Monopolies and the People Part 13

We are content to trammel all dealings with foreign nations in the way of barter, sale, and exchange, and send our coin to Europe, while we use, as the representative of money, an irredeemable paper currency.

Free trade would enable us to increase our commerce and s.h.i.+pping on the ocean; to arrest the stream of coin that is flowing from us to Europe; to sell where we could obtain the best prices, and buy where we could make the best bargains. We are in favor of direct taxation for the support of the government, because it will simplify our revenue system, and consequently require less revenue than is now needed. It will compel more rigid economy in the administration of the government, and place within the reach of the people the means of ascertaining how much is annually expended by those in power. It will destroy one branch of the system of monopolies that is robbing the agricultural and producing cla.s.ses of their substance. Let us not become alarmed at the thought of this direct taxation. We accept it as the best method for raising revenue for the support of state and munic.i.p.al government, and no good reason can be shown why the same method would not be best for the general government. The amount to be paid by the men of wealth would be in excess of what they now pay, because their property, and not what they consume, would be the basis of taxation. But to the laborer with a family, the mechanic, the farmer with small means, and to a majority of men who now pay in shape of duties from $100 to $200 annually, the amount required would be but a t.i.the of the sum now demanded. To learn something of the rate per cent necessary to support the government, let us look at the valuation of the property in the United States as returned with the census in 1870. The actual amount as returned was $14,178,486,732, call it in round numbers $15,000,000,000; a tax of one per cent on this amount would produce a revenue of $150,000,000. The above valuation is taken mainly from the returns made by a.s.sessors, and is but little more than one-third of the real value. Let us double the amount, then the value of the property in the United States will be $30,000,000,000. By an examination of the returns it will be seen that but little railroad property is included in the valuation. If this property is added, the above amount will be largely increased. By supposing the real value of the a.s.sessable property to be $30,000,000,000; then a tax of one-half per cent would raise a revenue of $150,000,000, a sum sufficient to pay all the necessary current expenses of the government and leave something to apply on the national debt. A tax of three-fourths per cent would raise a revenue of $225,000,000, enough to support the government and pay the interest on the whole of the national debt. Should the special tax be continued on spirits and tobacco, then a tax of four mills would raise a sufficient revenue for all legitimate governmental purposes. Now, a laboring man must pay from the proceeds of his labor from thirty per cent upwards for almost all his purchases of clothing for his family, and the same on many other articles of consumption. If, in the course of a year, he purchases to the amount of $150, of this sum, $50 is paid, indirectly, it is true, but nevertheless it is paid, and is a tax. With direct taxation, if his homestead should be worth $1,000, instead of paying $50 as he now does, he would pay five for the support of the government, and the other forty-five dollars now paid by him from the proceeds of his labor would be charged against the property of his rich neighbor. There is no injustice in this method of raising revenue for the support of the government, and its adoption would relieve the people from the oppressions of a ring of wealthy monopolies who now control the entire manufacturing industries of the country, and would allow the laws of trade, of demand and supply, to fix the prices of manufactured articles.

No reason now exists for the continuance of a law that a.s.sures to the manufacturer large dividends on his investments, while the farm products must be sold and bartered for a nominal price. The producer asks no protection save access to the market and the privilege of keeping for his family and himself the net proceeds of his crops, without being compelled to bestow one-third of it as a gratuity upon the already rich and lordly manufacturer. This right the agriculturalists will never enjoy until the old anti-republican theory of protective and revenue tariffs is exploded, and the equal rights of all are vindicated. When this tariff embargo on commerce is removed, when this blockade is raised, and the producer can send his grain to Europe, and in return receive such manufactured articles as he needs, without paying _royalty_ to some American lord, in shape of tariffs (ironically called "protection") the producing cla.s.ses will ask no other aid of government.

Then will appear the dawn of that universal brotherhood of man, which sooner or later will illuminate the whole civilized world. With "free trade" and direct taxation, a death blow will be given to monopolists, and the burdens so long borne by the laboring and producing cla.s.ses will be lifted from them, and they will be permitted to enjoy the fruit of their own labor.

EIGHTH.--_Patent Rights--Cash Payments Recommended in Place of Long Standing Mortgages on the Genius of American Industry._--We have shown some of the abuses connected with the patent system of the country, and their effect upon the people. While the monopoly of inventions is not of as great magnitude as some others of which we have treated, the oppressions resulting from it are more annoying than many that engage general attention. Inventions are patented because they are expected to be of public benefit, and because it is but just that the inventor should be rewarded for a discovery or invention that will advantage the public generally, or individuals who may make use of the invention or discovery. The monopoly given to the inventor, or discoverer, is to enable him to compensate himself for the time, labor, and skill, as well as the talent or genius bestowed upon the invention, and also to encourage others to enter the lists as inventors or discoverers of new and useful articles and principles. But our patent system was never designed for giving a monopoly to any one who happened to shape a plow handle different from those now in use, or who cut a thread used in operating a sewing machine in a peculiar manner, or for the many hundreds of trifling alterations made in many articles in general use, or in the manner of using them. An examination of the list of patents issued will demonstrate that not one in ten contains any new principle, or is of any value to any one, save the patentee. The apparent ease with which patents are obtained, and the indiscriminate manner of their issue, is a great and growing evil that should be remedied. No patent should be issued until a test had demonstrated its perfection and usefulness. An examination of many articles on which letters patent have been issued, coupled with the attempt to use them, discloses the fact that the invention, if it ever could be of any particular value, required further improvement to make it of such value, and that letters patent had been issued for an undeveloped theory. If the invention had been submitted to a practical test, this state of things would not have occurred, and the public would not have been defrauded. Patented articles enter so largely in the prosecution of all industrial pursuits that it is of the utmost importance that they should be perfect in their plans and construction, and that the government should a.s.sume some kind of responsibility in all cases when letters patent are issued. Such letters say in substance, that the patented article is new and useful, and that it is reasonably fit for the work in the view of the inventor.

These letters patent are a letter of credit to the patentee; as a license permitting him to sell his invention, and forbidding all persons to sell or use the invention without his consent. Under the present law it is simply a special favor, in shape of an exclusive right, granted to an individual to defraud the persons with whom he deals. The law should be so modified as to make the government or the examining officer responsible in all cases when patents issued for pretended discoveries or inventions prove to be neither new nor useful. If such were now the law, there would be less complaint of frauds practiced by pretended inventors, and the utter failure of patented articles to answer the purposes for which they were intended. The law should be so amended as to prevent oppressions and extortions in the sale and use of articles of real merit, for which the inventor should be rewarded, and should have an exclusive right to use and sell his invention. There should be some limit to the price of the article. Government has given him an exclusive right; he should be restricted to such prices as would fairly compensate him for his discovery. His case is not like that of other men, who in their dealings come in compet.i.tion, and where this compet.i.tion and the laws of demand and supply fix the prices of the commodities in which they deal. He has the whole business in his own hands, and any attempt on the part of others to interfere with his exclusive right is forbidden and punished. We have already stated that machines sold in this country for $75 could be bought in England for less than half that sum. Most of the articles and machines of different kinds patented in this country, and used in Europe, are sold by the patentees, their agents and a.s.signs, at less than half the sums demanded here at home. In Europe, where they have no monopoly, no exclusive right, they come in compet.i.tion with others; hence they sell at fair prices. But in this country, where they have an exclusive right, they extort from the purchaser from one hundred to five hundred per cent on the cost of the article. This, government should prevent. But a better way to adjust the whole matter between the public and the inventor would be for the government to pay a premium according to merit, for all new and useful inventions, and remove all restrictions. Let all be free to make, use, and sell, not the invention, but the thing invented. This course would require careful and thorough examination and experiment before the principle was indorsed by the government, and the premium paid. Or, if his invention proved to be new and useful, let government pay to the inventor such sum as would fairly and liberally compensate him, and give the invention to the public. Government has bestowed immense grants of land upon railroad companies, for the avowed purpose of a.s.sisting in the development of the country; with greater justice could it bestow upon the whole people all useful discoveries and inventions. Such a course, adopted and executed in good faith, would make it impossible for adventurers, sharpers, and swindlers to impose worthless inventions and pretended discoveries upon the government, and then palm them off upon the people. Under the present system of obtaining letters patent, the people are wronged and often cheated, and for their wrongs the government is mainly responsible. Some other plan should be adopted, which in its operations would liberally compensate the inventor, and at the same time protect the people from extortions practiced by the owners of valuable inventions, and also from the thousands of adventurers who have been so fortunate as to obtain letters patent upon pretended discoveries of principles neither new nor useful, using their letters of credit for the purpose of defrauding the public.

CONCLUSION.--We now approach the end of our labors. We have sought to present to the reader a candid statement of the different questions we have discussed; to lay before him evidence of the great and growing power of the men who are surely and swiftly getting control of the departments of the government, and monopolizing the finances and commerce of the whole country. In doing this we have endeavored to direct attention to the exclusive and munificent grants made to railroad companies, and to their abuse of these grants; to the means used by them to get control of the legislative and judicial departments of the government, and their apparent success in that direction; to the abridgment of the rights of the people incident thereto; to the dishonest and fraudulent practices of the men constructing, owning, and operating railroads; to the disgraceful Credit Mobilier swindle, and its influence upon the country; to the questionable position of some of the men representing the people in congress; to the destruction of the rights of the states and of the people; to the disregard of the const.i.tutional restrictions and safeguards when the interests of these corporations were to be subserved; the purposes for which taxes should be levied; to the nature of railroad corporations--that they are private in their organization, and subject to the control of the people; to the effect of the policy of affording local aid to railroad companies by taxation, etc.; to the blighting influence attending munic.i.p.al subscriptions to railroad companies; to the impositions practiced in transporting freights, and the warehouse and elevator abuses; to the fraudulent increase of capital stock by railroad companies through the watering process, and the extortions necessary to this dishonest practice; to their relative immunity from the burdens imposed for the support of government; to the strong grasp of consolidated capital upon the legislation of the country; to the special privileges granted to corporations by state legislatures; to the influence of these corporations on the executive department of the government; to the absolute control of the treasury and the finances enjoyed by corporations and Wall street brokers, with the manner of doing business in Wall street; to the influence of corporations in the selection of judges of the supreme court, with the decisions following the reconstruction of that court; to the banking and financial policy of the government, and its bad results; to the tariff policy and its effect upon the agricultural and producing cla.s.ses; to the patent system and its abuses; and finally to the fact demonstrated, that unless the many abuses that have obtained in the land can be corrected, the people will be justified in calling into action their inherent rights for regaining those privileges refused to them, but conferred upon the corporations, rings, and combinations which have obtained such great power in the government. We do not claim that our work is free from errors. We have sought to state the facts correctly. If they are inaccurate, the errors are unintentional. It was not with the wish or intention of doing injustice to any man, cla.s.s of men, corporations, or officers of the government, that we undertook this work; but with the firm belief and strong conviction that the liberties of the people were being taken from them, while a gigantic oligarchy was obtaining control of the government. We believe the remedy is yet with the people; but to save themselves prompt, speedy, and united action is imperative. We have watched with increasing interest the growing power of corporations, for years, hoping that the time would come when the people would awake to the necessity of a.s.serting their latent powers for the restoration of their rights. The civil war and other great political questions have engaged the public attention, while selfish and ambitious men have combined and consolidated their wealth and corporate power for the purpose of controlling the government and commerce of the country. Their success has been such as to alarm the agricultural, the producing, and laboring cla.s.ses. The indications now are that active and aggressive war will be waged against these oppressors of the people until they are shorn of their great power and the rights of the people are restored.

Desiring to aid in this great reform, we have deemed the present a favorable time to present this work to the public. While the combination the people are now combatting is powerful--possessing a dangerous influence over the legislative and judicial branches of the government, well organized and vigorous, controlling the finances of the country and holding our commerce in its grasp--strong in wealth, and in the extent of its organization--notwithstanding these fearful facts, that old republican truth still obtains, that "the people are the source of all power." That power is now being aroused. The watchword now heard, is "Equal and exact justice to all." That potent, though silent weapon, the ballot, is a sure correction of all abuses when intelligently used. The signs of the times are hopeful from the fact that, for the first time in many years, the people, especially the agricultural, producing, and laboring cla.s.ses are taking the lead. They are reading, thinking and acting independently of old political and partisan leaders; they are exercising their rights as freemen. They have declared that "old things shall be done away, and all things shall become new;" that the government shall be taken out of the old political grooves in which it has been running; that it shall a.s.sume new life, with the rights of the people fully recognized. That when the rights of the people and of free government on the one hand, and the privileges claimed by the combined corporate interests of the country on the other, are at issue, these rights shall not be made to yield to old precedents originating in monarchial and despotic governments, in order that the privileges claimed by corporations may be upheld.

The organization of the Patrons of Husbandry forms a nucleus around which all reformers can rally. The reforms they seek will effect the liberation of the whole people from the oppressions under which they now suffer. Our aim is to aid in this work. We feel a.s.sured that there is an irreconcilable conflict between the monopolies and the people; that the powers and privileges a.s.sured to corporations are at war with republican inst.i.tutions, and hostile to the const.i.tution of our country. To effect reforms will require time. Some relief can be speedily obtained, but to accomplish thorough reform, and bring the administration of the government under the control of the people, will require that the offices shall be filled by men whose education and pursuits have been such as to place them in full sympathy with the people--men who will not spend their time as legislators and judges in discussing federal prerogatives, and cla.s.sing our republican government with old time despotisms. The doctrine that corporations are subject to legislative control must be fully established as the fixed and settled policy of our government. When this point is reached, the farmer will not be obliged to divide his crops with railroad companies--and so with all other abuses. The power to correct all abuses must remain with the people. The prosperity of the people, the perpetuity of our form of government, the rights of the states and the public can only be preserved by guarding against all encroachments made upon free inst.i.tutions, whether they originate in congress or out of it--whether they are enunciated from the bench of the supreme court, or from the stump. In these days when the tendency is to a strong centralized government--when a few men control the finance of the country--when the whole commerce of the country is controlled by Wall Street gamblers--when special grants and privileges are bestowed upon companies and individuals, and when the property of each individual is insecure and liable to be a.s.sessed for the building of railroads--at this time, there came from Justice Bradley of the supreme court of the United States, these ominous words: "It is absolutely essential to the independent national existence that _government_ should have a firm hold on the two great sovereign instruments of the _sword_ and the _purse_." This announcement is made from the bench of the supreme court of the United States, on the fifteenth of January, 1872. The government must have a firm hold on the purse and sword. This is the declaration of the court made but a few months before it decided that railroad corporations were public, and that the property of private third parties of the whole people could be taxed to build them. We claim that under our form of government the people are the power to retain the control of the purse and sword; that to place them together in the hands of those persons who fill, for the time being, the government offices, is to take from the governing power its rights. But when the people's purse and the government finances are subject to the action of corporations and rings, the special favorites of the courts, the people are imperatively called upon to arise and a.s.sert their rights as freemen--to throw off this oppressive yoke--to stamp with the seal of condemnation, not only the enunciation of such anti-republican sentiment, but the judge who uttered it. The real question at issue between the people and monopolies fostered and protected by government is, whether the people shall rule, or remain the servants and va.s.sals of the monopolists. The final determination of this question will decide whether we are to live under the republic planned and formed for us by our revolutionary ancestors, or are to submit to the oligarchy shaped for us by recent enactments and decisions in favor of a cla.s.s of men, who, for the sake of private gain, are overturning and destroying our free inst.i.tutions. The issue is fairly presented; the lines distinctly drawn. The corporate hosts are marshaling their forces; the people, under the lead of the tillers of the soil, are preparing for battle.

When the Union was threatened with disruption, and the armies were about to engage in conflict, they armed themselves with the death dealing sword and gun. Hundreds of thousands of brave and patriotic men proved their devotion to their country by the sacrifice of their lives for its preservation. No such sacrifices are now demanded. In a legal, const.i.tutional manner, these corporations, rings, and combinations, can be routed "horse, foot, and dragoons;" their friends "at court" can be displaced; their paid agents and attorneys can be driven from the halls of congress and state legislatures; their judges can be invited to vacate their seats that others, elected by the votes of the people, may fill them; and the standard of "equal rights" can be again reared aloft without the use of bullets or the shedding of blood.

But after all these errors and abuses shall have been corrected, other questions will arise. The farmer of the west and south must have cheap transportation to the seaboard. It may be demonstrated that our present system of building railroads will not answer the purpose because of the great expense of constructing and operating them, and that other means must be adopted. Under the const.i.tution the general government has exclusive maritime jurisdiction, and can make ca.n.a.ls and slack water navigation. History demonstrates that water transportation is always cheapest. The government should provide for water transportation from the great agricultural centres to the sea-board. This kind of improvement the general government can lawfully make, and an expenditure of a small part of the wealth bestowed upon private railroad corporations would open up water channels, affording cheap transportation from the west to the east and south. Grain and meats could then be s.h.i.+pped to the sea-board at such rates as would warrant their transportation to foreign markets, which, with the abolition of protective duties, would furnish the farmer a good sale for his products, and an opportunity of purchasing his supplies free from the bounty he now pays the eastern manufacturer. With such means for s.h.i.+pping the farm products of the west and south, with protective tariffs abolished, and the financial policy of the nation so changed as to furnish to the people the same kind of money used by the government, with "specie payment" resumed, and the large margin between coin and paper removed, prosperity would again attend farming pursuits, and contentment would fill the land.

With all the advantages Providence has given us in this great country, with the pure and simple republic bequeathed to us by the heroes and statesmen of Seventy-Six, we ought to be a prosperous and happy people.

But, with the blighting curse of oppressive monopolies fastened upon us, upheld by bought legislation and strengthened by the decisions of judges and courts, who, from education, occupation, and sympathy with the oppressors of the people, or from baser motives, have become the special guardians of the monopolists, the laboring and producing cla.s.ses find it difficult to live, and, in many instances, are being reduced to absolute want. The farmer has abundant harvests, but their value is absorbed in oppressive charges for transportation to market, and he is bound down with onerous and unequal taxes until his labor has ceased to be remunerative. While this is true of most industrial pursuits, the manufacturer, protected by the government, the moneyed men of Wall street, who operate in gold and stocks, and the railroad men, who are protected by the decisions of the courts of the country, all ama.s.s princely fortunes--the result of special privileges bestowed upon them.

As a necessary consequence, the interests of the country are being divided. A moneyed "n.o.bility" are arrayed against the laboring and producing cla.s.ses. Special privileges, at war with republican inst.i.tutions, are granted them; their wealth is virtually exempted from taxation, and they are fast becoming the governing power, while those who produce the wealth of the country are compelled to spend their strength and devote their lives to the business of adding to the wealth of their oppressors. It may be asked why this state of things exists.

There are two reasons for it. First, the indifference manifested by the people to the affairs of the government; their willingness to allow others to direct and control the affairs of the nation, while they devote their time to their own personal interests, seemingly forgetful that they have any interest in national affairs, or in the administration of their own state government, and permitting those who now oppress them to shape legislation, and to obtain those grants and privileges which have now become the means of their oppression. The second cause is the disposition of those in power to override and disregard const.i.tutional restrictions. During the civil war the const.i.tution possessed no restrictive force. The law of necessity governed; the personal will of those in office was the supreme law. Acts of congress were pa.s.sed with direct reference to a state of war, and decisions of courts were controlled by the same causes. With the return of peace these laws remained unrepealed; the decisions of courts remained unreversed; const.i.tutional restrictions were deemed irksome and of little moment. Laws remained on our statute book which contravened the plain provisions of the const.i.tution, and the decisions of courts have continued in the same channel, until the great charter of our civil liberty, has become obsolete, and the personal opinions of courts, like the edicts of a monarch, have become the supreme law. Under this species of legislation, and this cla.s.s of decisions, these great oppressors of the country have grown up until their power is superior to that of all other interests, and not unfrequently defies the law. The first great reform to be effected is to re-establish the supremacy of the const.i.tution, and to demand of courts and legislators a strict observance of its provisions. When this is effected, the rights of the states and the people will be protected. The courts of the United States, and all other departments of the government, must remember that in our republican system the federal government is limited and restricted to the exercise of such powers as are expressly delegated to it, and that all attempts to confer special charters and privileges upon private companies are usurpations. They must remember that we have no government with kingly prerogatives; that in a republic the people retain control of the _purse_ and _sword_, and that the liberties of the people, the equality of all before the law, as well as the perpetuation of republican inst.i.tutions, are in the care and keeping of the sovereign people.

That there should be some means adopted to arrest this great and growing power of corporations is now forcibly demonstrated. Since writing the preceding pages, still another fatal stab has been given to the republic. Vanderbilt, the leader in the raid made by corporations upon the liberties of the people, and also an operator in Wall street gambling, has added to the other roads under his control the Lake Sh.o.r.e & Michigan Southern railway, and now controls the commerce of the west with the seaboard, and can fix the price of a barrel of flour, or bushel of wheat or corn, and from his decision there is no appeal. Extending these monopolies still further, Vanderbilt and his co-conspirators are about to take control of all the telegraph lines in the country, and dictate to the whole people the price to be paid for dispatches. Thus these enemies of republican government are surely getting control of all the business and commerce of the country. The finances, the carrying trade, the produce market, the price and sale of manufactured articles, and the means of communication between the different portions of the country, are all pa.s.sing into the hands of the enemies of the people. At the present time if any railroad company attempts to act independently and honestly, this combination of sharpers and swindlers make war upon it and force it to surrender, or drive it into bankruptcy.

No wonder that the people are becoming alarmed, and are preparing for the conflict. The attempt made to dissolve the Union was an open and bold one. The people met the issue, and triumphed. The attempt made to divide the country aroused the national patriotism. The attempt of this great combination of monopolists to obtain absolute control of the government, the finances, and commerce of the country, presents more serious cause for alarm than did the attempt to dissolve the Union. Our inst.i.tutions cease to be of any value when they are perverted to means of oppression. When men in high official positions trifle with the liberties of the people and encourage their oppressors, an indignant const.i.tuency should hurl them from power. If, knowing the wrongs that are committed against us, the encroachments being made on our liberties, the threatened and partially accomplished destruction of republican inst.i.tutions, we silently acquiesce, we are not freemen, and we deserve to be held as the bond-servants of our oppressors for all time to come.

But while the people are long-suffering and patient under adversity, there is a point beyond which their oppressors cannot venture without arousing them to action. That point is now reached; the fiat of the sovereign power in this land has gone forth; the voice of the people is heard from all portions of our common country demanding redress, and that the government shall be brought back to const.i.tutional limits; that the power of their oppressors shall be destroyed; that their rights as freemen shall be restored to them; that the halls of legislation and the courts of justice shall be filled by men who do not legislate for bribes, and who administer justice without respect to persons or interests, and prize const.i.tutional restrictions and the liberties of the people above the interests of corporations and rings formed to oppress them. If redress cannot be obtained at the ballot-box; if the influences which now control the government and business of the country cannot be overcome; if redress is denied in legislative halls and in the courts--then the people have the right, the "G.o.d-given right," to arise in their sovereign power and take what their servants have refused to give them. If reform cannot be obtained, or the wrongs of the people redressed in any other method, a resort should be had to _revolution_--peaceable, if possible, but such as will bring the country back to the days of its purity, and compel all to acknowledge the _sacred_ binding force of the const.i.tution.

Having an abiding confidence that the reform being inaugurated by the farmers of the country will advance to a triumphant issue, we present this volume to the public, as an humble but honest champion of the cause, acknowledging its imperfections, expecting criticisms and condemnations from the monopolists and their dependents, but asking a careful perusal and earnest consideration of the doctrine advocated.

APPENDIX.

CHAPTER I.

As our position on the "Legal Tender" decisions and their effect upon the finances and commerce of the country have been controverted by some of the _legal men_ to whom we have shown our ma.n.u.script, at the risk of wearying the reader, we quote the dissenting opinions of the late Chief Justice Chase, and his a.s.sociates, on the points at issue in those cases, feeling a.s.sured that these opinions fully sustain us. If our views are correct as to the effect of these decisions upon the best interests of the country, and their tendency to increase the power of the combinations that now have such control over the different departments of the government, as well as the financial and commercial interests of the country, it follows that no real relief from the oppressions under which the people are suffering can be obtained until the legal tender statutes are repealed, and the latest decisions of the supreme court as to their const.i.tutionality and scope are reversed.

We have claimed that those decisions were in conflict with the provisions of the const.i.tution. Our position is supported by the opinions quoted. We have said that the supreme court of the United States was reorganized in the interests of railroad corporations and other monopolies, before the legal tender questions were re-argued and reversed. The opinions quoted sustain us in this particular. But we desire the reader to examine these opinions and determine for himself.

CHAPTER II.

DISSENTING OPINION OF CHIEF JUSTICE CHASE.

We dissent from the argument and conclusion in the opinion just announced.

The rule, by which the const.i.tutionality of an act of congress pa.s.sed in the alleged exercise of an implied power is to be tried, is no longer, in this court, open to question. It was laid down in the case of _McCulloch_ v. _Maryland_, by Chief Justice Marshall, in these words: "Let the end be legitimate, let it be within the scope of the const.i.tution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited but consistent with the letter and spirit of the const.i.tution, are const.i.tutional."

And it is the plain duty of the court to p.r.o.nounce acts of congress not made in the exercise of an express power nor coming within the reasonable scope of this rule, if made in virtue of an implied power, unwarranted by the const.i.tution. Acts of congress not made in pursuance of the const.i.tution are not laws.

Neither of these propositions was questioned in the case of _Hepburn_ v.

_Griswold_. The judges who dissented in that case maintained that the clause in the act of February 25th, 1862, making the United States notes a legal tender in payment of debts, was an appropriate, plainly adapted means to a const.i.tutional end, not prohibited but consistent with the letter and spirit of the const.i.tution. The majority of the court as then const.i.tuted, five judges out of eight, felt "obliged to conclude that an act making mere promises to pay dollars a legal tender in payments of debts previously contracted is not a means appropriate, plainly adapted, really calculated to carry into effect any express power vested in congress, is inconsistent with the spirit of the const.i.tution, and is prohibited by the const.i.tution."

In the case of the _United States_ v. _De Witt_, we held unanimously that a provision of the internal revenue law prohibiting the sale of certain illuminating oil in the states was unconst.i.tutional, though it might increase the production and sale of other oils, and consequently the revenue derived from them, because this consequence was too remote and uncertain to warrant the court in saying that the prohibition was an appropriate and plainly adapted means for carrying into execution the power to lay and collect taxes.

We agree, then, that the question whether a law is a necessary and proper means to execution of an express power, within the meaning of these words as defined by the rule--that is to say, a means appropriate, plainly adapted, not prohibited but consistent with the letter and spirit of the const.i.tution--is a judicial question. Congress may not adopt any means for the execution of an express power that congress may see fit to adopt. It must be a necessary and proper means within the fair meaning of the rule. If not such it cannot be employed consistently with the const.i.tution. Whether the means actually employed in a given case are such or not the court must decide. The court must judge of the fact, congress of the degree of necessity.

A majority of the court, five to four, in the opinion which has just been read, reverses the judgment rendered by the former majority of five to three, in pursuance of an opinion formed after repeated arguments, at successive terms, and careful consideration; and declares the legal tender clause to be const.i.tutional; that is to say, that an act of congress making promises to pay dollars legal tender as coined dollars in payment of pre-existing debts is a means appropriate and plainly adapted to the exercise of powers expressly granted by the const.i.tution, and not prohibited itself by the const.i.tution but consistent with its letter and spirit. 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. One closed an honorable judicial career by resignation after the case had been decided, after the opinion had been read and agreed to in conference, and after the day when it would have been delivered in court, had not the delivery been postponed for a week to give time for the preparation of the dissenting opinion.

The court was then full, but the vacancy caused by the resignation of Mr. Justice Grier having been subsequently filled and an additional justice having been appointed under the act increasing the number of judges to nine, which took effect on the first Monday of December, 1869, the then majority find themselves in a minority of the court, as now const.i.tuted, upon the question.

Their convictions, however, remain unchanged. We adhere to the opinion p.r.o.nounced in _Hepburn_ v. _Griswold_. Reflection has only wrought a firmer belief in the soundness of the const.i.tutional doctrines maintained, and in the importance of them to the country.

We agree that much of what was said in the dissenting opinion in that case, which has become the opinion of a majority of the court as now const.i.tuted, was correctly said. We fully agree in all that was quoted from Chief Justice Marshall. We had indeed accepted, without reserve, the definition of implied powers in which that great judge summed up his argument, of which the language quoted formed a part. But if it was intended to ascribe to us "the doctrine that when an act of congress is brought to the test of this clause of the const.i.tution," namely, the clause granting the power of ancillary legislation, "its necessity must be absolute, and its adaptation to the conceded purpose unquestionable,"

we must be permitted not only to disclaim it, but to say that there is nothing in the opinion of the then majority which approaches the a.s.sertion of any such doctrine. We did indeed venture to cite, with approval, the language of Judge Story in his great work on the const.i.tution, that the words necessary and proper were intended to have "a sense at once admonitory and directory," and to require that the means used in the execution of an express power "should be _bona fide_, appropriate to the end," and also ventured to say that the tenth amendment, reserving to the states or the people all powers not delegated to the United States by the const.i.tution, nor prohibited by it to the states, "was intended to have a like admonitory and directory sense," and to restrain the limited government established by the const.i.tution from the exercise of powers not clearly delegated or derived by just inference from powers so delegated. In thus quoting Judge Story, and in this expression of our own opinion, we certainly did not suppose it possible that we could be understood as a.s.serting that the clause in question "was designed as a restriction upon the ancillary power incidental to every grant of power in express terms." It was this proposition which "was stated and refuted" in _McCulloch_ v. _Maryland_.

That refutation touches nothing said by us. We a.s.sert only that the words of the const.i.tution are such as admonish congress that implied powers are not to be rashly or lightly a.s.sumed, and that they are not to be exercised at all, unless, in the words of Judge Story, they are "_bona fide_ appropriate to the end," or, in the words of Chief Justice Marshall, "appropriate, plainly adapted" to a const.i.tutional and legitimate end, and "not prohibited, but consistent with the letter and spirit of the const.i.tution."

There appears, therefore, to have been no real difference of opinion in the court as to the rule by which the existence of an implied power is to be tested, when _Hepburn_ v. _Griswold_ was decided, though the then minority seem to have supposed there was. The difference had reference to the application of the rule rather than to the rule itself.

The then minority admitted that in the powers relating to coinage, standing alone, there is not "a sufficient warrant for the exercise of the power" to make notes a legal tender, but thought them "not without decided weight, when we come to consider the question of the existence of this power as one necessary and proper for carrying into execution other admitted powers of the government." This weight they found in the fact that an "express power over the lawful money of the country was confided to congress and forbidden to the states." It seemed to them not an "unreasonable inference" that, in a certain contingency, "making the securities of the government perform the office of money in the payment of debts would be in harmony with the power expressly granted to coin money." We perceive no connection between the express power to coin money and the inference that the government may, in any contingency, make its securities perform the functions of coined money, as a legal tender in payment of debts. We have supposed that the power to exclude from circulation notes not authorized by the national government might, perhaps, be deduced from the power to regulate the value of coin; but that the power of the government to emit bills of credit was an exercise of the power to borrow money, and that its power over the currency was incidental to that power and to the power to regulate commerce. This was the doctrine of the _Veazie Bank_ v. _Fenno_, although not fully elaborated in that case. The question whether the quality of legal tender can be imparted to these bills depends upon distinct considerations.

Was, then, the power to make these notes of the government--these bills of credit--a legal tender in payments an appropriate, plainly adapted means to a legitimate and const.i.tutional end? or, to state the question as the opinion of the then minority stated it, "Does there exist any power in congress, or in the government, by express grant, in execution of which this legal tender act was necessary and proper in the sense here defined and under the circ.u.mstances of its pa.s.sage?"

The opinion of the then minority affirmed the power on the ground that it was a necessary and proper means, within the definition of the court, in the case of _McCulloch_ v. _Maryland_, to carry on war, and that it was not prohibited by the spirit or letter of the const.i.tution, though it was admitted to be a law impairing the obligation of contracts, and notwithstanding the objection that it deprived many persons of their property without compensation and without due process of law.

We shall not add much to what was said in the opinion of the then majority on these points.

The reference made in the opinion just read, as well as in the argument at the bar, to the opinions of the chief justice, when secretary of the treasury, seems to warrant, if it does not require, some observations before proceeding further in the discussion.

It was his fortune at the time the legal tender clause was inserted in the bill to authorize the issue of United States notes and received the sanction of congress, to be charged with the anxious and responsible duty of providing funds for the prosecution of the war. In no report made by him to congress was the expedient of making the notes of the United States a legal tender suggested. He urged the issue of notes payable on demand in coin or received as coin in payment of duties. When the state banks had suspended specie payments, he recommended the issue of United States notes receivable for all loans to the United States and all government dues except duties on imports. In his report of December, 1862, he said that "United States notes receivable for bonds bearing a secure specie interest are next best to notes convertible into coin,"

and after stating the financial measures which in his judgment were advisable, he added: "The secretary recommends, therefore, no mere paper money scheme, but on the contrary a series of measures looking to a safe and gradual return to gold and silver as the only permanent basis, standard, and measure of value recognized by the const.i.tution." At the session of congress before this report was made, the bill containing the legal tender clause had become a law. He was extremely and avowedly averse to this clause, but was very solicitous for the pa.s.sage of the bill to authorize the issue of United States notes then pending. He thought it indispensably necessary that the authority to issue these notes should be granted by congress. The pa.s.sage of the bill was delayed, if not jeoparded, by the difference of opinion which prevailed on the question of making them a legal tender. It was under these circ.u.mstances that he expressed the opinion, when called upon by the committee of ways and means, that it was necessary; and he was not sorry to find it sustained by the decisions of respected courts, not unanimous indeed, nor without contrary decisions of state courts equally respectable. Examination and reflection under more propitious circ.u.mstances have satisfied him that this opinion was erroneous, and he does not hesitate to declare it. He would do so, just as unhesitatingly, if his favor to the legal tender clause had been at that time decided, and his opinion as to the const.i.tutionality of the measure clear.

Was the making of the notes a legal tender necessary to the carrying on the war? In other words, was it necessary to the execution of the power to borrow money? It is not the question whether the issue of notes was necessary, nor whether any of the financial measures of the government were necessary. The issuing of the circulation commonly known as greenbacks was necessary, and was const.i.tutional. They were necessary to the payment of the army and the navy and to all the purposes for which the government uses money. The banks had suspended specie payment, and the government was reduced to the alternative of using their paper or issuing its own.

Now it is a common error, and in our judgment it was the error of the opinion of the minority in _Hepburn_ v. _Griswold_, and is the error of the opinion just read, that considerations pertinent to the issue of United States notes have been urged in justification of making them a legal tender. The real question is, Was the making them a legal tender a necessary means to the execution of the power to borrow money? If the notes would circulate as well without as with this quality it is idle to urge the plea of such necessity. But the circulation of the notes was amply provided for by making them receivable for all national taxes, all dues to the government, and all loans. This was the provision relied upon for the purpose by the secretary when the bill was first prepared, and his reflections since have convinced him that it was sufficient.

n.o.body could pay a tax, or any debt, or buy a bond without using these notes. As the notes, not being immediately redeemable, would undoubtedly be cheaper than coin, they would be preferred by debtors and purchasers.

They would thus, by the universal law of trade, pa.s.s into general circulation. As long as they were maintained by the government at or near par value of specie they would be accepted in payment of all dues, private as well as public. Debtors, as a general rule, would pay in nothing else unless compelled by suit, and creditors would accept them as long as they would lose less by acceptance than by suit. In new transactions, sellers would demand and purchasers would pay the premium for specie in the prices of commodities. The difference to them, in the currency, whether of coin or of paper, would be in the fluctuations to which the latter is subject. So long as notes should not sink so low as to induce creditors to refuse to receive them because they could not be said to be in any just sense payments of debts due, a provision for making them a legal tender would be without effect except to discredit the currency to which it was applied. The real support of note circulation not convertible on demand into coin, is receivability for debts due the government, including specie loans, and limitation of amount. If the amount is smaller than is needed for the transactions of the country, and the law allows the use in these transactions of but one description of currency, the demand for that description will prevent its depreciation. But history shows no instance of paper issues so restricted. An approximation in limitation is all that is possible, and this was attempted when the issues of United States notes were restricted to one hundred and fifty millions. But this limit was soon extended to four hundred and fifty millions, and even this was soon practically removed by the provision for the issue of notes by the national banking a.s.sociations without any provision for corresponding reduction in the circulation of United States notes; and still further by the laws authorizing the issue of interest-bearing securities, made a tender for their amount, excluding interest.

The best support for note circulation is not limitation, but receivability, especially for loans bearing coin interest. This support was given until the fall of 1864, when a loan bearing increased currency interest, payable in three years and convertible into a loan bearing less coin interest, was subst.i.tuted for the six per cent and five per cent loans bearing specie interest, for which the notes had been previously received.