Five-minute digest
Legal Tender Cases
Summary
In Hepburn v. Griswold (February 1870) a divided Court had held that the Legal Tender Act of 1862 could not make paper United States notes a legal tender for debts incurred before the act. Within weeks two new justices, William Strong and Joseph P. Bradley, took their seats, and the Court agreed to consider the question again in two cases. In Parker v. Davis, a Massachusetts buyer had tendered greenbacks to complete a land purchase contracted before 1862. In Knox v. Lee, a Pennsylvania owner sued over sheep in Texas that Confederate authorities had seized and sold, and the trial judge told the jury it might consider that the notes were legal tender in fixing damages. Two questions were presented: whether the legal tender acts were valid as applied to debts contracted before their passage, and whether they were valid as to debts contracted afterward. Defenders of the acts argued that a sovereign nation must have means of self-preservation in war, that the power came from the combined grants over war, borrowing and the currency, and that every contract is made subject to the government's lawful authority. Opponents repeated the Hepburn reasoning: the Constitution grants no such power, the framers deliberately withheld it, and forced acceptance of depreciated paper takes the creditor's property. On 1 May 1871 the Court upheld the acts on both questions, five to four. Justice Strong, writing for the majority, held that the Constitution created a government with the power of self-preservation, that implied powers may arise from several express powers taken together, that the tender clause was an appropriate means to carry on the war, and that contracts are made subject to such lawful exercises of power. He expressly overruled Hepburn as to earlier debts, noting that it had been decided by a short-handed and divided court. Justice Bradley, concurring, stressed the national character of the government and the long practice of governments, including the Continental Congress, of issuing bills of credit in emergencies. Chief Justice Chase, dissenting for the former majority, protested that the reversal came from a change in personnel rather than in anyone's opinion and restated his reasoning. Justice Field, dissenting, argued that borrowing means obtaining money on a promise, not compelling acceptance of the promise as payment. The library text gives Strong's full opinion with excerpts of the Bradley concurrence and the Chase and Field dissents, without the reporter's notes. Justice Clifford's separate dissent is not included. In Juilliard v. Greenman (1884) the Court, with only Field dissenting, upheld the issue of legal tender notes in peacetime, and the federal monetary power has since been treated as settled.
Top Lessons
Sovereignty and self-preservation
Strong and Bradley read the Constitution as creating a full national government equipped to survive emergencies, with powers comparable to those of other sovereign nations. Their dissenting colleagues read it as a grant of enumerated powers that stops where the text and the framers' choices stop.
Powers drawn from many grants together
Strong argues that some implied powers flow from the aggregate of express powers rather than from one clause. This reasoning made it unnecessary to tie the tender clause to a single grant, but critics asked where such reasoning would stop.
Precedent and a changed Court
The Court reversed itself within fifteen months after two new justices joined. Strong defends correcting a serious constitutional error decided by an incomplete bench; Chase replies that the reversal was produced by no change in anyone's opinion. The episode remains a classic study in the authority of precedent.
What a lender agrees to
Strong holds that contracts are made subject to the government's lawful powers, so a creditor bears the risk of legislation affecting the currency. Field answers that the Constitution was ordained to establish justice and that a promise to pay should be fulfilled in substance, not in name.
Verified Quotes
“It certainly was intended to confer upon the government the power of self-preservation.”
“The Constitution was intended to frame a government as distinguished from a league or compact, a government supreme in some particulars over States and people.”
Frequently cited
“And it is no unprecedented thing in courts of last resort, both in this country and in England, to overrule decisions previously made.”
“The United States is not only a government, but it is a National government, and the only government in this country that has the character of nationality.”
“And this reversal, unprecedented in the history of the court, has been produced by no change in the opinions of those who concurred in the former judgment.”
“It was hoped that it had settled forever that under a Constitution ordained, among other things, 'to establish justice,' legislation giving to one person the right to discharge his obligations to another by nominal instead of actual fulfilment, could never be justified.”
Medical Lens
The opinions concern war finance, paper money and the authority of precedent and say nothing about health, medicine or the mind.