Case: STATE OF MASSACHUSETTS v. THE UNITED STATES
Abbreviation: Massachusetts v. United States
Decision Date: 1917-04-09
Docket Number: No. 33632
Citation: 52 Ct. Cl. 311
Volume: 52
Reporter: United States Court of Claims Reports
Court: United States Court of Claims
Jurisdiction: United States
Parties: STATE OF MASSACHUSETTS v. THE UNITED STATES.
Judges: Hat, Judge, DowNet, Judge, Booth, Judge, and Campbell, GTiief Justice, concur.
Pages: 311–327

Head Matter:
STATE OF MASSACHUSETTS v. THE UNITED STATES.
[No. 33632.
Decided April 9, 1917.]
On the Proofs.
War expenditures, reimbursement of. — This is a claim for th,e recovery by the State under the special , jurisdictional act, 39 Stats., 355, of (1) premium paid for coin with which it paid interest and principal of its bonds issued in 1861 for money borrowed and used to furnish troops for the service of the United States; and (2) interest, and premium paid for coin in payment of such interest, on bonds issued for money borrowed and expended in protecting its harbors and fortifying its coast.
Same¡ statutes construed. — The act of Congress of July 27, 1861, 12 Stats., 276, and the joint resolution of March 8, 1862, 12 Stats., 615, authorizing reimbursement to the States for war expenditures provided for payment for expenses “ properly incurred” in the raising and equipping of troops, and contemplated the repayment to the States of all expenses properly incurred by the States acting in good faith, and what the State determined was a necessary and proper expense is determinative of the question unless in violation of some statute or of public policy.
Liability of Government. — There being no act of Congress authoris-ing the repayment to the State of any part of the money expended by it under the second claim, the plaintiff has no legal status in this court for its repayment, and the action of Congress in repaying the principal sum upon this item was voluntary and created no legal foundation for anything more.
The Reporter's statement of the case:
Messrs. Frank W. Hackett, Henry M. Foote, and H. C. Atwül for the plaintiff.
Mr. Harvey D. Jacob, with whom was Mr. Assistant Attorney General Huston Thompson, for the defendants.
In 1896 the Supreme Court in 'United States v. New Torh, 160 U. S., S98, held that interest upon bond issues was a principal sum the United States agreed to refund, and that therefore such claims of the States should be allowed under the act of July 27,1861, supra.
Under the decision in the New York case, this court (in Pennsylvania v. The United States, 36 C. Cls., 507, and Maine v. The United States, 36 C. Cls., 531) allowed claims for interest on bond issues, and furthermore, in the Pennsylvania case, the court allowed the amount of premium necessary to secure gold with which to pay a part of the interest. The reason for the allowance of the gold premium, and the fact which differentiates the Pennsylvania case from the present, being that since 1840, 21 years before the bonds were issued, there had existed a statute of Pennsylvania requiring interest on State indebtedness to be paid in specie, whereas in the present case the statute providing for payment in coin was not passed until after the bonds now in controversy were issued and sold, and, therefore, the agreement to pay in coin was not a part of the contract between the State and the bondholders. In the Pennsylvania case the right to receive the interest in coin was a part of the contract.
When the contract with the bondholders was made, there was no thought entering into, it that money borrowed was to be repaid in anything other than- the accepted currency of the day. The bonds, issued and sold at a time when no law of the State required payments in coin, acknowledged an indebtedness to the holders of so many borrowed “ dollars.” The obligation of such a contract, as said by the Supreme Court (in Knox v. Lee, the second Legal Tender cases, 12 Wall., 457, 548), “was not a duty to pay gold or silver, or the kind of money recognized by the law at the time the contract was made, nor was it the duty to pay money of equal intrinsic value in the market. * * * But the obligation of a conti’act to pay money is to pay that which the law shall recognize as money when the payment is to be made.”
It is true that at the time these bonds were issued, gold and silver coin constituted the only general legal tender recognized by law, though by no means were gold and silver the only mediums of exchange. But the payment of interest on these 1861 bonds was not due until July 1, 1862, and on February 25, 1862, Congress passed the legal-tender act (12 Stats., 345), providing that Treasury bills should constitute a legal tender for all debts, public and private, with the exception of interest on the public debt and duties on imports. Immediately upon the passage of that act Treasury bills became legal tender for the settlement of the debt created by the contract here involved, the obligation of which was to pay only such character of money as the law recognized as money when the payment was to be made.
Therefore it is obvious that the promise of Massachusetts, by its act of March 22,1862, to pay in gold the interest and principal on these bonds issued and sold in 1861 voluntarily enlarged the obligation of the contract. While from purely a State standpoint it might have been a very wise move, it was in no sense a necessary element in the borrowing of the money to be used in behalf of the Federal Govern ment, and, consequently, did not constitute a proper expense in the raising of troops to aid in suppressing, the rebellion.
It is denied that in so far as the Federal Government is concerned Massachusetts had either legal or moral justification for making these payments in gold, and it is also denied that “when the later construction of the legal-tender act was announced (May, 1871) the State had incurred nearly all of this gold premium expense by paying her creditors in coin.” This statement is not borne out by the evidence the State furnishes. Indeed, the truth is that before Knox v. Lee was decided the State had only paid the regular semiannual interest from 1862 to 1871. Not a dollar of the principal had been returned. The principal on the bonds first maturing was not due until July, 1871, and Knox v. Lee was decided May, 1871.
It having been shown that Massachusetts was without either legal or moral justification in making these gold payments, it is clear that it was not an expense necessarily or properly incidental to the borrowing of money for use of the Federal Government. The Government received no benefit whatever from the action of the State in this respect, and, therefore, can not legally or equitably be charged for the cost of this gratuity under the reimbursing act of 1861, be that act considered an indemnifying statute or otherwise, for even an agreement to indemnify can not be extended further than the making whole of the agent for losses and expenses necessarily and properly incurred for the benefit of the in-demnitor, and not to expenses incurred by the indemnitee solely out of the bigness of his heart, for the future protection of his own credit, and resulting, only to his personal benefit.
If Massachusetts deemed it proper to protect her good reputation and credit for the future, no one could object, but surely she could not expect the Federal Government to pay the bill for a benefit so personal to herself. As well say that because she had a reputation for generosity to her citizens and, seeking to perpetuate it, she placed upon the breast of each of her soldiers a diamond pin. No one would deny her the right nor dispute the wisdom of such means of accomplishing her purpose; but who would say that a diamond pin Avas a necessary part of a soldier’s equipment and a proper item for reimbursement under a statute agreeing to indemnify for “ expenses properly incurred, in aiding to suppress an insurrection”?
In the year 1863 the State of Massachusetts borrowed on bonds some $200,000 with which to fortify and strengthen for defensive purposes the coast of the State. Later, many attempts were made to secure reimbursement from the Federal Government of the amount thus expended.
Under act of July 7, 1884, 23 Stats., 204, the accounting officers of the Treasury were authorized and directed to examine the claim “of the State of Massachusetts for expenses incurred and paid, at the request of the President and Secretary of State, during the war, in protecting the harbors and strengthening the fortifications on the coast, now on file with the Third Auditor,” under the act of July 27, 1861, “ and report the amount to Congress.” The accounting officers thereupon “ examined ” the claim and re-. ported to Congress that the sum of $209,885.61 was due the State, for AAthich appropriation was duly made.
The only general indemnification act for expenses incurred by the States in behalf of the Federal Government during the Civil War is the act of July 27, 1861, supra. That act obviously deals only with expenses incurred in raising and equipping troops. Therefore, until the act of July 7, 1884, claimant was without recourse. Under that act the Federal Government did not give its consent to be sued, nor did it confer jurisdiction of the case upon the court. That act merely directed the accounting officers to examine the claim and report the amount to Congress. The accounting officers have examined and have reported the amount to Congress, for which appropriation Avas made.
It is said that “ the act of 1884 was a positive instruction to the acounting officers to settle the claim under the act of July 27, 1861.” The plain terms of the act contradict such an assertion. There is a broad difference between an authorization to examine and report the amount and a positive instruction to settle. Also it is not clear from the language of the act of 1884 whether the claim was to be examined in accordance with the terms of the act of July 27, 1861, or whether authorization was simply to examine a claim filed with the auditor under said act of July 27, 1861. It is just as reasonable to say that the act meant the latter as the former; and when it is borne in mind that the accounting officers, acting under the act of 1884, declined to adjust and pay the claim as they were doing claims coming within the terms of the act of 1861, but instead simply examined this claim and reported the amount to Congress, it would seem, since appropriation was made in accordance with such report, that Congress did not intend by the act of 1884 to extend the provisions of the act of 1861 to cases of this character. Suffice it, however, to say that the terms of the act of 1884 were strictly complied with and the result accepted by Congress. That being the situation, there is shown to be no law under which the claim now made can be prosecuted.

Opinion:
BarNey, Judge,
reviewing the facts found to be established, delivered the opinion of the court:
This is a suit brought by the State of Massachusetts by virtue of the following jurisdictional act of Congress, which speaks for itself as to its purpose:
"That the claim of the State of Massachusetts for premium paid for com with which it paid the interest and principal of its bonds issued in the year eighteen hundred and sixty-one for money borrowed and used to furnish troops of the State for the service of the United States during the Civil War; and also its claim for interest and premium paid for coin in payment of such interest, on bonds issued for money borrowed and expended at the request, during said war, of the President of the United States, in protecting the harbors and fortifying the coast, which claims were rejected by the Comptroller of the Treasury Department, be, and the same are hereby referred to the Court of Claims for determination of the law and the facts, and report, to Congress. The evidence of the amount of said expenditures and of the computations of such premiums made by the accounting officers of the Treasury on file in said department, as furnished by the State, may be considered by the court so as to relieve the State of the necessity of again filing said evidence in court."
It will be seen that this act provides for the consideration of two claims; first, the claim for the State of Massachu setts on account of premium paid for coin in payment of interest on bonds issued for money borrowed and expended to furnish troops of the State for the service of the United States during the Civil War; second, its claim for interest and premium paid for coin in payment of such interest on bonds issued for money borrowed and expended during said war in protecting the harbors and fortifying the coast.
The facts involved are all a matter of record and are in effect agreed upon by the parties. The legal aspect of the case and its history are substantially as follows:
First claim. — July 27, 1861, 12 Stats., 276, the Congress enacted the following statute:
" That the Secretary of the Treasury be, and he is hereby, directed, out of any money in the Treasury not otherwise appropriated, to pay to the governor of any State, or his duly authorized agent, the costs, charges, and expenses properly incurred by such State in enrolling, subsisting, clothing, supplying, arming, equipping, paying, and transporting its troops employed in aiding to suppress the present insurrection against the United States, to be settled upon proper vouchers to be filed and passed upon by the proper accounting officers of the Treasury."
A joint resolution of Congress approved March 8,1862,12 Stats., 615, provides that the foregoing act shall be construed to apply to expenses incurred after as well as before the date of approval.
Pursuant to this, the State of Massachusetts armed and equipped volunteers for the service of the Federal Government during the Civil War and paid the cost, charges, and expenses incurred for that purpose. There being no money in the treasury of the State not otherwise appropriated, it became necessary for the State to raise the money required by borrowing it upon its bonds. Therefore, in pursuance of the act of its legislature approved May 21, 1861, it borrowed three millions of dollars on its bonds, which bore interest at the rate of 6 per cent per annum. They were payable beginning July 1,1871, and ending July 1,1876. Under the provisions of the act of its legislature approved April 25, 1862, the State borrowed $600,000 more on its bonds for the same purpose, and these bonds bore interest at the rate of 5 per cent per annum and were payable July 1, 1871. These bonds were all denominated Union loan bonds.
The act of the legislature of the State of Massachusetts approved March 22,1862, provided that:
" The interest and principal of all scrip or bonds of the Commonwealth of Massachuseets which have been or may hereafter be issued shall, when due, be paid in gold or silver coins."
The Supreme Court in the case of New York v. United States, 160 U. S., 598, decided that that State was entitled to recover from the United States interest upon its bonds issued to defray the expenses to be incurred in raising troops for the national defense pursuant to the act of June 27, 1861. Whereupon the several States which had paid interest for tlufi purpose, including the State of Massachusetts, filed claims with the Treasury Department for interest so expended. The State of Masachusetts also included in her claim as a part thereof the premium expended upon coin for that purpose. This premium, paid for coin which paid the interest on bonds issued under the act of the legislature of April 25, 1862, for the sum of $600,000, as hereinbefore stated, was paid. But the claim for premium on coin used to pay the interest on the bonds issued in July, 1861, was rejected, the same being the sum of $886,389.68, and it is for the recovery of that sum so rejected that this suit is brought, together with the second claim, which is as follows:
Second claim. — The State of Massachusetts had expended the sum of $209,885.61 soon after the outbreak of the Civil War for the purpose of protecting the harbors and strengthening the fortifications on the coast and had filed a claim for said sum so expended with the accounting officers of the Government, but did not include in said claim any claim for interest.
On July 7,1884, Congress passed the following act:
"That the proper accounting officers of the Treasury Department be, and they are hereby, authorized and directed to examine the claim of the State of Massachusetts for expenses incurred and paid at the request of the President and Secretary of State, during the war, in protecting the harbors and strengthening the fortifications on the coast, now on file with the third auditor, under the act of July twenty-seven, eighteen hundred and sixty-one (12 Stat., page two hundred and twenty-six) and report the amount to Congress."
Pursuant to said act the accounting officers examined said claim and found that said sum had been expended for the purposes mentioned and reported the same to Congress, which was duly paid by appropriations for that purpose. October 10, 1902, the State filed another claim in the Treasury Department which included a claim for interest and premium paid for coin with which such interest was paid on money borrowed by the State on bonds issued under the act of its legislature of March 30, 1863, for the purpose of protecting the harbors and strengthening the fortifications on the coast, which said claim was rejected and has never been paid. This constitutes the second claim in the plaintiff's petition.
We will now proceed to examine and discuss these claims in the order in which they are stated.
The first legal-tender act was passed by Congress February 25, 1862, 12 Stat., 345. This act was declared unconstitutional by the Supreme Court in the case of Hepburn v. Griswold, 8 Wallace, 606, which decision was overruled by the Supreme Court in the case of Knox v. Lee, 12 Wallace, 457, and the law decided to be constitutional. It will thus be seen that the first issue of the war-loan bonds by the State of Massachusetts was made several months before the passage of this act, at which time these bonds were only payable in coin.
The Legislature of Massachusetts passed an act March 22, 1862, making all of its bonds, both principal and interest theretofore issued or thereafter to be issued payable in coin. This act was passed less than a month after the passage of the legal tender act by Congress, at which time the legal tender issue of currency had depreciated very little in value. These historical facts are given as throwing some light upon the reason for this legislation by the State of Massachusetts. She had issued her bonds in good faith and upon the credit of the Commonwealth at a time when they were payable in coin.
. These bonds had been taken probably by her own citizens, but there was nothing to show that they were designed to stop at home. The fair name of the Commonwealth, it was assumed, would give them currency in other States and in foreign lands as well, notwithstanding the only security behind them was the promise of the State to pay. Except in the case of a State holding some of the bonds and suing as such there was no legal remedy for the enforcement of the obligation by the courts. Upon the good credit of the State the bonds were taken and the money supplied and used to aid the United States. There can be no doubt that when the bonds were issued and subscribed for or purchased they were payable only in coin. By the terms of the Constitution the State could not make them payable in anything else. The State so thought that they were payable in coin, and the holders of the bonds had a right to think the same. The legal tender act reserved the right to pay interest on the bonds of the United States in coin, and the principal was payable in coin. If it was proper for the United States in determining what policy was best as to its obligations to declare that their bonds and the interest thereon should be payable in coin, can it be said to be improper for Massachusetts to follow so illustrious an example ? She had failed to express on the face of the bonds the real understanding when they were issued and purchased, namely, that they were payable in coin, but was it not proper, having regard to her own promise and her own fair name, that she should subsequently recognize her obligation by giving the assurance as solemnly as possible that her compact would be kept according to its original intention? Certainly among the duties of a State not the least of them is that the State shall be honest.
In this connection it may be well to call attention to what was done by the Federal Government to strengthen its credit after the close of the Civil War. While some of its bonds provided that the interest should be paid in coin, there was no specific statement as to the kind of money in which the principal should be paid. In order to keep faith with the holders of these bonds and do what it believed was the understanding of the parties at the time they were issued, Congress enacted the following law, 16 Stat., 1:
"In order to remove any doubt as to the purpose of the Government to discharge all just obligations to the public creditors, and to settle conflicting questions and interpretations of the laws by virtue of which such obligations have been contracted, it is hereby provided and declared that the faith of the United States is solemnly pledged to the payment in coin or its equivalent , of all the interest-bearing obligations of the United States, except in cases where the law authorizing the issue of any such obligation has expressly provided that the same may be paid in lawful money or other currency than gold and silver
By the enactment of this law the Federal Government did almost exactly what Massachusetts did under similar circumstances ; and this was done when coin was still at a high premium.
It is unthinkable that at this time anyone dreamed that the State of Massachusetts would ever have to prosecute a claim against the Federal Government for the interest paid on these bonds. The State of Massachusetts never could have had any such thought in view. She simply said to her creditors, " You loaned me money upon these bonds of the standard of gold and silver, and though I may be enabled to pay for this loan by cheaper money I will never do so, but will pay you in kind." Hence there is no room for the assumption that the State of Massachusetts in the enactment of this statute had any other object in view than that of keeping good faith with her creditors. If any motive can be ascribed to a municipal corporation, we think it is a presumption amounting to a conclusion that the State of Massachusetts thereby was only doing what she believed to be proper because it was honest, and had no intent of increasing the expense to the Federal Government in the raising and equipping of these troops.
It was urged by the defendants at the trial that, we are not allowed to look at this feature of the case, but must apply the hard letter of the law as though this suit was between individuals. Let us briefly examine that question. By the act of July 27, 1861, 12 Stat., 276, the Federal Gov- ei'nment said to the sovereign State of Massachusetts (sovereign within certain limitations): " If you will help us in this, our time of distress, by advancing funds to raise and equip troops for our service, we will refund to you all expense ' froferly incurred ' for that purpose." In order to respond to this call it was necessary for the State of Massachusetts to pledge her credit by the issuance of bonds at that time payable only in coin. Thereafter the Federal Government enacted a law which subsequent events showed would enable the State to pay this loan in cheaper money. Within 80 days after the passage of this law and when its unfortunate history had hardly begun, was it otherwise than " proper " for Massachusetts to say to her creditors on these and other bonds, " You loaned us coin and we promise you that we will never compel you to take cheaper money in payment."
The proper construction to be given by courts to the word " proper " as used in section 8 of Article I of the Constitution was decided in the case of United States v. Fisher, 2 Cranch, 358. The question for decision there was whether a statute making the United States a preferred creditor was constitutional. The court held that it was, and Chief Justice Marshall in his opinion said:
"In construing this clause it would be incorrect, and would produce endless difficulties, if the opinion should be maintained that no law was authorized which was not indispensably necessary to give effect to a specified power.
" Where various systems might be adopted for that purpose, it might be said with respect to each that it was not necessary because the end might be obtained by other means. Congress must possess the choice of means, and must be empowered to use any means which are in fact conducive to the exercise of a power granted by the Constitution." Id., 396.
The same subject came before the Supreme Court in the famous case of Knox v. Lee, already referred to, and there the court said:
" It was, however, in McCulloch v. Maryland [4 Wheat., 416] that the fullest consideration was given to this clause of the Constitution granting auxiliary powers, and a construction adopted that has ever since been accepted as determining its true meaning. We shall not now go over the ground there trodden. It is familiar to the legal profession and, indeed, to the whole country. Suffice it to say in that case it was finally settled that in the gift by the Constitution to Congress of authority to enact laws 'necessary and proper ' for the execution of all the powers created by it, the necessity spoken of is not to be understood as an absolute one. On the contrary, this court then held that the sound construction of the Constitution must allow to the National Legislature that discretion with respect to the means by which the powers it confers are to be carried into execution, which will enable that body to perform the high duties assigned to it in the manner most beneficial to the people. Said Chief Justice Marshall, in delivering the opinion of the court: ' Let the end be legitimate, let it be within the scope of the Constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the Constitution, are constitutional.' " Id., 538.
There is another feature of this case which merits consideration. It is undisputed that Massachusetts in good faith actually spent the amount claimed in the payment of premium for coin for the payment of the interest on her bonds issued for money borrowed to answer the call for help by the Federal Government. As a matter of justice, ought not the statutes in question be given such a construction as to entitle the plaintiff to a judgment for this amount expended? In the New York ease Justice Harlan, speaking for the court, said that the statute of July 27, 1861, should be liberal^ construed, New York v. United States, 160 U. S., 620. He further said:
"On February 11, 1862, he [the Secretary of War] telegraphed : ' The Government will refund the State for the advances for troops as speedily as the Treasurer can obtain funds for that purpose.' Liberally interpreted, it is clear that the acts of July 27, 1861, and March 8, 1862, created, on the part of the United States, an obligation to indemnify the State for any costs, charges, and expenses properly incurred for the purposes expressed in the act of 1861, the title of which shows that its object was 'to indemnify the State for expenses incurred by them in defense of the United States.' "
After Massachusetts had expended this money in good faith regarding it as a " proper " expense for the purposes for which it was required, is it for this court to inquire into the question as to whether the State might have raised the money at less expense? Can we be called upon to find whether she might have put bonds upon the market at par which bore a lower rate of interest than those which she issued ?
In Johnston's case, 124 U. S., 236, the court considered a provision in the captured or abandoned property act which provided that the Secretary of the Treasury should make " such rules and regulations as are necessary to secure the proper and economical execution of the provisions of this act, and shall defray all expenses of such execution from the proceeds " of sales, etc. The question was upon the meaning of the term " the proper and economical execution " in the statute. The court, while recognizing that the approval of the President was made essential to the validity of the rules and regulations, declared that the entire administration of the system devised by Congress was committed to the Secretary of the Treasury, and said (p. 249) :
"Upon him alone was imposed the responsibility, in the first instance, of making rules and regulations for the 'proper and economical execution' of the statutes in question, through agents whom he should designate. Such authority was conferred upon the Secretary of the Treasury, subject to no other restriction than that the expenses charged upon the proceeds of sales be 'proper and necessary,' and be approved by him. But no rule was prescribed for its guidance in determining what expenses were to be regarded as of that character; for the reason, perhaps, that as each collection and sale of captured and abandoned property must depend upon its special circumstances, it was not practicable to establish a rule that would control every case.
" As no expense could be charged against the proceeds of any sale except upon the approval of the Secretary of the Treasury, and as his discretion must have been exercised with reference to the special facts of each case, his approval of an account of expenses in relation to the collection and sale of any particular lot of captured and abandoned property should be deemed conclusive evidence that such expenses were proper and necessary, unless it appeared that the allowance of such expenses were procured by fraud, or that the expenses were incurred in violation of some positive statute or of public policy."
The principle thus announced is applicable here when we consider that no rubs were announced in the statute by which the expenses incurred by the several States should be determined. What was proper for one State might not apply in another. Each State had to determine for itself. The method for raising the money was left entirely to the State, and w-hat the State determined was a necessary and proper expense should be determinative of the question unless we find that the expenses incurred by the State were in violation of some statute or of public policy. There was no statute which forbade in terms a State making its bonds and the interest payable in coin, nor can it be said that it was contrary to public policy that this should be done, because it is well recognized that notwithstanding the legal-tender act parties could contract for the payment of their obligations in coin, and such contracts have been enforced. Bronson v. Rodes, 7 Wallace, 229; Trebilcock v. Wilson, 12 Wallace, 687.
In short, under the act of July 27, 1861, is this court called upon to question the policy of Massachusetts in her maimer of raising the money which it was necessary for her to raise to answer the call of the Federal Government? If we are not called upon to inquire into these things, are we allowed to question her right, at the time she did, to promise her bondholders that they should receive their interest in coin? It might well be remarked here that if the defendants had then borrowed the money for the purposes for which Massachusetts borrowed it the interest paid would have been more than it cost Massachusetts.
The case of Willard v. Tayloe, 8 Wallace, 557, was a suit brought by the plaintiff for the specific performance of a contract entered into in 1854. The suit was brought in 1864 and at a time when coin was at a very high premium (one dollar in gold being worth $1.80 in United States notes); and the court decreed a specific performance only on the condition that the plaintiff should pay the amount due by the terms of the contract in gold or silver coin.
While it is true • that in decreeing specific performance of contracts the court exercises large discretion as to its terms, this decision seems to us clear justification for Massachusetts in providing, after the legal-tender act had been passed, that the interest on her bonds should be payable in coin. If a court of equity could decree that a contract entered into before the Civil War for the payment of money should be paid in coin before specific performance would be decreed, on the ground that it would be inequitable to do otherwise, why was not Massachusetts justified in saying that on a contract entered into with her bondholders for money payable in coin she should afterwards agree that the interest should be paid in coin, even though the law at that time would enable her to pay it in cheaper money ?
We now come to the consideration of the second claim in the plaintiff's petition. The findings show that at the outbreak of the Civil War Massachusetts expended the sum of $209,885.61 for the purpose of protecting the harbors and strengthening the fortifications of the coast. July 7, 1884, Congress recognized this expenditure by passing an act referring this claim to the accounting officers of the Treasury Department and authorizing and directing them to examine the claim of Massachusetts for expenses so incurred. Pursuant to said ¡let, the State of Massachusetts filed its claim for the same, together with interest upon the bonds which she had issued for borrowing money for that purpose, together with the premium paid for coin with which such interest was paid. Thereupon the accounting officers allowed the claim for the principal on the bonds, but rejected the claim for interest and premium. Congress afterwards appropriated for the principal sum so expended by the State, but never made any appropriation for the interest and premium. We have been cited to no law of Congress promising to repay Massachusetts any part of the money so expended by her, from which it follows that however generous and patriotic this action on the part of the State may have been, she has no legal status in this court for the repayment of the same. The action of Congress in repaying her the principal sum expended was entirely voluntary and created no legal foundation for anything* more.
It follows, from the foregoing, that the plaintiff should have judgment for the sum of $886,389.68 upon the first claim in the petition, and that the second claim should be dismissed, and it is so ordered.
Hat, Judge, DowNet, Judge, Booth, Judge, and Campbell, GTiief Justice, concur.