In one interesting case it appeared that the magistrates of California proposed, by way of treating convicts of all nationalities with strict equality, to cut off the Chinaman's queue when he was put in jail, just as they crop the heads of other offenders. But John complained to the Circuit Court, which told the magistrates they must do no such thing; and said, as it were, that Chinese pigtails are protected by Magna Charta, the Declaration of Independence, the Constitution, and every palladium of liberty; and that if the California authorities desired equality between Chinese and Caucasians in the matter of head-dress, the true way was to grow pigtails on the heads of the Caucasians.*

The Circuit Court in Oregon had occasion to consider the rights of the Chinese in another aspect. Under pressure of the objections to employment of Chinese labor, the Legislature of Oregon passed a law to prohibit its being employed upon street improvements and public works. This law being in force, Baker & Co., a firm of contractors for such works, put in a bid for a job of 50,000 dollars' worth of work upon improvements in Portland, which the city authorities advertised to put under contract. Their bid was the lowest, and they were entitled to the contract. It was surmised that they were intending to employ Chinese laborers in doing the work; and the city authorities refused to sign and deliver the contract unless the contractors would give bonds that in performing it they would comply with the law, and no Chinese should be employed. The contractors complained to the court. Upon certain technical questions connected with the proper way of bringing the suit, the judge ruled against them, but upon the general question of the right to employ Chinese labor, the decision was in their favor. The court cited the familiar provisions of the Burlingame treaty recognizing the right of emigration and assuring the Chinese of equal rights with other foreigners, and declared that a State cannot

* Ho Ah Kow v. Nunan, 5 Sawyer, 552; 13 West Jur. 409.

legislate so as to interfere with their operation. The treaty is the supreme law, and, until it has been abrogated or modified, the courts must enforce it. In agreeing that the Chinese may become residents here, it forbids any State to impose restraints and limits upon the Chinese as a race in respect to their labor and pursuits. The right to reside here implies the right to follow any lawful calling or pursuit open to other foreigners. The question whether the Chinese may wisely be allowed to come and labor here without restraint is a serious one, but it belongs solely to the national government, and is decided, for the time being, by the treaty. While that stands, no State can interfere.*

These positions certainly have some support from the acts of Congress which declare that the right of expatriation is a natural and inherent right of all people, in recognition of which. our government has freely received emigrants from all nations;† and that all persons shall have the same right in every State to make and enforce contracts, and the same benefit of laws for the security of persons and property, as is enjoyed by white citizens.

LEGISLATIVE ACTION IN CALIFORNIA.

Meantime California, during the spring and summer of 1879, by a remarkable duplication of political action, representing the sentiment of the community, renewed her remonstrance against the effects of the immigration, and her demand for some relief from the treaty, in two very emphatic ways. While Congress was in debate over bills to restrict the immigration, a constitutional convention was in session in the State; and its work was submitted to the people and ratified by them in May following, and is now in force. It declares that no native of China shall ever exercise the privileges of an elector. It devotes an entire article to the Chinese by name, describing them as aliens likely

* Baker v. Portland, 5 Sawyer, 566.

Rev. Stat. § 1977, 1978.

Rev. Stat. § 1999.

to be paupers, mendicants, and criminals, and commanding the legislature to impose conditions on their coming or remaining, and to provide for their removal if they will not comply. No corporation may employ a Chinaman; no Chinese shall be employed on any public work; their immigration is to be discouraged by law, and all companies importing them are to be subject to penalties; cities and towns are empowered to expel And subsequently, in September, under a law of 1877 providing for a popular vote upon the question of permitting Chinese immigration, an election was held, and resulted, according to the San Francisco journals, in a vote of 154,638 against allowing it, to 883 only in its favor. By these two grave State acts California has shown that her sense of need is immediate and deep. What measure of relief shall be accorded is one of the pressing questions of the time. It continues to excite efforts in Congress for restrictive legislation, and to engage the thoughtful attention of the Department of State. Very lately a commission of citizens deemed especially qualified has been nominated, to undertake the duty of maturing measures which shall, if possible, protect the industrial and social interests of California, without imperilling the commercial interests of America in China, or retracting the time-honored policy and traditions of our government towards foreigners.

CHAPTER IX.

THE NATIONAL BANKS.

THIS chapter will not give a general account of banking, but will only describe the important change by which, in recent years, a major part of the banking business and interests of the country have been brought under the supervision and control of the national government.

It is not obvious on the surface why a law which requires banks to deposit in the custody of government securities equivalent to cash for the full amount of its circulating notes, and more, should be called a "free-banking" law. The reason is found in the contrast between this system and the one which preceded it, which required special charters. In the earliest times, no doubt, any individual might engage in banking business, in any of its branches. A chief branch consisted in issuing bank-notes adapted and intended to circulate as money. Long ago it was found inconvenient and dangerous to allow this to be done by any and all persons at pleasure, and the privilege was taken in charge by government. Thus in all the early years of American legal history, the general rule was that persons who desired to issue bank-notes must obtain leave; and this was usually granted in the form of a charter from the State legislature.

*There was in New York, in Vermont, and perhaps elsewhere, an intermediate plan known as the "safety-fund” system, in which all the banks contributed to a fund to redeem the bills of those which became insolvent. Our purpose does not require any extended account of it.

Through quite a period Congress maintained a United States Bank, chiefly as a fiscal agent of government; and in newly settled States the restriction or prohibition of issuing bank-notes without charter authority was not always enforced. But, with these exceptions, the general doctrine, prior to 1838, was that issuing circulating notes was a privilege granted by the legislature of the State; so that only those persons to whom the legislature would make the grant might exercise it. The privilege was important and valuable; and, in the older and more conservative States, powerful political influence or adroit management and liberal expenditure of money were needed for procuring a charter. The charters named the men who were to be the members of the corporation, and these prescribed the terms and manner of admitting new members. Thus, the special-charter system, while it gave a legislature means of providing that only prudent, responsible, and solvent men should be bankers, and, wherever due care in granting charters was observed, afforded assurance that banks would be judiciously conducted, yet treated banking as a monopoly to be vested in the approved or favored few. Upon the other hand, the charters were often given, especially in newer States, without due consideration, or too freely. It is related that Aaron Burr, being employed to procure one from the New York Legislature, drafted an act authorizing the corporators to build an aqueduct for supplying New York city with water, and saying that they might use their surplus capital in other lawful transactions. The legislature, without perceiving the hidden purpose, passed the bill, whereupon the corporation straightway opened a bank. Instances are known of charters procured by gross bribery. The dominant political party would, very generally, grant charters to its own partisans and refuse them to its opponents. In one instance, twenty-five banks would have been chartered in one act if the governor had not vetoed it; and by another act which was passed, forty-one banks were authorized, thirty-seven of which were started. Thus, although