The question of the suability of a State has been so fully and illuminatingly developed in the efforts of the State of Virginia to avoid the payment of certain parts of its debt, that a somewhat detailed account of the controversy is warranted.

The Civil War left that State in a greatly impoverished condition and at the same time saddled with a large debt and accumulated interest thereupon. In 1871 an act was passed refunding the debt and counting off one-third of it as the portion justly belonging to the State of West Virginia, By this law it was provided that the interest coupons on these new bonds should be receivable in payment of taxes and claims due to the State. This created a valid contract between the State and its bondholders.45 Soon after this there arose in the State the so-called "Readjustment" agitation led by United States Senator William Mahone, founded upon the alleged right of the State to escape if possible from the burden of this refunded debt. This led to an act passed by the State requiring, when coupons were offered in payment of taxes, that the collector should receive them only for identification, and that he should exact payment of the taxes in money, but that if, later, the coupons were satisfactorily identified and verified, the money so paid might be recovered back. This act was popularly termed the "coupon killer," as the state judges and juries were depended upon to refuse, when in any case it was possible to do so, to identify the coupons. Also an act was passed fixing the manner in which relief should be granted in case coupons were improperly refused acceptance, and providing for the taxation of bonds.

The validity of these acts was immediately contested. In Hart-man v. Greenhow43 the Supreme Court awarded a mandamus to compel the treasurer of the State to receive the coupons in payment of taxes without first subtracting from them a tax upon the bonds to which they had been attached.

In Antoni v. Greenhow47 it was held that the "coupon killer"

45 Furman v. Nichol, 8 Wall. 44; 19 L. ed. 370.

46 102 U. 8. 672; 26 L. ed. 271.

47 107 U. S. 769; 2 Sup. Ct. Rep. 91; 27 L. ed. 468.

act was valid in so far as it merely changed the means by which the holder of the coupons could compel their application to the payment of taxes when they had been refused acceptance.48

In its opinion the court took pains to explain that it did not pass upon the question whether the tax collector was justified in refusing to accept the coupons in payment of taxes, but simply whether, if he did refuse, the remedy provided by the new law was substantially equivalent to that which the holder of the coupons possessed at the time the bonds were issued. Thus the constitutionality of the entire act was not in question, but only that part of it which related to the remedy afforded in case the coupons were refused acceptance. In Poindexter v. Greenhow,49 however, the constitutionality of the provision of the law of 18S2 which required tax collectors to receive in payment of taxes only gold and silver and United States notes and National Bank currency, came up for consideration. Poindexter tendered coupons in payment of his taxes, and, when they were refused acceptance, refused to tender currency, and, when his personal property was seized, brought action of detinue against Greenhow, treasurer and collector of taxes of the city of Richmond, Virginia. Upon appeal to the Supreme Court of the United States, the court held the Virginia act unconstitutional as impairing the obligation of the contract into which the State had entered in 1871, and declared, therefore, that the action of Greenhow in refusing to receive the tender of coupons was unwarranted, and his seizure of the plaintiff's property a trespass.

48 From this decision Justice Field dissented. "How can it be maintained," he declared, ". . . that the legislation of January 14 and April 7, 1882, does not impair the obligation of the contract under the Funding Act. It annuls the present receivability of the coupon; it substitutes for the specific execution of the contract, a protracted litigation, and when the genuineness of the coupon and its legal receivability for taxes are judicially established, its payment is made dependent upon the existence of money in the treasury of the State." Justice Harlan also dissented. "To my mind." he said, "... the change in the remedies has impaired both the obligation and value of the contract."

49 114 U. S. 270; 5 Sup. Ct. Rep. 903; 29 L. ed. 185.

"This immunity from suit, secured to the States," said the court, "is undoubtedly a part of the Constitution, of equal authority with every other, but no greater, and to be construed and applied in harmony with all the provisions of that instrument That immunity, however, does not exempt the State from the operation of the constitutional provision that no State shall pass any law impairing the obligation of contracts; for it has long been settled that contracts between a State and an individual are as fully protected by the Constitution as contracts between two individuals. It is true that no remedy for a breach of its contract by a State, by way of damages as compensation, or by means of process to compel its performance, is open, under the Constitution, in the courts of the United States, by a direct suit against the State itself, on the part of the injured party being a citizen of another State or a citizen or subject of a foreign State. But it is equally true that whenever in a controversy between parties to a suit, of which these courts have jurisdiction, the question arises upon the validity of a law by a State impairing the obligation of its contract, the jurisdiction is not thereby ousted, but must be exercised, with whatever legal consequences, to the rights of the litigants, may be the result of the determination. The cases establishing these propositions, which have been decided by this court since the adoption of the Eleventh Amendment to the Constitution, are numerous." 50 a defendant, in order to complete his defense, to produce a law of the State which constitutes his commission as its agent, and a warrant for his act. This the defendant in the present case undertook to do. He relied on the Act of January 26, 1882, requiring him to collect taxes in gold, silver, United States Treasury notes, national bank currency, and nothing else, and thus forbidding his receipt of coupons in lieu of money. That, it is true, is a legislative act of the government of Virginia, but it is not a law of the State of Virginia. The State has passed no such law, for it cannot; and what it cannot do, it certainly, in contemplation of law, has not done. The constitution of the United States and its own contract, both irrepealable by any act on its part, are the law of Virginia; and that law made it the duty of the defendant to receive the coupons tendered in payment of taxes, and declared every step to enforce the tax, thereafter taken, to be without warrant of law, and therefore a wrong. He stands, then, stripped of his official character, and, confessing a personal violation of the plaintiff's rights, for which he must personally answer, he is without defense. . . . The thing prohibited by the Eleventh Amendment is the exercise of jurisdiction in a 'Suit in law' or equity commenced or prosecuted against one of the United States by citizens of another State or by citizens or subjects of any foreign State.' Nothing else is touched; and suits between individuals, unless the State is the party in a substantial sense, are left untouched, no matter how much their determination may incidentally and consequentially affect the interests of a State or the operations of its government. The fancied inconvenience of an interference with the collection of its taxes by the government of Virginia, by suits against its tax collectors, vanishes at once upon the suggestion that such interference is not possible except when that government seeks to enforce the collection of its taxes contrary to the law and contract of the State and in violation of the Constitution of the United States." 51

50 Citing Fletcher v. Peck, 6 Cranch, 87; 3 L. ed. 162; N. J. v. Wilson. 7 Cranch, 164; 3 L. ed. 303; Green v. Biddle, 8 Wheat. 1; 5 L. ed. 547; Providence Bk. v. Billings, 4 Pet. 514; 7 L. ed. 939; Woodruff v. Trapnall, 10 How. 190; 13 L. ed. 383; Wolff v. New Orleans, 103 U. S. 3.58; 26 L. ed. 395; Jefferson Branch Bk. v. Skelley, 1 Black, 436; 17 L. ed. 173.

51 Chief Justice Waite and Justices Miller, Bradley, and Gray dissented.