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and judicious policy. Unless the Constitutions of the State and the United States forbid such legislation, as impairing contract, there is no interdict upon it.
Thus having shewn unquestionably, that the judicial power to declare laws void as contrary to constitutions, is an extreme jurisdiction, never to be exercised but in very clear cases, I now cast on those asserting it, the burthen of affirming that the charter of a bank is a contract within the meaning of that term as used in our constitutions. It cannot be done. Affirming the negative, I shall now take up the burthen of proof without dwelling on the difference between the Constitution of the United States, which adds the vexed word obligation, to that of contract, as used in the Constitution of Pennsylvania. We know how lamentably the Supreme Court of the United States were divided and exercised by this apparently slight difference of a mere word. But I shall attempt no advantage from it, although the omission of the word obligation in our Constitution, makes for my argument, I am content to do without it. The fact is, and it is a strong fact, that the courts of Pennsylvania have never adjudged any law of Pennsylvania to be contrary to the Constitution of Pennsylvania, (for the case of the Ebensburg road, in the 2d volume of the Pennsylvania Reports, forms no exception;) nor has the Supreme Court of the United States ever adjudged an act of Congress to be contrary to the Constitution of the United States. In Pennsylvania I stand upon a rock. Not only has neither legislation nor adjudication ever deemed a law a contract; but further, the judgment of no court of this State sanctions the assumption that a law can be judicially annulled, as impairing some other law importing a contract within the Constitution. These are persuasive premises. The courts of justice of our own State, by at least significant silence and inaction, are abettors, while its Legislature by repeated and unquestionable acts, has always exercised the power I assert, and much greater power than I assert, over what are called vested rights.
Going beyond the confines of mere professional impression, founded on no authority, let us inquire of philosophy, of the best foreign sources of information, of common parlance and common sense-whether a law is a contract? Was it ever so considered? Do they think so in England ? in France? at present? did antiquity? What reason has Judge Story, or any other bold asserter of such a novelty, for venturing to say so? Why is a charter a contract? Without regard to the sovereignty it shares, why is a bank charter, why is any law, held a contract with the State, subject to judicial control? Why is the great power of a community exercised in the enactment of a law, to be reduced to the level of a private agreement, and construed, regulated, or annulled accordingly? Blackstone, to whom I prefer referring, because from a random word or two of his, in a parenthesis, Chief Justice Marshall was prevailed on by Judge Story to infer all this immense result, defines law to be something prescribed, and prescribed by a superior, which commands, and mostly with penal sanction, what is to be done or not done. There is no contract in this, no equality, no consideration, no agreement, such as Blackstone defines a contract. All his instances of contracts, obviously contemplate individuals; he mentions A and B, as the parties to a contract. He has no idea of an act of state. It is palpal le, that a law is not in his mind at all. In both his definitions, that of a law and that of a contract, he shews beyond doubt, that he considers the one a public and sovereign act, the other an in. dividual transaction. To the same effect, may Rutherforth be cited. “A law,” he says, “is a rule to which men are obliged to make their moral actions conformable.” And “such acts of mankind as produce a mutual obligation, and consequently, a mutual claim on the parties concerned on both sides, are contracts.” Again, he adds, “ when we consider only the general notion of a law, there appears to be a plain difference between positive laws and compacts. A compact is an act of two or more persons, which produces an obligation upon those who make themselves parties to it, by their own immediate or direct consent. А law is an act of a superior, which obliges all, who are under his authority, as far as they are concerned in the matter of the law, and as far as the legislator has intended to oblige them; whether they immediately and directly consent or not.” These doctrines from indisputable authorities cannot be gainsaid. Even Marshall himself, in the very ratiocination of deducing a law to be a contract, by means of an innocent word in Blackstone, cannot help saying that one of the parties to the contract he constructs from a law, were individuals whom he names-James Gunn and others. The civil code of the State of Louisiana drawn with great care and precision, with referrnce to the best authorities, defines law to be a solemn declaration of legislative will. Law commands, permits, forbids, announces rewards and punishments, makes general dispositions not for particular instances, but for what is of common occurrence. A law prescribes for the future only, can have no retrospective operation, nor impair the obligation of contracts.
This definition of law, referring, among other authorities, to the judgment of the Supreme Court of the United States, evidently contemplates private contracts between individual parties, and excludes, both in its terms and spirit, all idea of an act of a State, or law itself, thus defined, being a contract.
To Madison's explanation in the Federalist, and Luther Martin's and others, for which I beg leave to refer to my letter of 1836, all proving that the constitutional prohibition applies to private contracts, between man and man, and not to laws, or what have been construed to be contracts between States and men, let me here add, Judge Story's note to the 33d chapter, page 217, of the 3d Volume of his Commentaries on the Constitution, which is as follows:
“In the original draft of the Constitution, some of the prohibitory clauses were not inserted; and particularly, the last clause, prohibiting a State to pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts. The former part was inserted by a vote of seven States against three. The latter was inserted in the revised draft of the Constitution, and adopted, at the close of the Convention, whether with, or without opposition, does not appear. It was probably suggested by the clause in the Ordinance of 1787, (Art. 2,) which declared
that no law ought to be made, &c. that shall interfere with, or affect private contracts or engagements, bona fide, and without fraud, previously formed,.'” By this note, Judge Story would seem to agree to the original design of the clause, its meaning as contradistinguishable from the construction he has since been mainly in. strumental in putting on it.
An intelligent foreigner, M. de Tocqueville, says of this clause in the Constitution, this power appears to me to attack more deeply than all the rest, the sovereignty of the States. I put the question to a respectable Italian lawyer now in this country, whether a law can be deemed a contract, to which he at once replied in the negative. A contract without individual parties to it, is not a common idea. A State contracting is an unusual thing: and a State contracting by general law, having none of the ordinary features of a contract, is, I believe, what was seldom if ever thought of, till a law of Georgia was so considered by Marshall, on the suggestion of Mr. Story, under peculiar circumstances which I shall endeavour to explain.
Legislative precedent, judicial authority, and the reason of all mankind, concur, while we keep ourselves within a State, to refute the notion that a law is a contract, much less a bank charter created by law. Are we bound to look beyond, as Chancellor Kent said in Fulton's case, to inquire further, to go out of our own State, our own legislation, our own jurisprudence, and to rake among the embers of a supposed Federal interdict for the apprehension that a different government, that the judiciary of the United States may annul a law of this state, which by our State authority rightfully repeals a bank charter? There is no adjudication of the United States to alarm or warn us. The federal judiciary has never adjudged that a bank charter is a contract-has never adjudged any thing like it. There is no analogous or kindred judgment of that judiciary. On the contrary, there are two solemn and deliberate judgments of the Supreme Court of the United States, that bank charters are public laws, that banks are political institutions. Laws of Maryland and Ohio taxing the Bank of the United States, were vacated by the Supreme Court on the ground that it was not a private, but a public corporation. In the last mentioned case, Chief Justice Marshall's language is, that the bank is not a private corporation, but a public corporation created for public and national purposes; that it is not an individual or company, having no political connexion with government and carrying on the private business of banking. Even if the Chief Justice had not said so, the judgment of the Court rests entirely on that ground. Its acts speaks more conclusively than any words.
There is other and stronger authority to the same effect; stonger than even that of the Supreme Court. Hamilton's defence of the constitutionality of the Bank vindicates it as a political machine, and the whole argument of this originator of the first great bank, is, that it was a public meazure. “ The simplest and most precise idea of a bank,” he says, “is a deposit of coin or other property, as a fund for circulating a credit upon it, which is to answer the purpose of money.” Privatinterests and direction are involved and employed, as the best means of accomplishing this public end. “It is a medium of exchange, a regulation of trade, and a gen. eral object,” he says,“ because itsbills are to circulate in all the revenues of the country.” He appeals to the practice of other nations for asserting that banks are an usual engine in the administration of national finances, and an ordinary, and the msot effectual instrument of public loans. So Burke, on the East India bill, said, if the Bank of England should by mismanagement fall into a state similar to that of the East India company; if it should be oppressed with demands it could not answer, engagements which it could not perform, and with bills for which it could not procure payment; no charter would protect the mismanagement from correction, and such public grievances from redress. If the City of London had the means and will of destroying an empire, and of cruelly oppressing and tyrannizing over millions of men as good as themselves, the charter of the City of London would prove no sanction to such tyranny and oppression. (These acts of mismanagement are precisely such as are now objected to our banks.) Thus Marshall's authority and that of the Supreme Court, is confirmed by Hamilton and Burke, that banks are political contrivances, and not private concerns, to which may be superadded the practice and understanding of every American State in all branches of government, with the full approbation of the community, that bank privileges are subject at all times to such changes as the State may make in them.
An uninterrupted current of Judicial, Executive, and Legislative determinations, by which States have taxed banks, reduced their paper and increased their coin circulation, as public welfare required, together with the enactment and enforcement of other fundamental changes, never supposed to impair the obligations of their charters as contracts, prove beyond refutal, that banks have always been universally deemed political means, not private property, and that legislation may regulate them from time to time as occasion requires. The Governor's late message recommends radical alterations, more sweeping than I consider expedient, but to the power of whose enactment no objection has been raised.
Mr. Sergeant, Mr. Hopkinson, and Mr. Forward, justify the palpable breach of the letter of the law in the non-payment of coin, by asserting the right of thebanks to judge whether it best comports with the public welfare. And how can they judge but as part of the government authorized to determine what is good for the community? All the Governor's suggestions assume that the banks are part of the State, to be regulated as such. The Bank of the United States is now the very State and Government itself. All States, acccording to the varying emergencies of bank agency with currency, always act on this ground. Several of the States, Massachusetts and Kentucky for instances, repealed bank charters by legislative action without judicial proceeding. In the debate of our Legislature on the repeal of the charter of the Bank of North America, the right of legislative repeal, without conviction of any offence or judicial agency was expressly insisted on. The professional notion that a court of justice is an indispensable agent in annulling a bank charter is merely professional, and wholly unfounded in either law or reason. It is one of the many spurious offspring of that professional paternity which in this country beyond all others is extremely prolific of technical dogmas. A legislature may and must be the revoking power when the bank has not forfeited its charter by misbehaviour, but the public good requires its revocation. A misbehaving bank may be tried for misbehaviour, and punished by forfeiture, in a court of justice. But a bank injurious to the commonwealth from any cause not proceeding from misman. agement or misconduct, falls within the power of legislative repeal alone. A court of justice has no judicial faculty of judging whether the bank is detrimental to the community; no cognizance of the case. The community itself must judge of that, and execute its judgment by the popular representatives. Moreover, the Supreme Court of the United States have unanimously determined,--and their unanimous resolution of a constitutional question is a rare thing,—that the Legislature of Pennsylvania retains judicial faculties especially of equitable character, owing to that imperfect distribution of the several powers of government, which it has been my unsuccessful effort in this Convention to remedy by a distinct constitutional provi.
sion. When incorporated persons violate charters, the courts may act on both persons and charters ; but when charters are public injuries, legislation alone can apply the remedy to the charters; and it must be a mere question of state policy whether public good requires repeal. Power to charter is assumed by American legislatures as devolved on them through the Revolution from the royal prerogative of the mother country; and legal proceedings being necessary in England to repeal a royal grant of charters, the idea has naturally prevailed with lawyers in this country, that charters can be revoked here as in England, by judicial action only. But this mistakes both premises and conclusion. It is extremely doubtful whether American legislation derives from succession to royal prerogative the power to charter; and even if it does, that is no reason why the charter emanating from a legislature must be revoked by a court. Roval prerogative has no faculty of investigation with a view to repeal. It must act through the instrumentality of courts of justice, which are but emanations from the royal authority, not co-ordinate departments of gov. ernment as with us. Nearly all our charters contain a clause reserving to the legislature, power to repeal them when public welfare requires. It is equally impracticable for a court to try questions of politics, and for legislatures to try forfeitures of private franchises. The technical notion that writs and courts are indispensable to repeal public charters, is in short only asserting that they are irrepealable but at the will of the bar; that legislatures, or the people, are not to be trusted with the exercise of this dangerous power; and that it is better administered by courts of justice is, however common a notion, not an argument I need combat. It is al. together contrary to the whole theory of American government, and, I believe, has proved extremely injurious in practice; one of those technical usurpations which it becomes us to throw off.
Distinguished lawyers and eminent judges have said, whose sayings published in law books, often pass for law, that laws are common contracts, that bank charters are such contracts, and that all charters are irrevocable but by judicial proceeding to forfeit them. Denying this, as to bank charters, but with unaffected respect, by professional reverence for those who have dictated it, I must treat it somewhat extensively, with all the freedom compatible with perfect deference for those whose mistake I shall strive to shew; one in particular, whose contributions to the litera. ture of law, I consider more valuable than to its stability, and whose extravagance all tend to take power from the community, and place it with the judiciary, which I hold to be even more injurious to the usefulness of the judiciary than derogatory to the sovereignty of the people. The law of prerogative, of prize, the common English law,—which, by fiction of law, he has contributed to fasten on the French of Louisiana, while he would take it, together with jury trial, in maritime cases, from those of New England and the other States much attached to it, if not make it the common law of these United States altogether,-charter law, criminal law and constitutional law, the whole encyclopædia of jurisprudence has been so remodelled by this learned judge as to require dissent to his doctrines, from, if I am not mis. taken, every judge on the bench with him. At his suggestion, Chief Justice Marshall, for the first time that such a thing was ever thought of, pronounced a law a common contract, when, indeed, there was much to induce some extraordinary