contract in New Hampshire. Are those insurances all to be held void, upon the principle of the decision from Alabama?

And as to notes issued by banks: if one in Alabama hold the notes of a bank incorporated by Pennsylvania, are they void? If one be robbed there of such notes, is it no theft? If one counterfeits those notes there, is it no crime? Are all such notes mere nullities, when out of the State where issued?

Mr. Webster here took leave of the ques tion of the power of a corporation created by one of the States to make contracts in another. I now proceed, said Mr. Webster, to consider whether there be anything in the law or constitution of the State of Alabama, which prevents the agent of the United States Bank, in that State, from making such a contract as that which is the foundation of this suit.

State authorizing the establishment of no other than one bank in the State.

This, said Mr. Webster, is a violent infer

How does the buying or selling bills of exchange in Alabama, by another purchaser than the Bank of Alabama, infringe her policy? Because, it is said, it diminishes the profits which she derives from the dealings of the bank. Profit is her policy, it is argued; gain, her end. Is it against her policy for Mr. Biddle to buy bills, because his bank is incorporated, and not against her policy for Mr. Girard to buy bills, because his is not incorporated? Or, how far does she carry this policy imputed to her? Is no one to be allowed to buy or sell bills of exchange in Alabama but a bank of her own, which may or may not be in credit, and may or may not be solvent? It would be strange, indeed, were any State in this Union to adopt such a policy as this. But, if the argument founded on this inferred policy of Alabama amounts to anything, it proves, not that incorporated citizens of other States cannot buy or sell bills there, but that it is the policy of Alabama to prevent other citizens from buying bills at all in Alabama.

*It is said that the buying of a bill of [*563 Reference has been made to the statute books exchange by such agent is contrary to the pol562*] to show cases in which the States have icy of the State of Alabama; and this is inforbidden foreign insurance companies from ferred from the law establishing the Bank of making insurances within their limits. But no Alabama; that bank being authorized to deal such prohibition has been shown against insur-in bills of exchange, and the constitution of the ances by citizens of, or companies created in, the different States. Is not this an exact case for the application of the rule exceptio probat regulam? The fact of such prohibitory legis-ence. lation shows that citizens of other States have, and that citizens of foreign powers had, before they were excluded by law, the right to make insurances in any and every one of the States. Mr. Webster next called the attention of the court to the deposit law passed by Congress on the 23d of June, 1836. It was, said he, one of the conditions upon which, under that act, any State bank should become a depository of the public money, that it should enter into obligations "to render to the government all the duties and services heretofore required by law to be performed by the late Bank of the United States, and its several branches or offices;" that is, to remit money to any part of the United States, transfer it from one State to another, etc. But that act required, also, something more: and it shows how little versed we in Congress were (and I take to myself my full share of the shame) in the legal obstacles to the doing of acts in one State by corporations of other States. The first section of that act provides that "in those States, territories, or districts, in which there are no banks," etc., the Secretary of the Treasury "may make arrangement with a bank or banks in some other State, territory, or district, to establish an agency or agencies in the States, territories, or districts, so destitute of banks, as banks of deposit," etc. Here is an express recognition by Congress of the power of a State bank to create an agent for the purpose of dealing as a bank in another State or territory.

It has been said that as there is no law of comity under the law of nations between the States, it remains for the legislatures of the several States to adopt, in their conduct towards each other, as much of the principle of comity as they please. Here, then, there is to be negotiation between the States, to determine how far they will observe this law of comity. They are thus required to do precisely what they cannot do. States cannot make treaties nor compacts. A State cannot negotiate. It cannot even hold an Indian talk. And now I would ask how it happens, at this time of the day, that this court shall be called upon to make a decision contrary to the spirit of the Constitution, and against the whole course of decisions in this country and in Europe, and the undisputed practice under this government for fifty years, overturning the law of comity, and leaving it to the States, each to establish & comity for itself?

I think, said Mr. Webster, that there is no just foundation for the inference of any such policy on the part of the State of Alabama. By referring to Aikins' Digest of the laws of that State, it will be found that she has carried her policy a little farther than merely the establishing of a bank. Her public officers are authorized to receive the notes of banks of other States in payment of dues to her; and she has enacted laws to punish the forgery of notes of other banks. Now, taking their acts together, considering them as a whole, the inference, which has been drawn from her establishment of a State bank under her constitution is certainly not sustained.

To consider this argument, however, more closely: it is assumed by it, first, that the State meant, by her legislation, to take to herself all the profits of banking within her territorial limits; and, second, that the act of buying and selling a bill of exchange belongs to banking.

The profits of banking are derived more from circulation than from exchange. If the State meant, through her bank policy, to take all the profits of banking, why has she not taken all the profits of circulation? Not only has she done no such thing, but she protects the circulation of notes of banks of other States.

Mr. Webster begged now to ask the particular attention of the court to this question: What is banking?

Alabama, in reference to banking, has done | amounts of capital, for purposes not professedly nothing but establish a bank, and given it banking; one, especially, to carry on the minthe usual banking powers. And when the ing business on a large scale. These companies learned counsel on the other side speak of bank-issued promissory notes, payable on [*565 ing, what do they mean by it? A bank deals in exchanges; and it buys or builds houses also; 564*] *so do individuals. If there be anything peculiar in these acts by a bank, it must be not in the nature of the acts individually, but in the aggregate of the whole. What constitutes banking, must be something peculiar. There are various acts of legislation, by different States in this country, for granting or preventing the exercise of banking privileges. But has any law ever been passed to authorize or to prevent the buying by an individual of a bill of exchange? No one has ever heard of such a thing. The laws to restrain banking have all been directed to one end; that is, to repress the unauthorized circulation of paper money. There are various other functions performed by banks; but, in discharging all these, they only do what unincorporated individuals do.

What is that, then, without which any institution is not a bank, and with which it is a bank? It is a power to issue promissory notes with a view to their circulation as money.

Our ideas of banking have been derived principally from the act constituting the first Bank of the United States, and the idea of that bank was borrowed from the Bank of England. To ascertain the character and peculiar functions of the Bank of England, Mr. Webster had referred, and referred the court, to various authorities: to M'Culloch's Commercial Dictionary; to Smollett's continuation of Hume's England; to Godfrey's History of the Bank England, in Lord Somers' Tracts, 11th volume, 1st article; to Anderson's History of Commerce, etc.

demand; and these notes readily got into circulation as cash to the prejudice of the circulation of the Bank of England. But Parliament being at this time in great want of ready money for the expenditures of the war on the Continent, the bank proposed to double its capital, and to lend this new half of it to government if government would secure to the bank an exclusive circulation of its notes. The statute of the sixth of Anne, ch. 22, was accordingingly passed; which recites that other persons and divers corporations have presumed to borrow money, and to deal as a bank, contrary to former acts; and thereupon it is enacted that "no corporation, or more than six persons in partnership, shall borrow, owe, or take up any money on their bills and notes, payable at demand, or at less than six months from the borrowing." This provision has been often re-enacted, and constitutes the banking privilege of the Bank of England. Competition was not feared from the circulation of individual notes. Hence individuals or partnerships of not more than six persons have been at liberty to issue small notes, payable on demand; in other words, notes for circulation. And we know that in the country such notes have extensively circulated; but private bankers in London, in the neighborhood of the bank, though it was lawful, have not found it useful to issue their own notes. So that the banking privilege of the Bank of England consisted simply in the privilege of issuing notes for circulation, while that privilege is forbidden, by law, to all other corporations, and all large partnerships and associations.

This privilege was restrained, in 1826, so as not to prohibit banking companies, except within the distance of sixty-five miles of London; and, at the same time, notes of the bank were made a tender in payment of all debts, except by the bank itself. This provision may be considered as a new privilege; but it does not belong to the original and essential idea of banking. Mr. M'Culloch remarks, and truly, that all that government has properly to do with banks is only so far as they are banks of issue. Upon the same principle the banks of other countries of Europe are incorporated, with the privilege to issue and circulate notes as their distinctive character. Here Mr. Webster explained the character of the banks of France, Belgium, etc.

The project of the Bank of England was conceived, Mr. Webster said, by Mr. Paterson, a Scotch gentleman, who had traveled much abroad, and had seen somewhere (he believed in Lombardy) a small bank which issued tickets or promises of payment of money. From this he took the idea of a bank of circulation. That was in 1694. At that time neither inland bills nor promissory notes were negotiable or transferable, so as to enable the holder to bring suit thereon in his own name. There was no negotiable paper except foreign bills of exchange. Mr. Paterson's conception was that the notes of the Bank of England should be negotiable toties quoties, or transferable from hand to hand, payable at the bank in specie, either on demand or at very short sight. This conception had complete success, because there was then Now, how is it in our own country? When no other inland paper, either bills or notes, our State legislatures have undertaken to rewhich were negotiable. The whole field was strain banking, the great end in view has been occupied by Bank of England notes. In 1698 to prevent the circulation of notes. Mr. Webinland bills were made negotiable by act of ster here referred to the statute books of MasParliament; and in the fourth year of Queen sachusetts, Maine, Rhode Island, and New Anne's reign promissory notes were made ne- Hampshire, for restraining unauthorized comgotiable. Of course, after this everybody might panies from issuing notes of circulation. issue promissory notes, and where they had then turned to the statute of Ohio, imposing a credit enough they might circulate as money. punishment for unauthorized banking. Her law There is not much of novelty in the inventions defines, in the first place, what constitutes a of mankind. Under this state of things, that bank, viz., the issuing of notes which pass by took place in England which we have seen delivery, and intended for circulation as cash. so often take place among us, and which we That, said Mr. Webster, is the true definition of have put to the account of modern contrivance. a bank, as we understand it, in this country, Large companies were formed, with heavy | Mr. Webster referred also to the laws of other

He

566*] *States, Maryland, New Jersey, Missouri, Pennsylvania, Delaware, North Carolina, South Carolina, Virginia, Georgia, all to the same effect. The law of the State of Alabama herself, said he, is much more important, in this view of the case, than that of any other State. The constitution of the State of Alabama was established in 1819; the law creating the bank of Alabama was passed in 1823. The constitution and this law are all the authorities from which the inference has been drawn of the policy of the State of Alabama. Did she suppose that by this law she was establishing such a monopoly of the purchase of bills of exchange as has been contended for in this case? Certainly not. For, by a law passed after-when both the law and public sentiment have wards, she restrained the circulation of unauthorized bank notes; that is, notes not issued by some authorized banks. But did she also restrain dealings in exchange? She did no such thing. Nor is there anything, either in the constitution or the laws of the State of Alabama, which shows that by banking she ever meant more than the circulation of bills as currency. There is nothing, therefore, in any law or any policy of Alabama, against the purchase of bills of exchange by others as well as by the Bank of Alabama. She has prohibited by law other transactions which are clearly banking transactions; but she has not touched this. If even her banking policy includes as well buying exchange as circulation, and she guards against competition in the one, and leaves the other open, who can say, in the face of such evidence, that it is her policy to guard against what she leaves free and unrestrained?

Is there anything in the constitution, or any ground in the legislation of Alabama, to sustain the allegation which has been made of her policy? If not, is the existence of such a policy to be established here by construction, and that construction far-fetched?

Mr. Webster here rested his argument on this case, which, he said, had been discussed by others so ably as not to justify his occupying the time of the court by going farther into it. The learned counsel on the other side had, in the course of his argument of yesterday, alluded to the newspapers, which, he said, had treated the decision of the court below scornfully. Mr. Webster said he was sorry to hear it; for the learned judge had acted, in his decision, he had no doubt, under a high sense of duty. I have been told, said Mr. Webster, but I have not seen it, that a press in this city, since this case has been under consideration in this court, has undertaken to speak, in a tone something approaching to that of command, of the decision upon it to be expected from this court. Such conduct is certainly greatly discreditable to the character of the country, as well as disrespectful and injurious to the court.

doing the vast number of contracts which would be affected by the affirmation here of the judgment rendered in the court below, because his object did not require that; his object was to diminish the prospect of mischief, not to enlarge it. For myself, I see neither limit nor end to the calamitous consequences of such a decision. I do not know where it would not reach, what interests it would not disturb, or how any part of the commercial system of the country would be free from its influences, direct or remote. And for what end is all this to be done? What practical evil calls for so harsh, not to say so rash, a remedy? And why now, when existing systems and established opinions, concurred in what has been found practically so safe and so useful; why now, and why here, seek to introduce new and portentous doctrines? If I were called upon to say what has struck me as most remarkable and wonderful in this whole case, I would, instead of indulging in expletives, exaggerations, or exclamations, put it down as the most extraordinary circumstance, that now, within a short month of the expiration of the first half century of our existence under this Constitution, such a question should have been made; that now, for the first time, and here, for the last place on earth, such doctrines as have been heard in its support should be brought forward. With all the respect which I really entertain for the court below, and for the arguments which have been delivered here on the same side, I must say that, in my judgment, the decision now under revision by this court is, in its principle, anticommercial and anti-social, new and unheard of in our system, and calculated to break up the harmony which has so long prevailed among the States and people of this Union.

It is not, however, for the learned gentleman, nor for myself, to say here that we speak for the country. We advance our sentiments and our arguments, but they are without authority. But it is for you, Mr. Chief Justice and judges, on this, as on other occasions of high importance, to speak and to decide for the country. The guardianship of her commercial interests; the preservation of the harmonious intercourse of all her citizens; the fulfilling, in this respect, of the great object of the Constitution, are in your hands; and I am not to doubt that the trust will be so performed as to sustain at once high national objects and the character of this tribunal.

Mr. Ingersoll, for the defendant, said that although distinct considerations of universal, of international, and of municipal law are involved in this case, he should not attempt to discriminate, but submit them altogether. The judgment of the Circuit Court is against the plaintiff's right of action. For that judgment A learned gentleman on the other side said, two distinct reasons are given, viz.: 1. That the other day, that he thought he might regard the law of Alabama excludes banking in that himself, in this cause, as having the country State except as prescribed by its peculiar profor his client. He only meant, doubtless, to ex-visions; and, 2. That besides that local law, the press a strong opinion that the interest of the country required the case to be decided in his favor. I agree with the learned gentleman, and I go indeed far beyond him, in my estimate 567] of the importance of this case to the country. He did not take pains to show the extent of the evil which would result from un

universal law excludes corporations not authorized by the legislative power of such States as did not charter them. The first reason [*568 is enough to support the judgment, without regard to the second, with which this court is not bound to concern itself. The corporation question, therefore, is not necessarily an issue.

It matters not what the rule of general juris- | Huberus, article 3; 3 Dallas, 370, in note; Bank prudence may be as to corporations attempting of Marietta, 2 Randolph, 465; Pennington v. extraterritorial transactions, if the law of Ala- Townsend, 7 Wendell, 276. The word in Hubama be that banking is prohibited in that berus is "potestas," which Dallas translates State, whether by corporations or individuals. "rights" meaning as it does mean any species of The banking question rules the case by the right by written, common, or even usage law; banking interdict, without reference to the cor- for no such power or right of one State can by poration question, on which the opposite argu- comity be supplanted by the law of another ment has spent itself in political denunciation. State. Comitas inter communitates is at most Alabama has a sovereign right to make bank- a frail and evanescent substitute for law. Daling an affair of State; and an unbroken series las translates it courtesy, and it is really nothof the uniform judgments of the Supreme ing more. It is a law of reciprocal necessity, of Court of the United States affirms not only indispensable reciprocity of absolute charity to that State right, but the obligation of this do as you would be done by; without which court to conform to it. Mr. Ingersoll then read the harmony of nations would be incessantly the articles of the constitution of Alabama con- disturbed: but which, nevertheless, is no more cerning banks, and an act of the Assembly of than the highest obligation of charity, to love that State in 1836, by which the profits of our neighbors as we do ourselves, but not betbanks are declared to be the resource substi- ter than ourselves. Its philosophy is well extuted for all other taxation of the State rev- plained by Judge Story by a classical quotation enue; and several passages of the case of The in his learned judgment in the case of Harvey State of Alabama v. Stebbins et al. Stewart's v. Richards, 1 Mason, 412, damus petimusque Alabama Reports, Vol. I. 299, which he urged as vicissim sub obtentu mutuæ necesitatis. Unconclusive of the controversy. The constitu- less, therefore, the State of Georgia needs such tion, legislation, and adjudication of a sovereign concession by comity from the State of AlaState all unite in declaring that even its own bama, she is not bound to make it. One of the citizens shall not deal in banking, but agreeably cases involving this question is brought here by to its peculiar laws. The plaintiff bank had the Carrollton Bank of Louisiana, the law of not in any respect conformed to those laws. which State requires its judges to refer in their Consequently it cannot bank in Alabama, nor judgments to the written law of the State on recover there on a banking transaction there. which the judgments are founded, and prohibits The second reason of the Circuit Court that cor- the judges from ever leaving the State whose porations have no extraterritorial power may boundaries are established by the Constitution. be erroneous, and yet the plaintiff bank must How could the courts of Alabama or any other fail for the first reason; not because it is a cor- State reciprocate with Louisiana such regulaporation, but because it is a bank, no matter tions as these? In another of the cases, the where or whether incorporated, or partnership, United States Bank of Pennsylvania is the or individual, or even inhabitant and citizen of plaintiff, which bank, by the law of that State Alabama. It is enough that it attempted bank- conferring its charter, is closely connected with ing contrary to the local and peculiar law of the canals, railroads, schools, and other imAlabama. That settles the question, without provements of Pennsylvania. Could any involving it with corporation law. The Bank stretch of comity give such provisions force in of the United States v. Deveaux, 5 Cranch, 61, Alabama? It is not judicial comity, but the falls under this principle, too, because no citi- comity of a State which its courts of judicature zens, including those of Alabama, can bank award. Story's Conflict of Laws, p. 37, sec. 38. there contrary to its laws. No court, therefore, can allow it, but as the No comity interferes with this unquestion- comity of the State, and not the court. Comable principle. It is the indisputable basis of ity, moreover, is international courtesy; never universal law that laws have no force beyond allowed between provinces, districts, counties, the territories of those who make them. This cities, or other parts of the same empire. The is one of the few principles of universal juris- connection between these United States is prudence universally acknowledged. The Unit- closer and more intimate than that of comity. ed States v. Bevans, 3 Wheaton, 386; 3 Dallas, Their Union by federal compact expressly set370, note, Huberus; Laussat's Fonblanque, book tles the relation of the States to each other, 4, ch. i. sec. 6, 658 (444); 2 Kent's Commentaries, and leaves no room for tacit or constructive 3d edition, part 5, lecture 39, 457; Story's Con- comity to operate. A national Constitution flict of laws, sec. 23, p. 24; Henry on Foreign declares that no State shall enter into any Law, p. 1; The United States v. Owens, 2 treaty, alliance, or confederation, or, without Peters, 540; Bank v. Donnally, 8 Peters, 372; the consent of Congress, into any agreement or Rhode Island v. Massachusetts, 12 Peters, 736. compact with another State or foreign power. It would be superfluous to multiply authori- Such union, with much providence and some ties for this indubitable position. In the case jealousy, has settled the powers anr relations last cited from 12 Peters, 740, this court of the respective States. An article of the carries it so far as to declare, and with perfect Constitution provides for the force and propriety, that an act of Parliament during the proof of public acts of State, for the [*570 569*] colonial condition of this country was privileges and immunities of the citizens of not binding here. The only force allowed to each State in all the rest, for fugitives from laws extraterritorially is derived from interna-justice and fugitives from labor; leaving little tional comity, which never intervenes to set or nothing on this important subject to judicial aside either the written law or the common law, construction. For certain purposes these Unitor even the State policy or State interest of an- ed States are one and the same nation; for other country. Henry, 2; Story's Conflict of others, quasi nation or close confederation, and Laws, page 33, sec. 32, 33; page 37, sec. 38; a mere confederation, but still a national con