The Federal Government is given power "to borrow money on the credit of the United States."

The power thus given is free from limitations. In the draft of the Constitution reported by the Committee on Detail to the Constitutional Convention, the draft read, "To borrow money and emit bills on the credit of the United States." The express authorization to emit bills of credit was stricken out by the Convention, but, apparently, not with the intention of thereby depriving the United States of the power, but that the power would be included in the general authority to borrow money. That this is so, has not been questioned by the courts. There has, however, been serious controversy as to the power of the United States to give a legal tender character to these bills when issued.

The debates in the Constitutional Convention, and other provisions of the Constitution,97 would seem to indicate an intention upon the part of the framers of the Constitution that a legal tender character might be given by Congress only to the metallic money coined by the United States, and the Supreme Court in Hepburn v. Griswold98 so held as regards the payment of debts between private parties created before the enactment of the law. In Knox v. Lee," however, four justices dissenting, this doctrine was overthrown, and the issuance of legal tender notes authorized as a legitimate war power. And finally, in the Legal Tender Cases - Juillard v. Greenman1 the authority in question was conceded to exist as implied in the general power to borrow money, whether in times of peace or of war, the court saying: "Such being our conclusion in matter of law, the question whether at any particular time, in war or in peace, the exigency is such, by reason of unusual and pressing demands on the resources of the government, or of the inadequacy of the supply of gold and silver coin to furnish the currency needed for the uses of the government and of the people, that it is, as a matter of fact, wise and expedient to resort to this means, is a political question, to be determined by Congress when the question of exigency arises, and not a judicial question, to be afterwards passed upon by the courts."

In Knox v. Lee it is to be observed that the legal tender power is deduced not wholly from the power to borrow money but from the ensemble of powers which are granted to the United States, which aggregate of powers, the court holds, evidences the intention to equip the Central Government with all the powers necessary for its maintenance as an effective sovereign State. The doctrine thus comes perilously near to an acceptance of the doctrine of "inherent sovereign powers." 2 Also the court declare that it is not indispensable to the existence of any power claimed for the Federal Government that it should be found specified in the words of the Constitution, or clearly and directly traceable to some one of the specified powers, but that its existence may be deduced from a combination of several expressly granted powers.

97 Vf. Tucker's argument, The Constitution of the united states, I, 508ff.

98 8 Wall. 603; lfl L. ed. 513. 99 12 Wall. 457: 20 L. ed 287.

1 110 T. S. 421: 4 Sup. Ct. Hop. 122: 28 L. ed. 204.

2 See Chapter 1IT of this treatise

The various powersfrom which, in the aggregate, the legal tender power is derived are summarized in the following paragraph, taken from the opinion of the court in Juillard v. Greenman:

"Congress as the legislature of a sovereign Nation, being expressly empowered by the 'Constitution to lay and collect taxes, to pay the debts and provide for the common defense and general welfare of the United States, and to borrow money on the credit of the United States, and to coin money and regulate the value thereof and of foreign coin; and being clearly authorized, as incidental to the exercise of those great powers, to emit bills of credit, to charter national banks and to provide a national currency for the whole people, in the form of coin, treasury notes and national bank bills; and the power to make the notes of the government a legal tender in payment of private debts being one of the powers belonging to sovereignty in other civilized Nations, and not expressly withheld from Congress by the Constitution; we are irresistibly impelled to the conclusion that the impressing upon the treasury notes of the United States the quality of being a legal tender in payment of private debts is an appropriate means, conducive and plainly adapted to the execution of the undoubted powers of Congress, consistent with the letter and spirit of the Constitution and, therefore, within the meaning of that instrument, 'necessary and proper for carrying into execution the powers vested by this Constitution in the Government of the United States.' "

As regards the contention that the effect of applying the legal tender law to prior contracted debts is to deprive the creditor of property without due process of law, in violation of the Fifth Amendment, the court in Knox v. Lee say: "That provision has always been understood as referring only to a direct appropriation, and not to consequential injuries resulting from the exercise of lawful power. It has never been supposed to have any bearing upon or to inhibit laws that indirectly work harm and loss to individuals. A new tariff, an embargo, a draft, or a war. may inevitably bring upon individuals great losses, may, indeed, render valuable property almost valueless. They may destroy the worth of contracts. But whoever supposed that because of this a tariff could not be changed, or a non-intercourse act, or an embargo be enacted, or a war be declared."