prevails among the several sovereignties of this Union. The public and well known and long continued usages of trade; the general acquiescence of the States; the particular legislation of some of them, as well as the legislation of Congress; all concur in proving the truth of this proposition. But we have already said that this comity is presumed from the silent acquiescence of the State. Whenever a State sufficiently indicates that contracts which derive their validity from its comity are repugnant to its policy, or are considered as injurious to its interests, the presumption in favor of its adoption can no longer be made. And it remains to inquire whether there is anything in the constitution or laws of Alabama from which this court would be justified in concluding that the purchase of the bill in question was contrary to its policy. The constitution of Alabama contains the following provisions in relation to banks: "One State bank may be established, with 593*] such number of branches as the General Assembly may from time to time deem expedient, provided that no branch bank shall be established, nor bank charter renewed, under the authority of this State, without the concurrence of two thirds of both houses of the General Assembly; and provided, also, that not more than one bank or branch bank shall be established, nor bank charter renewed, but in conformity to the following rules: "1. At least two fifths of the capital stock shall be reserved for the State. "2. A proportion of power, in the direction of the bank, shall be reserved to the State, equal at least to its proportion of stock therein. "3. The State and individual stockholders shall be liable respectively for the debts of the bank, in proportion to their stock holden there in. "4. The remedy for collecting debts shall be reciprocal, for and against the bank. "5. No bank shall commence operations until half of the capital stock subscribed for be actually paid in gold and silver; which amount shall, in no case, be less than one hundred thousand dollars." Now, from these provisions in the constitution, it is evidently the policy of Alabama to restrict the power of the Legislature in relation to bank charters, and to secure to the State a large portion of the profits of banking, in order to provide a public revenue; and also to make safe the debts which should be contracted by the banks. The meaning, too, in which that State used the word "bank," in her constitution, is sufficiently plain from its subsequent legislation. All of the banks chartered by it, are authorized to receive deposits of money, to discount notes, to purchase bills of exchange, and to issue their own notes payable on demand to bearer. These are the usual powers conferred on the banking corporations in the different States of the Union; and when we are dealing with the business of banking in Alabama, we must undoubtedly attach to it the meaning in which it is used in the constitution and laws of the State. Upon so much of the policy of Alabama, therefore, in relation to banks as is disclosed by its constitution, and upon the meaning which that State attaches to the word "bank," we can have no reasonable doubt. But before this court can undertake to say that the discount of the bill in question is illegal, many other inquiries must be made, and many other difficulties must be solved. Was it the policy of Alabama to exclude all competition with its own banks by the corporations of other States? Did the State intend, by these provisions in its constitution, and these charters to its banks, to inhibit the circulation of the notes of other banks, the discount of notes, the loan of money, and the purchase of bills of exchange? Or did it design to go still farther, and forbid the banking corporations of other States from making a contract of any kind within its territory? Did it mean to prohibit its own banks from keeping mutual accounts with the banks of other States, and from entering into any contract with them, express or implied? Or did she [*594 mean to give to her banks the power of contracting within the limits of the State with foreign corporations, and deny it to individual citizens? She may believe it to be the interest of her citizens to permit the competition of other banks in the circulation of notes, in the purchase and sale of bills of exchange, and in the loan of money. Or she may think it to be her interest to prevent the circulation of the notes of other banks; and to prohibit them from sending money there to be employed in the purchase of exchange, or making contracts of any other description. The State has not made known its policy upon any of these points. And how can this court, with no other lights before it, undertake to mark out by a definite and distinct line the policy which Alabama has adopted in relation to this complex and intricate question of political economy? It is true that the State is the principal stockholder in her own banks. She has created seven; and in five of them the State owns the whole stock, and in the others two fifths. This proves that the State is deeply interested in the successful operation of her banks, and it may be her policy to shut out all interference with them. In another view of the subject, however, she may believe it to be her policy to extend the utmost liberality to the banks of other States, in the expectation that it would produce a corresponding comity in other States towards the banks in which she is so much interested. In this respect it is a question chiefly of revenue, and of fiscal policy. How can this court, with no other aid than the general principles asserted in her constitution, and her investments in the stocks of her own banks, undertake to carry out the policy of the State upon such a subject in all of its details, and decide how far it extends, and what qualifications and limitations are imposed upon it? These questions must be determined by the State itself, and not by the courts of the United States. Every sovereignty would without doubt choose to designate its own line of policy, and would never consent to leave it as a prob lem to be worked out by the courts of the United States, from a few general principles, which might very naturally be misunderstood or misapplied by the court. It would hardly be respectful to a State for this court to forestall its decision, and to say, in advance of her legislation, what her interest or policy demands. Such a course would savor more of legislation than of judicial interpretation. If we proceed from the constitution and bank charters to other acts of legislation by the State, we find nothing that should lead us to a contrary conclusion. By an Act of Assembly of the State, passed January 12th, 1827, it was declared unlawful for any person, body corporate, company, or association, to issue any note for circulation as a bank note, without the authority of law; and a fine was imposed upon anyone offending against this statute. Now, this act protected the privileges of her own banks, in relation to bank notes only, and contains no prohibition against the purchase of bills of exchange, or against any other business 595] by foreign banks, which might interfere with her own banking corporations. And if we were to form our opinion of the policy of Alabama from the provisions of this law, we should be bound to say that the Legislature deemed it to be the interest and policy of the State not to protect its own banks from competition in the purchase of exchange, or in any thing but the issuing of notes for circulation. But this law was repealed by a subsequent law passed in 1833, repealing all acts of Assembly not comprised in a digest then prepared and adopted by the Legislature. The law of 1827, above mentioned, was not contained in this digest, and was consequently repealed. It has been said at the bar, in the argument, that it was omitted from the digest by mistake, and was not intended to be repealed. But this court cannot act judicially upon such an assumption. We must take their laws and policy to be such as we find them in their statutes. And the only inference that we can draw from these two laws, is, that after having prohibited under a penalty any competition with their banks by the issue of notes for circulation, they changed their policy, and determined to leave the whole business of banking open to the rivalry of others. The other laws of the State, therefore, in addition to the constitution and charters, certainly would not authorize this court to say that the purchase of bills by the corporations of another State was a violation of its policy. But it cannot be supposed that the constitution of Alabama intended to prohibit its mer. chants and traders from purchasing or selling bills of exchange, and to make it a monopoly in the hands of their banks. And it is evident that the court of Alabama, in the case of The State v. Stebbins, did not mean to assert such a principle. In the passage relied on they are speaking of a paper circulating currency, and asserting the right of the State to regulate and to limit it. The institutions of Alabama, like those of the other States, are founded upon the great principles of the common law; and it is very clear that at common law, the [*596 right of banking in all of its ramifications, belonged to individual citizens, and might be exercised by them at their pleasure. And the correctness of this principle is not questioned in the case of The State v. Stebbins. Undoubtedly, the sovereign authority may regulate and restrain this right: but the constitution of Alabama purports to be nothing more than a restriction upon the power of the Legislature, in relation to banking corporations, and does not appear to have been intended as a restriction upon the rights of individuals. That part of the subject appears to have been left, as is usu ally done, for the action of the Legislature, to be modified according to circumstances; and the prosecution against Stebbins was not founded on the provisions contained in the constitution, but was under the law of 1827 above mentioned, prohibiting the issuing of bank notes. We are fully satisfied that the State never intended by its constitution to interfere with the right of purchasing or selling bills of exchange, and that the opinion of the court does not refer to transactions of that description, when it speaks of banking as a franchise. The question then recurs-Does the policy of Alabama deny to the corporations of other States the ordinary comity between nations? or does it permit such a corporation to make those contracts which, from their nature and subject matter, are consistent with 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 existports, 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 State was to be regarded as a franchise. And this case has been much relied on by the defendant in error. Now, as we are satisfied, from a careful examination of the case, that the word "franchise" was not used, and could not have been used by the court in the broad sense imputed to it in the argument. For if banking includes the purchase of bills of exchange, and all banking is to be regarded as the exercise of a franchise, the decision of the court would amount to this that no individual citizen of Alabama could purchase such a bill. For franchises are special privileges conferred by government upon individuals, and which do not belong to the citizens of the country, generally, of common right. It is essential to the character of a franchise that it should be a grant from the sovercign authority, and in this country no franchise can be held which is not derived from a law of the State. the court of Alabama itself (in 2 Stewart's Alabama Reports, 147) that the corporation of another State may sue in its courts; and the decision is put directly on the ground of national comity. The State, therefore, has not merely acquiesced by silence, but her judicial tribu nals have declared the adoption of the law of international comity in the case of a suit. We have already shown that the comity of suit brings with it the comity of contract; and where the one is expressly adopted by its courts, the other must also be presumed according to the usages of nations, unless the con. trary can be shown. The cases cited from 7 Wend. 276, and from 2 Rand. 465, cannot influence the decision in the case before us. The decisions of these two State courts were founded upon the legislation of their respective States, which was sufficiently explicit to enable their judicial tribunals to pronounce judgment on their line of policy. But because two States have adopted a particu be given to the contracts in these cases, and from so much as "decides that the con- [*598 tracts, which were the subjects of the suits, were not against the policy of the laws of Alabama. lar policy in relation to the banking corpora- | nations furnishes a rule by which validity can tions of other States, we cannot infer that the same rule prevails in all of the other States. Each State must decide for itself. And it will be remembered that it is not the State of Alabama which appears here to complain of an infraction of is policy. Neither the State, nor any of its constituted authorities have interfered in this controversy. The objection is taken by persons who were parties to those 597] contracts, and *who participated in the transactions which are now alleged to have been in violation of the laws of the State. It is but justice to all the parties concerned to suppose that these contracts were made in good faith, and that no suspicion was entertained by either of them that these engagements could not be enforced. Money was paid on them by one party, and received by the other. And when we see men dealing with one another openly in this manner, and making contracts to a large amount, we can hardly doubt as to what was the generally received opinion in Alabama at that time, in relation to the right of the plaintiffs to make such contracts. Everything now urged as proof of her policy, was equally public and well known when these bills were negotiated. And when a court is called on to declare contracts thus made to be void upon the ground that they conflict with the policy of the State, the line of that policy should be very clear and distinct to justify the court in sustaining the defense. Nothing can be more vague and indefinite that that now insisted on as the policy of Alabama. It rests altogether on speculative reasoning as to her supposed interests, and is not supported by any positive legislation. There is no law of the State which attempts to define the rights of foreign corporations. We, however, do not mean to say that there are not many subjects upon which the policy of the several States is abundantly evident, from the nature of their institutions, and the general scope of their legislation, and which do not need the aid of a positive and special law to guide the decisions of the courts. When the policy of a State is thus manifest, the courts of the United States would be bound to notice it as a part of its code of laws, and to declare all contracts in the State repugnant to it to be illegal and void. Nor do we mean to say whether there may not be some rights under the Constitution of the United States, which a corporation might claim under peculiar circumstances, in a State other than that in which it was chartered. The reasoning, as well as the judgment of the court, is applied to the matter before us; and we think the contracts in question were valid, and that the defense relied on by the defendants cannot be sustained. The judgment of the Circuit Court in these cases must therefore be reversed with costs. Mr. Justice Baldwin delivered an opinion assenting to the judgment of the court, on principles which were stated at large in the opinion. This opinion was not delivered to the reporter. Mr. Justice M'Kinley delivered an opinion dissenting from the judgment of the court: I dissent from so much of the opinion of the majority of the court as decides that the law of This is the first time since the adoption of the Constitution of the United States that any federal court has, directly or indirectly, imputed national power to any of the States of the Union; and it is the first time that validity has been given to such contracts, which, it is acknowledged, would otherwise have been void, by the application of a principle of the neces sary law of nations. This principle has been adopted and administered by the court as part of the municipal law of the State of Alabama, although no such principle has been adopted or admitted by that State. And whether the law of nations still prevails among the States, notwithstanding the Constitution of the United States, or the right and authority to administer it in these cases are derived from that instru ment, are questions not distinctly decided by the majority of the court. But whether attempted to be derived from one source or the other, I deny the existence of it anywhere, for any such purpose. Because the municipal laws of nations cannot operate beyond their respective territorial limits, and because one nation has no right to legislate for another; certain rules founded in the law of nature and the immutable principles of justice have, for the promotion of harmony and commercial intercourse, been adopted by the consent of civilized nations. But no necessity exists for such a law among the several States. In their character of States they are governed by written constitutions and munici pal laws. It has been admitted by the counsel, and decided by the majority of the court, that without the authority of the statutes of the States chartering these banks, they would have no power whatever to purchase a bill of exchange, even in the State where they are established. If it requires the exertion of the legislative power of Pennsylvania, for instance, to enable the United States Bank to purchase a bill of exchange in that State, why should it not require the same legislative authority to enable it to do the same act in Alabama? It has been contended in argument that the power granted to the bank to purchase a bill of exchange at Philadelphia, in Pennsylvania, payable at Mobile, in Alabama, would be nugatory, unless the power existed also to make contracts at both ends of the line of exchange. The authority to deal in exchange may very well be exercised by having command of one end of the line of exchange only. To buy and sell the same bill at the bank is dealing in exchange, and may be exercised with profit to the bank; but not, perhaps, as conveniently as if it could make contracts in Alabama as well as at the bank. But if it has obtained authority to command but one end of the line of exchange, it certainly has no right to complain that it cannot control the other, when that other is within the jurisdiction of another State, whose authority or consent it has not even asked for. The bill of exchange which is the subject of controversy between the Bank of Augusta and Earle, and 'that which is the subject of controversy be tween the United States Bank and Primrose, 599*] *were both drawn at Mobile, and made payable at New York. Neither of the banks had authority from any State to make a contract at either end of the line of exchange here established. Here, then, they claim, and have exercised, all the rights and privileges of nat ural persons, independent of their charters; and elaim the right, by the comity of nations, to make original contracts everywhere, because they have a right, by their charters, to make like contracts in the States where they were created, and have "a local habitation and a zame." As the majority of the court have not expressly stated whether Alabama has adopted the whole charters of the banks, or what parts they have adopted, there is now no certainty what the law of Alabama is on the subject of these charters. But these are not all the difficulties that arise in the exercise of this power by the judiciary. Many questions very naturally present themselves in the investigation of this subject, and the first is, To what government does this power belong? Second, Has it been conferred upon the United States? or has it been reserved to the States by the tenth amendment of the Constitution? If it be determined that the power belongs to the United States, in what And how is it to be exercised? By the judiciary, or by Congress? The counsel for the banks contended that the power of Congress to regulate commerce among the several States, deprives Alabama of the power to pass any law restraining the sale and purchase of a bill of belongs to Congress. The court, by the opinion of the majority, does not recognize this doctrine, in terms. But if the power which the court exercised is not derived from that provi sion of the Constitution, in my opinion it does not exist. It is difficult to conceive of the exercise of national comity, by a State having no national power. Whatever national power the old thir-provision of the Constitution is it to be found? teen States possessed previous to the adoption of the Constitution of the United States, they conferred, by that instrument, upon the federal government. And to remove all doubt upon the question whether the power thus conferred was exclusive or concurrent, the States are, by the tenth section of the first article of the Con-exchange; and, by consequence, the whole power stitution, expressly prohibited from entering into any treaty, alliance, or confederation; and, without the consent of Congress, from entering into any agreement or compact with an other State, or with a foreign power. By these provisions, the States have, by their own voluntary act, and for wise purposes, deprived themselves of all national power, and of all the means of international communication; and cannot even enter into an agreement or compact with a sister State, for any purpose whatever, without the consent of Congress. The comity of nations is defined by Judge Story, in his Conflict of Laws, to be the obligations of the laws of one nation in the territories of another, derived altogether from the voluntary consent of the latter, and in the absence of any positive rule, affirming, or denying, or restraining the operation of foreign laws, courts of justice presume the tacit adoption of them by their own government, unless they are repugnant to its policy or prejudicial to its interests. Conflict of Laws, 37. Now, I ask again, what is the necessity for such a rule of law as this? Have not the States full power to adopt or reject what laws of their sister States they please? And why should the courts interfere in this case, when the States have full power to legislate for themselves, and to adopt or reject such laws of their sister States as they think proper? If Alabama had adopted these laws, no difficulty could have arisen in deciding between these parties. This court would not then have been under the necessity of resorting to a doubtful presumption for a rule to guide its decision. But when the court have determined that they have the power to presume that Alabama has adopted the laws of the States chartering these banks, other difficult questions arise. How much of the charter of each bank has been adopted? This is a question of legislative discretion, which, if submitted to the Legislature of the State, would be decided upon reasons of policy and public convenience. And the question of power to pass such a law under the Constitution of Alabama, would have to be considered and de600] cided. These are very inconvenient questions for a judicial tribunal to determine. If ever Congress shall exercise this power to the broad extent contended for, the power of the States over commerce, and contracts relating to commerce, will be reduced to very narrow limits. The creation of banks, the making and indorsing of bills of exchange and promissory notes, and the damages on bills of exchange, all relate, more or less, to the commerce among the several States. Whether the exercise of these powers amounts to regulating the commerce among the several States, is not a question for my determination on this occasion. The majority of the court have decided that the comity of nations gives validity to these contracts. And what are the reasons upon which this doctrine is now established? Why, the counsel for the banks say: We are obliged to concede that these banks had no authority to make these contracts in the State of Alabama, in virtue of the laws of the States creating them, or by the laws of Alabama. Therefore, unless this court will extend to them the benefit of the comity of nations, they must lose all the money now in controversy, they will be deprived hereafter of the benefit of a very profitable branch of their business as bankers, and great public inconvenience will result to the commerce of the country. And besides all this, there are many corporations in the north, which were created for the purpose of carrying on various branches of manufactures, and particularly that of cotton. Those engaged in the manufacture of cotton will be unable to send their agents to the south to sell their manufactured articles, and to purchase cotton to carry on their business, and may lose debts already created. This is the whole amount of the argument, upon which the benefit of this doctrine is claimed. Because banks cannot make money in places and by means not authorized by their charters; "because they may lose by [*601 contracts made in unauthorized places; because 1. At least two fifths of the capital stock shall be reserved for the State. 2. A proportion of power in the direction of the bank shall be reserved to the State, equal at least to its proportion of stock therein. 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 place in our civil code, is to be established. Notwithstanding, it is conceded that the States hold ample legislative power over the same subject, it is deemed necessary, on this occasion, to settle this doctrine by the supreme tribunal. The majority of the court having, in their opinion, conceded that Alabama might make laws to prohibit foreign banks to make contracts, thereby admitted, by implication, that she could make laws to permit such contracts. I think it would have been proper to have left the power there, to be exercised or not, as Alabama, in her sovereign discretion, might judge best for her interest or her comity. The majority of the court thought and decided otherwise. And here arises the radical and essential difference between them and me. They maintain a power in the federal government, and in the judicial department of it, to do that which in my judgment belongs, exclusively, to the State governments, and to be exercised by the legislative, and not the judicial departments thereof. A difference so radical and important, growing out of the fundamental law of the land, has imposed on me the unpleasant necessity of maintaining, single handed, my opinion against the opinion of all the other members of the court. However unequal the conflict, duty impels me to maintain it firmly; and, although I stand alone here, I have the good fortune to be sustained, to the whole extent of my opinion, by the very able opinion of the Court of Appeals of Virginia, in the case of The Marietta Bank v. Pendill et al. 2 Ran. Rep. 465. If Congress have the power to pass laws on this subject, it is an exclusive power; and the States would then have no power to prohibit contracts of any kind within their jurisdictions. If the government of the United States have power to restrain the States under the power to regulate commerce, whether it be exerted by the legislative or the judicial department of the government is not material; it being the paramount law, it paralyzes all State power on the same subject. And this brings me to the consideration of the second ground on which I dissent. It was contended by the counsel for the banks that all the restraints imposed by the constitution of Alabama, in relation to banking, were designed to operate upon the Legislature of the State, and not upon the citizens of that or any other State. To comprehend the whole scope and intention of that instrument, it will be necessary to ascertain, from the language used, what was within the contemplation and design of the convention. The provision in the constitution on the subject of banking is this: "One State bank may be established, with such number of branches as the General Assembly may, from time to time, deem expedient; provided, that no branch bank shall be established, nor bank charter renewed, under the authority 602*] of this State, without the concurrence of two thirds of both houses of the General Assembly; and provided, also, that not more that one bank nor branch bank shall be estab 3. The State, and the individual stockholders. shall be liable, respectively, for the debts of the bank, in proportion to their stock holden therein. 4. The remedy for collecting debts shall be reciprocal for and against the bank. 5. No bank shall commence operations until half of the capital stock subscribed for shall be actually paid in gold or silver, which amount shall in no case be less than one hundred thousand dollars." There are a few other unimportant rules laid down, but they are not material to the present inquiry. The inquiry naturally suggests itself to the mind, Why did Alabama introduce into her constitution these very unusual and specific rules? If they had not been deemed of great importance, they would not have been found there. Can anyone say, therefore, that this regularly organized system, to which all banks within the State of Alabama were to conform, did not establish for the State, her Legislature, or other authorities a clear and unequivocal policy on the subject of banking? It has been conceded in the argument, and by the opinion of the majority of the court, that these constitutional provisions do restrict and limit the power of the Legislature of the State. Then the Legislature cannot establish a bank in Alabama but in conformity with the rules here laid down. They have established seven banks; five of them belonging exclusively to the State, and two fifths of the stock of the other two, with a proportionate power in the direction, reserved to the State. Each of these banks is authorized to deal in exchange. It is proper to stop here, and inquire whether the subject of exchange is proper to enter into the policy of the legislation of a State, and whether it is a part of the customary and legitimate business of banking. All the authorities on the subject show that in modern times it is a part of the business of banking. See Postlethwaite's Commercial Dictionary, title Bank; Tomlin's Law Dictionary, title Bank; Rees's Cyclopædia, title Bank; Vatt. 105. This last author quoted, after showing that it is the duty of the sovereign of a nation to furnish for his subjects a sufficiency of money for the purposes of commerce, to preserve it from adulteration, and to punish those who counterfeit it, proceeds to say: "There is another custom more modern, and of no less use to commerce, than the establishment of money, namely, exchange, or the business of the bankers; by means of whom the merchant remits immense sums *from one end of the world to the [*603 other with very little expense, and, if he pleases, without danger. For the same reasons that sovereigns are obliged to protect com. merce, they are obliged to protect this custom by good laws, in which every merchant, for. |