Seventeen Talks on the Banking Question / Between Uncle Sam and Mr. Farmer, Mr. Banker, Mr. Lawyer, Mr. Laboringman, Mr. Merchant, Mr. Manufacturer

by Charles N. Fowler

This question came up in the case of Hepburn vs. Griswold, December, 1869, and was held by five judges against three, the Court then consisting of eight judges, the opinion of the Court being delivered by Salmon P. Chase, himself, who was then Chief Justice, "that the making of the Notes, or Bills of Credit, a legal tender in payment of pre-existing debts, is not a means appropriate, plainly adapted, or really calculated to carry into effect any power vested in Congress; is inconsistent with the spirit of the Constitution, and is prohibited by the Constitution."

Mr. Farmer: Well, this man Chase, who was then Chief Justice, was Secretary of the Treasury, and favored the issuance of these same United States Notes, didn't he?

Mr. Lawyer: Yes, he is the same person. But you must remember that he was a politician in the one case, and a Chief Justice in the other. Possibly, I should have said a statesman in the first place, but Thomas B. Reed said that a statesman was a dead politician, and probably, you might say, according to his theory, that Chase is a statesman now.

Chase also held that the clause in the Acts of 1862 and 1863, which makes United States Notes legal tender in payment of all debts, public and private, so far as it applies to debts contracted before the passage of these Acts, is unwarranted by the Constitution: "The legal tender quality," Chase said, "was valuable only for the purpose of dishonesty, every honest purpose was answered as well without it."

Just one year afterward, in December, 1870, the question of the legal tender of the United States Notes was again before the United States Supreme Court, which now consisted of nine members. In a decision of five against four, the above decision was reversed; one judge had died, and a new judge had been created, and these two joined the three formerly in favor of the Act.

Mr. Manufacturer: That looks a little as though General Grant wanted that kind of a decision, and had picked out the right kind of men to get it. Possibly it was more this decision than pressure of business that called for the creation of an additional member of the Court—was it not?

Mr. Lawyer: A great many have thought so, and that makes it look as though the Supreme Court does some legislating occasionally on its own account. However, the same question came up again in the case of Juillard vs. Greenman, and was decided the same way in March, 1884. It was then held that Congress has the constitutional power to make Treasury Notes of the United States a legal tender in payment of private debts in time of peace, as well as in time of war.

Justice Gray uses this language: "The power is incident to the power of borrowing money, and issuing Bills or Notes of the Government for money borrowed, of impressing upon those bills or notes, the quality of being a legal tender for the payment of private debts was a power universally understood to belong to sovereignty in Europe and America at the time of the framing and adoption of the Constitution of the United States." It appears that he based his decision upon this fact, but George Bancroft, the historian, reviewed this opinion in both its legal and historical aspects. And referring to the statement quoted above, this great historian declared it to be a stupendous error, and further affirmed that no such power was understood to belong to sovereignty in Europe at the time of the adoption of the Constitution, that is, in 1788.

Mr. Manufacturer: Well, I assume that we have another guess coming yet, haven't we? You know this same Court has guessed four times already on the Sherman Anti-Trust Law. In the Knight case, they declared that manufacturing was not and could not be considered as United States Commerce. Then came the Trans-Missouri case, then the Northern Security Co. case, and last the Tobacco and Standard Oil cases, wherein this august body ran amuck the word "reasonable," although that very word was not in the Act at all, and although it had been impossible to get Congress to put it into the Act. But after all, is it not the very soul of the whole question? And is it not a fact that the Supreme Court of the United States ought to be constantly interpreting the Constitution of the United States in the light of changed conditions, and ever advancing public opinion?