2. The commonwealths are inhibited from depreciating the property of their creditors, or aiding individual debtors to depreciate the property of their creditors, by making anything a legal tender in the payment of debts except the gold and silver coin of the United States.1

3. The commonwealths are inhibited from restricting or regulating the transmission of property or messages by persons in the United States to persons in foreign states, or by persons in one commonwealth to persons in another.2

4. The commonwealths are inhibited from passing any law impairing the obligation of contracts. This provision. demands a more minute examination and explanation.

First. The power against which the inhibition is directed is not exactly the same as that comprehended under the word "State" (commonwealth), as employed in the foregoing clauses and as explained at the close of subdivision I, of this subject. The language of the constitution, in this clause, is that "no State shall . . pass any . . . law impairing," etc.; and the Court has decided that "the prohibition is aimed at the legislative power of the State" (commonwealth), "and not at the decisions of its courts or the acts of administrative or executive boards or officers."4 The impairing of the obligation must be made by a provision of the constitution of the commonwealth, or by some act passed by the legislature of the commonwealth,5 in order to warrant the intervention of the United States judiciary in behalf of the individual against the same.

1 Constitution, Art. I, sec. 10, § I.

2 Henderson et al. v. Mayor of N. Y. et al., 92 U. S. Reports, 259; Welton v. Missouri, 91 Ibid. 275; Wabash &c. Railway Co. v. Illinois, 118 Ibid. 557. $ Constitution, Art. I, sec. 10, § 1.

4 New Orleans Waterworks Co. v. Louisiana Sugar Refining Co., 125 U. S. Reports, 18.

5 New Orleans Gas Co. v. Louisiana Light Co., 115 U. S. Reports, 650.

6 It does not matter, however, whether the act or provision be original or adopted. Williams 7. Bruffy, 96 U. S. Reports, 176.

Second. The term "contract" has, in this connection, been made subject to exhaustive definition by the courts. It is held to mean a legally binding agreement in respect to property, either expressed or implied, executory or executed, between private parties, or between a commonwealth and a private party or private parties; or a grant from one party to another; or a grant, charter, or franchise from a commonwealth to a private party or private parties.1

Third. The term "obligation" has received an equally exact and exhaustive definition. It is held to mean the existing body of law, defining, regulating, securing and giving sanction to the contract.2 In fact, we may say that the chief element in the obligation is the existing remedy provided by law for its enforcement. Any distinction, therefore, between the obligation and the remedy, in this connection, is unsound.

Fourth. The most important term of the clause is the word "impair." Any alteration of the substance of the contract, or of the law governing the contract at the time it was entered into, would be, in popular definition, an impairment. There are, however, some grave difficulties in the way of accepting this as the legal definition of the term. Shall, for example, a commonwealth be regarded as impairing the obligation of a contract by simply changing its judicial procedure for the enforcement of the same, or by defending the public health or morals against any baleful influence or

1 Fletcher v. Peck, U. S. Reports, 6 Cranch, 87; Vanhorne v. Dorrance, Ibid. 2 Dallas, 304; Dartmouth College v. Woodward, Ibid. 4 Wheaton, 518; The Binghampton Bridge, Ibid. 3 Wallace, 51; Hall v. Wisconsin, 103 U. S. Reports, 5; New Orleans Water Works Co. v. Rivers, 115 Ibid. 674; St. Tammany Water Works v. New Orleans Water Works, 120 Ibid. 64; Vanhorne v. Dorrance, U. S. Reports, 2 Dallas, 304; Fletcher v. Peck, Ibid. 6 Cranch, 87; etc.

2 Bronson and Kinzie, U. S. Reports, 1 Howard, 311; McCracken v. Hayward, Ibia. 2 Howard, 608.

3 Walker v. Whitehead, U. S. Reports, 16 Wallace, 314; Tennessee v. Sneed, 96 U. S. Reports, 69; Edwards v. Kearzey, 96 Ibid. 595; Louisiana v. New Orleans, 102 Ibid. 203.

4 Nelson v. St. Martin's Parish, 111 U. S. Reports, 716.

effect, which might arise by a strict adherence to the same? In other words, is the power of the commonwealth to control its public policy in matters pertaining to judicial and police regulations limited by the body of contracts existing at any particular moment?

The first part of this question was answered in an early case, and to the position then taken the Court has substantially adhered ever since. The Court held that the commonwealth may change its judicial procedure without making any distinction between past and future contracts in the application of the new forms; but must not, under the cloak of the same, so change the nature and extent of existing remedies as materially to impair the rights and interests of any of the parties.1 In re-affirming this opinion, twenty years later, the Court said: "It is difficult, perhaps, to draw a line that would be applicable in all cases between legitimate alterations of the remedy" under the power to regulate the modes of procedure, "and provisions . . . which impair the right"; but the Court entirely concurred in the rule of the former case.2 The Court has pointed out the chief things which may not be done by a commonwealth, under its power to regulate its judicial procedure. It may not pass an insolvent law which shall apply to past contracts. It may not suspend the remedy as to past contracts. It may not so shorten the period of a statute of limitations as not to leave a reasonable time for the commencement of a suit. It may not substitute any other means of payment than that expressed or implied in the contract, or any other measure

1 Green v. Biddle, U. S. Reports, 8 Wheaton, I.

2 Bronson v. Kinzie, U. S. Reports, 1 Howard, 311.

3 Sturgis v. Crowningshield, U. S. Reports, 4 Wheaton, 122.

• Cooley, Constitutional Limitations, 357, fourth edition.

♪ Hawkins v. Barney, U. S. Reports, 5 Peters, 457; Sohn v. Waterson, Ibid. 17 Wallace, 596; Terry v. Anderson, 95 U. S. Reports, 628.

6 McCracken v. Hayward, U. S. Reports, 2 Howard, 608.

of values. It may not make such subsequent exceptions of property from sale in execution of judgment for satisfaction of debt upon contract as shall substantially weaken the general security upon which the contract rested when it was made.2 It may not withdraw from the lien of the judgment property which, when judgment was obtained, was bound thereby. It may not subsequently prohibit the sale of property, on execution for debt upon contract, for less than an appraised value or percentage of an appraised value. It may not subsequently authorize a redemption of property, after sale, by a mortgagor or his creditors, nor extend the period for redemption, if any, which was legal at the time the contract was made,5 etc.

The Court has given a very distinct, though more recent, answer to the second part of our question. It holds that not only is the police power of a commonwealth unlimited by the body of contracts existing at any given moment of time, but that a commonwealth cannot by any contract divest itself of the police power or limit the exercise of the same according to its own discretion.6 What the boundaries and content of the police power of a commonwealth are the Court has not clearly defined, as I have elsewhere explained. As I have shown, the Court has given it an excessively wide range.7 It has treated it as nearly identical with the whole internal government of the commonwealth, less the jural power. believe this to be extravagant, as I have elsewhere said. The Court has, however, excluded in detail from the police

1 Effinger v. Kenney, 115 U. S. Reports, 566.

2 Edwards v. Kearzey, 96 U. S. Reports, 595.

3 Gunn v. Barry, U. S. Reports, 15 Wallace, 610.

4 McCracken v. Hayward, U. S. Reports, 2 Howard, 608.

I

5 Bronson v. Kinzie, U. S. Reports, 1 Howard, 310; Howard v. Bugbee, Ibid. 24 Howard, 461.

6 · Boyd v. Alabama, 94 U. S. Reports, 645; Beer Co. v. Massachusetts, 97 Ibid. 25.

7

p. 212.

p. 213 ff.

power, when brought into conflict with existing contracts, some things which, according to its general definition, would appear to be included in it.

It has decided, for example, that a commonwealth cannot rescind an agreement, made by itself, not to exercise the power of taxation, or to exercise it only within certain limits.1 In other words, it is law in our system that a commonwealth legislature may bargain away the tax power of the commonwealth, unless prohibited therefrom by the commonwealth constitution, and that, if it does do so, the United States government will protect the rights of individuals established under the contract. In still other words, it is law in our system that a commonwealth may create a property right in an individual to an exemption from the operation of a governmental power. What is this but the negative side of the feudal system? It seems to me that a sound interpretation of the constitution of the United States would not accord to the commonwealths the power to divest themselves by contract of the power of taxation; and this for two reasons. The first is that, according to the true history and spirit of our system, the commonwealths are simply local governments, entrusted by the sovereign behind both the local and the general governments with governmental powers only, and that their discretion in the exercise of these powers cannot extend to the point of conferring upon any person or body of persons a right to an exemption from their exercise. The power to do this is not a governmental power merely. It is a power to change the system of government. It is a sovereign power. The commonwealth may of course exempt certain persons or property from taxation, but that is altogether another thing from an irrevocable exemption from its power of taxation. A temporary or a permanent suspension of the employment of a power is not at all the same thing as

1 The Jefferson Branch Bank v. Skelly, U. S. Reports, 1 Black, 436; Univer sity v. People, 99 U. S. Reports, 309.