In the case of Faw v. Marsteller, a deed of sale was made in 1779 of land upon a perpetual ground-rent of 26 pounds current money of Virginia. It was contended by the grantor's assigns that this contract did not come within the statute, because it was a continuing contract, and that the rentals falling due after the resumption of specie payment, should be construed as obligations arising after that date, and that these rentals should be paid in full in specie. Chief Justice Marshall denied this claim, holding that the contract did come within the operation of the statute. The Chief Justice said, continuing:—

"It seems to be the date and not the duration of the contract which was regarded by the Legislature. The act is implied directly to the date of contract, and the motive for making it was that contracts entered into during the circulation of paper money, ought in justice to be discharged by a sum different in intrinsic value from the nominal sum mentioned in the contract, and that when the Legislature removed the delusive standard, by which the value of the thing acquired had been measured, they ought to provide that justice should be done to the parties."

The Virginia Legislature had, however, provided in the act referred to, that where the scale in values proved in any particular case to work injustice, the courts were empowered to make a special inquiry into the value in specie of the claim in the particular contract, and that this judgment of the court should determine the amount to be paid in liquidation of the contract. Chief Justice Marshall held, from the evidence before him, that this was one of those extraordinary cases, which were not justly provided for by the scale of values, and ordered a special inquiry to determine the annual rental value in specie of the land at the time when the land was sold. Surely the great exponent of the sanctity of contracts would not have rendered this decision, had he believed in the power of the government to change the intrinsic value of the unit of money, and compel parties to

existing contracts to receive in payment the debased coin at its face value. In the light of the facts of this case, and the specific judgment of the court, the statement of Chief Justice Marshall in his opinion in the same case,' which is quoted by Mr. Justice Strong in the legal tender cases, that "according to the law of contracts all moneys accruing under it, which were not received during the currency of paper, would be payable in such other money as might be current at the time of payment," must be taken to mean only that the creditor cannot object to the kind of money offered in payment, because it was not money at the time when the contract was made.

The same principles controlled the United States Supreme Court in laying down the rule that where, during the prevalence of the civil war, a note or contract was made in the Southern States within the Confederate lines, calling for the payment of a number of dollars, and which remained unpaid at the re-establishment of peace, the sum payable in the lawful money of the United States on such a note must be ascertained by the determination of the value in such money of the Confederate currency at the time and place, when and where such note or contract was made.2

The fact that the same court rendered these decisions at the same time that they were deciding the legal tender cases, indisputably sustains my contention that the legal tender cases are not to be taken as a judicial determination, that the United States Government can impair the obligation of existing contracts by compelling, in performance of such contracts, the receipt of a debased currency at its face value.

Fourthly. The dicta of these justices are still further weakened by their claim that the United States Government

1 2 Cranch, 29.

2 See among other cases, the Confederate Note Cases, 19 Wall. 548; Stewart v. Salmon, 94 U. S. 434; Cook v. Lillo, 103 U. S. 793; Wilmington, etc., R. R. Co. v. King, 91 U. S. 3.

had reduced the intrinsic value of its coin, and thus impaired the obligation of existing contracts in 1834. The latter half of the proposition is not true.

Under the act of 1792, the silver dollar was established as a unit of value in the ratio to gold of 15 to 1; but by 1823, it became very plain that the true ratio was 16 to 1. As a result of this depreciation of silver, the gold passed out of circulation and was either sent to Europe or hoarded in this country. Inasmuch as both silver and gold were legal tender, and the debtor could pay his contracts in either coin, he would surely pay in the cheaper metal. At that time, therefore, this country was on a silver basis, and all the existing contracts were made in reliance upon payment in silver. The creditor gained nothing, therefore, from this relative appreciation of the gold dollar. The only one who profited by it was the possessor of the gold dollar, and his profit depended solely upon the extra quantity of gold in the gold dollar. Inasmuch as the country was already on a silver basis, in re-establishing a parity between the two metals, Congress acted wisely in reducing the quantity of gold in the gold dollar, because it was the scarcer coin, and had already passed out of active circulation. Values were in nowise disturbed by this Congressional enactment; they would have been if the intrinsic value of the silver dollar had been increased, for all contracts were then made a silver basis. The situation is now completely changed. We are on a gold basis, and the terms of all contracts are determined by a reference to the gold standard. The remonetization of silver at a ratio which would make the silver dollar inferior in intrinsic value to the gold dollar would at once take us to the silver basis, and the values of all monetary obligations would be proportionately reduced.

on

This exposition seems to make clear that while the legal tender cases would, as prominent precedents, have proved stumbling-blocks in the way of securing a declaration that

a silver free coinage bill was unconstitutional, so far as it applied to existing contracts; such a declaration might have been confidently expected, if the court had been called to pass upon the question.

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§ 93. Legislative restraint of importations - Protective tariffs. The reader, who has carefully followed the line of argument adopted, and the tests applied, in each case of the exercise of police power, will scarcely need any special elaboration of the grounds upon which it is held to be a violation of civil liberty for the government to do any act which is intended to and does restrain importations. Whatever may be thought of the justice of an import tax, in the abstract, the United States constitution expressly grants to the United States government the power to lay such a tax upon all importations. A tariff for revenue, therefore, comes within the legitimate exercise of police power. It is one mode of taxation. But no claim can be successfully made to an express or implied power to establish a tariff whose object is to restrain importations for the protection of competing home industries. The only provision on the subject is article 1, section 8, where it is provided that Congress shall have power" to lay and collect taxes, duties, imposts, and excises to pay the debts and provide for the common defense and general welfare of the United States." Here is found only an authority to establish a tariff for revenue. In the days when the constitutionality of tariff laws used to be discussed, it appears to have been conceded by the abler statesmen, that there was no authority in the constitution for creating a tariff for protection, and the claim was usually made that they may establish a tariff for revenue with incidental protection." This is clearly an inconsistency. A tariff for revenue, when carried to its logical extreme, would involve the institution of a policy, which would encourage importations, and discourage home manufactures, for the greater the im

ports the larger will be the revenue. On the other hand, the principle of protection, when pushed to its extremity, would restrain importations, and, if possible, the tariff would be so constructed that there would be no imports, and hence no revenue. While a tariff for revenue so constructed as to operate as an intentional restraint upon home industries would not be just or wise, all tariffs should be constructed with the single object in view of raising revenue, and so far as there is any attempt to afford the so-called incidental protection, Congress exceeds the express power to lay imposts.

But, in accordance with the rule of constitutional construction advocated and explained in a subsequent section,1 since the States are denied the power to lay imposts or duties upon imports," without the consent of Congress," "except what may be absolutely necessary for executing its inspection laws," 2 we claim that Congress may, without express grant of such a power, lay imposts for the purposes of protection, if the constitution does not prohibit it. But we also claim that a tariff for protection is prohibited by the constitution, not in express terms, but by the general clause which provides that no one shall be deprived of life, liberty or property, without due process of law." It would be as constitutional for a State to prohibit one class of citizens from trading with another, as it is for the United States to prohibit, totally or partially, the dealing of citizens with foreign countries. It is a part of the civil liberty of a citizen of a constitutional State to be permitted to have business relations with whom he pleases. Even though a protective tariff does not compel the consumer to pay more for the home products than he would have to pay for the

1 See post, Chapter XVI.

2 U. S. Cons., art. I., § 10.

3 U. S. Const. Amend., art. 5. The platform of the Democratic National Convention of 1892 contains a similar declaration as to the constitutionality of a tariff law for protection.