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sage, after all amendments have been consid- tion. No act of Congress, however, has ever ered. A low rate of interest on bonds of brief given greater satisfaction to the masses, irreduration, with no discrimination in favor of spective of party, their only regret being that national banks, will, in my judgment, make it did not go far enough; that it did not place the best funding law attainable.
the coinage of silver on the same free and un“The amendment offered by the Senator limited basis with gold. In my judgment, this from Texas [Mr. Cooke), together with some defect of the law will be cured at no distant things which have fallen from other Senators, day. But the work of financial reform in 1878 have induced me to change my purpose of re did not stop with the restoration of silver maining silent. The amendment of the Sen- money. By the act of May 31, 1878, the ator from Texas relates to a subject of great further destruction and contraction of greenimportance to the American people. Its ob- backs was prohibited. They were recognized ject, if I understand it correctly, is to protect by this legislation as a permanent part of our the greenback currency now in circulation currency. They were no longer left to the from possible destruction under the operations caprice or interested motives of their enemies. of the pending bill. With that object, it is The business world took notice of this fact, perhaps needless for me to say, I deeply and and their credit rose at once.
Under the apearnestly sympathize, and I embrace the op- prehension of being compelled to do so by portunity presented by that wholesome amend- law, the Secretary of the Treasury agreed to ment to express my views of its propriety and receive them in payment of customs duties on necessity.
imports, and they immediately took their place “Sir, it is now something more than a year in the money markets at par with gold. On since a needless, uncalled-for, and alarming this fact is based the claim that specie payfinancial agitation sprang up, instigated by ments have been resumed. I am glad to know associated bankers and capitalists, in favor of that the Senator from Delaware (Mr. Bayard] the wholesale destruction of the entire legal- looks upon this claim of specie resumption as tender note or greenback currency of this I do, for it is a pleasure to concur with him country. The systematic efforts made in the whenever I can. In the opening sentences of same interest to force a resumption of specie his speech of January 27, 1880, he says there payments on a gold basis alone are fresh in is no actual resumption of specie payments at the minds of all. By the act of 1873 silver this time, and, after describing the present was destroyed as money, and by the act of law on that subject, he declares that 'to re1875 provision was made for the retirement sume by such a delusive process is as idle as to and destruction of legal-tender notes until they bail water with a sieve.' were contracted within the reach of a gold ba “It would be difficult, indeed, to describe sis for the purposes of redemption. This policy more forcibly a foolish effort to do an imposwas the most baneful and truly infernal one sible thing. That Senator, I am sure, will ever inflicted upon the people of this country. therefore agree with me that the revival of The memory of it starts afresh the curses of its business throughout the country is not in any victims. It destroyed all values both of prop- respect due to the so-called resumption of erty and labor. It bankrupted millions of specie payments, when in point of fact such honest people, deprived laboring men and a resumption has not taken place at all. In women of a chance to earn bread, drove thou- my judgment the legislation of 1878, legalizing sands and tens of thousands to vice and crime, silver money and protecting the greenback filled the prisons with despairing inmates, and currency from further destruction and constained the earth with the blood of suicide and sequent contraction, did more than all other murder. This is the true record of the years causes combined to restore confidence in busibetween 1873 and 1878. The patience of the ness circles and to bring about whatever depeople at last gave way. They turned upon gree of prosperity we have since enjoyed. We this accursed policy of destroying money, the have had bountiful harvests, it is true, but measure of all values, and broke it down. The without financial stability, and without confiyear 1878 is one long to be remembered by the dence in the quality and amount of money laboring people of this country. In that year regulated by law, no favorable change would they gained the only victories they have had have occurred. The President of the United on the financial question since the Republican States, however, at the opening of Congress in party came into power, nearly twenty years December, 1879, and again at the opening of ago. On the 28th day of February, 1878, the the present session, asked us to undo all we Congress of the United States, by an over- have done on this great subject. In his anwhelming vote over the veto of the President, nual message of December last he strongly restored the old American silver dollar to urges Congress to authorize the Secretary of coinage and circulation.
the Treasury to saspend the coinage of the “The struggle here was protracted and de- silver dollar of 4124 grains; and then with termined. The advocates of the gold basis, the daring hardihood he recommends the retiremonometallists, the adherents of silver demone- ment from circulation of the entire volume of tization, filled the country with predictions of legal - tender potes, commonly called greenthe evils which would flow from its restora- backs.
Sir, this is a tremendous issue. It is the justice by the Federal Government on other boldest attempt at outrage on the people, as it subjects. Each has a limited sphere of soverseems to me, in the whole range of our finan- eignty beyond which it can not go. Each has cial history. It is not equaled even by the prescribed bounds, and there must stop. But act of Ma 1869; for while that act plun- with the people, back of all Federal and State ders the tax-payers of hundreds of millions governments, is lodged the supreme, absolute, they never agreed to pay, yet its grasp at and unlimited authority from which emanate power was not so great as we are now con all constitutions, laws, and policies. They can fronted with. This demand upon us to destroy bind and they can loosen. They made the at one fell blow nearly three hundred and fifty government of the States, and they made the millions of the debt-paying money now in use Federal Government. Chief-Justice Marshall, comes as that of the President, but it is not the master mind of American jurisprudence, in merely his. It is the demand of more than deciding the case of McCulloch os. The State two thousand national banks organized as the of Maryland, says: National Bank Association, that Congress shall
“ The Government of the Union, then (whatever abandon to them the absolute control of every may be the intluence of this fact on the case), is emfeature of our financial system. The President phátically and truly a Government of the people. In in his message simply speaks for them when he form and in substance it emanates from them. Its attempts to excite distrust against United States powers are granted by them, and are to be exercised notes made by law a legal tender. It is evident directly on them and for their benefit. they think no money should reach the people “The great purposes for which the people except through their own agency. if the created the Government of the Union are also greenback currency was swept from existence specifically declared. In the decision just the banks would have the financial field to cited, Chief-Justice Marshall again says: themselves, and their currency, with its profits “ The Government proceeds directly from the peoto them and its expense to the people, would ple, is ordained and established in the name of the soon fill the place of that which had disap- people, and is declared to be ordained in order to form
a more perfect union, establish justice, insure domespeared. This is the vast stake for which the tic tranquillity, provide for the common defense, promoney power now plays. It involves not only mote the general welfare, and secure the blessings of millions, but power. It involves the abdica- liberty to ourselves and our posterity. tion by Congress of all its powers over the "With these purposes in view-purposes as currency and the surrender of the whole sub- beneficent, as vast, far-reaching, and glorious ject to a moneyed autocracy before which
as ever sustained the hopes of the human race every interest and every department of this - did the framers of that sacred instrument, Government will be powerless.
the Constitution, make a close and narrow “Such corporation wealth and far-reaching limitation of the means by which to carry financial dominion as that to which the Na- them out? We have heard much, throughout tional Banking Association now aspires have all our history, of strict constructionists of the hardly a parallel in the history of the world. Constitution. I hope and believe that I beIs it not time to look to the terms and the long to that party.' I am in favor, however, principles of the Constitution? In whose of strictly construing the Constitution for the hands does that instrument place the power accomplishment of the great and declared ends to create a circulating medium for the use of of Government, rather than for their defeat. the people? We constantly hear about the I believe the power to carry out and establish duty of driving the financial question out of these ends is vested by the Constitution in the Congress. To read from day to day the or Government of the United States. By the last gans of the banks, it would appear to be a clause of section 8 of the first article of the usurpation on the part of Congress to consider Constitution it is declared that Congress shall the question at all. From them it would ap- have powerpear that the Federal Government was entirely
"To make all laws which shall be necessary and incompetent to endow its paper currency with proper for carrying into execution the foregoing debt-paying functions. Such, too, I under- powers, and all other powers vested by this Constitustand to be the position of the able chairman tion in the Government of the United States, or in of the Finance Committee of this body.
any department or officer thereof. “Let us examine briefly and see whether the " That is a broad and sweeping provision, founders of this Government did in fact fetter and it has been held to bestow a wide discreits hands and cripple its powers to the extent tion upon Congress in the selection of the claimed. In all governments among men sov- necessary and proper means with which to ereign power is lodged somewhere. There is execute the powers of the Government and to always a place beyond which you can go no fulfill the purposes of its creation. The defarther. In the words of William Pitt, in the cision of the present Supreme Court of the House of Commons, in 1799: “In every gov- United States, in 12 Wallace, holding the laws ernment there must reside somewhere a su- creating legal-tender notes to be constitutional preme, absolute, and unlimited authority.” on the ground that such a currency was necesSovereignty is rightfully claimed on some sub- sary for the preservation of the Government, jects by the States of this Union, and with equal has been harshly criticised. The Senator from
Delaware, in his speech of more than a year ally coined is excluded. But those who take ago, saw proper to say:
this position, and urge a technical construction, "Nor do I care now to recite the sad history of the
can not themselves adhere to the term 'coin overthrow of one of the most deliberate decisions ever without giving it an explanation which does reached by the Supreme Court, accomplished so speedily by the active interference and power of Prosi- tution does not speak of the coinage of gold or
not appear in the Constitution. The Constident Grant and Mr. Hoar, his Attorney-General, by the change not in the opinion but in the personnel of silver. All kinds of metals may be coined. the tribunal, and an increase in its numbers. Iron, zinc, lead, and all other metallic subOn May 1, 1871, this decision was overruled by the stances might be used to comply with the mere reconstructed court by a vote of 5 to 4, and their judg- verbal phrase of the Constitution. Nor does ment is to be found in the twelfth volume of Wal- the Constitution expressly authorize Congress lace's Reports.
to declare any kind of money, even gold and “Sir, the Senator might have spared the silver, a legal tender. These facts show that Supreme Court his grave censure. Every prin- in order to restrict the term “coin' to the ciple of law as to the power of Congress found precious metals, instead of allowing it to apin 12 Wallace, upholding the constitutionality ply to all metals, and in order to give Congress of the legal-tender acts of 1862 and 1863, is to the power to declare them a legal tender, we be found in 4 Wheaton, in the case of McCul- have to go outside of the express words of the loch vs. The State of Maryland, enunciated by Constitution to obtain its meaning. Chief-Justice Marshall in 1819, now more than
“Nobody questions that so far as the coinsixty years ago
age of metal money is concerned no other sub"All there is of the question of power is stances except gold and silver can be coined, stated on page 421 of 4 Wheaton:
and yet the Constitution does not say so. No"We admit
body questions that Congress can make gold “Says Chief-Justice Marshall
and silver a legal tender, and yet the Constituas all must admit, that the powers of the Govern tion is silent on that point. If, therefore, so ment are limited, and that its limits are not to be much of the power of Congress over the questranscended. But we think the sound construction
tion of money, on points where there has never of the Constitution must allow to the national Legis- been any dispute, is derived from inferences lature that discretion, with respect to the means by arising out of the Constitution, rather than cution, which will enable that body to perform the from expressions to be found in it, might we high duties assigned to it in the manner most bene- not with safety apply the same rule to the ficial to the people. Let the end be legitimate, let it matter that is in controversy? I do not bebe within the scope of the Constitution, and all means which are appropriate, which are plainly adapted to
lieve that the power of Congress is exhausted that end, which are not prohibited, but consist with by the mere coinage of metallic money. Let the letter and spirit of the Constitution, are constitu it be understood that all money is created by tional.
law, and that all power to declare what shall “Under the doctrine here laid down, the be money is vested in Congress. The Supreme issue of legal-tender notes in 1862 and 1863 Court of the United States says: was left by the Constitution to the discretion
“ If the power to declare what is money is not in of Congress, to be decided by that body in Congress, it is annihilated. view of all the facts then before it. This ruling indeed makes the power of Congress de- Section 10 of the first article of the Constitu
“It is expressly taken away from the States. pend on a question of fact. “The Government in 1862 and 1863 was
tion provides thatstriving to maintain its own existence. Was
“No State shall enter into ary treaty, alliance, or that end legitimate and within the scope of the coin money ; emit bills of credit ; make anything but
confederation ; grant letters of marque and reprisal; Constitution? It had to support great armies gold and silver coin a tender in payment of debts ; in the field and equip fleets on the ocean to pass any bill of attainder, ex post facto law, or law iminsure self-preservation. Was the legal-tender pairing the obligation of contracts, or grant any title note currency an appropriate means of assist- of nobility. ance for that purpose? Was it adapted to the “This is a sweeping prohibition of the exerservice it was expected to perform? Was it a cise of power by the States. It is a total necessary and proper means to a legitimate negative, and, taken in connection with the end? If so, it was a constitutional currency affirmative grant of power on this subject, it unless prohibited by the letter or the spirit of demonstrates the original purpose to confer the Constitution. It is not pretended that upon Congress a full and complete power over such a prohibition exists in terms. Is it pro- the currency of the people. There is one feathibited by the spirit of the Constitution, or by ure in this prohibitory clause of the Constituany implication arising out of any of its pro- tion more suggestive than any other. The visions? We are all familiar with the argu- power to make anything but gold and silver a ment on this point. Because the Constitution legal tender in payment of debts is expressly gives to Congress the power to coin money denied to the States, but not to Congress. The and regulate the value thereof and of foreign subject was before the minds of the framers of coins' it is insisted that the power to make the Constitution; they considered it; and the money out of anything that can not be actu- fact that they denied to the States, in express
VOL. XXI.-11 A
words, the power to make paper money a
defines the material to be coined as metal, are comlegal tender, and were totally silent as to the pelled to concede to Congress large discretion in all
other particulars. The Constitution does not ordain power of Congress on that subject, is a strong what metals may be coined, or prescribe that the legal implication in favor of that power in Congress. value of the metals when 'coined shall correspond at This implication is greatly strengthened, too, all with their intrinsic value in the market, nor does when we reflect that the power of Congress tó it even affirm that Congress may declare anything to make gold and silver a legal tender in pay; fessedly the power to regulate the value of money
be a legal tender for the payment of debts. Conment of debts is also an implied power, and coined, and of foreign coins, is not exhausted by the not an express grant. If it was the intention first regulation. More than once in our history has of the framers of the Constitution that Con- the regulation been changed without any denial of the gress should not have the power to make any- power of Congress to change it, and it seems to have thing but the precious metals a legal tender, shall be coined, its purity, and how far its statutory how easily, how certainly, how inevitably value as money shall correspond from time to time would they have inserted such a provision with the market value of the same metal as bullion. when they were treating of that very question! How, then, can the grant of a power to coin money Would they have used express language in and regulate its value, made in terms so liberal and order to deprive the States of this power, of all power over the currency, be regarded as implied
unrestrained, coupled also with a denial to the States while Congress, to whom every vestige of prohibition to Congress against declaring Treasury power over money was transferred, was left notes a legal tender, if such declaration is appropriate untrammeled, unless it was their design to per- and adapted to carrying into execution the admitted mit Congress a discretion on the subject? If powers of the Government ? it is said that this is a Government of dele “But it has been strenuously insisted on this gated powers, and that while the power to floor that the obligation of contracts was immake anything but gold and silver a legal ten- paired by the passage of the legal tender acts, der was prohibited to the States, yet it was as they are known, of 1862 and 1863. Even if not delegated to the United States, the answer this position could be sustained, it is not clear is, that neither was the power to make gold that it would render them unconstitutional. and silver a legal tender expressly delegated to The States are prohibited from making any the United States. So that if by reason of its law impairing the obligation of contracts.' full general control of the question of money Is that true, however, as to Congress? We Congress derives a power, unexpressed in the do not find it so in the language of the ConConstitution, to declare what shall be a legal stitution; neither do we find it in the practices tender in the payment of debts, what is there of the Government. What is a general bankto confine it merely to the precious metals? rupt law except a provision by which conOn this point the reasoning of the Supreme tracts may not only be impaired but abrogated, Court, to my mind, is just and unanswerable. totally destroyed ? A bankrupt law applies to It is found on page 546 of 12 Wallace, and is all contracts, past and future, and provides as follows:
legal methods for their entire obliteration. It “Why, then, it may be asked, if the design was to may be said that the power is expressly granted prohibit to the new Government, as well as to the in the fourth clause of section 8, Article I of States, that general power over the currency which the Constitution to enact a general bankrupt such denial not expressly extended to the new gove law. That is true; but if Congress is prohibiternment as it was to the States? In view of this ited from impairing, under any circumstances, might be argued with much force that when it is con the validity of contracts, how can two such sidered in what brief and comprehensive terms tho antagonistic principles stand together in the Constitution speaks, how sensible its framers must same instrument ? Congress can declare war, have been that emergencies might arise when the precious metals (then more scarce than now) might before whose blasts contracts are withered and prove inadequate to the necessities of the Govern- blown away. Congress can pass non - interment, and the demands of the people; when it is re course acts, and enforce embargoes by which membered that paper money was almost exclusively contracts may be hindered, impaired, and anin use in the States as the medium of exchange, and when the great evil sought to be remedied was the nulled. But I am very far from admitting that want of uniformity in the current value of money, it the legal-tender acts do impair the obligation might be argued, we say, that the gift of power to of contracts, whatever the power of Congress coin money and regulate the value thereof was under- may be on that subject. The argument on the power which had belonged to the States and this point, however, can of course apply only which they, surrendered. Such a construction, it to contracts made prior to February, 1862. might be said, would be in close analogy to the mode All contracts made since the passage of the of construing other substantive powers granted to first legal-tender act have been made with Congress. They have never been construed literally, reference to the existence of the legal-tender and the Government could not exist if they were. Thus the power to carry on war is conferred by the note currency. power to declare war. The whole system of the trans "The complaint in regard to contracts prior portation of the mails is built upon the power to es- to February, 1862, is that a man who owed a tublish post-offices and post-roads. The power to debt at that time might afterward pay it in the letter of the grant. Even the advocates of a strict legal-tender notes, or greenbacks, as they are literary construction of the phrase "to coin money popularly styled, and that his creditor had to and regulate the value thereof, while insisting that it take them. Was this an impairment of an or
dinary contract to pay money, in which there their legal value, they could no more have paid a debt was no mention of any special kind of money, than uncoined bullion, or cotton, or wheat. Every and in the discharge of which both parties contract for the payment of money simply is necessasimply contemplated the use of the lawful ment over the currency, whatever that power may be, money of the country? I say it was not. and the obligation of the parties is therefore assumed Numerous decisions of the Supreme Court of with reference to that power. our own country, and of the highest courts of all “In the discussion of this great question, howother civilized countries, might be cited to show ever, we have always heard much stress laid that the obligation of a contract to pay money on what have been termed the 'war powers' is to pay that which the law shall recognize of the Constitution. There are those who, as money when the payment is to be made.' while admitting that Congress has the power Every contract is made subject to the power to make legal-tender notes, still insist that such of the Government to enact new laws and to power only exists during war. They hold that repeal old ones. AU human conduct is gov a state of war gives rise to a power in the Conerned by the same rule. We all take the risk stitution, and confers it upon Congress, over of not only what the law now is, but of wha the currency of the country, which has no exit hereafter may be. This is a risk which istence in time of peace. It is certainly true every citizen shares at every step and on every that great war powers belong to this Governconceivable subject. The legal-tender acts are ment. But is the power on the part of Connot the only financial bazards the American gress to create a legal-tender note circulation people have encountered in the way of a for the people one of them? That is the plain change of laws. The acts of Congress regu- question. The powers of Congress on the sublating the coinage of gold and silver have been ject of war are specifically named in the Conrepeatedly altered and amended. The number stitution. It may be profitable to read them. of grains of gold in the gold eagle was reduced 6 per cent in 1834, without changing its legal- prisal, and make rules concerning captures on land
“ To declare war, grant letters of marque and retender value. The same thing has been done and water; more than once with silver coin, and it has “To raise and support armies, but no appropriation never been contended that such legislation im- of money to that use shall be for a longer term than paired the obligation of contracts. The posi- two years;
“To provide and maintain a navy ; tion assumed by the Supreme Court on this “ To make rules for the Government and regulation point is the only one which can be upheld. It of the land and naval forces ; is stated on page 548 of 19 Wallace, as follows: “To provide for calling forth the militia to execute “It is true that under the acts a debtor, who be
the laws of the Union, suppress insurrection, and recame such before they were passed, may discharge
pel invasions ; his debt with the notes authorized by them, and the ing the militia, and for governing such part of them
"To provide for organizing, arming, and disciplincreditor is coinpelled to receive such notes in discharge of his claim. But whether the obligation of the con
as may be employed in the service of the United tract is thereby weakened can be determined only States, reserving to the States, respectively, the apafter considering what was the contract obligation. pointment of the officers, and the authority of trainIt was not a duty to pay gold, or silver, or the kind ing the militia according to the discipline prescribed of money recognized by law at the time when the con
by Congress. tract was made, nor was it a duty to pay money of equal intrinsic value in the market. (We speak now of it, over the currency is derived from the
“Sir, if the power of Congress, or any part of contracts to pay money generally, not contracts to pay some specifically-defined species of money.) The grants of the Constitution in relation to war, expectation of the creditor and the anticipation of the it must be found somewhere in the clauses debtor may have been that the contract would be dis- which I have just read. They contain all the charged by the payment of coined metals, but neither power which has been given to Congress on its fruits, nor the anticipation of the other, constitutes the subject of war. Those who contend that its obligation. There is a well-recognized distinction the legal-tender notes are constitutional in war, between the expectation of the parties to a contract but not in peace, claim that their argument is and the duty imposed by it. (Speden vs. Austin, 5 sustained by the two clauses just quoted: Adolphus and Ellis, N. S., 671; Dunn vs. Sayles, Irid., 685; Coffin vs. Landis, 10 Wright, 426.) Were “To raise and support armies, but no appropriation it not so, the expectation of results would be always of money to that use shall be for a longer term than equivalent to a binding engagement that they should two years; follow. But the obligation of a contract to pay money “To provide and maintain a navy. is to pay that which the law shall recognize as money when the payment is to be made. If there is anything
“They contend that the power to raise and settled by decision it is this, and we do not under- support armies and to provide and maintain a stand it to be controverted. (Davies, 28 ; Barrington navy implies the power to resort to an issue of vs. Potter, Dyer 81, b. fol. 67; Faw vs. Marsteller, 2 legal-tender notes if necessary. It is clear to Cranch, 29.) No one ever doubted that a debt of $1,000 contracted before 1834 could be paid by one
my mind that in these clauses the framers of hundred cagles coined after that year, though they the Constitution were providing a power in contained no more gold than ninety-tour eagles such Congress for the appropriation of money for as were coined when the contract not because of the intrinsic value of the coin, but be- rather than for a power to create money to be
vas made; and this, the support of our military and naval forces cause of its legal value. The eagles coined after 1834 were not money until they were authorized by law; appropriated. The same sentence which proand had they been coined before without a law fixing vides for raising and supporting armies treats