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prevails among the several sovereignties of this this court can undertake to say that the discount Union. The public and well known and long of the bill in question is illegal, many other in. continued usages of trade; the general acquiries must be made, and many other diffiquiescence of the States; the particular legis- culties must be solved. Was it the policy of lation of some of them, as well as the legislation Alabama to exclude all competition with its of Congress; all concur in proving the truth of own banks by the corporations of other States ? this proposition.

Did the State intend, by these provisions in its But we have already said that this comity is constitution, and these charters to its banks, to presumed from the silent acquiescence of the inhibit the circulation of the notes of other State. Whenever a State sufficiently indicates banks, the discount of notes, the loan of money, that contracts which derive their validity from and the purchase of bills of exchange? Or did its comity are repugnant to its policy, or are it design to go still farther, and forbid the bank. considered as injurious to its interests, the pre-ing corporations of other States from making a sumption in favor of its adoption can no longer contract of any kind within its territory? Did be made. And it remains to inquire whether it mean to prohibit its own banks from keeping there is anything in the constitution or laws of mutual accounts with the banks of other States, Alabama from which this court would be and from entering into any contract with justified in concluding that the purchase of the them, express or implied? Or did she [*594 bill in question was contrary to its policy. mean to give to her banks the power of con.

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The constitution of Alabama contains the tracting within the limits of the State with following provisions in relation to banks: foreign corporations, and deny it to individual

“One State bank may be established, with citizens? She may believe it to be the interest 593") such number of branches as the Gen- of her citizens to permit the competition of eral Assembly may from time to time deem ex- other banks in the circulation of notes, in the pedient, provided that no branch bank shall be purchase and sale of bills of exchange, and in established, nor bank charter renewed, under the loan of money. Or she may think it to be the authority of this state, without the concur. her interest to prevent the circulation of the rence of two thirds of both houses of the Gen. notes of other banks; and to prohibit them eral Assembly; and provided, also, that not from sending money there to be employed in more than one bank or branch bank shall be the purchase of exchange, or making contracts established, nor bank charter renewed, but in of any other description. conformity to the following rules:

The State has not made known its policy "1. At least two fifths of the capital stock upon any of these points. And how can this shall be reserved for the State.

court, with no other lights before it, undertake “2. A proportion of power, in the direction to mark out by a definite and distinct line the of the bank, shall be reserved to the State, policy which Alabama has adopted in relation equal at least to its proportion of stock therein. to this complex and intricate question of polit.

"3. The State and individual stockholders ical economy? It is true that the State is the shall be liable respectively for the debts of the principal stockholder in her own banks. She bank, in proportion to their stock holden there has created seven; and in five of them the in.

State owns the whole stock, and in the others 4. The remedy for collecting debts shall be two fifths. This proves that the State is deeply reciprocal, for and against the bank.

interested in the successful operation of her “5. No bank shall commence operations un- banks, and it may be her policy to shut out all til half of the capital stock subscribed for be interference with them. In another view of actually paid in gold and silver; which amount the subject, however, she may believe it to be shall, in no case, be less than one hundred her policy to extend the utmost liberality to thousand dollars."

the banks of other States, in the expectation Now, from these provisions in the constitu- that it would produce a corresponding comity tion, it is evidently the policy of Alabama to in other States towards the banks in which she restrict the power of the Legislature in relation is so much interested. In this respect it is a to bank charters, and to secure to the State a question chiefly of revenue, and of fiscal policy. large portion of the profits of banking, in order How can this court, with no other aid than the to provide a public revenue; and also to make general principles asserted in her constitution, safe the debts which should be contracted by and her investments in the stocks of her own the banks. The meaning, too, in which that banks, undertake to carry out the policy of the State used the word "bank,” in her constitution, State upon such a subject in all of its details, is sufficiently plain from its subsequent legisla- and decide how far it extends, and what qualition. All of the banks chartered by it, are au fications and limitations are imposed upon it! thorized to receive deposits of money, to dis. These questions must be determined by the count notes, to purchase bills of exchange, and State itself, and not by the courts of the United to issue their own notes payable on demand to States. Every sovereignty would without bearer. These are the usual powers conferred doubt choose to designate its own line of policy, on the banking corporations in the different and would never consent to leave it as a probStates of the Union; and when we are dealing lem to be worked out by the courts of the with the business of banking in Alabama, we United States, from a few general principles, must undoubtedly attach to it the meaning in which might very naturally be misunderstood which it is used in the constitution and laws of or misapplied by the court. It would hardly the State. Upon so much of the policy of Ala be respectful to a State for this court to forebama, therefore, in relation to banks as is dis- stall its decision, and to say, in advance of her closed by its constitution, and upon the meaning legislation, what her interest or policy demands. which that State attaches to the word "bank," Such a course would savor more of legislation we can have no reasonable doubt. But before than of judicial interpretation

If we proceed from the constitution and But it cannot be supposed that the constitubank charters to other acts of legislation by the tion of Alabama intended to prohibit its mer. State, we find nothing that should lead us to a chants and traders from purchasing or selling contrary conclusion. By an Act of Assembly bills of exchange, and to make it a monopoly of the State, passed January 12th, 1827, it was in the hands of their banks. And it is evident declared unlawful for any person, body cor. that the court of Alabama, in the case of The porate, company, or association, to issue any State v. Stebbins, did not mean to assert such a note for circulation as a bank note, without the principle. In the passage relied on they are authority of law; and a fine was imposed upon speaking of a paper circulating currency, and anyone offending against this statute. Now, asserting the right of the State to regulate and this act protected the privileges of her own to limit it. banks, in relation to bank notes only, and con. The institutions of Alabama, like those of tains no prohibition against the purchase of the other States, are founded upon the great bills of exchange, or against any other business principles of the common law; and it is 595*] by foreign banks, which *might inter *very clear that at common law, the [*596 fere with her own banking corporations. And right of banking in all of its ramifications, beif we were to form our opinion of the policy of longed to individual citizens, and might be exAlabama from the provisions of this law, we ercised by them at their pleasure. And the corshould be bound to say that the Legislature rectness of this principle is not questioned in deemed it to be the interest and policy of the the case of The State v. Stebbins. Undoubt. State not to protect its own banks from comedly, the sovereign authority may regulate and petition in the purchase of exchange, or in any restrain this right: but the constitution of Alathing but the issuing of notes for circulation. bama purports to be nothing more than a reBut this law was repealed by a subsequent law. striction upon the power of the Legislature, in passed in 1833, repealing all acts of Assembly relation to banking corporations, and does not not comprised in a digest then prepared and appear to have been intended as a restriction adopted by the Legislature. The law of 1827, upon the rights of individuals. That part of above mentioned, was not contained in this the subject appears to have been left, as is usudigest, and was consequently repealed. It has ally done, for the action of the Legislature, to been said at the bar, in the argument, that it be modified according to circumstances; and the was omitted from the digest by mistake, and prosecution against Stebbins was not founded was not intended to be repealed. But this on the provisions contained in the constitution, court cannot act judicially upon such an as- but was under the law of 1827 above mentioned, sumption. We must take their laws and prohibiting the issuing of bank notes. We are policy to be such as we find them in their stat- fully satisfied that the State never intended by utes. And the only inference that we can its constitution to interfere with the right of draw from these two laws, is, that after having purchasing or selling bills of exchange, and prohibited under a penalty any competition that the opinion of the court does not refer to with their banks by the issue of notes for circu- transactions of that description, when it speaks lation, they changed their policy, and de- of banking as a franchise. termined to leave the whole business of bank. The question then recursDoes the policy ing open to the rivalry of others. The other of Alabama deny to the corporations of other laws of the State, therefore, in addition to the States the ordinary comity between nations ? constitution and charters, certainly would not or does it permit such a corporation to make authorize this court to say that the purchase of those contracts which, from their nature and bills by the corporations of another State was a subject matter, are consistent with its policy, violation of its policy.

and are allowed to individuals ? In making The decisions of its judicial tribunals lead to such contracts a corporation no doubt exercises the same result. It is true that in the case of its corporate franchise. But it must do this The State v. Stebbins, 1 Stewart's Alabama Re- whenever it acts as a corporation, for its exist. ports, 312, the court said that since the adop- ence is a franchise. Now, it has been held in tion of their constitution, banking in that the court of Alabama itself (in 2 Stewart's AlaState was to be regarded as a franchise. And bama Reports, 147) that the corporation of an. this case has been much relied on by the de- other State may sue in its courts; and the defendant in error.

cision is put directly on the ground of national Now, as we are satisfied, from a careful exam comity. The State, therefore, has not merely ination of the case, that the word “franchise" acquiesced by silence, but her judicial tribu. was not used, and could not have been used by nals have declared the adoption of the law of the court in the broad sense imputed to it in international comity in the case of a suit. We the argument. For if banking includes the pur- have already shown that the comity of suit chase of bills of exchange, and all banking is brings with it the comity of contract; and to be regarded as the exercise of a franchise, where the one is expressly adopted by its the decision of the court would amount to courts, the other must also be presumed acthis—that no individual citizen of Alabama cording to the usages of nations, unless the con. could purchase such a bill. For franchises are trary can be shown. special privileges conferred by government upon The cases cited from 7 Wend. 276, and from individuals, and which do not belong to the 2 Rand. 465, cannot influence the decision in citizens of the country, generally, of common the case before us. The decisions of these two right. It is essential to the character of a fran. State courts were founded upon the legislation chise that it should be a grant from the sover- of their respective States, which was sufficiently cigo authority, and in this country no franchise explicit to enable their judicial tribunals to ran be held which is not derived from a law of pronounce judgment on their line of policy. the State.

But because two States have adopted a particu.

lar policy in relation to the banking corpora. I nations furnishes a rule by which validity can tions of other States, we cannot infer that the be given to the contracts in these cases, and same rule prevails in all of the other States. from so much as decides that the con- [*598

Each State must decide for itself. And it will tracts, which were the subjects of the suits, be remembered that it is not the State of Ala- were not against the policy of the laws of Ala. bama which appears here to complain of an in- bama. fraction of its policy. Neither the State, nor This is the first time since the adoption of the any of its constituted authorities have inter-Constitution of the United States that any fed. fered in this controversy. The objection is eral court has, directly or indirectly, imputed taken by persons who were parties to those national power to any of the States of the 597*) contracts, and *who participated in the Union; and it is the first time that validity has transactions which are now alleged to have been been given to such contracts, which, it is acin violation of the laws of the State,

knowledged, would otherwise have been void, It is but justice to all the parties concerned by the application of a principle of the neces. to suppose that these contracts were made in sary law of nations. This principle has been good faith, and that no suspicion was enter. adopted and administered by the court as part tained by either of them that these engage of the municipal law of the State of Alabama, ments could not be enforced. Money was paid alt.sough no such principle has been adopted on them by one party, and received by the other. or admitted by that State. And whether the And when we see men dealing with one another law of nations still prevails among the States, openly in this manner, and making contracts to notwithstanding the Constitution of the United a large amount, we can hardly doubt as to what States, or the right and authority to administer was the generally received opinion in Alabama it in these cases are derived from that instru. at that time, in relation to the right of the ment, are questions not distinctly decided by plaintiffs to make such contracts. Everything the majority of the court. But whether at. now urged as proof of her policy, was equally tempted to be derived from one source or the public and well known when these bills were ne other, I deny the existence of it anywhere, for gotiated. And when a court is called on to de- any such purpose. clare contracts thus made to be void upon the Because the municipal laws of nations cannot ground that they conflict with the policy of the operate beyond their respective territorial lim. State, the line of that policy should be very its, and because one nation has no right to leg. clear and distinct to justify the court in sus. islate for another; certain rules founded in the taining the defense. Nothing can be more vague law of nature and the immutable principles of and indefinite that that now insisted on as the justice have for the promotion of harmony policy of Alabama. It rests altogether on and commercial intercourse, been adopted by speculative reasoning as to her supposed inter the consent of civilized nations. But no necesests, and is not supported by any positive leg. sity exists for such a law among the several islation. There is no law of the State which States. In their character of States they are attempts to define the rights of foreign corpora- governed by written constitutions and munici. tions,

pal laws. It has been admitted by the counsel, We, however, do not mean to say that there and decided by the majority of the court, that are not many subjects upon which the policy without the authority of the statutes of the of the several States is abundantly evident, States chartering these banks, they would have from the nature of their institutions, and the no power whatever to purchase a bill of exgeneral scope of their legislation, and which change, even in the State where they are estabdo not need the aid of a positive and special lished. If it requires the exertion of the legis law to guide the decisions of the courts. When lative power of Pennsylvania, for instance, to the policy of . State is thus manifest, the enable the United States Bank to purchase . courts of the United States would be bound bill of exchange in that State, why should it to notice it as a part of its code of laws, and to not require the same legislative authority to endeclare all contracts in the State repugnant to able it to do the same act in Alabama ' It has it to be illegal and void. Nor do we mean to been contended in argument that the power say whether there may not be some rights un granted to the bank to purchase a bill of ex. der the Constitution of the United States, which change at Philadelphia, in Pennsylvania, paya corporation might claim under peculiar cir. able at Mobile, in Alabama, would be nugatory, cumstances, in a state other than that in which unless the power existed also to make contracts it was chartered. The reasoning, as well as at both ends of the line of exchange. The au. the judgment of the court, is applied to the thority to deal in exchange may very well be matter before us; and we think the contracts in exercised by having command of one end of question were valid, and that the defense re- the line of exchange only. To buy and sell the lied on by the defendants cannot be sustained. same bill at the bank is dealing in exchange, and

The judgment of the Circuit Court in these may be exercised with profit to the bank; but cases must therefore be reversed with costs. not, perhaps, as conveniently as if it could make

contracts in Alabama as well as at the bank. Mr. Justice Baldwin delivered an opinion But if it has obtained authority to command assenting to the judgment of the court, on prin- but one end of the line of exchange, it certainly ciples which were stated at large in the opinion. bas no right to complain that it cannot control This opinion was not delivered to the reporter. the other, when that other is within the juris

diction of another State, whose authority, or Mr. Justice M'Kinley delivered an opinion consent it has not even asked for. The bill of dissenting from the judgment of the court: exchange which is the subject of controversy

I dissent from so much of the opinion of the between the Bank of Augusta and Earle, and majority of the court as decides that the law of' that which is the subject of controversy be

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tween the United States Bank and Primrose,, As the majority of the court have not expressly 599'! 'wen both draw at Mobile, and made stated whether Alabama has adopted the wholo payablo at New York. Neither of the banks charters of the banks, or what parts they have had authority from any State to make a con. adopted, thore so now no certainty what the tnct at either end of the line of exchange here law of Alabama is on the subject of these char. established. Here, then, they claim, and have terı. exercised, all the rights and privileges of nat But these are not all the dificulties that arise val persons, independent of their charters; and is the exercise of this power by the judiciary. claim the right, by the comity of nations, to Many questions very naturally present them. make original contracts everywhere, because solves in the investigation of this subject, and they have a right, by their charters, to make the irst is, To what government does this fike contracts in the States where they wero power belong! Second, Has it been conferred created, and have "a local habitation and a upon the United States ? or has it been reserved wno."

to the States by the tenth amendment of the It is difficult to conceive of the exercise of Constitution: If it be determined that the national comity, by a State having no national power belongs to the United States, in what power. Whatever national power the old thir. provision of the Constitution is it to be found? ieen States possessed previous to the adoption And how is it to be exercised! By the judi. of the Constitution of the United States, they ciary, or by Congress! The counsel for the conferred, by that instrument, upon the federal banks contended that the power of Congress to government. And to remove all doubt upon regulate commerce among the several States, the question whether the power thus conferred deprives Alabama of the power to pass any law was exclusive or concurrent, the States are, by restraining the sale and purchase of a bill of the tenth section of the first article of the Con. exchange; and, by consequence, the whole power stitution, expressly prohibited from entering belongs to Congress. The court, by the opinion into any treaty, alliance, or confederation; and, of the majority, does not recognize this docwithout the consent of Congress, from enter-trine, in terms. But if the power which the ing into any agreement or compact with an court exercised is not derived from that provi. other State, or with a foreign power. By these sion of the Constitution, in my opinion it does provisions, the States have, by their own vol. not exist. untary act, and for wise purposes, deprived If ever Congress shall exercise this power to themselves of all national power, and of all the the broad extent contended for, the power of means of international communication; and the States over commerce, and contracts relat. cannot even enter into an agreement or coming to commerce, will be reduced to very darpact with a sister State, for any purpose what row limits. The creation of banks, the making ever, without the consent of Congress. The and indorsing of bills of exchange and promis. comity of nations is defined by Judge Story, in sory notes, and the damages on bills of exhis Conflict of Laws, to be the obligations of change, all relate, more or less, to the comthe laws of one nation in the territories of an. merce among the several States. Whether the other, derived altogether from the voluntary exercise of these powers amounts to regulating consent of the latter, and in the absence of the commerce among the several States, is art any positive rule, affirming, or denying, or re- e question for my determination on this occastraining the operation of foreign laws, courts sion. The majority of the court have decided of justice presume the tacit adoption of them that the comity of nations gives validity to by their own government, unless they are re. these contracts. pugnant to its policy or prejudicial to its inter- And what are the reasons upon which this esta. Conflict of Laws, 37.

doctrine is now established: Why, the counNow, I ask again, what is the necessity for sel for the banks say: We are obliged to consuch a rule of law as this! Have not the States cede that these banks had no authority to make full power to adopt or reject what laws of their these contracts in the State of Alabama, in vir. sister States they pleasei And why should the tue of the laws of the States creating them, or courts interfere in this case, when the States by the laws of Alabama. Therefore, unless this have full power to legislate for themselves, and court will extend to them the benefit of the to adopt or reject such laws of their sister comity of nations, they must lose all the money States as they think proper? If Alabama had now in controversy, they will be deprived hereadopted these laws, no difficulty could have after of the benefit of a very profitable branch arisen in deciding between these parties. This of their business as bankers, and great public court would not then have been under the de- inconvenience will result to the commerce of cessity of resorting to a doubtful presumption the country. And besides all this, there are for a rule to guide its decision. But when the many corporations in the north, which were court have determined that they have the power created for the purpose of carrying on various to presume that Alabama has adopted the laws branches of manufactures, and particularly that of the States chartering these banks, other diffi- of cotton. Those engaged in the manufacture cult questions arise. How much of the char. of cotton will be unable to send their agents tor of each bank has been adopted! This is a to the south to sell their manufactured ar. question of legislative discretion, which, if sub-ticles, and to purchase cotton to carry on their mitted to the Legislature of the State, would business, and may lose debts already created. be decided upon reasons of policy and public This is the whole amount of the argument, convenience. And the question of power to upon which the benefit of this doctrine is pas much a law under the Constitution of Ala claimed. Because banks cannot make money in hamn, would have to be considered and de- płaces and by means not authorized by their 606") cided. These are very inconvenient Charters; "because they may lose by (*601 questions for a judicial tribunal to determinal contracts made in unauthorized places; because

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the commerce of the country may be subjected lished, nor bank charter renewed, at any one
to temporary inconvenience; and because cor. session of the General Assembly, nor shall any
porations in the north, created for manufactur bank or branch bank be established, or bank
ing purposes only, cannot, by the authority of charter renewed, but in conformity with the
their charters, engage in commerce also; this following rules :
doctrine, which has not heretofore found a 1. At least two fifths of the capital stock
place in our civil code, is to be established. shall be reserved for the State.
Notwithstanding, it is conceded that the States 2. A proportion of power in the direction of
hold ample legislative power over the same the bank shall be reserved to the State, equal at
subject, it is deemed necessary, on this occa least to its proportion of stock therein.
sion, to settle this doctrine by the supreme tri 3. The State, and the individual stockholders,
bunal. The majority of the court having, in shall be liable, respectively, for the debts of the
their opinion, conceded that Alabama might bank, in proportion to their stock holden there-
make laws to prohibit foreign banks to make in.
contracts, thereby admitted, by implication, 4. The remedy for collecting debts shall be
that she could make laws to permit such con reciprocal for and against the bank.
tracts. I think it would have been proper to 5. No bank shall commence operations until
have left the power there, to be exercised or half of the capital stock subscribed for shall be
not, as Alabama, in her sovereign discretion, actually paid in gold or silver, which amount
might judge best for her interest or her comity: shall in no case be less than one hundred thou-
The majority of the court thought and decided sand dollars."
otherwise. And here arises the radical and There are a few other unimportant rules laid
essential difference between them and me. down, but they are not material to the present

They maintain a power in the federal govern- inquiry. The inquiry naturally suggests itself,
ment, and in the judicial department of it, to to the mind, Why did Alabama introduce into
do that which in my judgment belongs, exclu- her constitution these very unusual and specific
sively, to the State governments, and to be ex: rules? If they had not been deemed of great
orcised by the legislative, and not the judicial importance, they would not have been found
departments thereof. A difference so radical there. Can anyone say, therefore, that this
and important, growing out of the fundamental regularly organized system, to which all banks
law of the land, has imposed on me the un. within the State of Alabama were to conform,
pleasant necessity of maintaining, single hand did not establish for the State, her Legislature,
ed, my opinion against the opinion of all the or other authorities a clear and unequivocal
other members of the court. However unequal policy on the subject of banking? It has been
the conflict, duty im pels me to maintain it conceded in the argument, and by the opinion
firmly; and, although I stand alone here, I of the majority of the court, that these con-
have the good fortune to be sustained, to the stitutional provisions do restrict and limit
whole extent of my opinion, by the very able the power of the Legislature of the State.
opinion of the Court of Appeals of Virginia, Then the Legislature cannot establish
in the case of The Marietta Bank v. Pendilla bank in Alabama but in
et al. 2 Ran. Rep. 465. If Congress have the formity with the rules here laid down. They
power to pass laws on this subject, it is an ex- have established seven banks; five of them
clusive power; and the States would then have belonging exclusively to the State, and two
no power to prohibit contracts of any kind fifths of the stock of the other two, with a pro-
within their jurisdictions. If the government portionate power in the direction, reserved to
of the United States have power to restrain the the State. Each of these banks is authorized
States under the power to regulate commerce, to deal in exchange.
whether it be exerted by the legislative or the It is proper to stop here, and inquire wheth-
judicial department of the government is not er the subject of exchange is proper to enter
material; it being the paramount law, it para- into the policy of the legislation of a State, and
lyzes all State power on the same subject. And whether it is a part of the customary and legiti-
this brings me to the consideration of the second mate business of banking. All the authorities
ground on which I dissent.

on the subject show that in modern times it is It was contended by the counsel for the banks a part of the business of banking. See Postlethat all the restraints imposed by the constitu. thwaite's Commercial Dictionary, title Bank; tion of Alabama, in relation to banking, were Tomlin's Law Dictionary, title Bank; Rees's designed to operate upon the Legislature of the Cyclopædia, title Bank; Vatt. 105. This last State, and not upon the citizens of that or any author quoted, after showing that it is the other State. To comprehend the whole scope duty of the sovereign of a nation to furnish for and intention of that instrument, it will be nec his subjects a sufficiency of money for the essary to ascertain, from the language used, purposes of commerce, to preserve it from adul. what was within the contemplation and design teration, and to punish those who counterfeit it, of the convention. The provision in the con proceeds to say: "There is another custom stitution on the subject of banking is this: more modern, and of no less use to commerce, “One State bank may be established, with such than the establishment of money, namely, exnumber of branches as the General Assembly change, or the business of the bankers; by may, from time to time, deem expedient; pro- means of whom the merchant remits immense vided, that no branch bank shall be established, sums *from one end of the world to the ('603 nor bank charter renewed, under the authority other with very little expense, and, if be 602'] *of this State, without the concurrence pleases, without danger. For the same rea. of two thirds of both houses of the General sons that sovereigns are obliged to protect com. Assembly; and provided, also, that not more merce, they are obliged to protect this custhat one bank nor branch bank shall be estab-' tom by good laws, in which every merchant, for

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