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The more important question upon the involved in the case now before the merits of the case is, whether the Con- court, and the law may be good in part, stitution of the United States interposes although bad in part. any impediment to the plaintiff's right of The precise meaning and interpretarecovery in this case. And this question tion of the terms, bills of credit, has no has been presented at the bar under the where been settled; or if it has, it has following points :
not fallen within my knowledge. As 1. Whether the certificates issued un- used in the Constitution, it certainly cander the provisions of the law of the State not be applied to all obligations, or of Missouri, are bills of credit, within vouchers, given by, or under the authe sense and meaning of the Constitu. thority of a State for the payment of tion.
money. The right of a State to borrow 2. If so, whether, as they formed the money cannot be questioned ; and this consideration of the note on which the necessarily implies the right of giving judgment below was recovered, the note some voucher for the repayment: and it was rendered thereby void and irrecov. would seem to me difficult to maintain erable.
the proposition, that such voucher canThe first is a very important question, not legally and constitutionally assume and not tree from difficulty; and one a negotiable character; and as such, to upon which I have entertained serious a certain extent, pass as, or become a doubts : but looking at it in all its bear- substitute for, money. The act does not ings, and considering the consequen- profess to make these certificates a circes to which the rule established by a culating medium, or substitute for momajority of the court will lead, when ney. They are (except as relates to carried out to its full extent, I am com- public officers) made receivable only for pelled to dissent from the opinion pro- taxes and debts due to the State, and for nounced in this case.
salt sold by the lessees of salt springs The limitation upon the powers of the belonging to the State.
These are State of Missouri, which is supposed to special and limited objects; and these have been transcended, is contained in certificates cannot answer the purpose the tenth section of the first article of of a circulating medium to any considthe Constitution of the United States, erable extent. • No State shall emit bills of credit.' Are A simple promise to pay a sum of mothe certificates issued under the authori. ney, a bond or other security given for ty of the Missouri law, bills of credit the payment of the same, cannot be conwithin this prohibition ?
sidered a bill of credit, within the sense The form of the certificate is prescrib- would take from the States all power to
of the Constitution. Such a construction ed in the third section of the act (act borrow money, or execute any obliga, 27th of June, 1821,) as follows :
tion for the repayment.
The natural "This certificate shall be receivable at and literal meaning of the terms, import the treasury or any of the loan offices of a bill drawn on credit merely, and not the State of Missouri, in the discharge bottomed upon any real or substantial of taxes or debts due to the State, for the fund for its redemption. There is a sum of $ with interest for the same material and well known distinction beat two per centum per annum, from this tween a bill drawn upon a fund, and one date,' &c. And the thirteenth section drawn upon credit only. A bill of creddeclares, “that the certificates of the said it may therefore be considered a bill loan office shall be receivable at the drawn and resting merely upon the credtreasury of the State, and by all tax it of the drawer ; as contradistinguished gatherers and other public officers, in from a fund constituted or pledged for payment of taxes or other moneys now the payment of the bill. Thus, the due, or to become due to the State, or Constitution vests in Congress the power any county or town therein; and the to borrow money on the credit of the said certificates shall also be received United States. A bill drawn under such by all officers, civil and military, in the authority would be a bill of credit. And State, in the discharge of salaries and this idea is more fully expressed in the fees of office.' It is proper here to no- old Confederation (Art. 9). “Congress tice, that if the latter branch of this sec. shall have power to borrow money or tion should be considered as conflicting emit bills on the credit of the United with that prohibition in the Constitution, States.' Can the certificates issued which declares that no State shall make under the Missouri law, according to the anything but gold and siver coin a tender fair and reasonable construction of the in payment of debts; no such question is act, be said to rest on the credit of the
State? Although the securities taken existing in almost every member of the for the certificates loaned are not in Union. terms pledged for their redemption, yet If these certificates are bills of credit, these securities constitute a fund amply inhibited by the Constitution, it appears sufficient for that purpose, and may well to me difficult to escape the conclusion, be considered a fund provided for that that all bank notes, issued either by the purpose. The certificates are a mere States or under their authority and perloan upon security in double the amount mission, are bills of credit; falling loaned. And in addition thereto (section within the probibition. They are 29), provision is made expressly for con- certainly, in point of form, as much stituting a fund for the redemption of bills of credit; and if being used as these certificates. These are guards and a circulating medium, or substitute checks against their depreciation, by in- for money, makes these certificates suring their ultimate redemption. bills of credit, bank notes are more em
The emissions of paper money by the phatically such. And not only the States, previous to the adoption of the notes of banks directly under the man. constitution, were, properly speaking, agement and control of a State, of which bills of credit; not being bottomed upon the United States, but all notes of banks
description of banks there are several in any fund constituted for their redemp- established under the authority of a tion, but resting solely for that upon the credit of the State issuing the State, must fall within the prohibition.
There was no check therefore For the States cannot certainly do that upon excessive issues; and a great de. indirectly which they cannot do directly. preciation and loss to holders of such And if they cannot issue bank notes be. bill followed as matter of course.
But cause they are bills of credit, they cannot when a fund is pledged, or ample pro. authorize others to do it. If this circuitvision made for the redemption of a bill ous mode of doing the business would or voucher, whatever it may be called, take the case out of the prohibition, it there is but little danger of a deprecia. would equally apply to the Missouri tion or loss.
certificates ; for they were issued by But should these certificates be con- persons acting, under the authority of sidered bills of credit, under an enlarged the Stale, and indeed could be issued in sense of such an instrument; it does not
no other way, necessarily follow that they are bills of
This prohibition in the Constitution credit, within the sense and meaning of could not have been intended to take the Constitution. As no precise and from the States all power whatever over technical meaning or interpretation of a
a local circulating medium, and to supbill of credit has been shown, we may press all paper currency of every dewith propriety look to the state of things scription. The power is given to Conat the adoption of the Constitution, to gress to coin money; and the States are ascertain what was probably the under- prohibited from coining money. But standing of the convention by this limi. to construe this as embracing a paper tation on the power of the States. The circulating medium of every description, State emissions of paper money had been and thereby render illegal the issuing of excessive, and productive
all bank notes by or under the authority
great mis. chief. In some States, and at some
of the States, will not, I presume, be times, such emissions were, by law, contended for by any one, and I am unmade a tender in payment of private tial reason why the prohibition does not
able to discover any sound and substandebts ; in others not so.
But the great evil that existed was, that creditors were
reach all such bank notes, if it extends compelled to take such a depreciated to the certificates in question.
The conclusion to which I have come currency, and articles of property in payment of their debts. This being the
on this point, renders it unnecessary for mischief, it is an unfair construction of me to examine the second question made the Constitution to restrict the intended at the argument. I am of' opinion, that remedy to the acknowledged and real the judgment of the State court ought to nischief. The language of the Consti- be afhrmed. tution may perhaps be too broad to admit Mr Justice M'Lean. of this restricted application. But to Several cases, depending upon the consider the certificates in question bills same principles were brought into this of credit within the Constitution, is, in court, from the Supreme Court of the my judgment, a construction of that in- State of Missouri, by writs of error. strument which will lead to serious em In the case of Hiram Craig and others, barrassment with State legislation; as the declaration sets forth the cause of ac
tion in the following terms, viz. • For in which a decision in the suit could be that whereas, heretofore, on the 1st day had, where is drawn in question the of August, in the year of our Lord 1822, validity of a statute of, or an authority at the county, &c, the said Craig, John exercised under any State, on the ground Moore and Ephraim Moore made their of their being repugnant to the Consticertain promissory note in writing, bear- tution, treaties or laws of the United ing date, &c, and then and there, for States, and the decision is in favor of value received, jointly and severally, such their validity,' may be re-examined promised to pay to the State of Missouri, and reversed or affirmed in the Supreme on the 1st day of November, 1822, at the Court of the United States upon a writ loan office in Chariton, the sum of one of error. hundred and ninety nine dollars and nine Had not the point been settled by tynine cents, and the two per centum several adjudications in similar cases, I per annum, the interest accruing on the should entertain strong doubts whether certificates borrowed from the 1st day of it sufficiently appeared on the record, October, 1821, nevertheless,' &c. that the validity of the statute of Mis
The general issue of non assumpsit souri was drawn in question, on account having been pleaded in each case, the of its repugnance to the Constitution. Circuit court of Chariton, in which the In the finding of the Chariton Circuit suits were commenced, rendered judg. Court, the act is referred to, and the ments in favor of the plaintiff
. The fol. consideration of the note is stated; but lowing entry, in the case of Craig and it no where appears in the record, that others, was made on the record. . And the validity of the statute was contested. afterwards at a court begun and held at And as this is the only ground on which Chariton, on Monday the 1st of Novem. this court can take jurisdiction of the ber, 1824, and on the second day of said case, it would seem to me that it should court, the parties by their attorneys ap
not be left to inference, but be clearly peared, and neither party requiring a
stated in the proceeding. jury, the cause is submitted to the court;
In the Supreme Court of Missouri, the therefore, all and singular the matters judgment of the Circuit Court and things and evidences being seen and affirmed: but it does not appear what heard by the court, it is found by them, objections to the affirmance were urged that the said defendants did assume upon before the court. This question, how. themselves in manner and form as the ever, seems not to be open, and I yield plaintiff's counsel allege: and the court to the force of prior adjudications. Two also find that the consideration for which points must necessarily be considered the writing declared upon and the in the investigation of the merits of this assumpsit was made, was for the loan of case. loan office certificates, loaned by the
1. Are the certificates authorized to State, at her loan office at Chariton; be issued by the law of Missouri, bills which certificates were issued, and the of credit, within the meaning of the loan made in the manner pointed out by Constitution ? an act of the legislature of the State of 2. If they are bills of credit, is the Missouri, approved the 27th day of June, note on which this suit was brought 1821 ; entitled "an act for the establish: void. ment of loan offices, and the acts amen
It is contended by the counsel for the datory and supplementary thereto." And plaintiff's in error,
any paper issued the court do further find, that the plain. by a State, that contains a promise to pay tiff hath sustained damages, by reason
a certain suim, and is intended to be used of the non-performance of the assump
as a medium of circulation, is a bill of tions and undertakings of the said de. credit, and comes within the mischief fendants, to the sum of two hundred against which the Constitution intended and thirtyseven dollars and seventy nine to guard. In illustration of this position, cents. Therefore it is considered, &c. a reference is made to the depreciated
currency of the Revolution. An appeal was taken to the Supreme Court of Missouri, in which this judg. our history, bills of credit formed the
During that most eventful period of ment and the others were affirmed.
currency of the country; and every. The first question which this case pre- thing of greater value was excluded sents for consideration, arises under the from circulation. These bills were so lwentyfifth section of the judiciary act multiplied by the different States and by of 1789; which provides, that a final Congress, that their value was greatly judgment or decree in any suit, in the impaired. This loss was attempted to highest court of law or equity of a State be covered, and the growing wants of
the Government supplied, by increased They all contained a promise of payemissions. These caused a still more ment at a future day; and where they rapid depreciation, until the credit of were not made a legal tender, creditois the bills sunk so low as not to be current were often compelled to receive them in at any price. Various statutes were payment of debts, or subject themselves passed to force their circulation, and to great inconveniences and peril. sustain their value ; but they proved The character of these bills, and the ineffectual. For a time, creditors were evils which resulted from their circulacompelled to receive these bills under tion, give the true definition of a bill of the penalty of forfeiting their debt ; credit, within the meaning of the Conlosing the interest; being denounced as stitution; and of the mischiefs against enemies to the country, or some other which the Constitution provides. penalty. These laws destroyed all just The following is the form of the bills relations between creditor and debior; emitted in 1780, under the guarantee of and so debased a currency produced the Congress. . The possessor of this bill most serious evils in almost all the rela. shall be paid Spanish milled doltions of society. Nothing but the ardor lars by the 31st day of December, 1706, of the most elevated patriotism could with interest, in like money, at the rate overcome the difficulties and embarrass. of five per cent per annum, by the State ments growing out of this state of things. of according to an act, &c.
It will be found somewhat difficult to Bills of credit were denominated curgive a satisfactory definition of a bill of rent money; and were often referred to credit. In what sense it was used in the in the proceedings of Congress hy that Constitution, is the object of inquiry. title, in contradistinction to loan office
Different nations of Europe have emit- certificates. It is reasonable to suppose ted, on various emergencies, three de. that in using the term .bills of credit scriptions of paper money: 1. Notes, in the Constitution, such bills were stamped with a certain value, which meant as were known at the time by contained no promise of payment, but that denomination. If the term be suswere to pass as money. 2. Notes, re- ceptible of a broader signification, it ceivable in payment of public dues, with would not be safe so to construe it; as it or without interest. 3. Notes, which would extend the provision beyond the the Government promised to pay at a evil intended to be prevented, and infuture period specified, with or without stead of operating as a salutary restraint, interest, and which were made receiva- might be productive of serious mischief. ble in payment of taxes, and all debts The words of the Constitution must alto the public.
ways be construed according to their Bills of the last class were issued dur- plain import, looking at their connexion ing the revolution; and in some of the and the object in view. Under this rule colonies they had been emitted long be- of construction, I have come to the confore ihat time. In 1690 bills of credit clusion, that to constitute a bill of credit, were for the first time issued, as a sub- within the ineaning of the Constitution, stitute for money, in the colony of Mas- it must be issued by a State, and its cirsachusetts Bay, as stated in Hutchinson's culation as money enforced by statutory history. In 1716 a large emission was provisions. It must contain a promise of made and lent to the inhabitants, to be payment by the State generally, when paid at a certain period; and in the mean no fund has been appropriated to enable time to pass as money. For forty years, the holder to convert it into money. It the historian says, the currency was in must be circulated on the credit of the much the same state as if a hundred State ; not that it will be paid on presenthousand pounds sterling had been tation, but that the State, at some future stamped on pieces of leather or paper of period, on a time fixed, or resting in its various denominations, and declared to own discretion, will provide for the paybe the money of the Government, with ment. out any other sanction than this, that If a more extended definition than when there should be taxes to pay, the this were given to the term, it would treasury would receive this sort of mo- produce the most serious embarrassments ney; and that every creditor should be to the fiscal operations of a State. Every obliged to receive it from his debtor. State in the transactions of its moneyed
The bills issued during the revolution concerns, has one department to inveswere denominated bills of credit. In tigate and pass accounts, and another to 1780 the United States guarantied the pay them. * Where a warrant is issued payment of bills emitted by the States. for the amount due to a claimant, which
is to be paid on presentation to the trea. marque and reprisal ; coin money ; emit surer, can it be denominated a bill of bills of credit; make anything but gold credit? And may not this warrant be and silver coin a tender in payment of negotiated, and pass in ordinary transac- debts; pass any bill of attainder, ex tions, as money? This is very common post facto law, or law impairing the obliin some of the States; and yet it has not gations of contracts; or grant any title been supposed to be an infraction of the of nobility.' Constitution.
Under the statute of Missouri, certifiAudited bills are often found in cir- cates in the following form were issued : culation; in which the State promises to • This certificate shall be receivable at pay a certain sum, at some future day the treasury, or any of the loan offices specified. If these are inhibited by the of the State of Missouri, in the discharge Constitution, can a State make loans of of taxes or debts due to the State, for money? Can there be any difference the sum of dollars, with interest between borrowing money from a credi. for the same, at the rate of two per centor, and any other person who does not
tum per annum, from this date, the stand in that relation ? The amount can
day of 182. not alter the principle. If a State may It appears by the third section of the borrow one hundred thousand dollars, act, that two hundred thousand dollars she may borrow a less sum; and if an were authorized to be issued, of the obligation to pay with or without interest above certificates, each not exceeding may be given in the one case, it may in ten dollars, nor less than fifty cents. the other.
By the thirteenth section, these certifiWhere money is borrowed by a State, cates were made receivable at the State it issues script which contains a promise treasury by tax gatherers and other pubto pay, according to the terins of the lic officers, in payment of taxes or mocontract. If the lender, for his own neys due to the State, or any county or convenience, prefers this script in small town therein; and they were made redenominations, may not the State ac- ceivable by all officers in payment of commodate him? This may be made a salaries and fees of office. condition of the loan. If a State shall Under the fifteenth section, commisthink proper to borrow money of its own sioners were authorized to loan these citizens, in sums of five, ten, or twenty certificates to the citizens in the State ; dollars, may it not do so? If it be un apportioning the amount among the sevable to meet the claims of its credit. eral counties according to the populaors, shall it be prohibited from acknow- tion, on mortgages or personal security. ledging the claims, and promising pay. The act provides the means by which ment with interest at a future day? these certificates shall be paid, and the The principles of justice and sound policy fact is admitted that at this time they alike require this; and unless the right are all redeemed by the State. of the State to do so be clearly inhibit The design, in issuing these certified, it must be admitted.
cates, seems to have been to furnish the In the adjustment of claims against a citizens of Missouri with the means of county, orders are issued on the county paying to the State the taxes which it treasury; and it is common for these to imposed, and other debts due to it. It circulate, by delivery or assignment, as was in effect giving a credit to the debtbank notes or bills of exchange. ors of the State, provided they would
May a State do, indirectly, that which give good, real or personal security. the Constitution prohibits it from doing Had the arrangement been confined to directly? If it cannot issue a bill or those who owed the State ; and had note, which may be put into circulation certificates been required of them, proas a substitute for money, can it, by an mising to pay the amount, with interest; act of incorporation, authorize a com no objection could have been urged to pany to issue bank bills on the capital of the legality of the transaction. And ihe State? It will thus be seen, that if even if the State, in the discharge of an extended construction be given to the its debts, had paid such certificates, the term · bills of credit,' as used in the Con- act would not have been illegal. stitution; it may be made to embrace The State of Missouri adopted no almost every description of paper issued measures to force the circulation of the by a State.
above certificates. No creditor was The words of the Constitution are, that under any obligation to receive them. no State shall enter into any treaty, alli. By refusing them, his debt
. was not postance, or confederation ; grant letters of poned, nor the interest upon it suspend