emit.(a) The constitution considers the emission of bills of credit, and the enactment of tender laws, as distinct operations, independent of each other, which may be separately performed. Both are forbidden. To sustain the one because it is not also the other; to say that bills of credit may be emitted, if they be not made a tender in payment of debts; would be, in effect, to would be, in effect, to expunge that distinct, independent prohibition, and to read the clause as if it had been entirely omitted.(b)

§ 245. On the 27th day of June, 1821, the legislature of the state of Missouri passed an act entitled "an act for the establishment of loan offices;" by the third section of which, the officers of the treasury of the state, under the direction of the governor, were required to issue certificates to the amount of two hundred thousand dollars, of denomination not exceeding ten dollars, nor less than fifty cents, in the following form: "This certificate shall be receivable at the treasury of any of the loan offices in the state of Missouri, in discharge of taxes or debts due to the state, for the sum of dollars, with interest for the same, at the rate of two per cent per annum, from this date." These certificates were to be receivable at the treasury and by tax gatherers and other public officers, in payment of taxes, or moneys due or to become due to the state, or to any town or county therein, and by all officers, civil and military, in the state, in discharge of salaries and fees of office; and in payment for all salt made at the salt springs owned by the state, and to be afterwards leased by the authority of the legislature. The twentythird section of the act pledged certain property of the state for the redemption of those certificates; and the

(a) Briscoe v. The Bank of the Commonwealth of Kentucky, 11 Peters, 258.

(b) Craig v. The State of Missouri, 4 Peters, 431.

law authorized the governor to negotiate a loan of silver or gold for the same purpose. A provision was made in the law, for the gradual withdrawal of the certificates from circulation; and all the certificates have since been redeemed. The commissioners of the loan office were authorized to make loans of the certificates to citizens of the state, assigning to each district a proportion of the amount of the certificates, to be secured by mortgage or personal security; the loans to bear interest not exceeding six per cent per annum, and the loans on personal property to be for less than two hundred dollars. It was held, that the certificates issued under the authority of the law of Missouri, were "bills of credit,” and that their emission was prohibited by the constitution of the United States, which declares that no state shall emit "bills of credit."(a) A state cannot emit bills of credit, or, in other words, it cannot issue that description of paper, to answer the purpose of currency, which was denominated, before the adoption of the constitution, "bills of credit." But a state may grant acts of incorporation for the attainment of those objects which are essential to the interests of the society. This power is incident to sovereignty, and there is no limitation on its exercise by the state in the constitution, in respect to the incorporation of banks.(b) When a state emits bills of credit, the amount to be issued is fixed by law, as also the fund out of which they are to be paid, if any fund be pledged for their redemption, and they are issued on the credit of the state; which, in some form, appears on the face of the notes, or by the signature of the who issues them.(c)

person

(a) Craig v. The State of Missouri, 4 Peters, 431. See also Linn v. State Bank of Illinois, 1 Scam. 87.

(b) Briscoe, &c. v. The Bank of Kentucky, 11 Peters, 258. (c) Ibid.

§ 246. It has been held that a bank note issued by the bank, the act of the incorporation of which declared that it should be established in the name of the commonwealth of Kentucky, under the direction of president and directors chosen by the legislature, and declared to be exclusively the property of the state, authorizing the issuing of notes, with a capital of $2,000,000, to be paid out of money thereafter to be paid into the treasury of the state for vacant lands, were not bills of credit within this clause of the constitution, notwithstanding the dividends of the bank were to be paid into the treasury. The decision in this case was placed upon the ground that there was with others, one quality which distinguished the notes of this bank from bills of credit. That every holder could look to the bank as well as to its funds, and had in his power the means of enforcing his claim against the corporation. That as at the time of the adoption of the constitution, the Bank of North America and the Massachusetts Bank, and some others, were in operation, it could not be supposed that the notes of those banks were intended to be inhibited by the constitution, or that they were considered as bills of credit within the meaning of that instrument. That upon a fair construction of the terms "bills of credit," as used in the constitution, they did not include ordinary bank notes.(a)

§ 247. The clause in the constitution prohibiting the making any thing but gold and silver coin a tender in payment of debts, is founded upon the same general policy and upon the same general considerations as those relating to bills of credit, and the coining of money. It has been held, that this prohibition applies to all future laws on the subject of tender, and consequently, that no

(a) Briscoe v. The Bank of the Commonwealth of Kentucky, 11 Peters,

259.

state legislature can provide, that future pecuniary contracts may be discharged by any thing but gold and silver coin. (a)

§ 248. We are in the next place to consider what laws are within the prohibition against impairing the obligation of a contract. It should be remarked, in the first place, that the objection to a law on the ground of its impairing the obligation of a contract, does not depend on the extent of the change which the law may make in it: that any deviation from its terms, by postponing or accelerating the period of performance which it prescribes, or imposing conditions not expressed in the contract, or dispensing with the performance of those which are, however minute or apparently immaterial in their effect upon the contract of the parties, impairs its obligation, and is within this constitutional prohibition.

§ 249. The language in this clause is general, and applies to all contracts which respect property or some object of value, and confer rights which may be asserted in a court of justice. When the constitution was framed the term "contract" had a known legal meaning, as definite and as well understood as a bill of attainder or an ex post facto law. This meaning was adopted, and became a part of the instrument as fully as if it had been expressed in words. The common law had defined the term. It had declared a contract to be a compact between two or more parties; and whether it related to real or personal estate, or was executed or executory, or rested in parol or was under seal, the constitution preserved it inviolate from the action of a state legislature, so far as it created rights or contained obligations binding on the parties in law or equity. The character of the parties to the compact, was not intended to prevent the

(a) Ogden v. Saunders, 12 Weeat. 265-339. Story on the Constitution, § 1366.

general application of the prohibition. Whether a state, a minor municipal corporation, or an individual is a party, is immaterial. All are embraced in the same provision. The rights and duties of the contracting parties, whoever they may be, are determined by the contract, and are protected from legislative interference and control.

§ 250. The constitution does not, however, give validity to contracts which confer no right; nor does it add to those which they do confer. It prohibits a state from impairing the obligation of the contract, that is, the rights and duties which arise from it. It does not declare that every contract contained an obligation, or that it should be enforced; but it does declare, that whatever obligations are created or rights secured, shall not be impaired by the act of the legislature; thus leaving the questions as to the nature, form, extent, construction, and validity of the contract, and the manner of enforcing it, to be determined by the judicial department of the government, and only prohibiting the legislature from passing a law which shall impair the obligations or rights created by it.

251. It is obvious, therefore, that in every case where the prohibition is attempted to be applied, the first inquiry is, whether the case be one in which the subject matter is a contract relating to property or some object of value, and which imposes an obligation capable, in legal contemplation, of being impaired? If it be such a contract, the remaining inquiry is, whether the act of the legislature impairs that obligation? Hence, it is a proper subject of examination whether the contract be executed, or executory? And if the latter, whether it be upon sufficient consideration, proved or presumed? If it be an act of the legislature which constitutes the contract, is it executed? Has the object of the contract been performed? or, is it a mere executory contract, re