Chief-justice Chase had hardly taken his seat upon the supreme bench, when he was called upon to interpret, as judge, the series of laws which he had recommended and put in execution as finance minister. And this was a great gain for the country, since no man then or since was so thoroughly acquainted with the whole history of that legislation, and with its practical operation in general and in detail.

1 Finance Report, 1872, p. xix.

In 1863 and 1864 the assessors of New York had levied a tax upon the capital stock of the banks doing business under the laws of that State. Some of these banks resisted the tax, on the ground that it was in fact imposed upon the United States bonds in which a large proportion of their capital was invested, and that the bonds, under the constitution and laws of the United States, were exempt from local taxation. The Court of Appeals sustained the assessments, but the Supreme Court of the United States, at the December term of 1864, adjudged the tax contrary to the national constitution, and so the judgment of the Court of Appeals was reversed. In 1866 the legislature of New York provided by law for refunding to the banks the taxes of 1863 and 1864, collected upon that part of their capital invested in United States securities, and the board of supervisors of the county of New York was subsequently charged with the duty of auditing the claims of banks in that county for reimbursement under the law. The supervisors refused to allow the claim of exemption upon United States notes; the Court of Appeals sustained the supervisors ; and the Bank of New York carried the case to the Supreme Court at Washington.1

At the hearing, during the December term of 1868, the corporation counsel, Messrs. O'Conor and O'Gorman, contended that the United States notes were not securities, and so exempt from local taxation, but a new kind of money. "Instead of borrowing money," they argued, "Congress made money, and rendered borrowing unnecessary." The opinion of the court, delivered by the Chief-justice, affirmed that while these notes were intended to circulate as money, and with the national bank-notes to constitute the credit circulation of the country, they were nevertheless obligations of the United States, each expressing upon its face an engagement to pay a certain number of dollars. "The dollar intended," said the court, "is the coined dollar of the United States; a certain quantity in weight and fineness of gold or silver, authenticated as such by the stamp of the government." These obligations, it was held, were strictly securities, and under this general description were exempted from local taxation by the acts of February and July, 1862, and expressly by the act of March, 1863. The judgment of the Court of Appeals was therefore reversed.

1 Supreme Court Reports. 7 Wallace, 26. Bank versus Supervisors.

The character of the United States notes, as obligations to be paid in real money, was thus determined. Their legal tender quality was next to be considered-indeed, was already before the court, brought there by Mrs. Hepburn, of Kentucky, and by five other plaintiffs in as many suits.1 Mrs. Hepburn had given a note for $11,250 to Henry Griswold on the 20th of June, 1860, payable on the 20th of February, 1862. The note was not paid at maturity, and in March, 1864, suit having been brought by Griswold in the Louisville Chancery Court, Mrs. Hepburn tendered $12,720 in United States notes for principal, interest, and costs. Gold was then at a premium of about 60 per cent., and the tender was refused. Mrs. Hepburn then tendered the notes to the court, and the chancellor, "resolving all doubts in favor of the United States," declared the tender good, received the notes, and adjudged the debt to be satisfied. Griswold carried the case to the Kentucky Court of Errors, which reran the chancellor's judgment, and Mrs. Hepburn appealed from the Court of Errors to the Supreme Court of the United States.

1 Supreme Court Reports. 8 Wallace, C03. Hepburn versus Griswold.

Mrs. Hepburn's note was a contract made before the war, to pay $11,250 in coin or its equivalent, and the sum of $11,250 in legal tender notes was worth in March, 1864, only about $7000 in coin. This was not what the contract required, and thus the question was directly raised, whether Congress, under the constitution, could exercise a power forbidden to the States, and enact a valid law impairing the obligation of contracts.

The cause was first argued at the Decern* ber term, 1867. At the request of Mr. Stan-bery, then attorney-general, the court postponed this and other cases, involving incidentally the same question, until December, 1868, when Attorney-general Evarts argued for the government in favor of the legal tender provision of the law, and Mr. Clark-son N. Potter against it. At different times counsel were heard in the other five cases, -seven, including Mr. B. R. Curtis, for the law, and six, including Mr. Bradley, against it. Finally, four of the cases were decided on other grounds; the fifth and sixth were found to turn upon the legal tender acts; and on the 27th of November, 1869, the court decided the case of Hepburn versus Griswold in conference. On the 7th of February, 1870, the opinion prepared by the Chief-justice was read from the bench, and the judgment of the Court of Errors of Kentucky was affirmed. In this opinion Justices Nelson, Clifford, Field, and Grier concurred. Justices Miller, Swayne, and Davis dissented.

The conclusion of the court, as stated by the Chief-justice, was, "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." It was upon the receivability of the notes for government dues, and not upon the quality of legal tender, that reliance for circulation was originally placed; for the legal tender clause was an after-thought, and did not appear in the original draft of the bill. All the useful purposes of the notes would have been fully answered, and were answered by the national bank-notes, without making them a legal tender for pre-existing debts. The application of the law to such debts impairs the obligation of contracts, and is therefore inconsistent with the spirit of the constitution. Finally, it is a direct violation of the provisions declaring that private property shall not be taken for public use without due compensation, and that no person shall be deprived of property without due process of law.