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APPEAL from the order of the General Term of the
TAXATION OF NATIONAL BANKS.
owners of such capital according to law. They were
to be assessed, as the act provides, on the value of COURT OF APPEALS, NEW YORK.
their shares, meaning the market value or the price
which such shares would bring without regard to the PEOPLE ex rel. TRADESMEN NATIONAL BANK V. COM
value of the real estate which was to be assessed sepaMISSIONERS OF TAXES AND ASSESSMENTS,
rately. When the assessors had fixed upon the value
of such shares then the deduction was to be made from Rate of, how determined in New York-Deduction for
the value of the shares of the real estate, and here the real estate.
real point of the controversy is presented as to what In assessing shares of stock in National banks in New York,
that deduction shall be. It is to be proportionate and the assessors must determine the actual value of the shares-taking into consideration all the capital of the as the assessed value of the real estate is to the capital bank, whether surplus or in real estate or otherwise, and then deduct from such value, such sum as repre
stock. The phraseology last employed must be consents the proportion which the assessed value of the sidered in the connection with the “value of the real estate bears to the assessed value of the entire capital.
shares " which have previously been inserted in the Thus, the capital of a National bank was $1,000,000, and was statute, and when the statute speaks of the “whole represented by 25,000 shares of $40 each. The assessors
amount of the capital stock," it is reasonable to suppose assessed the shares at $56 each, making in the aggregate $1,400,000, and the real estate at $200,000. Held, that they that it had reference to its fair value and not to the should deduct from the assessed value of each share $8, being one-seventh, or the proportion which the real
nominal amount of the capital. It certainly includes estate bore to the aggregate assessed value of the shares. the value as that constitutes the actual amount, and
the important element which was to be taken into
. consideration in the assessment of the shares. The case was reported below in 9 Hun, 650.
words last cited, as expressed in the section cited, inHugh L. Cole, for appellant.
clude evidently every part of the assets of the bank Horace Barnard, for respondents.
from which income is derived and from which the divi. MILLER, J. The relator claims relief upon the
dends earned are to be paid. This clearly compreground that the commissioners of taxes and assess- hends the surplus on hand as well as any other investments did not obey the mandate of the statute in mak
ment which constitutes a portion of the capital. These ing the proper deduction from the value of each share sources of income represent the capital and form a of the capital stock of the bank as the law required.
material part of it, which is liable to be assessed as the The capital of the bank was $1,000,000, and was repre
act directs. The assessors are to consider every thing sented by 25,000 shares at $40 a share. The commis- which gives value to the shares in fixing the basis of sioners valued the shares at $56 each, and assessed the assessment. The People ex rel. Gallatin Bank v. Comreal estate at $200,000, making the total value of the missioners, etc., 67 N. Y. 516. Such being the princicapital stock, including the real estate, $1,400,000. They ple upon which the assessment is based it is not appardeducted from the value of each share $8, being the
ent in what manner a deduction can be made from the one-seventh, or the proportion which the real estate value of the shares in proportion to the nominal capibore to the whole amount of the capital stock, includ
tal instead of the real capital according to its value. ing the real estate, making the entire assessment upon
The word “ nominal” is not used, and while the the shares $1,200,000. It is urged that this deduction
amount of the capital may be nominal it may also, was erroneous, and that instead thereof one-fifth of when it has increased in value by profits earned, be far the value of each share, $11.20, should have been de- beyond that. And when it has thus become actually ducted, thus reducing the value of each share to $44.80
more valuable than the nominal amount, there is no in the place of $48, the amount of the actual assessment,
valid ground for holding that the latter sum should be and making a difference of $80,000 in total amount of the criterion. In fact the language cited would seem the taxable property assessed.
to indicate that it was intended by the Legislature to The statute under which the commissioners acted exclude any such construction. (chap. 761, Laws of 1866, $ 1) declares, that the stock- In support of the construction placed upon the statholders of any bank "shall be assessed and taxed on ute in question it may be observed that it tends to the value of their shares of the stock therein
carry out the apparent intention of the law-makers to “but not at a greater rate than is assessed on other fix a fair and just valuation upon property of this demoneyed capital in the hands of individuals in this scription, while a contrary rule would operate unjustly State. And in making such assessment there shall also and render a uniformity of assessment almost out of be deducted from the value of such shares such sum the question. No rule appears to be more equitable, as is in the same proportion to such value as is the as- rational and fair, than to assess the shares of bank sessed value of the real estate of the bank *
stocks at their value, and then make the deduction in the whole amount of the capital stock of the said proportion to the real capital, as we think the statute bank," etc.
authorizes. If it were otherwise, banking institutions The evident object and purpose of the act from which had been prosperous and successful and whose which the foregoing provision is cited, was to provide
shares had been raised far above the par value might a system of taxation of the stockholders of National escape taxation upon a large portion of the amount of banks by which they should be assessed for their shares their capital, while those which had been unfortunate in the same method and bear the same burthens as are and reduced in value might be taxed upon a far greater assessed upon other property, and thus be compelled amount thau their entire capital, upon entirely a fictito pay their fair and just proportion of taxes to be levied. tious basis of value, and upon property which in fact The clause in the section cited, to the effect that they had no existence. This clearly never was intended, were not to be assessed at a greater rate than other and the rule applicable to the construction of statutes moneyed capital, clearly meant that they should be as. does not require such a strict interpretation of the law sessed as much and to the same extent and not a less as will frustrate its design and completely pervert the rate than assessments are imposed upon individual object of the law-makers.
1 * * * *
It may also be remarked that the basis of taxation shareholders; whereas, if it refuses to pay these taxes, adopted by the commissioners in this case appears to it will impair its credit, embarrass its business, and have been followed and approved in the case of The expose itself to vexatious and expensive suits, and enPeople ex rel. Gallatin Bank v. The Commissioners, etc., tail upon itself irremediable injuries in resisting the supra, recently decided by this court.
illegal exactions made upon it. The General Term were in error in its decision and Hence, in view of the probable consequences, I have the judgment should be reversed and the writ of cer- reached the conclusion that the complainant, in its tiorari quashed.
corporate capacity, is entitled to a standing in this Judgment reversed. court, and to relief, and I shall, therefore, authorize a
decree permitting complainant to pay to the defend
ant, or into the registry of the court, forty per cent of UNITED STATES CIRCUIT COURT, SIXTH CIRCUIT.
the amount of the tax assessed against its shareholdMERCHANTS' NATIONAL BANK OF TOLEDO V. CUMMING.
ers, in accordance with its tender heretofore made,
and, on this being done, an injunction be issued perUnjust discrimination — Restraining collection of tax petually enjoining the collection thereof. The costs at suit of bank.
will be decreed against defendant, to be paid out of The shares of stock of a National bank were taxed at their the money to be realized under decree hereinbefore
full value, while other property was assessed at from authorized.
USURY BY NATIONAL BANKS.
SUPREME COURT OF PENNSYLVANIA, 1878. strain him from collecting a tax assessed for the year 1876 on the shares of stock of plaintiff's bank. The late Judge Emmons of the same circuit, before his CAKE V. THE FIRST NATIONAL BANK OF LEBANON. death, granted a preliminary injunction.
Renewal notes - acceptance of -- set-off for usury. Judge Raney and Wager Swayne, of Toledo, for
Whether other notes have been accepted by a bank in replaintiffs.
newal of notes sued on is a question for the jury.
Where there has been a series of renewal notes given for Judge Griswold and F. K. Hamlin, for respondent. the continuation of the same original loan, a taint of BAXTER, Circuit Judge, made the following memo- usury in the first transaction follows down through the
whole, and in an action by a National bank on the last randum: *
of the series, the borrower is entitled to credit for all There were several points presented and urged in the
the interest he has paid from the beginning. argument of this case, on hearing which, in the view I
CTION against the defendant as an accommodahave taken of it, need not be discussed here. Suffice
tion indorser of a draft and a note, discounted by it to say that, from the pleadings and proofs, it very
the plaintiff, a National bank, for the maker, Stine. satisfactorily appears that complainant's capital stock
Sharp & Alleman, for plaintiff in error. was assessed for the year 1876 at its full value, while all
A. L. Smith, for defendant in error. other property was assessed at from thirty to forty per SHARSWOOD, J. We think the first, third, fourth cent only of its real value, and that, by reason of this
and fifth assignments of errors must be sustained, but unequal assessment, complainant's capital stock was in
not the second. the bands of its shareholders onerated with an undue The defendant below was accommodation indorser proportion of the public taxes. It is not important to for Stine on two notes, which had been discounted by inquire into the methods leading to such a result.
the bank, and being unpaid at maturity were duly proWhether from inadvertence or design, the consequen- tested. Stine procured Cake to indorse renewal notes, ces are the same to the complainant. It is an injustice and sent them to the bank, who retained them until that contravenes the Constitution of Ohio, as well as at least one of them had fallen due, and then informed the provisions of the National Banking Law, and a Stine that they had not accepted them. No notice of wrong which the courts may, when their powers are non-payment was given Cake on these notes. This properly invoked, take cognizance of to redress. But
suit was instituted on the first notes. It is the very the defendant insists that the wrong complained of is case of Hart v. Boller, 15 S. & R. 162, in which this a wrong to complainant's shareholders, against whom court held that it was error to take from the jury the the tax was assessed, and not against the complainant. question whether the renewal notes were accepted in This objection seemed, on first impression, to have
payment. been well taken, but further reflection induces the be
We think, too, that Overholt v. The National Bank lief that it involves the rights of complainant as well
of Mt. Pleasant, 1 Norris, 490, is directly in point on as the rights of its corporators. Between the two
the question raised as to the usurious interest received there is an intimate connection; the legal entity -- the
by the bank. It was there decided that where there corporation - is distinct from the shareholders, but
has been a series of renewal notes given for the conthe former is a trustee for the latter, and custodian of
tinuation of the same original loan, the taint of usury corporate funds; and if it shall pay the taxes so as
in the first transaction follows down the descent sessed, and assume to deduct the same from dividends
through the whole line, and when therefore a National declared, or to be hereafter declared in favor of its
bank sues to recover its debt on the last of the series shareholders, it may, and the averment is that it will,
of renewal notes, the borrower is entitled to credit for subject itself to a multiplicity of suits with its own all interest he has paid from the beginning on the
loan, and not merely to the excess above the lawful * The clerk of the court, in a letter to the Editor, under
rate. date of April 15, 1878, says: "There was no written opinion in the case other than the memorandum herewith inclosed." Judgment reversed, and venire facias de novo awarded.
issued on the judgments, sold the premises to the CONSTITUTIONALITY OF EXEMPTION LAWS.
plaintiff in error, and thereafter executed to him a deed
in due form. The regularity of the sale is not conSUPREME COURT OF THE UNITED STATES, OCTO- tested. BER TERM, 1877.
The act of August 22, 1868, was then in force. The
acts of 1854 and 1859 had been repealed. Wilson v. EDWARDS, Plaintiff in error, v. KEARZY. Sparks, 72 N. C. 211. No point is made upon these
acts by the counsel upon either side. We shall, thereThe remedy subsisting in a State when and where a contract is made, and is to be performed, is a part of its
fore, pass them by without further remark. obligation, and any subsequent law of the State which so The plaintiff in error brought this action in the Suaffects that remedy as substantially to impair and lessen the value of the contract is forbidden by the Consti
perior Court of Granville county to recover possession tution, and is therefore void.
of the premises so sold and conveyed to him. That court Accordingly a law of North Carolina exempting personal property and a homestead of a debtor from sale under
adjudged that the exemption created by the Constituexecution, held invalid as to debts contracted before its tion and the act of 1868 protected the property from enactment.
liability under the judgments, and that the sale and N error to the Supreme Court of the State of North conveyance by the sheriff were, therefore, void. JudgCarolina. The facts appear in the opinion.
ment was given accordingly. The Supreme Court of Mr. Justice SWAYNE delivered the opinion of the the State affirmed the judgment. The plaintiff in error court.
thereupon brought the case here for review. The only The Constitution of North Carolina of 1868 took Federal question presented by the record is, whether effect on the 24th of April in that year. Sections 1 the exemption was valid as regards contracts made and 2 of article X declare that personal property of before the adoption of the Constitution of 1868. any resident of the State, of the value of five hundred The counsel for the plaintiff in error insists upon the dollars, to be selected by such resident, shall be ex- negative of this proposition. The counsel upon the empt from sale under execution or other final process other side, frankly conceding several minor points, issued for the collection of any debt; and that every maintains the affirmative views. Our remarks will be homestead and the buildings used therewith, not ex- confined to this subject. ceeding in value one thousand dollars, to be selected The Constitution of the United States declares that by the owner, or in lieu thereof, at the option of the no State shall pass any * law impairing the owner, any lot in a city, town, or village, with the obligation of contracts." buildings used thereon, owned and occupied by any A contract is the agreement of minds, upon a suffiresident of the State, and not exceeding in value one cient consideration, that something specified shall be thousand dollars, sball be exempt in like manner from done, or shall not be done. sale for the collection of any debt under final process. The lexical definition of impair is “to make worse;
On the 22d of August, 1868, the Legislature passed an to diminish in quantity, value, excellence, or strength; act which prescribed the mode of laying off the home- to lessen in power; to weaken; to eufeeble; to detestead and setting off the personal property so exempted riorate."-Webster's Dict. by the Constitution. On the 7th of April, 1869, another Obligation is defined to be “the act of obliging or act was passed, which repealed the prior act and pre-binding; that which obligates; the binding power of scribed a different mode of doing what the prior act a vow, promise, oath, or contract,” etc.-Idem. provided for. This latter act has not been repealed or “The word is derived from the Latin word obligatio, modified.
tying up; and that from the verb obligo, to bind or tie Three several judgments were recovered agaiust the up; to engage by the ties of a promise or oath or form defendant in error-one on the 15th of December, 1868, of law; and obligo is compounded of the verb ligo, to upon a bond dated the 25th of September, 1865; tie or bind fast, and the preposition ob, which is preanother on the 10th of October, 1868, upon a bond fixed to increase its meaning." Blair v. Williams and dated February 27, 1866; and the third on the 7th of Lapsley v. Brashears, 4 Littel, 65. January, 1868, for a debt due prior to that time. Two The obligation of a contract includes every thing of these judgments were docketed and became liens within its obligatory scope. Among these elements upon the premises in controversy on the 16th of De- nothing is more important than the means of enforcecember, 1868. The other one was docketed and became ment. This is the breath of its vital existence. such lien on the 18th of January, 1869. When the debts Without it the contract, as such, in the view of the were contracted for which the judgments were ren- law, ceases to be and falls into the class of those “imdered the exemption laws in force were the acts of perfect obligations," as they are termed, which January 1, 1854, and of February 16, 1859. The first- depend for their fulfillment upon the will and connamed act exempted certain enumerated articles of science of those upon whom they rest. The ideas of inconsiderable value and "such other property as the right and remedy are inseparable. “ Want of right freeholders appointed for that purpose might deem and want of remedy are the same thing." 1 Bac. necessary for the comfort and support of the debtor's Abr., tit. Actions in General, letter B. family, not exceeding in value fifty dollars at cash val- In Von Hoffman v. Quincy, 4 Wall. 552, it was said: uation." By the act of 1859 the exemption was ex- "A statute of frauds embracing pre-existing parol tended to fifty acres of land in the county or two contracts not before required to be in writing would acres in a town, of not greater value than five hundred affect its validity. A statute declaring that the word dollars.
ton should, in prior as well as subsequent contracts, be On the 22d of January, 1869, the premises in contro- held to mean half or double the weight before preversy were duly set off to the defendant in error as a scribed, would affect its construction. A statute prohomestead. He had no other real estate, and the viding that a previous contract of indebtment may be premises did not exceed a thousand dollars in value. extinguished by a process of bankruptcy, would inOn the 6th of March, 1869, the sheriff, under executions volve its discharge, and a statute forbidding the sale of any of the debtor's property, under a judgment period, however short, it may for another, however upon such a contract, would relate to the remedy." long. And if it may exempt property to the amount
It cannot be doubted, either upon principle or here in question, it may do so to any amount. This, authority, that each of such laws would violate the as regards the mode of impairment we are considering, obligation of the contract, and the last not less than would annul the inhibition of the Constitution, and the first. These propositions seem to us too clear to set at naught the salutary restriction it was intended require discussion. It is also the settled doctrine of to impose. this court that the laws which subsist at the time and The power to tax involves the power to destroy place of making a contract enter into and form a part McCulloch v. Maryland, 4 Wheat. 430. The power to of it as if they were expressly referred to or incorpo- modify at discretion the remedial part of a contract is rated in its terms. This rule embraces alike those the same thing. which affect its validity, construction, discharge, and But it is said that imprisonment for debt may be enforcement. Von Hoffman v. Quincy, supra; Mc- abolished in all cases, and that the time prescribed by Cracken v. Hayward, 2 How. 612.
a statute of limitations may be abridged. In Greene v. Biddle, 8 Wheat. 92, this court said, Imprisonment for debt is a relic of ancient barbartouching the point here under consideration : “It is ism. Cooper's Justinian, 658; 12 Tables, Tab. 3. It no answer that the acts of Kentucky now in question has descended with the stream of time. is punishare regulations of the remedy and not of the right to ment, rather than a remedy. It is right for fraud, but the lands. If these acts so change the nature and extent wrong for misfortune. It breaks the spirit of the of existing remedies as materially to impair the rights honest debtor, destroys his credit, which is a form of and interests of the owner, they are just as much a capital, and dooms him, while it lasts, to helpless idleviolation of the compact as if they overturned his ness. Where there is no fraud it is the opposite of a rights and interests."
remedy. Every right-minded man must rejoice when “One of the tests that a contract has been impaired such a blot is removed from the statute book. is that its value has by legislation been diminished. It (But upon the power of a State, even in this class of is not by the Constitution to be impaired at all. This cases, see the strong dissenting opinion of Washingis not a question of degree or manner or cause, but ton, J., in Mason v. Hale, 12 Wheat. 370.) of encroaching in any respect on its obligation - dis- Statutes of limitation are statutes of repose. They pensing with any part of its force.” Planters' Bank
are necessary to the welfare of society. The lapse of v. Sharp et al., 6 How. 327.
time constantly carries with it the means of proof. It is to be understood that the encroachment thus
The public as well as individuals are interested in the denounced must be material. If it be not material it
principle upon which they proceed. They do not imwill be regarded as of no account.
pair the remedy, but only require its application These rules are axioms in the jurisprudence of this
within the time specified. If the period limited be court. We think they rest upon a solid foundation.
unreasonably short and designed to defeat the remedy Do they not cover this case ? and are they not decisive
upon pre-existing contracts, which was part of their of the question before us?
obligation, we should pronounce the statute void. We will, wever, further examine the subject. Otherwise we should abdicate the performance of or
It is the established law of North Carolina that stay of our most important duties. The obligation of a laws are void, because they are in conflict with the contract camot be substantiully impaired in any way National Constitution. Jacobs v. Smallwood, 63 N. C. by a State law. This restriction is beneficial to those 112; Jones v. Crittenden, 1 Car. Law, 385; Barnes v. whom it restrains, as well as to others. No commuBarnes, 8 Jones, 366. This ruling is clearly correct. nity cau have any higher public interest than in the Such laws change a term of the contract by postponing faithful performance of contracts and the honest adthe time of payment. This impairs its obligation by ministration of justice. The inhibition of the Constimaking it less valuable to the creditor. But it does
tution is wholly prospective. The States may legislate this solely by operating on the remedy. The contract is
as to contracts thereafter made as they may see fit. not otherwise touched by the offending law. Let It is only those in existence when the hostile law is us suppose a case. A party recovers two judg- passed that are protected from its effect. ments - one against A, the other against B - each for In Bronson v. Kenzie, 1 How. 311, the subject of the sum of fifteen hundred dollars upon a promissory exemptions was touched upon, but not discussed. note. Each debtor has property worth the amount of There a mortgage had been executed in Illinois. Subthe judgment and no more. The Legislature there- sequently the Legislature passed a law giving the mortafter passes a law declaring that all past and future
gagor a year to redeem, after sale under a decree, and judgments shall be collected “in four equal annual requiring the land to be appraised, and not to be sold installments.” At the same time another law is passed for less than two-thirds of the appraised value. The which exempts from execution the debtor's property
law was held to be void in both particulars as to to the amount of fifteen hundred dollars. The court
pre-existing contracts. What is said as to exemptions holds the former law void and the latter valid. Is not
is entirely obiter, but coming from so high a source, it such a result a legal solecism ? Can the two judg
is entitled to the most respectful consideration. The ments be reconciled? One law postpones the remedy,
court, speaking through Chief Justice Taney, said: the other destroys it-except in the contingency that A State “may, if it thinks proper, direct that the the debtor shall acquire more property-a thing that
necessary implements of agriculture, or the tools of may not occur, and that cannot occur if he die before
the mechanic, or articles of necessity in household the acquisition is made. Both laws involve the same
furniture, shall, like wearing apparel, not be liable to principle and rest on the same basis. They must stand
execution on judgments. Regulations of this descripor fall together. The concession that the former is
tion have always been considered in every civilized invalid cuts away the foundation from under the lat
community as properly belonging to the remedy, to be ter. If a State may stay the remedy for one fixed
executed or uot by every sovereignty, according to its own views of policy and humanity." He quotes with any price; and sales of the most common articles for approbation the passage which we have quoted from ready money could only be made at enormous and Greene v. Biddle. To guard against possible miscon- ruinous depreciation. struction, he is careful to say further: “ Whatever “State Legislatures, in too many instances, yielded to belongs merely to the remedy may be altered accord- the necessities of their constituents and passed laws ing to the will of the State, provided the alteration does by which creditors were compelled to wait for the paynot impair the obligation of the contract. But if that ment of their just demands on the tender of security effect is produced, it is immaterial whether it is done or to take property at a valuation, or paper money by acting on the remedy, or directly on the contract falsely purporting to be the representative of specie." itself. In either case it is prohibited by the Constitution. Ramsey's Hist. U. 8.77.
The learned Chief Justice seems to have had in his “The effects of these laws interfering between debtmind the maxim “de minimis," etc. Upon no other ors and creditors were extensive. They destroyed ground can any exemption be justified. “Policy and public credit and confidence between man and man, humanity” are dangerous guides in the discussion of injured the morals of the people, and in many instana legal proposition. He who follows them far is apt to ces insured and aggravated the ruin of the unfortunate bring back the means of error and delusion. The pro- debtors, for whose temporary relief they were brought bibition contains no qualification, and we have no ju- forward.” 2 Ramsey's Hist. S. C. 429. dicial authority to interpolate any. Our duty is simply Besides the large issue of continental money, nearly to execute it.
all the States issued their own bills of credit. In many Where the facts are undisputed, it is always the duty instances the amount was very large. 2 Phillips' Hist. of the court to pronounce the legal result. Merchants' Amer. Paper Money, 29. The depreciation of both Bank v. The State Bank, 10 Wall. 604. Here there is no became enormous. Only one per cent of the “conti. question of legislative discretion involved. With the nental money" was assumed by the new government. constitutional prohibition, even as expounded by the Nothing more was ever paid upon it. Act of August late Chief Justice, before us on one hand, and on 4, 1790, $ 4, 1 Stat. 140; 2 Phillips' Hist. American Pathe other the State Constitution of 1868, and the laws per Currency, 194. It needless to trace the history passed to carry out its provisions, we cannot hesitate of the emissions by the States. to hold that both the latter do seriously impair the ob- The treaty of peace with Great Britain declared that ligation of the several contracts here in question. We "the creditors on either side shall meet with no lawsay, as was said in Gunn v. Barry, 15 Wall. 622, that no ful impediment to the recovery of the full amount in one can cast his eyes upon the new exemptions thus sterling money of all bona fide debts heretofore concreated without being at once struck with their ex- tracted." The British minister complained earnestly cessive character and hence their fatal magnitude. to the American Secretary of State of violations of The claim for the retrospective efficacy of the Consti- this guaranty. Twenty-two instances of laws in contution or the laws cannot be supported. Their valid
flict with it in different States were specifically named. ity as to contracts subsequently made admits of no 1 Amer. State Papers, 195, 196, 199, and 237. In doubt. Bronson v. Kenzie, supra.
South Carolina“ laws were passed in which property The history of the National Constitution throws a of every kind was made a legal tender in payment of strong light upon this subject. Between the close of debts, although payable according to contract in gold the war of the revolution and the adoption of that in- and silver. Other laws installed the debt, so that of strument, unprecedented pecuniary distress existed sums already due only a third, and afterward only a throughout the country.
fifth, was securable in law.” 2 Ramsey's Hist. S. C., "The discontents and uneasiness, arising in a great Ib. Many other States passed laws of a similar charmeasure from the embarrassment in which a great acter. The obligation of the contract was as often number of individuals were involved, continued to be- invaded after judgment as before. The attacks were come more extensive.
quite as common and effective in one way as in the At length two great parties were formed in every other. To meet these evils in their various phases the State, which were distinctly marked, and which pur
National Constitution declared that "no State should sued distinct objects with systematic arrangement. emit bills of credit, make any thing but gold and silver 5 Marshall's Life of Washington, 75. One party sought coin a legal tender in payment of debts, or pass any to maintain the inviolability of contracts, the other to law * impairing the obligation of contracts. impair or destroy them.
All these provisious grew out of previous abuses. 2 “The emission of paper money, the delay of legal | Curtis' Hist. of the Const. 366. See, also, the Federproceedings, and the suspension of the collection of alist, Nos. 7 and 44. In the number last mentioned taxes, were the fruits of the rule of the latter where- Mr. Madison said that such laws were not only forbidever they were completely dominant." Ib.
den by the Constitution, but were “contrary to the “The system called justice was, in some of the first principles of the social compact and to every States, iniquity reduced to elementary principles." | principle of sound legislation.”
• In some of the States creditors were treated The treatment of the malady was severe, but the as outlaws. Bankrupts were armed with legal author- cure was complete. ity to be persecutors, and by the shock of all confi- “No sooner did the new government begin its ausdence society was shaken to its foundations." Fisher picious course than order seemed to arise out of conAmes' Works (ed. of 1859), p. 120.
fusion. Commerce and industry awoke and were · Evidences of acknowledged claims on the public cheerful at their labors, for credit and confidence would not command in the market more than one-fifth awoke with them. Everywhere was the appearance of of their nominal value. The bonds of solvent men, prosperity, and the only fear was that its progress was payable at no very distant day, could not be negoti- too rapid to consist with the purity and simplicity of ated but at a discount of thirty, forty, or fifty per cent ancient manners."'-- Ames' Sup. 122. per annum. Landed property would rarely command “Public credit was reanimated. The owners of