to refer to the debates of the convention that framed it; or to cite many authorities to sustain the foregoing positions or conclusions. They seem to me to be so clearly correct, and so well grounded in good sense, that such labor is wholly unnecessary. I will, however, remark, that there is nothing in the history of the Constitution, or in the debates of the convention that framed it, or in any book of authority, in conflict with the views and conclusions *Page 473 
I have expressed. For these reasons I am of the opinion the act of Congress, approved February 25, 1862, is not repugnant to any provision of the Constitution of the United States, and is valid.
It follows that the judgment of the Supreme Court in the first case should be affirmed, and that in the second should be reversed, and one given for the plaintiff, declaring that the notes of the United States, issued under such act, were and are a legal tender in payment of the defendant's bond and mortgage, and that he deliver the same to the plaintiff to be canceled, and acknowledge satisfaction of the mortgage, and cancel the same of record, and that the plaintiff recover the costs of the appeal to this court.