Imatges de pàgina
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they must be obtained, as well during the war as previously to its declaration, from the General Government. This alteration is fully justified by the advantages of uniformity, in all points relating to foreign powers; and by the necessity of an immediate responsibility to the nation, in all matters in which the nation itself is responsible to others. Moreover, were it otherwise, it would be in the power of a single state to involve the whole Union in war, at its pleasure; and although the issuing of letters of marque is not always designed as a preliminary or provocative to war, yet, in its essence, it is a measure of hostile retaliation for unredressed grievances, real or supposed, and is most generally succeeded by open hostilities.

2d. The prohibition of the states to coin money was necessary to give complete effect to the power of the Union in relation to the current coin, and arose from a consideration of the danger and facility of circulating base or spurious coins, where the coins are various in value and denomination, and issued by several independent and irresponsible authorities Under the Confederation, it was left in the hands of the states as a concurrent right, with an exception in favour of the exclusive right of Congress to regulate the alloy and the value. In this particular, these two provisions have been found to be an improvement on the old; for while the alloy and the value depended on the General Government, a right of coinage in the individual states could have no other effect than to multiply expensive mints, and diversify the forms and weights of the coins in circulation. The latter measure was found to defeat the purposes for which the power was originally submitted to the Federal authority; and so far as the former might prevent the easy remittance of gold and silver to the

central mint for recoinage, the end can be as well attained by local mints established by the General Government in particular states. But the general substitution of a paper medium for a metallic currency obviates the objection entirely, and gives, therefore, greater importance to the extension of the prohibition to "bills of credit."

The loss which this country had sustained between the war of the Revolution and the adoption of the Federal Constitution, from the fatal effects of paper money on public and private confidence, on the industry and morals of the people, the national reputation, and the character of Republicanism itself, could be redeemed in no other way than by the voluntary surrender by the several states of the power which had been rendered the instrument of such profligate and destructive mischief. In addition to these considerations, the same reasons which evince the necessity of denying to the individual states the power of regulating the coin, apply with equal force to inhibit them from substituting a paper medium in its place. Were every state at liberty to regulate the value of its metallic currency, there would be as many different currencies as states; and thus the commercial intercourse between them would be em barrassed and impeded; retrospective alterations of the value of its coin might be made by any state, in fraud not only of its own citizens, and those of other states, but of foreigners, which would not merely interrupt the harmony among the states, and engender animosities between them, but discredit and compromise the Union with foreign nations, by the indiscretion or profligacy of a single state. Nor are these mischiefs less incident to a power in the states to emit bills of credit than to coin money; and the power to make anything but gold or silver coin a tender in pay

ment of debts is withdrawn from the states, on the same principle as that of issuing a paper currency.

This restriction upon the power of the states has received a construction of the utmost importance, both to their individual rights and the authority of the Federal Government. It has been ruled by the Supreme Court, that although the term "bills of credit," in its enlarged, and, perhaps, in its literal sense, may comprehend any instrument by which a state engages to pay money at a future day, thereby including a certificate given for money borrowed, yet that the language of the Constitution, and the mischief intended to be prevented, equally limit its interpretation. The word "emit," it was observed, is never employed in describing those contracts by which a state binds itself to pay money at a future day, for services actually received, or money borrowed for immediate use. Nor are instruments executed for such purposes denominated in common language "bills of credit." To emit bills of credit conveys to the mind the idea of issuing paper, redeemable at a future day, in anticipation of the public resources, and intended to circulate as money.* This is the sense, indeed, in which the terms have always been understood, and in which they were interpreted by the court. The Constitution, moreover, considers the emission of bills of credit, and the enactment of tender laws, as distinct operations, which may be separately performed, independently of each other. Both acts are forbidden; and to affirm, as has been done in some of the states,† that bills of credit may be emitted, if not made a legal tender, is, in effect, to expunge that distinct and independent prohibition, and to read the Constitution

* 4 Peters, 431.

+ 8 ibid., 40.

as if that branch of the clause had been omitted. But there is too much reason to fear that such an expedient has since been resorted to, or, rather, that a successful attempt has been made to elude this wholesome restriction.

The Legislature of Kentucky, in the year 1820, passed an act establishing a bank, and constituting the president and directors a corporation, with a capital consisting of all moneys paid into the treasury of the state for the sale of its vacant lands, and other property. The bank was authorized to receive money on deposite, to make loans, and issue promissory notes; and was the exclusive property of the state. In relation to this bank, thus constituted, with such a capital, and so owned, it was held that its notes thus issued were not bills of credit within the meaning of the Constitution.* It was admitted, indeed, that to constitute a bill of credit within the purview of the prohibition, it must be issued by a state, on the faith of a state, and designed to circulate as money; that the paper which it issues must circulate on the credit of the state, and be so received and used in the ordinary business of life; that the persons issuing it must have power to bind the state; they must act as agents, and, of course, not incur any personal responsibility, nor impart as individuals any credit to the paper. These were admitted to be the leading characteristics of a bill of credit, and yet the notes issued by this "Bank of the Commonwealth of Kentucky"-for such, moreover, was its title-were held not to be bills of credit within the meaning of the Federal Constitution. Before we assent to this conclusion, let us bring the question to a test, I will not say of common sense, but of the characteristics

* 11 Peters, 257.

specified by the court.

These shall serve as interrogatories, to which answers shall be drawn from its own statement of the facts.

1st. Were the notes of this bank issued by the state?

Answer. The bank was established by the state : its capital consisted of the funds of the state, and it was authorized by the state to issue its notes.

2d. Did its paper circulate on the credit of the state?

Ans. Its issues were founded on its capital, which was the property of the state.

3d. Had the persons who issued its notes author ty to bind the state?

Ans. The bank was the property of the state, wh¬ named or appointed its directors in the act of incorporation.

4th. Did the directors or officers of the bank ac as agents of the state, without incurring personal responsibility?

Ans. Of course. There was no other stockholder than the state; and they could not have acted on any other responsibility to the public than that of the state, as they were not made personally responsible as principals by the act of incorporation.

5th. Did the directors or officers of the bank impart any credit, as individuals, to the notes of the bank?

Ans. No other than is imparted by the signatures of the officers of every other bank. It is to the capital of the bank, and to the responsibility of the stockholders, that the public look for security, and not to the persons whose official signatures are affixed to its

notes.

If there be any "other matter or thing" which may be put by way of general interrogatory, the answer

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