The opinion
The questions presented and argued by the appellant's counsel are in this form: "First. Has Congress the power to make the paper promises of the federal government a legal tender in payment of any debts not due to that government? Secondly. If it has this power in respect to any debt, not due to the federal government, can a bank of this state avail itself of such an enactment and tender these federal paper promises in redemption of its bills, and thus estop the execution of the trust by which the state has secured the redemption of those bills out of a fund pledged for the express purpose by solemn provision of law?" It is conceded that Congress has power to authorize the issue of treasury notes, and make them receivable in payment of all debts and dues to the federal government. But the authority of Congress to make them "lawful money and a legal tender in payment of all debts, public and private, within the United States," is challenged and denied.
I shall assume, without stopping to prove what has often been established upon judicial investigation and by judicial decisions by a court having the right to investigate and decide, that the instrument known as the Constitution of the United States, is a Constitution ordained and established by the people of the United States. That it contains certain specified powers and provisions which, when carried into effect, produced a government, possessed of the right to maintain and perpetuate itself for all time. The product of the Constitution is government, and such was the intention of those who ordained and established it. It is not a league, a compact, an alliance of states, but it provided for a government, that should have, by the exercise of the powers therein specified, a right to make laws and compel obedience to such laws. The powers of such government, though limited and *Page 503
specified, are supreme within their sphere of action, and so also are the powers of the state governments, the latter not being usually specified in the state constitutions.
There can never, in theory or legally, be any conflict between the two jurisdictions, and we owe allegiance alike to each. There can be no conflict, and there should be no embarrassment touching the question of allegiance; as the Constitution of the United States declares: "This Constitution, and the laws of the United States, which shall be made in pursuance thereof, c., 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.) When, therefore, any act of the government is challenged, the sole inquiry and question for decision is, was such act authorized by the Constitution? If the act is done under a law of the United States, the inquiry will be, was such law "made in pursuance of the Constitution." If the question raised is answered in the affirmative, state laws and constitutions in conflict therewith must yield. They are invalid and not binding upon the citizen. If the question is answered in the negative, then the act done was unauthorized and is void. Much has been said and written touching the rules proper to be adopted for the construction of the Constitution; some claiming a liberal, enlarged construction; others, a narrow, strict construction. Governments are established for the benefit of those subject to them. This is emphatically so of republican governments. The state government is for the benefit of the people as well as the United States government, and in times of peace and the harmonious action of both governments, the state government operates upon and affects the interest of the people far more than the United States government. Its jurisdiction embraces vastly more subjects, and affects more interests. As both governments are for the benefit of the people, I apprehend, that when a question of conflict between the two governments arises, the rule that a liberal construction should be applied, because the government is beneficial, can have little application. The *Page 504
true rule, in my judgment, in such a case, is to consider fairly the provisions of the Constitution of the United States, and ascertain whether the given case is within them, and if not, then to abstain from exercising jurisdiction. It is very important that all the jurisdiction of the states over matters exclusively confided to them, should be carefully preserved, and that the government of the United States should be confined to the limits prescribed by the Constitution to which it owes its existence.
These suggestions do not question the rule of liberal construction, as applied to the subjects which may be embraced in the specific powers conferred upon Congress; and when it becomes a question, whether such powers authorize the doing of certain things, undoubtedly all the attending circumstances are to be taken into consideration, as in the construction of contracts, with a view of determining whether the power fairly embraces the cases. The nature of a constitution, in the language of Chief Justice MARSHALL, "requires that only its great outlines should be marked, its important objects designated, and the minor ingredients which compose those objects be deduced from the nature of the objects themselves." He says: "A constitution, to contain an accurate detail of all the subdivisions of which its great powers will admit, and of all the means by which they may be carried into execution, would partake of the prolixity of a code, and could scarcely be embraced by the human mind. It would probably never be understood by the public."
The nature of a constitution, then, is to mark the great outlines, and designate the important objects of the government to be established. This is of necessity so; as to all organized bodies, some fundamental canons are enacted defining their creed or specifying their powers.
The Constitution, after specifying certain powers to be exercised by Congress, adds: "And to make all laws that 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 *Page 505
or officer thereof." In McCulloch v. The State of Maryland ( 4 Wheat., 314 ), this provision underwent a most elaborate examination by Chief Justice MARSHALL, and I shall not attempt to add anything to his masterly exposition of it.
I do not know that I object to the exposition of this provision of the Constitution, as made upon the argument of this case, by the learned counsel (Mr. Curtis) for the appellant. Undoubtedly the law enacted under this provision must sustain a proper relation to the previously granted powers, and must be necessary and proper for carrying into execution some one or more of those powers, or some other power vested in a department or an officer thereof. And I agree that Congress is not necessarily the exclusive judge of such relation, and of the necessity and propriety of making such law. Its decision may be questioned before the judicial power, which may decide that the relation, necessity and propriety did not exist, and thus adjudge the congressional act unauthorized. The judicial power will not be justified in considering the degrees of necessity and propriety, or in instituting comparisons between the measure adopted by Congress and some other measure better calculated, in the opinion of the court, for carrying into execution the granted power. Chief Justice MARSHALL, in the case referred to, sums up the argument by saying: "We admit, as all must admit, that the powers of the government are limited, and that its limits are not to be transcended. But we think 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. 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 consistent with the letter and spirit of the Constitution, are constitutional."
Let us now bring into view some of the "foregoing powers" expressly conferred upon Congress. They are: "to levy and *Page 506
collect taxes, duties, imposts and excises, to pay the debts, and provide for the common defence and general welfare of the United States;" "to borrow money on the credit of the United States;" "to regulate commerce with foreign nations, and among the several states;" "to coin money, regulate the value thereof, and of foreign coin;" "to declare war, grant letters of marque and reprisal;" "to raise and support armies;" "to provide and maintain a navy." (Art. 1, § 8.) There are some prohibitions. Let us notice them here. "No capitation or other direct tax shall be laid, unless," c.; "no tax or duty shall be laid on any article exported from any state." (§ 9.) There are some other limitations upon the powers not necessary to be here noticed. There are some limitations of the powers of the states which should be carefully noticed. "No state shall enter into any treaty, alliance, or confederation, grant letters of marque and reprisal; coin money, emit bills of credit; make anything but gold and silver coin a tender in payment of debts; pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts."
"No state shall, without the consent of Congress, lay any duty or tonnage, keep troops or ships of war in time of peace, enter into any agreement or compact with another state, or with a foreign power, or engage in war, unless actually invaded, or in such imminent danger as will not admit of delay." (§ 10.) Let us add, for the purpose of showing the independent character of the government within its proper sphere: "The executive power shall be vested in the president of the United States of America." (Art. 2, § 1.) The Constitution makes provision for courts in which the judicial power of the United States shall be vested. Some amendments were made, and in article 10 it is declared: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people." On reading these clauses containing powers and limitations, and certain prohibitions of powers to the States — powers national and common to all nations possessed of independence — of full sovereignty — what impression is produced *Page 507
upon the mind, touching the character of the government about to be brought into being? Its powers are not numerous, but they are of the vastest importance to the well-being of all the people occupying the country included within the limits of the United States; and the happiness and prosperity of such people was, and is, to depend mainly upon the faithful execution of these powers. The people, through their state organizations, can enter into no treaty, alliance or confederation; they cannot engage in war, nor coin money. These, and some other powers are prohibited to them, and are conferred upon the federal government exclusively. They are prohibited from making anything but gold and silver coin a tender in payment of debts; and unless the federal government has this power it is extinct, and can have no existence among the people who have established the state and national governments. Whatever the emergency, however fatal it may be to the states, to the United States, to the people, that gold and silver coin, under all circumstances, shall be demandable in payment of debts, there is no power to relieve them. The people have annihilated this power, unless it is possessed by the United States government; and they are in a condition unknown to any people that have ever constituted a community, under any form of government known to mankind. The relation of debtor and creditor has, in all ages, in civilized nations, been regarded as a matter of great importance, and has always been subject to the regulation and control of the sovereign legislative power. History informs us of numerous instances in which the legislative power of nations has been invoked to interfere between the debtor and the creditor, and they have interfered for the relief of the debtor, and thereby saved the nation from convulsions, and, perhaps, ruin.
But with us, if the power is gone, whatever may be the condition of the country and its money, though the "gold and silver coin" may have disappeared — though its value, compared with all property, real and personal, may have appreciated an hundred fold — yet the debtor must produce it *Page 508
in payment of his debt. In short, the creditor may have the power of appropriating ten or a hundred times as much of his debtor's property as he transferred to his debtor a year or two before, for the very debt he is collecting. These are not extravagant suppositions; but whether they are or not, they illustrate my position — that the debtor class in time of national calamity, in the absence of the precious metals, may be ruined, and their property transferred to the creditor class, though there may be as much or more property and real wealth in the country as there had been at any time previous. I repeat that this power of interference by the government, between the debtor and the creditor, has always existed in other nations, and has, in times of emergency, been often exercised; and a mode for extinguishing debts, other than with the precious metals, has been authorized. The power has been exercised for the good of the nation as a whole, if not for its very salvation. I concede, of course, that if this important governmental power is extinguished throughout the limits of the United States, this is an end to the question we are considering.
In my opinion it is not extinguished; and I will proceed to state some reasons for this opinion:
In giving construction to contracts, wills, statutes — indeed any written instrument — it is important to understand clearly the subject to which the written language was or should be applied. This rule is emphatically applicable in giving construction to the Constitution. The meaning of the language used must be understood, and the subject matters to which the language relates, or which may be fairly embraced within the language creating the powers: the condition of things coëxisting with the making of the Constitution, and which might be reasonably anticipated to exist in the future, should be considered in giving construction to the various provisions of the Constitution, and to the Constitution as a whole. There existed at the time thirteen states, and it was understood that this number would be increased. Each of these states possessed all the powers pertaining to independent nations, *Page 509
except as modified or restricted by the articles of confederation. They possessed powers common to all independent nations: of regulating their own commerce, and the law of contracts; of making money or declaring what should constitute money; and, of course, what should pay debts. They could emit bills of credit; issue their own paper money, and make it receivable in payment of debts. They could discriminate, in regulating commerce, in favor of their own citizens, and against the citizens of other states or nations. Under such circumstances it was obvious, indeed it was already proved, that there could be no such thing as harmony touching any of those matters. Most of the then states possessed harbors upon the ocean, and were engaged in foreign commerce, and commerce among themselves. There could be no uniformity of regulations touching such commerce.
Some of the States tried to agree upon a system for themselves, and failed. The system of one State would nullify the system of another, or other States. Free importations by one State would render impracticable the system of other States, imposing duties for revenue or for the protection of home industry. Embarrassing and unreasonable regulations, touching commerce between the citizens of one State and other States would be made. Each State might have a moneyed system unlike that of any other State; a system of weights and measures entirely different. Commerce between the citizens of one State and other States might be prohibited and destroyed. The confederacy had no power to derive a revenue from importations, nor had the states practically this power; as they would never be able to agree upon a common system, and owing to their geographical positions, any system other than free trade would be practically nullified by the action of the other States.
This state of things could not last. The people were powerless to protect their interests. A change was necessary, if they were to indulge hopes of future prosperity. This practically powerless condition of the people was an important, if not the most important, reason for making an effort to devise a remedy, and the remedy devised was the Constitution. A *Page 510
leading object of the Constitution was to get rid of all conflicting commercial interests and, as to commerce, to effect a union of all the people of all the states, great and small, and make them one people, one nation, without divided interests, and without power, as states, to produce divided interests or conflicts. This was a leading idea in favor of the Constitution, and to me it has always seemed the most valuable one.
Was this idea carried into effect by the Constitution? I think it was clearly and fully. It required several provisions to effect the object; some conferring powers upon the new government; others prohibiting the exercise of certain powers to the state governments. Hence were granted the powers: "To regulate commerce with foreign nations, and among the several states, and with the Indian tribes." "To establish uniform laws on the subject of bankruptcies throughout the United States;" "to coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures;" and, in addition, the power to make all laws necessary and proper for carrying into effect these powers. The prohibitions upon the states, in connection with commerce, are, that they shall not 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." These provisions, I think, accomplish the object intended, viz., the committing to Congress, the common representative and agent of all the people, the exclusive power to establish a uniform system of commerce throughout the United States. All these powers have a very important connection with and relation to commerce, over which the common government was to exercise great, if not exclusive, control for the common benefit of all the people of all the states.
Now what is commerce? I need not stop to look up and quote definitions. We know that it consists in the exchanging of property, or the buying and selling of commodities; the latter as generally understood. As so understood it cannot be carried on without money. In the absence of money it must substantially perish; something called money must exist. It is a necessity *Page 511
to commerce — an aid always attendant upon it; and the power that regulates commerce should, theoretically, be the exclusive power to create money, to say what shall be money, the representation of values, and it should have the power to regulate its quantity: not that such power, by way of changing the quantity, should be often or capriciously exerted. The language of the Constitution is, "to regulate commerce with foreign nations, and among the several States," and "to make all laws which shall be necessary and proper for carrying into execution these powers." It is argued that these powers are not broad enough to embrace the case we are considering: the power expressed is limited to regulating commerce, and this only, "with foreign nations and among the several States:" that Congress can only regulate, not create, and that it cannot even regulate commerce within the states. Commerce was never created by a mere act of legislation. It must have production to supply it with materials to be sold and bought. But legislation may protect the products of labor — may stimulate and encourage labor, and furnish money, making it easy to buy and sell property. It may, by many regulations of commerce, cause industry to take such direction as to produce the materials for commerce. Regulations of commerce with foreign nations may be productive of great individual, and consequently national, wealth or great poverty. And the same effects may follow regulations of commerce among the states. Money is necessary to commerce. And the kind of money, and the quantity, may be, indeed, are, direct regulators of commerce. Without money there would be no commerce; with certain kinds of money, such as Lycurgus established, iron, there would be little commerce. With convenient money, in suitable quantities, commerce may be active and profitable to the people and nation. But it is said that the power to make government promises a tender in payment of private debts has not been granted to Congress, and this is so eo nomine; nor has the power, by name, been given to Congress to do very many things that it has done, some of which have been questioned, others not. Congress has established a military *Page 512
school; it has enacted criminal statutes touching a variety of subjects; it has chartered banks, c., c. If it be shown that money is a necessity to commerce, as well to regulate it as to invite its presence, it will follow that some power must exist somewhere to make money, or make something to perform the office of money. The states clearly have not the power. They cannot coin money and regulate its value. It has been sometimes argued, conceding that the power which regulates commerce should also regulate the money, and that it has, as a legitimate, if not necessary consequence, the right and power to do so, yet, as the Constitution had expressly conferred upon Congress the power to coin money and regulate its value, and the value of foreign coins, that it has no other power over or concerning money: that the maxim, expressio unius exclusio alterius applies. The power to coin money, c., is not a limitation upon the power to regulate commerce. It may be one of the means, but not the only one. If it is, then, as I have already remarked, commerce can never be regulated by any other means, and in the absence of coined money, or a sufficient quantity of it to circulate the vendible commodities, a contingency quite likely to arise, commerce may languish, decline and possibly perish.
But it may be further objected that this power of regulating commerce is limited to foreign nations and to commerce among the states, that is, between the people of one state and another; and that therefore Congress cannot make any regulation touching the commerce in a state, that is, such as may be confined within the limits of a state; and cannot, therefore, do anything affecting such commerce. I apprehend that any attempt to distinguish, so far as commerce is to be affected by money, between commerce in a state, and commerce "among the several states," will always prove a failure. The products of any state enter directly or indirectly into the commerce "among the states." The manufactures of New England are consumed in all the states, and the grains and other productions of the western and middle states find a market in all the other states, and so also of the productions of the south. And *Page 513
it may be added, that this is mainly owing to the commercial provisions of the Constitution, and the wisdom of the government resulting from it. But it is only necessary to a proper relation between these commercial powers and the necessity and propriety of an act for carrying them into effect, that it appear that such act regulates commerce with foreign nations or among the states. Now, no one will question the position that that which will compulsorily discharge debts, that which in numerical quantities previously ascertained may be tendered in payment of debts of like numerical amount, will be a great and controlling regulator of commerce, and all the commerce of the country.
If the thing be inconvenient for circulation, it will embarass and diminish commerce. Lycurgus understood this when he made iron the money of the Spartans for the purpose of preventing commerce and turning the energies of the people into other pursuits.
If the thing be convenient it may greatly increase commerce by stimulating industry. The paper promises of governments or of banks have, in modern times, been regarded as the most convenient article for an additional circulation, and although these promises refer to some other standard, usually coined money, nevertheless they may perform the office of money, and the sovereign power may declare them money, and make them tenderable in payment of debts. It may be that a like numerical quantity will not purchase as much property as the coined money to which reference is made in the paper promises. And this will always be so when the promise to pay coined money is not at once performed upon demand; for such coined money, if of the precious metals, as is usual, has an intrinsic value as an article of commerce in all the markets of the world, and the paper promises have no such value. But the measure of depreciation, where they circulate, may be greatly affected by the question whether they may be tendered in payment of debts. If they may be, the depreciation will be far less. Hence, though there may be great danger of the issues of government paper, or irredeemable bank paper, in excess, thus *Page 514
widening the margin between them and coined money, the danger may be much less with government issues made tenderable in payment of debts, than in bank issues not so tenderable. And it is to be kept in mind, that the states can not make the issues of the banks established by them a lawful tender in payment of debts, whereas, as I insisted, Congress may do so, and thus provide a safer and better circulation than the states. The question of danger does not affect the question of power. If the power exists it may be carried into execution, however dangerous it may be. It may be very unwise under some circumstances to exercise the power, and very wise to exercise it under other circumstances — indeed, criminal not to do so. The salvation of the nation may depend upon its exercise, and when the further life and existence of the nation may depend upon the exercise of powers conferred upon Congress, that Congress that should refuse to exercise such power, would be justly chargeable, for all time to come, as participating in the crime of national slaughter, and would be as justly convicted of such crime, as was ever, by municipal law, a felon, of the crime of manslaughter.
This is not the place to justify or assail the expediency of the act of Congress authorizing the issue of treasury notes, and declaring them receivable in payment of taxes, interest, duties, debts and demands due to the United States, and declaring them to be lawful money and a legal tender in payment of all debts, public and private, within the United States. It is the question of power that we inquire about, and being of the opinion that the provisions in the act referred to, have a direct tendency to promote the circulation of the notes authorized to be issued, and preserve them in a degree from depreciation, as compared with coined money, and that they operate directly upon commerce and tend greatly to regulate it among the several states, and also with foreign nations, by stimulating greater productions and facilitating the circulation and exportations of such products, I am quite clear that they are authorized by the provisions of the Constitution already brought under consideration. *Page 515
Let us pursue the question further. It is a great question, affecting vitally the prosperity of the nation.
Considering the subject or object of these powers, and the circumstance, the most important, that the people, who were to create and carry on this commerce, were members of other bodies politic, possessing certain powers in common with all independent states, which powers, if exercised by them, would embarrass, derange, and might effectually destroy the common system established by the federal government, it was absolutely necessary to impose certain prohibitions upon these other bodies politic — the states. Among these prohibitions, I have always regarded, so far as commerce is concerned, and I may add, the peace of the states and the harmony of the systems, those which prohibit the states from making anything but gold and silver coin a tender in payment of debts, and from passing any law impairing the obligation of contracts. If these powers had been suffered to remain with the states, it is quite obvious that difficulties between the people of the different states would soon have arisen, endangering peace and harmony between them. Distrust would have existed, and there would have been an absence of that confidence necessary as a base for commerce between them. Independent nations may protect their merchants and citizens from the frauds of other nations, consequent upon a debasement of the coin or a change of the measures of value in which debts are to be paid, or for a neglect or refusal to pay, by a resort to war. But the states have no right or power to make war upon each other, and they are prohibited from doing certain things which might be a just cause of war, and the people have intrusted the regulation of commerce among them to a general common government. Notwithstanding the prohibition I am noticing, many of the states have, from time to time, for the relief and ease of their people, enacted stay laws, valuation laws, c., c., all of which, on being brought properly before a court, in which the judicial power of the United States is vested, have been set aside, and the creditor has had his remedies unimpaired, *Page 516
and peace and harmony between the people of the different states have been preserved.
I am dwelling upon these commercial powers and the system relating to commerce, inaugurated by the creation of the new government — the common umpire — because history informs us that the difficulties which had arisen prior to the adoption of the Constitution, and which would inevitably arise, were a main cause of, and reason for, the establishment of a government that should be vested with the powers necessary for the protection of commerce, and all those engaged in it, and under which industry and enterprise could safely develop the dormant resources of the whole country, protected against the laws of one state, invidiously discriminating in favor of its own citizens and against those of another or other states. (See the proceedings which led to the adoption of the Constitution. Elliot's Debates, v. 1, pp. 122 to 155.) They show the great defects in the articles of confederation, for the want of power to regulate commerce, and from it to derive revenues. Efforts were made to correct the evils arising from conflicting systems and supposed interests of the states. Virginia, January 21, 1786, appointed delegates to meet delegates of other states, "to take into consideration the trade of the United States; to examine the relative situations and trade of the said states; to consider how far a uniform system in their commercial regulations may be necessary to their common interest and their permanent harmony, and to report to the several states such an act relative to this great object, as when unanimously ratified by them, will enable the United States in Congress assembled, effectually to provide for the same." (Id., 149.) New York, New Jersey, Pennsylvania and Delaware, appointed delegates who met the delegates of Virginia at Annapolis, in September, 1786. This convention made a report recommending a convention of all the states, the powers of the deputies to be extended "to other objects than those of commerce." Congress concurred in the recommendation, and resolved that it was expedient that such convention be held, and appointed a time and place for holding it. *Page 517
It was held in 1787, and produced the Constitution of the United States. Thus it is seen that the difficulties arising from the conflicting commercial systems of the states, was the principal cause of the calling of the convention.
Now, although it was absolutely necessary for the success of this commercial system, that the states should not possess the power to pass laws impairing the obligation of contracts, or to make anything but gold and silver coin a tender in payment of debts, there was no necessity that the government, common to all, should be deprived of these powers, nor any reason why Congress should not possess them. On the contrary, there was every reason, in the nature of things, why such general government should possess these powers, and should fully exercise them for the common benefit of all the people — the nation, under circumstances that might arise; powers, as I have already said, possessed and exercised by all civilized independent nations, and, without which powers, a nation would be unable to protect itself from the greatest and most dangerous convulsions, and a large portion of its subjects from ruin. All independent governments have a vital interest in the prosperity of all their subjects, and in the increase of their wealth; and all wise governments are constantly vigilant in observing the operation of their laws of trade and commerce, changing, modifying and improving them, for the better protection of industry and the development and protection of wealth. The most favorable results, as experience has shown, generally follow from stability in the laws which have long established the relations between money and property, contracts or promises to pay money, and the money as it was when the promise was made. Hence, the depreciation of the coin, change in the mode of paying debts, and the thing in which the debt may be paid, have always been regarded as evils, or as an evidence of great national embarrassment, a calamity. And such changes are, by the moral code, unjustifiable, except in great emergencies. But the power to make such changes is not, for these reasons impeached. On the contrary, occasions do arise, when there *Page 518
is a necessity for the exercise of the power, that commerce may not be destroyed; that the great mass of the people may not be ruined; that the resources of the nation may not waste away and perish. All the people interested in the government, and the government, have a common interest in the prosperity of the people and the resources of the nation.
In my opinion, the provision objected to in the act in question, has a direct, legitimate and pertinent relation to the powers vested in Congress over commerce. That the provision declaring the treasury notes authorized to be issued "lawful money and a legal tender in payment of all debts, public and private, within the United States, except duties on imports and interest as aforesaid," had, and has, a great effect upon the commerce of the country, no one will question. Indeed, the complaint is that its effect was to appreciate values, thus extinguishing the previous relation between commercial property and the precious metals. It is not denied that its effect has been to stimulate industry and thus increase production, and impart greater activity to commerce. And, I think, it cannot be successfully denied that in the absence of such a provision, under the circumstances then and now existing, the commerce of the country would have received a withering blow; industry and production, instead of being active, would have languished.
Creditors insisting upon the discharge of their debts in something that could not be procured from, or even by, the banks, universal insolvency must have ensued; and production, and therefore, commerce, must have been, to say the least, greatly diminished. Even danger of these consequences is sufficient for my argument. I am examining the question of the power of Congress, not whether the power was wisely exercised. It will not be denied, that in the absence of such provision, property would have greatly depreciated in value as compared with "gold and silver coin," and that commerce would have been thereby greatly affected. Certainly such results might have been reasonably apprehended; and although Congress possessed the powers I have referred to, over commerce, *Page 519
it is claimed that it had no power to prevent such results, but that the previous law must have its course, whatever the consequences might be, though Congress was the author of such law, having provided coined money and regulated its value by declaring how much of the precious metals should constitute a dollar, and having regulated the value of foreign coins, taking the dollar as the standard, its powers are exhausted, and that its action was final. It is not, however, denied that Congress may reconstruct the dollar, and make it, though nominally the same, of far less value, as compared with a given quantity of the precious metals. The precious metals, it is said, possess a real, intrinsic value in the estimation of all civilized nations, and that they are generally used as the representative of values as money. And all this is so. Still the precious metals are a mere article of commerce between nations and among the people or subjects of such nations, until the nation, by an act of legislation, gives to them a different character, by taking certain portions and impressing upon them the stamp of the government, and giving them names which the people may use in their contracts; and also declaring that the damages for the breach of all contracts shall be estimated in the stamped precious metals according to their denominations, and shall be satisfied by them. This system is very convenient and important. But does it, of necessity, supersede all other systems, though in truth, it may have been once established? Certainly not. Systems of money have been adopted by nations for the purpose of developing the industry of the people, and protecting the produce of such industry; for the purpose of creating and protecting commerce; as a means of producing national wealth and enabling the people to pay taxes in something called money, and which has a certain numerical, denominational value, aside from the general value of the metals comprising it as an article of commerce. The precious metals are made money for the convenience of, and as an aid to, commerce. Commerce is the principal thing on account of which money is created by any nation. A people or community, if such a *Page 520
case may be supposed, having no commerce, have no need of money. Now, although a nation has once established a system of money composed of the precious metals, as an aid to commerce, it does not follow that it may not change that system, or, indeed, wholly abrogate it, and substitute something else as the representative of values, classifying it by numerals, and giving them names. The nation may and ought to do so, if, in its judgment, it has discovered a better system for the development of its industry, and the encouragement and protection of commerce. Commerce is the subject, the object to be protected; the thing called money, the standard referred to in the making of contracts, is simply a means of creating, stimulating and protecting commerce.
Now the United States government possesses as full and ample powers touching commerce as any nation that ever existed — certainly as to regulating it with foreign nations and among the several States; and this power is sufficiently ample to justify Congress in declaring what shall be receivable in the payment and discharge of debts. This power exists nowhere else in this country. The power over commerce with other nations and among the States is confined to Congress. It, of necessity, includes the power to prescribe the thing which shall be the common representative of commercial values. It is its duty so to prescribe for the common benefit of all the people who produce the means of, or things used in, commerce, and who are engaged in it.
As to commerce, the people of the United States are substantially one nation. Their State governments have little or no jurisdiction over it. They must look to Congress for protection. They have agreed that Congress shall regulate their commerce with foreign nations and among the States, and they have prohibited the States from enacting certain laws which would conflict with the fair and legitimate exercise of the power confided to Congress, the prohibition embracing all debts and all contracts.
The fact that Congress may establish "uniform laws on the subject of bankruptcies throughout the United States" supports, *Page 521
instead of detracting from, the argument. It is one of those powers directly connected with commerce, and it embraces all bankruptcies, whether arising from obligations entered into in foreign or domestic commerce; in short, all cases of bankruptcy. It excludes, necessarily, the States from the exercise of the power, or rather no State could have exercised the power "throughout the United States;" and our State insolvent laws are only operative upon contracts made after their enactment, upon the principle that such contract is made in reference to the existing law, which enters into and constitutes a part of the contract. A general bankrupt law, to operate upon existing contracts, passed by a State legislature, would infringe the provision prohibiting the passage of any law impairing the obligation of contracts. Congress may impair the contract and discharge the debtor. I refer to this as showing the ample powers that it was intended Congress should have over commerce "throughout the United States," and not as a power, for the carrying into execution of which the legal tender provision in question was authorized. This power touching bankruptcies does not interfere with the power to declare in what debts may be paid, thus preserving commerce in full vigor and preventing bankruptcies.
As we have seen, there are some express limitations upon the powers of Congress; those relating to commerce are, that "no tax or duty shall be laid on articles exported from any State; no preference shall be given by any regulation of commerce, or revenue, to the ports of one State over those of another; nor shall vessels bound to and from one State, be obliged to enter, clear or pay duties in another." These limitations do not affect the question we are considering. I conclude this view of the powers of Congress relating to commerce, by again referring to the rule in McCulloch v. State of Maryland, deduced from a consideration of the provision authorizing laws to be made to carry into execution the powers granted, viz., that the Constitution allows 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 *Page 522
enable that body to perform the high duties assigned to it, in the manner most beneficial to the people. 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, and which are not prohibited, but are consistent with the letter and spirit of the Constitution, are constitutional. In my opinion, the measure adopted by Congress, in making treasury notes a legal tender in payment of debts, comes within the tests here laid down.
I have thus far considered the question under the commercial powers of Congress. I will consider the question briefly under the power to borrow money on the credit of the United States. This power does not mean literally the borrowing and receiving the thing called money. It is not denied that Congress may issue treasury notes and compel their acceptance by the creditors of the government. Borrowing money means neither more nor less than raising supplies on the credit of the government. The issuing and paying out of treasury notes may be a forced loan to the government. But if they are issued and sold in the market, as stocks are, for the purpose of raising supplies, may not the government, in addition to its promise to pay them, give to them a character and qualities which will command for them a higher price in the market? As to stocks, it may increase the interest, prolong the time for payment or redemption, exempt them from taxation, by itself or the States, and all for the purpose of enhancing their value, and thus increasing the supplies.
And so, I apprehend, Congress may, for the like purpose, make the treasury notes receivable in payment of public dues and in payment of all debts, public or private. Such qualities will give them greatly increased value. They will impart to them negotiability, circulation. All persons, and especially those owing debts, will accept them for property which the government needs, because they can be used not only in purchasing property, but in payment of debts, whether contracted before or after the enactment of the law authorizing their issue. This quality of satisfying debts, undoubtedly imparts *Page 523
to them very great additional value, and without it they would, at once, depreciate greatly below their present value as compared with coin, and the government might be compelled to issue a far greater quantity of them, and thus increase the national debt to be hereafter paid by levying and collecting additional taxes.
Call the issuing of these treasury notes borrowing money or a forced loan, and the quality in them, making them receivable in payment of all debts, enhances their value and enables the government to realize from them a greater amount of supplies. The question is not, is this just or unjust to the people, or a certain class of the people. About this some may differ. The answer to such question is, the power being conceded, that it was submitted to Congress, and Congress decided it, and may reconsider it, and again decide. The courts only inquire and decide concerning the power.
Banks in this state are organized, and become incorporated under general laws, and the Constitution prohibits the legislature from passing any law sanctioning the suspension of specie payments by them. The legislature is empowered to require by law ample security for the redemption, in specie, of all bills or notes issued or put in circulation as money by such banks. The legislature had provided a system of security by deposits of bonds and mortgages, and State or United States stocks, with a superintendent of the banking department, and for the sale of such securities and the redemption of such bills and notes when payment is refused by the banks in the "lawful money of the United States." It is argued that the system results in a trust, and the creation of a trust fund, for the benefit of the billholders — the cestui que trusts; and that Congress cannot interfere with such trusts and the rights of the beneficiaries under it. It may be conceded that Congress cannot interfere with trusts so as to deprive beneficiaries of the enjoyment of the property charged with the trust, except as the taxing power may reach it in common with all other property. I speak of trusts generally. But may there not be trusts which Congress may affect and make void by legislation? *Page 524
Suppose property is charged with a trust to be converted into specie, the precious metals, and then to be coined into money, and the money to be paid over to the beneficiaries. Such a trust would be void as to the coining. Suppose the trust to be valid when created, but it conflicts with a valid act of Congress subsequently created, will it not cease to be a valid trust? It will make no difference whether the trust had its origin in a State law or State Constitution, as the laws of Congress passed in pursuance of the United States, are the supreme law of the land.
Now, if I am right in the position that Congress could make the treasury notes in question a legal tender in payment of all debts, public and private, when a bank tenders such treasury notes in payment of its circulating notes, it at once discharges its debts, and there will be nothing for the trust to operate upon, or rather the power of the trustee to dispose of the trust property will be suspended.
Assume that the object of the securities is to secure the payment of the bank notes in specie, or rather in coined money (for this is the meaning of the word "specie," as used in the Constitution), and the securities are brought to a public sale, and the purchaser bids a certain number of dollars, he will owe the superintendent that number of dollars, which debt may be discharged by a tender of treasury notes. It may be said that he will, as a trustee, only be authorized to make sale of the securities for specie dollars; that is, that he may exchange a certain amount of securities for a certain number of specie dollars. It must be literally an exchange, for if he takes the bid or promise to pay a certain number of dollars in specie, such promise may be satisfied by tendering a like number of dollars in treasury notes.
It is to be noticed, that the legislature does not grant charters in this State annexing conditions to the grant, but the banks are organized under general laws, containing certain requirements with which the banks in this case complied, thus giving them a corporate existence. They also complied with the requirement of the legislature to furnish security for the redemption *Page 525
of their bills and notes. But a failure to redeem such bills in specie is no where made a condition to their continued corporation existence. The law, however, provides what may be done in case of a failure to redeem such bills in "lawful money of the United States." And the doing of what is prescribed, touching the securities, may not necessarily arrest the business of the bank. In short, its existence as a corporation does not depend upon the performance of a condition to redeem its bills in specie. And, as Congress has provided that it may pay its debts in treasury notes, the law of Congress takes precedence of the State law requiring redemption in something else, if so construed, authorizing and directing the bank superintendent to convert the securities for the purpose of raising the means of paying the bills, which have been already paid. In other words, the debt being paid, the superintendent has no jurisdiction to proceed and convert the securities into money.
I concur in the opinions of my brethren, touching the power to borrow money upon the credit of the United States, and refer to their more full and complete arguments upon that power.
ROSEKRANS, J., concurred with the majority of the court, on the ground that the principle involved in the cases had been determined in favor of the validity of the act of Congress by the Supreme Court of the United States, in McCulloch v. The State of Maryland ( 4 Wheat., 316 ), and the late case of The People, on the relation of the Bank of Commerce, v. The Commissioners of Taxes of the City of New York (2 Black U.S., 620.)