434.

CHAPTER XXVII.

THE LIMITATIONS OF THE STATES.

ARTICLE I.

General Reasons.-Duly to limit the States was no less important than duly to limit the Union. In 1787 the States were strong, the Union weak. States had persistently neglected to discharge their duties under the Confederation. Hence it was almost as necessary positively to deny them powers the possession of which was inconsistent with a vigorous general government, as it was to add to the powers of that government.

Section 10, Clause 1.-No State shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts; pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts, or grant any title of nobility.

435. Reasons for these Prohibitions.—If a State could enter into treaties, alliances, and confederations, and grant letters of marque and reprisal, the Nation would thereby be drawn into difficulties, and the Union would soon be broken up. The exercise by the States of such powers would make them sovereign States. In fact, nearly all of the powers enumerated in this clause were denied to the States in the Articles of Confederation.

436. Bills of Credit.-The Supreme Court has defined bills of credit as paper issued by the sovereign power containing a pledge of its faith, and designed to circulate as money." Congress and the States issued such money in large quantities in the Revolution; the intolerable evils that these bills produced were fresh in the minds

of the men who framed the Constitution; and, to prevent the recurrence of similar evils, they voted down a proposition authorizing Congress to emit bills of credit, and prohibited the States from issuing them. According to Mr. Madison, the purpose was to give Congress the power to issue bills not having the legal-tender quality, but to prohibit the States absolutely.

For the States to coin money, emit bills of credit, and make anything but gold and silver a tender in payment of debts, would be repugnant to the sovereignty of the Union. Besides, their exercise of these powers would introduce endless confusion into the monetary system of the country, as is well illustrated by the history of the Confederation and of the State banks.

437. The Obligation of a Contract.-Chief Justice Marshall says a contract is an agreement in which a party undertakes to do, or not to do, a particular thing." Accordingly, it creates duties and rights between two or more parties. The obligation of a contract is its binding force or sanction upon all the parties concerned. However, this obligation does not arise unless the contract is one that the law sanctions. Thus, a man who agrees to pay money without an equivalent is not bound to pay the money, because such a contract is not binding. A law impairing the obligation of a contract is a law that weakens or destroys its binding force. Two or more men entering into a contract, do so with reference to the law as it is at the time, and no law should afterward interfere with what they have done.

438. The Dartmouth College Case.-Judge Cooley says no clause of the Constitution has been more prolific of litigation, and given rise to more animated, and, at times, angry controversy than this one in relation to contracts. The best known case that has arisen under it is the Dartmouth College Case.1 The New Hampshire Legislature materially changed by law the terms and conditions of the charter of Dartmouth College, granted many years before. This law the Supreme Court set aside in 1818, on the ground that the charter was a contract between the State and the college corporation, and that the law impaired it. This decision, which has since been the great bul14 Wheaton 518.

wark of vested rights in the United States, has been somewhat modi. fied by recent decisions.

439. No Prohibition on Congress.-Congress is not prohibited from impairing contracts, but it was assumed that such prohibition was not necessary. It has been held that the Legal Tender Acts had that effect. The argument is that contracts requiring the payment of money, existing in 1862-3 when these acts were passed, were made when gold and silver only were legal money; that these contracts called for coin, or its equivalent, to satisfy them; while the acts allowed them to be satisfied with depreciated paper money. Chief Justice Chase thus reasoned in 1868, but the Supreme Court did not take that view.

440. The Statute of Limitations.—The phrase "law impairing the obligation of contracts" is purely technical. It is the business of the courts to declare its meaning, and to adjust it to other parts of our jurisprudence. The Statute of Limitations, which exists in all English-speaking countries, declares that certain rights shall cease if they are not asserted or prosecuted within a certain time. For example, title to land, under these conditions, lapses in twenty-one years. The Supreme Court has decided that such statutes do not impair the obligation of contracts, unless they are made retroactive. A similar decision has been rendered concerning usury laws.

Section 10, Clause 2.-No State shall, without the consent of the Congress, lay any imposts or duties on imports or exports except what may be absolutely necessary for executing its inspection laws; and the net produce of all duties and imposts laid by any State on imports or exports, shall be for the use of the treasury of the United States; and all such laws shall be subject to the revision and control of the Congress.

441. Inspection Laws.-The great object of inspection laws is to bring certain commodities offered for sale, as meats, flour, oil, and the like, up to a given standard of quality. This is in the interest of both producer and consumer. The inspector examines the commodity, and marks the cask or package. Inspection laws cannot be kept up without expense, and the above clause permits the States, without asking the consent of Congress, to lay such duties on exports and imports, in the form of fees, as may be necessary to defray this expense. But if there is an excess of fees collected, over and above defraying such cost, then the

1 Sturgis v. Crowninshield, 4 Wheaton 122.

States must pay such excess into the National treasury. Moreover, Congress has full power to revise and control all inspection laws. To permit the States to levy taxes upon imports and exports for a wider purpose than to enforce these important laws, would prevent commerce from being National.

442. Limits of This Power.-How far the provision in regard to inspection laws extends, is a question that has been often before the Supreme Court. A law of Maryland requiring importers of goods in bales or packages to take out a license, was declared unconstitutional. Chief Justice Marshall1 laid down the rule that the right to import goods involves the right to sell them, and that so long as such goods remain in the original packages they are a part of the foreign commerce of the country, and not taxable by the State. But licenses imposed by States on retail liquor-dealers are constitutional, even when the liquors sold are imported, such dealers not being importers, or not selling the liquors in bulk. To raise money for the support of marine hospitals, Massachusetts and New York enacted laws levying taxes upon alien passengers arriving in their ports, but the Court set these laws aside as invasions of the right of Congress to regulate commerce.3

Section 10, Clause 3.-No State shall, without the consent of Congress, lay any duty of tonnage, keep troops or ships of war in time of peace, enter into any agreement or compact with another State, or with a foreign power, or engage in war, unless actually invaded, or in such imminent danger, as will not admit of delay.

443. Tonnage Duties.-A duty of tonnage is a tax laid on ships according to their burden or carrying capacity, and is computed by the ton. The States may tax ships belonging to citizens or other persons residing within their borders as other property is taxed, according to their value. The imposition of tonnage duties by States would be plainly inconsistent with the regulation of commerce by Congress; it would soon derange the whole commercial system, and might even throw the country back into the commercial condition that existed before 1789.

444. State Troops, Ships of War, Etc.-The concluding prohibitions of the clause are absolutely essential

1 Brown v. Maryland, 12 Wheaton 419.

2 The License Cases, 5 Howard 504.
3 The Passenger Cases, 7 Howard 283.

to the peace and security, and even the existence of the Nation. If the States could keep troops or ships of war in time of peace; enter into agreements or compacts with one another, or with foreign powers; or engage in war, unless invaded or in imminent danger, the Union would, in a short time, be wholly broken up. Unions would be formed within the Union; State treaties with foreign powers would be made; war would result, and disintegration would surely follow.

445. The States not Sovereign. It is idle to hold that any body politic is sovereign, in the proper sense of the word, which is denied such powers as entering into treaties and compacts, granting letters of marque and reprisal, coining money, emitting bills of credit, establishing legal tender, laying imposts and tonnage taxes, keeping troops and ships of war in times of peace, and engaging in war.

NOTE.-The difficulty of adjusting the powers of Congress in respect to commerce to the rights of the States, has been remarked in Chapter XXV.

Mr. Desty groups the following points that had been adjusted, with appropri ate citations: "Private interest must be made subservient to the general interest of the community, so the power of States over police regulations is supreme. A State law intended as a regulation of police, is not a regulation of commerce, but the police power cannot be extended over inter-State transportation of the subjects of commerce. A State may regulate the position of vessels in her harbors or rivers, or may regulate the speed of steamers or railroad trains. States may prohibit the introduction of slaves, or exclude paupers, criminals, diseased or infirm persons, and persons afflicted with contagious diseases, and may exact a bond to indemnify from expense of maintaining passengers after arrival ; but to exclude passengers who are in possession of their faculties, and neither paupers nor criminals, is a regulation of commerce which the State cannot exercise. So a State cannot legislate to prevent the importation of cattle during certain seasons of the year, this being more than an exercise of its police powers; but it may regulate the introduction of game during certain months; but forbidding the exportation of game, lawfully killed within the State, is unconstitutional. A State may forbid the sale of an illuminating liquid below a certain standard, or regulate the use of explosives and dangerous oils and substances, or may remove the same. The police power extends to the protection of the lives, limbs, health, comfort, morals, and quiet of all persons, and the protection of all property in the State. This clause does not interfere with the rights of States to enact inspection, quarantine, and health laws, as well as laws regulating internal commerce, or commerce local in its character, as requiring the master of a vessel to report the names, ages, and origin of passengers. Inspection laws are not burdens on trade, nor unjust discriminations, so long as they are reasonable; but a statute requiring vessels to furnish statements of the name and owner is void as to United States vessels. So, a statute relating to the survey of sea-going vessels is a regulation of commerce, and void."-The Constitution of the United States, p. 72; also, p. 298.