Five-minute digest
Hepburn v. Griswold
Summary
To pay for the Civil War, Congress passed the Legal Tender Act of 25 February 1862, which authorized paper United States notes, soon called greenbacks, and declared them lawful money and a legal tender for all debts public and private. The notes were not redeemable in gold on demand, and they quickly traded below coin. In June 1860 Mrs. Hepburn of Louisville had given Henry Griswold a promissory note for $11,250, due in February 1862, days before the act passed. When Griswold sued, she offered payment in greenbacks. A Louisville chancery court accepted that tender, but the Court of Appeals of Kentucky reversed, and Hepburn's side brought the dispute to Washington. The question was whether Congress could compel a creditor to accept the paper notes, at face value, for a debt contracted before the statute was enacted. Those defending the act argued that it was a necessary and proper means of carrying on a war for national survival, of borrowing money and of regulating commerce, and that McCulloch v. Maryland left the choice of means to Congress. Griswold's side answered that no clause of the Constitution grants a power to make paper a legal tender, that the framers had deliberately withheld it, and that forcing a creditor to take depreciated paper took his property without due process of law. On 7 February 1870 Chief Justice Chase, who as Treasury Secretary had administered the very notes in question, announced the judgment, usually counted as four to three. Chase accepted Marshall's test for implied powers but held that making notes a legal tender for earlier debts was not an appropriate or plainly adapted means to any express power, since the notes would have circulated without that quality and the compulsion debased the currency. He added that the provision ran against the spirit of the Constitution, which forbids states to impair contracts, and against the Fifth Amendment's protection of property. Justice Miller, joined by Justices Swayne and Davis, dissented: the war had exhausted ordinary credit, Congress had judged the tender quality indispensable, and Marshall's broad reading of necessary and proper left that judgment to the legislature. The library text contains Chase's opinion, including his note that Justice Grier concurred in the conference before leaving the bench, and the opening portion of Miller's dissent; the reporter's notes are left out. On the day the decision came down, President Grant sent the Senate the nominations of William Strong and Joseph P. Bradley. With both seated, the reconstituted Court reheard the question and in the Legal Tender Cases of May 1871 upheld the act by five to four, expressly overruling Hepburn.
Top Lessons
Implied powers and the limits of necessity
Both Chase and Miller claim Marshall's McCulloch opinion. Chase reads its test as requiring a real fit between means and an express power, plus consistency with the spirit of the Constitution; Miller reads it as leaving the degree of necessity to Congress. The case shows how one precedent can support opposite conclusions.
What is money?
Chase's opinion contains a short lesson in monetary theory: coin has value in itself, while paper promises depend on confidence and the prospect of redemption. Miller answers that legal tender status gave the notes a steady use in paying debts that kept them from collapse.
Contracts, creditors and the meaning of property
Chase treats a debt payable in dollars as property whose value Congress cannot cut by statute, comparing the act to forcing a buyer of a hundred acres to accept fifty. The argument links the Contract Clause, which binds only the states, to the Fifth Amendment's due process guarantee against Congress.
Judging in calmer times
Chase admits that the act was passed in a season of emergency and that many, perhaps including himself, have since changed their minds. Miller replies that the history of that gloomy time vindicates Congress. The opinions invite reflection on how emergencies should affect constitutional judgment.
Verified Quotes
Frequently cited
“We are obliged to conclude that an act making mere promises to pay dollars a legal tender in payment of debts previously contracted, is not a means appropriate, plainly adapted, really calculated to carry into effect any express power vested in Congress; that such an act is inconsistent with the spirit of the Constitution; and that it is prohibited by the Constitution.”
“There is a well-known law of currency, that notes or promises to pay, unless made conveniently and promptly convertible into coin at the will of the holder, can never, except under unusual and abnormal conditions, be at par in circulation with coin.”
“It is difficult to conceive what act would take private property without process of law if such an act would not.”
“The time was not favorable to considerate reflection upon the constitutional limits of legislative or executive authority.”
“That the legal tender act prevented these disastrous results, and that the tender clause was necessary to prevent them, I entertain no doubt.”
“But what was needed was something more than the credit of the government.”
Medical Lens
A dispute over paper currency, contracts and implied powers; the opinions contain no discussion of health, medicine or the mind.