Part 19 (1/2)

The power to make the notes of the United States the legal equivalent to gold and silver necessarily includes the power to cancel with them specific contracts for gold as well as money contracts generally. Before the pa.s.sage of the act of 1862, there was no legal money except that which consisted of metallic coins, struck or regulated by the authority of congress. Dollars then meant, as already said, certain pieces of gold or silver, certified to be of a prescribed weight and purity by their form and impress received at the mint. The designation of dollars, in previous contracts, meant gold or silver dollars as plainly as if those metals were specifically named.

It follows, then, logically, from the doctrine advanced by the majority of the court as to the power of congress over the subject of legal tender, that congress may borrow gold coin upon a pledge of the public faith to repay gold at the maturity of its obligations, and yet, in direct disregard of its pledge, in open violation of faith, may compel the lender to take, in place of the gold stipulated, its own promises; and that legislation of this character would not be in violation of the const.i.tution, but in harmony with its letter and spirit.

The government is, at the present time, seeking in the markets of the world a loan of several hundred millions of dollars in gold, upon securities containing the promises of the United States to repay the money, princ.i.p.al and interest, in gold; yet this court, the highest tribunal of the country, this day declares, by its solemn decision, that should such loan be obtained, it is entirely competent for congress to pay it off, not in gold, but in notes of the United States themselves, payable at such time and in such manner as congress may itself determine, and that legislation sanctioning such gross breach of faith would not be repugnant to the fundamental law of the land.

What is this but declaring that repudiation by the government of the United States of its solemn obligations would be const.i.tutional?

Whenever the fulfilment of the obligation in the manner stipulated is refused, and the acceptance of something different from that stipulated is enforced against the will of the creditor, a breach of faith is committed; and to the extent of the difference of value between the thing stipulated and the thing which the creditor is compelled to receive, there is repudiation of the original obligation. I am not willing to admit that the const.i.tution, the boast and glory of our country, would sanction or permit any such legislation. Repudiation in any form, or to any extent, would be dishonor, and for the commission of this public crime no warrant, in my judgment, can ever be found in that instrument.

Some stress has been placed in argument in support of the a.s.serted power of congress over the subject of legal tender in the fact that congress can regulate the alloy of the coins issued under its authority, and has exercised its power in this respect without question, by diminis.h.i.+ng in some instances, the actual quant.i.ty of gold or silver they contain.

Congress, it is a.s.sumed, can thus put upon the coins issued other than their intrinsic value; therefore, it is argued, congress may, by its declaration, give a value to the notes of the United States, issued to be used as money, other than that which they actually possess.

The a.s.sumption and the inference are both erroneous, and the argument thus advanced is without force, and is only significant of the weakness of the position which has to rest for its support on an a.s.sumed authority of the government to debase the coin of the country.

Undoubtedly congress can alter the value of the coins issued by its authority by increasing or diminis.h.i.+ng, from time to time, the alloy they contain, just as it may alter, at its pleasure, the denominations of the several coins issued, but there its power stops. It cannot make these altered coins the equivalent of the coins in their previous condition; and, if the new coins should retain the same names as the original, they would only be current at their true value. Any declaration that they should have any other value would be inoperative in fact, and a monstrous disregard by congress of its const.i.tutional duty. The power to coin money, as already declared by this court, is a great trust devolved upon congress, carrying with it the duty of creating and maintaining a uniform standard of value throughout the Union, and it would be a manifest abuse of this trust to give to the coins issued by its authority any other than their real value. By debasing the coins, when once the standard is fixed, is meant giving to the coins, by their form and impress, a certificate of their having a relation to that standard different from that which, in truth, they possess; in other words, giving to the coins a false certificate of their value. Arbitrary and profligate governments have often resorted to this miserable scheme of robbery, which Mill designates as a shallow and impudent artifice, the ”least covert of all modes of knavery, which consists in calling a s.h.i.+lling a pound, that a debt of one hundred pounds may be cancelled by the payment of one hundred s.h.i.+llings.”

In this country no such debas.e.m.e.nt has ever been attempted, and I feel confident that none will ever be tolerated. The changes in the quant.i.ty of alloy in the different coins has been made from time to time, not with any idea of debasing them, but for the purpose of preserving the proper relative value between gold and silver. The first coinage act, pa.s.sed in 1792, provided that the coins should consist of gold, silver, and copper--the coins of cents and half-cents consisting of copper, and the other coins consisting of gold and silver--and that the relative value of gold and silver should be as fifteen to one, that is, that an ounce of gold should be taken as the equal in value of fifteen ounces of silver.

In progress of time, owing to the increased production of silver, particularly from the mines of Mexico and South America, this relative value was changed. Silver declined in relative value to gold until it bore the relation of one to sixteen instead of one to fifteen. The result was that the gold was bought up as soon as coined, being worth intrinsically sixteen times the value of silver, and yet pa.s.sing by law only at fifteen times such value, and was sent out of the country to be recoined. The attention of congress was called to this change in the relative value of the two metals and the consequent disappearance of gold coin. This led, in 1834, to an act adjusting the rate of gold coin to its true relation to silver coin.

The discovery of gold in California, some years afterwards, and the great production of that metal, again changed in another direction the relative value of the two metals. Gold declined, or in other words, silver was at a premium, and as gold coin before 1834 was bought up, so now silver coin was bought up, and a scarcity of small coin for change was felt in the community. Congress again interfered, and in 1853 reduced the amount of silver in coins representing fractional parts of a dollar, but even then these coins were restricted from being a legal tender for sums exceeding five dollars, although the small silver coins of previous issue continued to be a legal tender for any amount. Silver pieces of the denomination of three cents had been previously authorized in 1851, but were only made a tender for sums of thirty cents and under.

These coins did not express their actual value, and their issue was soon stopped, and in 1853 their value was increased to the standard of coins of other fractional parts of a dollar.

The whole of this subject has been fully and satisfactorily explained in the very able and learned argument of the counsel who contended for the maintenance of the original decision of this court in _Hepburn_ v.

_Griswold_. He showed by the debates that congress has been moved, in all its actions under the coinage power, only by an anxious desire to ascertain the true relative value of the two precious metals, and to fix the coinage in accordance with it; and that in no case has any deviation from intrinsic value been permitted except in coins for fractional parts of a dollar, and even that has been only of so slight a character as to prevent them from being converted into bullion, the actual depreciation being made up by their portability and convenience.

It follows, from this statement of the action of congress in altering at different times the alloy of certain coins, that the a.s.sumption of power to stamp metal with an arbitrary value and give it currency, does not rest upon any solid foundation, and that the argument built thereon goes with it to the ground.

I have thus far spoken of the legal tender provision with particular reference to its application to debts contracted previous to its pa.s.sage. It only remains to say a few words as to its validity when applied to subsequent transactions.

So far as subsequent contracts are made payable in notes of the United States, there can of course be no objection to their specific enforcement by compelling a delivery of an equal amount of the notes, or by a judgment in damages for their value as estimated in gold or silver dollars, nor would there be any objection to such enforcement if the legal tender provision had never existed. From the general use of the notes throughout the country and the disappearance of gold and silver coin from circulation, it may perhaps be inferred in most cases, that notes of the United States are intended by the parties where gold or silver dollars are not expressly designated, except in contracts made in the Pacific states, where the const.i.tutional currency has always continued in uses. As to subsequent contracts, the legal tender provision is not as unjust in its operation as when applied to past contracts, and does not impair to the same extent private rights. But so far as it makes the receipt of the notes, in absence of any agreement of the parties, compulsory in payment of such contracts, it is, in my judgment, equally unconst.i.tutional. This seems to me to follow necessarily from the duty already mentioned cast upon congress by the coinage power,--to create and maintain a uniform metallic standard of value throughout the Union. Without a standard of value of some kind, commerce would be difficult, if not impossible, and just in proportion to the uniformity and stability of the standard is the security and consequent extent of commercial transactions. How is it possible for congress to discharge its duty by making the acceptance of paper promises compulsory in all future dealings--promises which necessarily depend for their value upon the confidence entertained by the public in their ultimate payment, and the consequent ability of the holder to convert them into gold or silver--promises which can never be uniform throughout the Union, but must have different values in different portions of the country; one value in New York, another at New Orleans, and still a different one at San Francisco.

Speaking of paper money issued by the states,--and the same language is equally true of paper money issued by the United States--Chief Justice Marshall says, in _Craig_ v. _The State of Missouri_: ”Such a medium has been always liable to considerable fluctuation. Its value is continually changing; and these changes, often great and sudden, expose individuals to immense loss, are the sources of ruinous speculations, and destroy all confidence between man and man. To cut up this mischief by the roots, a mischief which was felt by the United States, and which deeply affected the interest and prosperity of all, the people declared in their const.i.tution that no state should emit bills of credit.”

Mr. Justice Was.h.i.+ngton, after referring, in _Ogden_ v. _Saunders_, to the provision of the const.i.tution declaring that no state shall coin money, emit bills of credit, make anything but gold and silver coin a tender in payment of debts, says: ”These prohibitions, a.s.sociated with the powers granted to congress 'to coin money and to regulate the value thereof, and of foreign coin,' most obviously const.i.tute members of the same family, being upon the same subject and governed by the same policy. This policy was to provide a fixed and uniform standard of value throughout the United States, by which the commercial and other dealings between the citizens thereof, or between them and foreigners, as well as the moneyed transactions of the government, should be regulated. For it might well be asked, Why vest in congress the power to establish a uniform standard of value by the means pointed out, if the states might use the same means, and thus defeat the uniformity of the standard, and consequently the standard itself? And why establish a standard at all for the government of the various contracts which might be entered into, if those contracts might afterwards be discharged by a different standard, or by that which is not money, under the authority of state tender laws? It is obvious, therefore, that these prohibitions in the tenth section are entirely h.o.m.ogeneous, and are essential to the establishment of a uniform standard of value in the formation and discharge of contracts.”

It is plain that this policy cannot be carried out, and this fixed and uniform metallic standard of value throughout the United States be maintained, so long as any other standard is adopted, which of itself has no intrinsic value and is forever fluctuating and uncertain.

For the reasons which I have endeavored to unfold, I am compelled to dissent from the judgment of the majority of the court. I know that the measure, the validity of which I have called in question, was pa.s.sed in the midst of a gigantic rebellion, when even the bravest hearts sometimes doubted the safety of the republic, and that the patriotic men who adopted it did so under the conviction that it would increase the ability of the government to obtain funds and supplies, and thus advance the national cause. Were I to be governed by my appreciation of the character of those men, instead of my views of the requirements of the const.i.tution, I should readily a.s.sent to the views of the majority of the court. But, sitting as a judicial officer, and bound to compare every law enacted by congress with the greater law enacted by the people, and being unable to reconcile the measure in question with that fundamental law, I cannot hesitate to p.r.o.nounce it as being, in my judgment, unconst.i.tutional and void.

In the discussions which have attended this subject of legal tender there has been at times what seemed to me to be a covert intimation, that opposition to the measure in question was the expression of a spirit not altogether favorable to the cause, in the interest of which that measure was adopted. All such intimations I repel with all the energy I can express. I do not yield to any one in honoring and reverencing the n.o.ble and patriotic men who were in the councils of the nation during the terrible struggle with the rebellion. To them belong the greatest of all glories in our history,--that of having saved the Union, and that of having emanc.i.p.ated a race. For these results they will be remembered and honored so long as the English language is spoken or read among men. But I do not admit that a blind approval of every measure which they may have thought essential to put down the rebellion is any evidence of loyalty to the country. The only loyalty which I can admit consists in obedience to the const.i.tution and laws made in pursuance of it. It is only by obedience that affection and reverence can be shown to a superior having a right to command. So thought our great Master when he said to his disciples: ”If ye love me, keep my commandments.”

CHAPTER V.

GOVERNMENT CONTROL OF RAILROADS.

Since concluding what we desired to say on the subject of controlling and regulating railroads and railroad corporations, our attention has been directed to a circular from _The New York Nation_, of July 27th, 1873, ent.i.tled: ”The Railroad Discussion, and Common Sense.” This singular article challenges attention. If it is put forth in the interest of railroad corporations, we can readily account for the views expressed, and the covert foreshadowing of national control of railroads; but if it be published and circulated in the interest of the people as _The Nation_ would have us understand, it is not calculated to a.s.sist them in their efforts at reform, but on the contrary will tend to divide and distract their counsels, and delay the relief sought.

We copy the circular, that the reader may judge of its merits, and to give a more intelligent understanding of our remarks upon it:--

THE RAILROAD DISCUSSION AND COMMON SENSE--THE LATEST DEVICE FOR FIXING RATES OF TRANSPORTATION.