Daniel Webster.

The Great Speeches and Orations of Daniel Webster With an Essay on Daniel Webster as a Master of English Style online

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the debate. Is it not obvious, that, supposing the act of New York to be
a part of the contract, the question still remains as undecided as ever.
What is that act? Is it a law, or is it a nullity? a thing of force, or
a thing of no force? Suppose the parties to have contemplated this act,
what did they contemplate? its words only, or its legal effect? its
words, or the force which the Constitution of the United States allows
to it? If the parties contemplated any law, they contemplated all the
law that bore on their contract, the aggregate of all the statute and
constitutional provisions. To suppose that they had in view one statute
without regarding others, or that they contemplated a statute without
considering that paramount constitutional provisions might control or
qualify that statute, or abrogate it altogether, is unreasonable and
inadmissible. "This contract," says one of the authorities relied on,
"is to be construed as if the law were specially recited in it." Let it
be so for the sake of argument. But it is also to be construed as if the
prohibitory clause of the Constitution were recited in it, and this
brings us back again to the precise point from which we departed.

The Constitution always accompanies the law, and the latter can have no
force which the former does not allow to it. If the reasoning were
thrown into the form of special pleading, it would stand thus: the
plaintiff declares on his debt; the defendant pleads his discharge under
the law; the plaintiff alleges the law unconstitutional; but the
defendant says, You knew of its existence; to which the answer is
obvious and irresistible, I knew its existence on the statute-book of
New York, but I knew, at the same time, it was null and void under the
Constitution of the United States.

The language of another leading decision is, "A law in force at the time
of making the contract does not violate that contract"; but the very
question is, whether there be any such law "in force"; for if the States
have no authority to pass such laws, then no such law can be in force.
The Constitution is a part of the contract as much as the law, and was
as much in the contemplation of the parties. So that the proposition, if
it be admitted that the law is part of the contract, leaves us just
where it found us: that is to say, under the necessity of comparing the
law with the Constitution, and of deciding by such comparison whether it
be valid or invalid. If the law be unconstitutional, it is void, and no
party can be supposed to have had reference to a void law. If it be
constitutional, no reference to it need be supposed.

2. But the proposition itself cannot be maintained. The law is no part
of the contract. What part is it? the promise? the consideration? the
condition? Clearly, it is neither of these. It is no term of the
contract. It acts upon the contract only when it is broken, or to
discharge the party from its obligation after it is broken. The
municipal law is the force of society employed to compel the performance
of contracts. In every judgment in a suit on contract, the damages are
given, and the imprisonment of the person or sale of goods awarded, not
in performance of the contract, or as part of the contract, but as an
indemnity for the breach of the contract. Even interest, which is a
strong case, where it is not expressed in the contract itself, can only
be given as damages. It is all but absurd to say that a man's goods are
sold on a _fieri facias_, or that he himself goes to jail, in pursuance
of his contract. These are the penalties which the law inflicts for the
breach of his contract. Doubtless, parties, when they enter into
contracts, may well consider both what their rights and what their
liabilities will be by the law, if such contracts be broken; but this
contemplation of consequences which can ensue only when the contract is
broken, is no part of the contract itself. The law has nothing to do
with the contract till it be broken; how, then, can it be said to form a
part of the contract itself?

But there are other cogent and more specific reasons against considering
the law as part of the contract. (1.) If the law be part of the
contract, it cannot be repealed or altered; because, in such case, the
repealing or modifying law itself would impair the obligation of the
contract. The insolvent law of New York, for example, authorizes the
discharge of a debtor on the consent of two thirds of his creditors. A
subsequent act requires the consent of three fourths; but if the
existing law be part of the contract, this latter law would be void. In
short, nothing which is part of the contract can be varied but by
consent of the parties; therefore the argument runs _in absurdum_; for
it proves that no laws for enforcing the contract, or giving remedies
upon it, or any way affecting it, can be changed or modified between its
creation and its end. If the law in question binds one party on the
ground of assent to it, it binds both, and binds them until they agree
to terminate its operation. (2.) If the party be bound by an implied
assent to the law, as thereby making the law a part of the contract, how
would it be if the parties had expressly dissented, and agreed that the
law should make no part of the contract? Suppose the promise to have
been, that the promisor would pay at all events, and not take advantage
of the statute; still, would not the statute operate on the whole, - on
this particular agreement and all? and does not this show that the law
is no part of the contract, but something above it? (3.) If the law of
the place be part of the contract, one of its terms and conditions, how
could it be enforced, as we all know it might be, in another
jurisdiction, which should have no regard to the law of the place?
Suppose the parties, after the contract, to remove to another State, do
they carry the law with them as part of their contract? We all know they
do not. Or take a common case. Some States have laws abolishing
imprisonment for debt; these laws, according to the argument, are all
parts of the contract; how, then, can the party, when sued in another
State, be imprisoned contrary to the terms of his contract? (4.) The
argument proves too much, inasmuch as it applies as strongly to prior as
to subsequent contracts. It is founded on a supposed assent to the
exercise of legislative authority, without considering whether that
exercise be legal or illegal. But it is equally fair to found the
argument on an implied assent to the potential exercise of that
authority. The implied reference to the control of legislative power is
as reasonable and as strong when that power is dormant, as while it is
in exercise. In one case, the argument is, "The law existed, you knew
it, and acquiesced." In the other it is, "The power to pass the law
existed, you knew it, and took your chance." There is as clear an assent
in one instance as in the other. Indeed, it is more reasonable and more
sensible to imply a general assent to all the laws of society, present
and to come, from the fact of living in it, than it is to imply a
particular assent to a particular existing enactment. The true view of
the matter is, that every man is presumed to submit to all power which
may be lawfully exercised over him or his right, and no one should be
presumed to submit to illegal acts of power, whether actual or
contingent. (5.) But a main objection to this argument is, that it would
render the whole constitutional provision idle and inoperative; and no
explanatory words, if such words had been added in the Constitution,
could have prevented this consequence. The law, it is said, is part of
the contract; it cannot, therefore, impair the contract, because a
contract cannot impair itself. Now, if this argument be sound, the case
would have been the same, whatever words the Constitution had used. If,
for example, it had declared that no State should pass any law impairing
contracts _prospectively_ or _retrospectively_; or any law impairing
contracts, whether existing or future; or, whatever terms it had used to
prohibit precisely such a law as is now before the court, - the
prohibition would be totally nugatory if the law is to be taken as part
of the contract; and the result would be, that, whatever may be the laws
which the States by this clause of the Constitution are prohibited from
passing, yet, if they in fact do pass such laws, those laws are valid,
and bind parties by a supposed assent.

But further, this idea, if well founded, would enable the States to
defeat the whole constitutional provision by a general enactment.
Suppose a State should declare, by law, that all contracts entered into
therein should be subject to such laws as the legislature, at any time,
or from time to time, might see fit to pass. This law, according to the
argument, would enter into the contract, become a part of it, and
authorize the interference of the legislative power with it, for any
and all purposes, wholly uncontrolled by the Constitution of the United
States.

So much for the argument that the law is a part of the contract. We
think it is shown to be not so; and if it were, the expected consequence
would not follow.

The inquiry, then, recurs, whether the law in question be such a law as
the legislature of New York had authority to pass. The question is
general. We differ from our learned adversaries on general principles.
We differ as to the main scope and end of this constitutional provision.
They think it entirely remedial; we regard it as preventive. They think
it adopted to secure redress for violated private rights; to us, it
seems intended to guard against great public mischiefs. They argue it as
if it were designed as an indemnity or protection for injured private
rights, in individual cases of _meum_ and _tuum_; we look upon it as a
great political provision, favorable to the commerce and credit of the
whole country. Certainly we do not deny its application to cases of
violated private right. Such cases are clearly and unquestionably within
its operation. Still, we think its main scope to be general and
political. And this, we think, is proved by reference to the history of
the country, and to the great objects which were sought to be attained
by the establishment of the present government. Commerce, credit, and
confidence were the principal things which did not exist under the old
Confederation, and which it was a main object of the present
Constitution to create and establish. A vicious system of legislation, a
system of paper money and tender laws, had completely paralyzed
industry, threatened to beggar every man of property, and ultimately to
ruin the country. The relation between debtor and creditor, always
delicate, and always dangerous whenever it divides society, and draws
out the respective parties into different ranks and classes, was in such
a condition in the years 1787, 1788, and 1789, as to threaten the
overthrow of all government; and a revolution was menaced, much more
critical and alarming than that through which the country had recently
passed. The object of the new Constitution was to arrest these evils; to
awaken industry by giving security to property; to establish confidence,
credit, and commerce, by salutary laws, to be enforced by the power of
the whole community. The Revolutionary War was over, the country had
peace, but little domestic tranquillity; it had liberty, but few of its
enjoyments, and none of its security. The States had struggled together,
but their union was imperfect. They had freedom, but not an established
course of justice. The Constitution was therefore framed, as it
professes, "to form a more perfect union, to establish justice, to
secure the blessings of liberty, and to insure domestic tranquillity."

It is not pertinent to this occasion to advert to all the means by which
these desirable ends were to be obtained. Some of them, closely
connected with the subject now under consideration, are obvious and
prominent. The objects were commerce, credit, and mutual confidence in
matters of property; and these required, among other things, a uniform
standard of value or medium of payments. One of the first powers given
to Congress, therefore, is that of coining money and fixing the value of
foreign coins; and one of the first restraints imposed on the States is
the total prohibition to coin money. These two provisions are
industriously followed up and completed by denying to the States all
power to emit bills of credit, or to make any thing but gold and silver
a tender in the payment of debts. The whole control, therefore, over the
standard of value and medium of payments is vested in the general
government. And here the question instantly suggests itself. Why should
such pains be taken to confide to Congress alone this exclusive power of
fixing on a standard of value, and of prescribing the medium in which
debts shall be paid, if it is, after all, to be left to every State to
declare that debts may be discharged, and to prescribe how they may be
discharged, without any payment at all? Why say that no man shall be
obliged to take, in discharge of a debt, paper money issued by the
authority of a State, and yet say that by the same authority the debt
may be discharged without any payment whatever?

We contend, that the Constitution has not left its work thus unfinished.
We contend, that, taking its provisions together, it is apparent it was
intended to provide for two things, intimately connected with each
other. These are, -

1. A medium for the payment of debts; and,

2. A uniform manner of discharging debts, when they are to be discharged
without payment.

The arrangement of the grants and prohibitions contained in the
Constitution is fit to be regarded on this occasion. The grant to
Congress and the prohibition on the States, though they are certainly to
be construed together, are not contained in the same clauses. The powers
granted to Congress are enumerated one after another in the eighth
section; the principal limitations on those powers, in the ninth
section; and the prohibitions to the States, in the tenth section. Now,
in order to understand whether any particular power be exclusively
vested in Congress, it is necessary to read the terms of the grant,
together with the terms of the prohibition. Take an example from that
power of which we have been speaking, the coinage power. Here the grant
to Congress is, "To coin money, regulate the value thereof, and of
foreign coins." Now, the correlative prohibition on the States, though
found in another section, is undoubtedly to be taken in immediate
connection with the foregoing, as much as if it had been found in the
same clause. The only just reading of these provisions, therefore, is
this: "Congress shall have power to coin money, regulate the value
thereof, and of foreign coin; but no State shall coin money, emit bills
of credit, or make any thing but gold and silver coin a tender in
payment of debts."

These provisions respect the medium of payment, or standard of value,
and, thus collated, their joint result is clear and decisive. We think
the result clear, also, of those provisions which respect the discharge
of debts without payment. Collated in like manner, they stand thus:
"Congress shall have power to establish uniform laws on the subject of
bankruptcies throughout the United States, but no State shall pass any
law impairing the obligation of contracts." This collocation cannot be
objected to, if they refer to the same subject-matter; and that they do
refer to the same subject-matter we have the authority of this court for
saying, because this court solemnly determined, in _Sturges v.
Crowninshield_, that this prohibition on the States did apply to systems
of bankruptcy. It must be now taken, therefore, that State bankrupt laws
were in the mind of the Convention when the prohibition was adopted, and
therefore the grant to Congress on the subject of bankrupt laws, and the
prohibition to the States on the same subject, are properly to be taken
and read together; and being thus read together, is not the intention
clear to take away from the States the power of passing bankrupt laws,
since, while enacted by them, such laws would not be uniform, and to
confer the power exclusively on Congress, by whom uniform laws could be
established?

Suppose the order of arrangement in the Constitution had been otherwise
than it is, and that the prohibitions to the States had preceded the
grants of power to Congress, the two powers, when collated, would then
have read thus: "No State shall pass any law impairing the obligation of
contracts; but Congress may establish uniform laws on the subject of
bankruptcies." Could any man have doubted, in that case, that the
meaning was, that the States should not pass laws discharging debts
without payment, but that Congress might establish uniform bankrupt
acts? And yet this inversion of the order of the clauses does not alter
their sense. We contend, that Congress alone possesses the power of
establishing bankrupt laws; and although we are aware that, in _Sturges
v. Crowninshield_, the court decided that such an exclusive power could
not be inferred from the words of the grant in the seventh section, we
yet would respectfully request the bench to reconsider this point. We
think it could not have been intended that both the States and general
government should exercise this power; and therefore, that a grant to
one implies a prohibition on the other. But not to press a topic which
the court has already had under its consideration, we contend, that,
even without reading the clauses of the Constitution in the connection
which we have suggested, and which is believed to be the true one, the
prohibition in the tenth section, taken by itself, does forbid the
enactment of State bankrupt laws, as applied to future as well as
present debts. We argue this from the words of the prohibition, from the
association they are found in, and from the objects intended.

1. The words are general. The States can pass no law impairing
contracts; that is, any contract. In the nature of things a law may
impair a future contract, and therefore such contract is within the
protection of the Constitution. The words being general, it is for the
other side to show a limitation; and this, it is submitted, they have
wholly failed to do, unless they shall have established the doctrine
that the law itself is part of the contract. It may be added, that the
particular expression of the Constitution is worth regarding. The thing
prohibited is called a _law_, not an _act_. A law, in its general
acceptation, is a rule prescribed for future conduct, not a legislative
interference with existing rights. The framers of the Constitution would
hardly have given the appellation of _law_ to violent invasions of
individual right, or individual property, by acts of legislative power.
Although, doubtless, such acts fall within this prohibition, yet they
are prohibited also by general principles, and by the constitutions of
the States, and therefore further provision against such acts was not so
necessary as against other mischiefs.

2. The most conclusive argument, perhaps, arises from the connection in
which the clause stands. The words of the prohibition, so far as it
applies to civil rights, or rights of property, are, that "no State
shall coin money, emit bills of credit, make any thing but gold and
silver coin a tender in the payment of debts, or pass any law impairing
the obligation of contracts." The prohibition of attainders, and _ex
post facto_ laws, refers entirely to criminal proceedings, and therefore
should be considered as standing by itself; but the other parts of the
prohibition are connected by the subject-matter, and ought, therefore,
to be construed together. Taking the words thus together, according to
their natural connection, how is it possible to give a more limited
construction to the term "contracts," in the last branch of the
sentence, than to the word "debts," in that immediately preceding? Can a
State make any thing but gold and silver a tender in payment of future
debts? This nobody pretends. But what ground is there for a distinction?
No State shall make any thing but gold and silver a tender in the
payment of debts, nor pass any law impairing the obligation of
contracts. Now, by what reasoning is it made out that the debts here
spoken of are any debts, either existing or future, but that the
contracts spoken of are subsisting contracts only? Such a distinction
seems to us wholly arbitrary. We see no ground for it. Suppose the
article, where it uses the word _debts_, had used the word _contracts_.
The sense would have been the same then that it now is; but the identity
of terms would have made the nature of the distinction now contended for
somewhat more obvious. Thus altered, the clause would read, that no
State should make any thing but gold and silver a tender in discharge of
_contracts_, nor pass any law impairing the obligation of _contracts_;
yet the first of these expressions would have been held to apply to all
contracts, and the last to subsisting contracts only. This shows the
consequence of what is now contended for in a strong light. It is
certain that the substitution of the word _contracts_ for _debts_ would
not alter the sense; and an argument that could not be sustained, if
such substitution were made, cannot be sustained now. We maintain,
therefore, that, if tender laws may not be made for future debts,
neither can bankrupt laws be made for future contracts. All the
arguments used here may be applied with equal force to tender laws for
future debts. It may be said, for instance, that, when it speaks of
_debts_, the Constitution means existing debts, and not mere
possibilities of future debt; that the object was to preserve vested
rights; and that if a man, after a tender law had passed, had contracted
a debt, the manner in which that tender law authorized that debt to be
discharged became part of the contract, and that the whole debt, or
whole obligation, was thus qualified by the pre-existing law, and was no
more than a contract to deliver so much paper money, or whatever other
article might be made a tender, as the original bargain expressed.
Arguments of this sort will not be found wanting in favor of tender
laws, if the court yield to similar arguments in favor of bankrupt laws.

These several prohibitions of the Constitution stand in the same
paragraph; they have the same purpose, and were introduced for the same
object; they are expressed in words of similar import, in grammar, and
in sense; they are subject to the same construction, and we think no
reason has yet been given for imposing an important restriction on one
part of them, which does not equally show that the same restriction
might be imposed also on the other part.

We have already endeavored to maintain, that one great political object
intended by the Constitution would be defeated, if this construction
were allowed to prevail. As an object of political regulation, it was
not important to prevent the States from passing bankrupt laws
applicable to present debts, while the power was left to them in regard
to future debts; nor was it at all important, in a political point of
view, to prohibit tender laws as to future debts, while it was yet left
to the States to pass laws for the discharge of such debts, which, after
all, are little different in principle from tender laws. Look at the law
before the court in this view. It provides, that, if the debtor will
surrender, offer, or tender to trustees, for the benefit of his
creditors, all his estate and effects, he shall be discharged from all
his debts. If it had authorized a tender of any thing but money to any
one creditor, though it were of a value equal to the debt, and thereupon
provided for a discharge, it would have been clearly invalid. Yet it is
maintained to be good, merely because it is made for all creditors, and
seeks a discharge from all debts; although the thing tendered may not be
equivalent to a shilling in the pound of those debts. This shows, again,
very clearly, how the Constitution has failed of its purpose, if, having
in terms prohibited all tender laws, and taken so much pains to
establish a uniform medium of payment, it has yet left the States the
power of discharging debts, as they may see fit, without any payment at
all.

To recapitulate what has been said, we maintain, first, that the
Constitution, by its grants to Congress and its prohibitions on the
States, has sought to establish one uniform standard of value, or medium



Online LibraryDaniel WebsterThe Great Speeches and Orations of Daniel Webster With an Essay on Daniel Webster as a Master of English Style → online text (page 37 of 122)