The Role of the Supreme Court in American Government and Politics, 1835–1864 [Reprint 2020 ed.] 9780520350366

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The Role of the Supreme Court

The Role of the Supreme Court in American Government and Politics 1835-1864 CHARLES GROVE HAINES AND

FOSTER H. SHERWOOD

UNIVERSITY BERKELEY

OF

AND

CALIFORNIA LOS

ANGELES

PRESS •

1957

UNIVERSITY OF C A L I F O R N I A

PRESS

B E R K E L E Y AND LOS A N G E L E S CALIFORNIA -OCAMBRIDGE UNIVERSITY

PRESS

LONDON, E N G L A N D

© 1 9 5 7 . BY T H E REGENTS OF T H E U N I V E R S I T Y OF

CALIFORNIA

L I B R A R Y OF CONGRESS CATALOG CARD NO.

PRINTED IN T H E UNITED STATES OF

57-10498

AMERICA

Preface T

_ L H E TRAGIC D E A T H of Professor Charles Grove Haines on December 27, 1948, found him engaged in the preparation of this volume. It has been my privilege to complete the work started by him. Under these circumstances it is important to make clear my conception of my role, and to indicate the state of affairs when it became necessary for me to assume full responsibility. Professor Haines had intended this volume to cover the period 1835-1885, but at the time of his death he had completed only chapters i, ii, and vii in a form requiring merely the final editing. The other nine chapters (exclusive of chapter xiii) were in the form of more or less completed case studies and interpretative essays arranged under intended chapter headings. Some of these had to be supplemented with further historical and biographical data, and the whole fitted together into the appropriate chapters. Chapter xiii, for which there was not even a skeleton, is entirely my work. Since this volume appears under the coauthorship of Professor Haines, I have tried to preserve in its pages his own point of view, whenever it was known to me, and to exclude my own. T o this end I decided to shorten the span of years covered in the volume, since I had very little in his own hand to rely on for the postCivil War and Reconstruction era. My qualifications for assuming such a responsibility were an association of some ten years' standing with Professor Haines, as both student and colleague, and my experience as his research assistant in the final stages of the first volume and the early stages of this one. I was greatly assisted in making the difficult transition by Mr. John C. Hogan, Professor Haines's last research assistant, who served me for two years after the latter's death. He was able to supplement the written evidence of plans and objectives with much valuable information drawn from oral conversation. Mr. Hogan had also prepared a number of memoranda and special studies which were of great help in the final preparation of many chapters. [V]

vi

Preface

Others to whom special indebtedness must be acknowledged include Miss Helen Newman, librarian of the Supreme Court Library, who was extremely helpful in supplying photostatic copies of many valuable documents in the Supreme Court archives; Mr. Thomas Dabogh for his frequent assistance as librarian of the Los Angeles County Law Library; the Massachusetts Historical Society for copies of documents important in the Rhode IslandMassachusetts boundary controversy; the Vermont Historical Society for much valuable material on the case of Holmes v. Jennison; and Dr. Algerdas N. Cheleden, who served Professor Haines as research assistant in preparing the early portions of this volume. T h e contributions of the foregoing are clearly upon the record. I can only ask the pardon of those others to whom Professor Haines would have made acknowledgment, but of whose contribution he left no record. It is particularly important to make it clear that for errors of fact or interpretation I alone am responsible. FOSTER H .

Los Angeles, California February, 1956

SHERWOOD

Contents CHAPTER

I.

PAGE

A New Era in Constitutional Interpretation . . .

1

T h e Principles and Policies of the Jacksonian Democrats

2

T h e Impact of Political T r e n d s upon Legal and Political T h i n k i n g from 1800 to 1840

8

T h e Supreme Court and Jacksonian Democracy

.

Roger Brooke T a n e y Becomes Chief Justice . . .

11 12

Justice Joseph P. Story and His Constitutional Doc-

II.

III.

IV.

trines

17

T h e Decision of Cases L e f t Over from the Marshall Period

27

Proprietors of the Charles River Bridge v. Proprietors of the Warren Bridge and Others . . . .

35

City of New York v. M i l n

43

Briscoe v. Bank of Kentucky

48

T h e Interpretation of the Status and Rights of Corporations

55

Bank of Augusta v. Earle

61

Louisville, Cincinnati, and Charleston Rail-road Co. v. Letson

76

Marshall v. Baltimore and Ohio Railroad Co.

83

T h e Supreme Court and the Issue of Slavery before 1856 United States v. T h e Amistad

92 98

Groves v. Slaughter

110

Rowan et al. v. Runnels

118

T h e Status of Fugitive Slaves and the Attitude of the Supreme Court [vii]

121

Contents

viii CHAPTER

V.

VI.

PAGE

T h e Interpretation of the Commerce Clause: T h e Evolution of the Court's Interpretation of the Commerce Clause under Chief Justice Taney's Leadership

140

T h e License Cases

142

T h e Passenger Cases

152

Cooley v. Board of Wardens of the Port of Philadelphia

172

Pennsylvania v. Wheeling and Belmont Bridge Co.

176

United States v. Marigold

186

Veazie et al. v. Moor

189

T h e Supreme Court and the Issue of State versus Federal Sovereignty

193

T h e Fiscal Bank Bill

193

T h e Bankruptcy Act

198

Peck v. Jenness

200

Holmes v. Jennison

206

United States v. Gratiot

217

Pollard v. Hagan

218

Martin v. Waddell's Lessee

218

Dobbins v. Commissioners of Erie County

219

T h e Habeas Corpus Bill

221

T h e Booth Cases and the Power of the Federal Government T o Enforce Its Laws without State InterferVII.

ence

224

T h e Development by the Supreme Court of the Technique and Procedure for the Settlement of Boundary Disputes between States

245

Procedure for Settling Controversies between States under the Articles of Confederation

246

T h e Federal Constitutional Convention and the Settlement of Interstate Disputes

249

T h e Controversy between New York and New Jersey

254

Contents CHAPTER

VIII.

IX.

X.

XI.

ix PAGE

Boundary Disputes between Rhode Island and Massachusetts

261

Other Cases Involving Boundary Disputes Presented to the Supreme Court before the Civil War .

277

T h e Theory of the Separation of Powers and the Supremacy of the Judiciary

287

Judicial Supervision of the Executive Department . T h e Federal Judicial Power in Its Relation to the States

292 310

T h e Sources of Judicial Power and the Extent of Legislative Control

321

T h e Interpretation of the Contract Clause and the Protection of Vested Rights under Chief Justice Taney's Leadership

337

State Bankruptcy Legislation and the Rights of Private Contract

339

State Contracts with Corporations

347

State Regulation of Banks

359

T h e Ohio Bank T a x Exemption Controversy

370

T h e Dred Scott Case

393

T h e Majority Opinions

402

T h e Dissenters

415

T h e Sequel and Evaluation of the Case .

423

Abraham Lincoln and the Supreme Court during the Civil War

436

Lincoln's Views on the Role of the Judiciary in American Government

437

Republican Strategy under the Leadership of Lincoln

444

Wartime Executive Domination of the Court and Curtailment of Judicial Power As Revealed in Ex parte Merryman

454

Contents

X CHAPTER

XII.

PAGE

Abraham Lincoln and Constitutional Interpretation during the Civil War

467

T h e Blockade of Southern Ports Judicial Capitulation to the Executive

467 .481

Taney's Resistance to Executive Domination of the XIII.

Federal Government

487

Contributions to and Changes in American Constitutional Law by the Supreme Court under Chief Justice Taney

500

T h e Relationship between the Federal and the State Governments

505

T h e Protection of Vested Property Rights and the Rights of Corporations

510

Judicial Supremacy and the Doctrine of the Separation of Powers

518

Table of Cases

523

Index

529

CHAPTER I

A New Era in Constitutional Interpretation

T

JLHE FIRST P A R T of this study 1 described the primary party divisions between the conservative and liberal forces that dominated the political and social life of the people during the Colonial, Revolutionary, and critical periods of American history. These parties were particularly evident in the drafting and adoption of the federal Constitution and in the political conflicts waged during the first decades after the establishment of the new government. T h e volume also traced the formulation and advocacy of the essential principles of each party by the great leaders of political thinking and practice— Hamilton and Jefferson. And, more important to the study of the Supreme Court's role in the evolution of the American system of government, it described the functions the federal courts were designed to perform in accordance with the political views and outlook of the respective groups. It was apparent that the courts were regarded as part of the political framework of the country and were intended to help implement the main planks of party platforms. T h e participation of the justices in carrying out the principles of Federalism during the administrations of Washington and Adams was notorious and was only partially checked by the nearly successful attempt to impeach Justice Chase. A n d the justices appointed by Democratic-Republican presidents were expected to interpret the fundamental law in accordance with Democratic-Republican principles. T h o u g h this party was almost continuously in control of the federal government from the inauguration of T h o m a s Jefferson in 1801 to the accession of Lincoln in 1861, the issues between conservatives and liberals continued to be contested throughout more than three decades of this period. From 1801 to 1835 the Supreme Court under Chief Justice Marshall's direction assumed the leadership in adopting the doctrines of federal supremacy and of a nationalistic interpretation of the Constitution. T h e Court also rendered decisions especially favorable to 1 See Charles Grove Haines, The Role of the Supreme Court in American ment and Politics, 1789-1835 (Berkeley and Los Angeles, 1944).

[1]

Govern-

2

The

R o l e of the Supreme C o u r t ,

1835-1864

the protection of property and vested rights against state acts allegedly interfering therewith. T h e s e decisions were a n n o u n c e d a n d became the law of the land at a time w h e n the Democratic-Republican party controlled the legislative and executive branches of the government and received repeated p o p u l a r mandates. 2 It can thus be readily understood w h y the Supreme C o u r t was the object of persistent attacks for more than a decade, attacks w h i c h almost resulted in the adoption of measures that w o u l d have drastically limited its powers a n d effectively checked the tendency toward federal judicial supremacy, the m a i n features of w h i c h h a d already been f o r m u l a t e d and applied. Despite the a p p o i n t m e n t of e n o u g h Democratic-Republicans to give their party a majority o n the Supreme Bench, C o u r t decisions continued to be dominantly nationalistic and to carry o u t the foremost H a m i l t o n i a n doctrines of Federalism. T h e accession of A n d r e w Jackson to the presidency in 1829 was looked u p o n as the d a w n of a new day, w h e n the people w o u l d control all departments of the government, a n d life-appointed judges w o u l d have less authority to define the rights or regulate the political conduct of the people. B u t it was not u n t i l the end of his second administration that Jackson was able to a p p o i n t justices w h o could change the current of federal j u d i c i a l decisions. A n d the change then inaugurated was far f r o m as significant a n d far-reaching as Democratic leaders anticipated. T h e Supreme C o u r t f r o m its establishment in 1789 had assumed an assertive and, not infrequently, a domineering attitude in the interpretation a n d application of the Constitution w i t h respect to the powers not only of the states b u t also of Congress and the executive. It was taken for granted, t h o u g h seldom frankly avowed, that the C o u r t was intended to perform political functions in the process of interpreting the federal Constitution a n d laws and was expected, w h e n occasion arose, to assert authority over b o t h the president and Congress. T h e C o u r t h a d for years assumed the role of defining and a p p l y i n g w h a t were deemed to be the f u n d a m e n t a l principles a n d doctrines of the A m e r i c a n system of government as expressed or implied in the written f u n d a m e n t a l law. T h e s e principles and doctrines, quite differently interpreted by the leaders of democratic and liberal groups, were soon to be a p p l i e d in different ways a n d w i t h certain marked differences in meaning. THE

PRINCIPLES AND POLICIES

OF

THE

JACKSONIAN

DEMOCRATS

T h e r e are, of course, very different interpretations of the effects u p o n A m e r i c a n government and politics of the election of A n d r e w * See ibid., especially chaps, x-xii.

N e w E r a in Constitutional Interpretation

3

Jackson to the presidency. It is generally conceded, however, that his election symbolized an upsurge in the demands of the common people for greater participation in public affairs and in their resentment against the special advantages of privilege and aristocracy. A new type of democratic political philosophy was in process of development, and it influenced all phases of American life, including legal and constitutional interpretation, and dominated in varying degree the period from 1820 to i860. Affecting and to a certain extent conditioning the development of this philosophy and the practices based upon it were three major characteristics of this period. 3 First came the rapid growth and expansion of the country both in territory and in economic and industrial development. Second, there was a notable increase in the spirit and attitude of sectionalism. T h e general interests and policies of the four sections—the Northeast, the Old South, the Northwest, the Southwest—became more marked and diverse. T h e localism and particularism characteristic of the states during the Revolutionary and Colonial periods were, in large part, gradually transferred to these regions or sections. Third, democratic and humanitarian movements were prevalent in all sections during these decades. "By the strange twistings of Fate," notes Avery Craven, "the three great strands of development in the life span of a generation of Americans were tangled in such a way as to push reason aside and to give emotion full sway." 4 T h e extent to which these strands of development affected the work of the Supreme Court will be seen in the following chapters. It has frequently been contended that the revolt of the masses under the leadership of Andrew Jackson had no clear objectives and was predicated upon no program that could be called a political philosophy. But this is true only to a limited extent, for the masses of the people influenced by any popular movement seldom act on clearly defined or well-understood objectives; they follow their leaders. "In the great democratic revolution which came about between 1825 and 1840, Jackson is at most points the recognized and trusted leader. He embodied with rare perfectness a political theory, at the same time that he spoke only what the mass of men everywhere thought." 5 Though Jackson had little concern for any particular political program, he was an intuitive leader of people, and in a given situation his policy developed from his own sense of justice and his shrewd under3

See Avery Craven, The Coming of the Civil War (New York, 194«), pp. 3 ff. Ibid., p. 15. William MacDonald, Jacksonian Democracy: 1829-183J (New York, 1906), p. 315. See also Arthur A. Ekirch, Jr., The Decline of American Liberalism (New York, 4 5

1955). chaP- 6-

4

The Role of the Supreme Court, 1835-1864

standing of human psychology. No better example of this can be cited than his dramatic victory over the Bank of the United States. Regardless of errors of judgment concerning financial matters, this triumph was considered a victory for the people through Jackson's leadership. Jackson realized the truth of Alexander Hamilton's observation that a national bank was not "a mere matter of private property, but a political machine of the greatest importance to the State." 6 T h e spirit of Jacksonian democracy as a social philosophy designed to achieve a better way of life for the common man was expressed in Jackson's message to Congress vetoing the bill to renew the charter for a national bank: . . . but when the laws undertake to add to these natural and just advantages artificial distinctions . . . to make the rich richer and the potent more powerful, the humble members of society, the farmers, mechanics, and laborers, who have neither the time nor the means of securing like favors to themselves, have a right to complain of the injustices of their Government.7

This was a political philosophy soon to be given concrete application in various phases of American life. It cannot be assumed, however, that without Jackson's guidance there would have been no substance to the urge for democracy which prevailed for several decades. For the laboring man deprived of the right to vote by property qualifications, the policy of Jacksonian democracy was clear in its opposition to and effective in its removal of the majority of such remaining barriers to the free and equal exercise of manhood franchise. T o the farmer, forced to pay dearly for transporting his produce or for the loan of money on his property, Jacksonian democracy typified the resentment of himself and many others at the dominant position and privileges of the "money power." 8 And to the rising entrepreneur, struggling to build a new business, the movement represented a tangible means of loosening the control of the existing aristocracy of power and of wealth. These and other similar objectives characterized the crusade of Jacksonian democracy against 6 See "Report on a National Bank," in Alexander Hamilton, Works (constitutional ed.; New York, n.d.), Ill, 424. 7 James D. Richardson, A Compilation of the Messages and Papers of the Presidents (Washington, 1897), II, 1 1 5 3 . "It seems clear now," says Arthur M. Schlesinger, Jr., "that more can be understood about Jacksonian Democracy if it is regarded as a problem not of sections but of classes." The Age of Jackson (Boston, 1946), p. 263. 8 Of this conflict Jackson wrote in 1837: "It is now plain that the war is to be carried on by the monied aristocracy of numbers; the prosperous to make the honest laborers hewers of wood and drawers of water through the credit and paper system." F. J . Turner, "Social Forces," 16 American Historical Review (1911), 227.

New Era in Constitutional Interpretation

5

the continuance of government by the few—a crusade which was the offspring of the philosophy of democracy fostered and developed by the aristocratic humanitarian, Thomas Jefferson. The Republican party of Jefferson had lost its hold on the people during the era of personal politics beginning with the administration of President Monroe, and many of its leaders, such as John Quincy Adams, had become part of the group who considered themselves ordained to rule. After Jackson defeated Adams for the presidency in 1828, new party alignments began to take definite shape as Adams and other Republicans joined with the Federalists in what was to become the loosely formed, conservative, and anti-Jackson group, soon to be known as the Whig party. The other emergent group, rallying around the leadership of Andrew Jackson with the new designation of Democrats, was composed of Jeffersonian Republicans, Federalists, States' rights men, and the formerly uninfluential and unrepresented groups now engaged in the struggle to secure political and economic power. At the time of Martin Van Buren's election to the presidency the chief tenets of the Democratic party platform were westward expansion and equal rights and privileges for all men. For the time being the party was carried along on the wave of nationalist sentiment which followed the failure of the South Carolina secession movement, but gradually it shifted again toward the protection of States' rights—a trend hastened and strengthened by the vigorous and persistent attacks of abolitionists on the system of slavery, prevalent chiefly in the South. The Whigs, aiming to carry on the Federalist and nationalistic doctrines of Alexander Hamilton, received the support of manufacturing interests seeking protection for their growing industries and of merchants and bankers strongly opposing Jackson's financial measures. Though tending somewhat to oversimplification, Frederick Jackson Turner saw in the party contests of the time a conflict between an agricultural society on the one hand, and a conservative industrial and manufacturing society of the New England type on the other. An aggressive and expanding democracy emphasizing human rights and individualism clashed with the established order which supported vested rights and the special privileges of the new and numerically increasing corporate organizations.9 Recurring again to the basic political division which prevailed during the Revolutionary War and during the formation and establishment of a central government, Thomas 'Frederick Jackson Turner, The United States: 1830-1850; Sections (New York, 1935), p. 30.

The Nation and Its

6

T h e Role of the Supreme Court,

1835-1864

Hart Benton contended that "there never has been but two parties . . . founded in the radical question, whether People or Property, shall govern? Democracy implies a government by the people. . . . Aristocracy implies a government of the rich . . . and in these words are contained the sum of party distinction." 10 Truly the election of Andrew Jackson and Martin Van Buren was "a revolution in political values." 11 T h e emergence of Jacksonian democracy therefore coincided with the breakup of the former national parties which had controlled the political life of the country for several decades. Instead of the adjustment and compromise characteristic of the formation and early development of the American government, the parties of the Jacksonian period engaged in contests for power. T h e doctrines and principles which formerly divided political parties were becoming submerged in a kind of political melee in which personal and sectional views became increasingly dominant. T h e constitutional principles and doctrines formulated during Federalist control of the Supreme Court proved to be of great significance in the bitter contests for public power waged by the newly formed parties. Among these doctrines was that of the separation of powers. Many of the framers of the Constitution expected informal and cooperative arrangements to develop between the departments, an expectation Washington shared in his effort to consult with the Senate on the ratification of a treaty, and, through Jefferson, to secure an interpretation of a treaty from the Supreme Court. Such efforts gave way to a somewhat rigid and impractical separation of powers, with a departmental independence that made unity of action well-nigh impossible. Furthermore, at a time when sectional feelings and interests were growing, the doctrine of federal supremacy as formulated by Chief Justice Marshall, including enlargement of the Supreme Court's function in implementing this supremacy, tended to make difficult and cumbersome the natural and normal reference to the people of vital constitutional issues and problems. Since the base of the sovereign control of political affairs, except for the few issues that might be dealt with through amendments to the written Constitution, had been changed, largely by judicial construction, the people were induced to refer matters involving basic political differences to the departments of the central government and, not infrequently, to the Supreme 10 Niles'

Weekly Register, Aug. 29, 1835; cf. Schlesinger, op cit., p. 125. Schlesinger, op. cit., pp. 267 ff. See also Louis Hartz, " T h e Whig Tradition in America and Europe," 46 American Political Science Review (1952), g8g. 11

New Era in Constitutional Interpretation

7

Court for final settlement. T h e way was thus prepared for the secret and underhanded wirepulling in which politicians revel. T h e solution of the issue of slavery illustrates some of these difficulties. A t best it was a difficult problem to resolve, but postponement of its resolution merely led to increasing bitterness and enmity on both sides. A n d postponement was due in part to the conviction that the solution would have to come from the Supreme Court. Yet the Dred Scott case 12 merely exaggerated the bitterness and brought it to the surface. By this time the system of undercover politics characteristic of the Federalist regime from 1789-1835—whereby a delicate pattern of checks and balances was devised with the federal judiciary asserting its right to act as arbiter between different agencies claiming sovereign powers—had fostered resentment among the representatives of vital political interests and had created a feeling that compromise was no longer possible. It is of little use to speculate on the course of American political development if the views of Washington and Jefferson on departmental cooperation and adjustment had prevailed, and if more direct and effective means had been evolved, as Jefferson proposed, for the reference of vital political and constitutional issues to the people. Nevertheless, it now seems clear that the constitutional principles and practices developed by the Supreme Court under Federalist control, and modified only to a slight degree and in certain particulars by the Court under Chief Justice T a n e y , made extremely difficult the settlement of political contests involving sectional rivalry in the period 1820-1860. Certain characteristics of the Jacksonian period of American government influenced the work of the Supreme Court. T h e president regarded himself as the representative of the whole people, and as such asserted the rights of the executive against the legislature and the judiciary. T h e veto power was put to new uses to strengthen and support the president in carrying out his policies, and through this the legislature met its first decisive check. It was in opposition to this tendency that the W h i g party was organized to check and control the abuse of executive powers. For the first time the executive became the object of suspicion and distrust. 13 Under Jackson's leadership the executive won a decisive victory over the congressional aristocracy that had been in control of affairs from 1 2 19

Howard 393 (1856). See C. Edward Merriam, A History of American Political Theories (New York, 1906), chap, v; Harold C. Syrett, Andrew Jackson (Indianapolis, 1953), passim. 13

8

T h e Role of the Supreme Court, 1835-1864

the time of the Revolution. N o t only did Jackson and his party leaders adopt the spoils system, but the popular suspicion against an encroaching aristocracy was reflected in a movement to change the property basis of suffrage. W h i t e manhood suffrage was gradually adopted throughout all the states. T h e popular distrust of aristocratic control in government was also reflected in the suspicion of and hostility toward the courts. In this period, too, the term of judicial office was shortened, and constitutional provisions for popular election of judges were adopted. T h e r e was also a distinct tendency toward popular ratification of changes in state constitutions. It was scarcely to be expected, when such principles and doctrines were in the ascendancy, that the Supreme Court could adhere to the practices dominant in the operation of the federal judiciary from 1789 to 1835. As anticipated, Chief Justice T a n e y and his associates adopted at the outset a less assertive attitude on political and economic matters than had the Marshall Court, and introduced judicial self-restraint into some of the Court's major decisions. T h e ensuing chapters will undertake not only to evaluate the nature and significance of these new trends in the interpretation of the fundamental law, but also to consider the extent to which the ideas of Chief Justice Marshall, as well as his judicial techniques, were accepted and made an enduring part of the American constitutional structure. THE

IMPACT OF POLITICAL TRENDS UPON LEGAL AND POLITICAL THINKING FROM 1800 TO 1840

T h e foremost issue between the dominant political groups in the period 1800-1840 was nationalism versus localism. It had arisen from the growing fear of one group and their efforts to counteract the centralization or consolidation of the all-important powers of the nation and the states into a single or unitary government, and from the support of the other group for the opposite trend toward nationalism, as manifested in the decisions of the Supreme Court, in a tariff policy which gave an impetus to industry and commerce, and in the policy of granting aid for internal improvements within the states. A l t h o u g h the early leadership in formulating the political philosophy of States' rights had come mainly from such Virginians as T h o m a s Jefferson, Spencer Roane, and John T a y l o r , the adherents of this point of view could not be categorically grouped into a sectional picture. T h e so-called "revolution" of 1800 was a vindication of the general impression of a majority of the people 1 4 that the Federalist party " T h e only solidly Federalist territory in this election was New England, New Jersey, and Delaware; the Jeffersonian Republicans led in New York, Pennsylvania,

N e w Era in Constitutional Interpretation

g

had moved too rapidly and too far along the path of centralization, and was an implied endorsement of the contention of the Kentucky and Virginia Resolutions that the people, through their state governments, had the right to decide when Congress had exceeded its powers under the Constitution. New England in the War of 1812 had acted upon very positive postulates of state sovereignty and opposition to nationalism as expressed in the Hartford Convention. During the period 1800-1840 many States in turn had actively and sometimes quite vigorously resisted the encroachments of federal authority upon what were conceived to be the reserved rights of the states. The War of 1812 marked a definite turning point, however, from localism to nationalism. It stimulated the rise of industrialism in the New England and middle Atlantic states, the increase of cotton culture in the South and its reorientation from foreign to Northern markets, the development of opportunities in the rapidly growing new West, and the emergence of an American type and spirit; all these were reflected in the nationalistic trend of politics which produced a national defense program, the Second Bank of the United States, the rise of protectionism beginning with the tariff of 1816, and aid from the central government for internal improvements. 15 Between 1812 and 1840 the offices of the general government, especially the executive office, were occupied by legatees of the Jeffersonian States' rights philosophy, but such were the exigencies of national expansion and political development that during the periods of both the conservatively motivated National Republicanism and the radical revolution under Jackson's leadership, nationalism became increasingly predominant in the capital. Andrew Jackson paid homage to the principle of States' rights, fought the national bank, vetoed bills for internal improvements, and, on occasion, disregarded the decisions of the Supreme Court; although the Democratic party was mainly the party of the South, Jackson, unlike Jefferson, was a product of the practical nationalism of the new West. He departed from the principles of his great predecessor when he censored the nullification doctrines of South Carolina in the great tariff controversy. T h e nationalistic trends of Jackson's administration, later sponsored by the leaders of the Whig party, were responsible for a strengthening and a reiteration of the States' rights position which became more an expression of the sentiment of the South than and the new Western states as well as in the South. John D. Hicks, The Union, A History of the United, States to 1865 (Boston, 1937), p. 255. 15 Ibid., pp. 322-345. See also Richard Hofstadter, The American Political tion (New York, 1948), pp. 54 ft.

Federal Tradi-

io

The Role of the Supreme Court, 1835-1864

of the views of the dominant groups and interests in the North and West. T h e controversies over the tariff and over nullification, plus the growing attacks of Northern abolitionists on the institution of slavery, led the people of the South to reassert with increasing enthusiasm the Jeffersonian principle of state sovereignty and popular self-determination. Throughout the period from 1800 to 1840, Marshall, Story, Webster, and many other influential conservatives exerted upon the Supreme Court in particular and upon the country in general constant pressure in favor of a broad interpretation of the Constitution in order to restrict popular control of public affairs. It is frequently asserted that Jackson, with a liberal outlook, intuitively realized the disinclination of the people to govern themselves, and that a majority rule for him consisted in his seeing for the people what they could not see for themselves. Whether or not this is true, it is obvious that those who sought to restrict popular control, from fear either of instability or of destruction of property rights and privileges, saw in the Supreme Court a device for the gradual limitation of the popular will. It was assumed that the people would not readily recognize nor vigorously resist the Court's unwarranted extensions of authority. T h e opinions of Chief Justice Marshall and Justice Story and the briefs of Daniel Webster and other counsel for the emerging entrepreneur class had emphasized again and again in the preceding decades that the Constitution of the United States was adopted "by the people" and was the settled and permanent law of the land, subject to change only by amendment. 16 In their opinion, it was the duty of the Supreme Court to interpret the Constitution in accordance with the designs of the conservative groups which gave it their enthusiastic support primarily for the protection of property rights. Chief Justice Marshall laid a solid foundation for this theory in Fletcher v. Peck17 and Dartmouth College v. Woodward18 by protecting the inviolability of a corporate franchise as a contract not to be impaired by a state legislature. Justice Joseph Story, until his death in 1845, tried to hold the Supreme Court in line with the traditional principles and policies of the Marshall regime. It was against this trend that Chief Justice Taney and his associates directed the main current of constitutional interpretation for more than a decade. 16 This contention completely denies the States' rights doctrine that the Constitution was adopted by sovereign states, and that its provisions were, in part or in whole, subject to voidance at will by the people of those states. 17 6 Cranch 87 (1810). 18 4 Wheaton 518 (1819). See also Marshall's views regarding the protection of property rights in Haines, op. cit., pp. 624-628.

New Era in Constitutional Interpretation THE

SUPREME C O U R T AND JACKSONJAN

DEMOCRACY

T h e threat to property privileges and advantages implicit in the spirit of the Jacksonian democratic movement was more annoying and menacing to the aristocratic-conservative interests which had heretofore governed the country than were the bad manners and boisterous conduct of the job-seekers and partisans of the new Democratic party machine. Like Jefferson before him, Jackson found a substantial bar to his progress toward the establishment of democratic ideals and principles in the decisions and potent influence of the Supreme Court. For more than thirty years Chief Justice Marshall had maintained the Court as a strong and effective bulwark against the inroads of the democratic spirit, and had used it as the agent of a weakening Federalist party to hamper the effectiveness of the democratic principles sponsored by Jefferson and his successor. 19 In McCulloch v. Maryland20 Marshall had upheld the constitutionality of the Bank of the United States, and yet Jackson, when confronted by the question of renewing the charter, opposed the bank as unconstitutional. In his famous veto message of July 10, 1832, Jackson specifically challenged the Marshall Court's opinion on the questions of constitutionality and of its final authority to determine such matters. In regard to the second question he said, as had Jefferson and Roane before him: If the opinion of the Supreme Court covered the whole ground of this act, it ought not to control the coordinate authorities of this government. T h e Congress, the Executive, and the Court must each for itself be guided by its own opinion of the Constitution. . . . T h e authority of the Supreme Court must not, therefore, be permitted to control the Congress or the Executive, w h e n acting in the legislative capacities, but to have only such influence as the force of their reasoning may deserve. 21

T h e extent to which the Supreme Court under Chief Justice T a n e y ' s leadership broke with the principles and doctrines of Chief Justice Marshall and his associates is frequently exaggerated. T h i s exaggeration is due, at least in part, to an overemphasis on the somewhat spectacular phases of the so-called "Jacksonian Revolution." 2 2 19 See Haines, op. cit., chap, xi; Albert J. Beveridge, The Life of John Marshall (Boston and New York, 1919), IV, 461-517; David Loth, Chief Justice John Marshall and the Growth of the Republic (New York, 1949), chaps, xiii ff. 20 4 W h e a t o n 316 (1819). 21 Richardson, op. cit., II, 1145. See Haines, op cit., pp. 605-607. 22 For example, Samuel E. Morison and Henry S. Commager call the Democrats "the party of poverty and numbers, and the W h i g s the party of property and talents. . . ." It was the Whigs, they feel, w h o carried on "the nationalist and paternal tradition of Hamilton." The Growth of the American Republic (3d ed.; New York, 1942), I, 558.

12

T h e Role of the Supreme Court,

1835-1864

Though Jackson brought into the management of national affairs some of his frontier ideás, and was willing to accord the people a larger share in the control of the government than had the leaders of the Democratic-Republicans, now called "Democrats," these aspects of Jackson's administration can easily be overrated. It is true that Andrew Jackson grew up in a frontier society, but it should not be forgotten that "he had become a man of property, a cotton planter, a leader who used his leadership to protect the interests of himself and conservative friends in days when all men on the frontier, in the midst of abundant opportunities, strove to build up their fortunes." 23 Many people believed that Andrew Jackson's "reign," as it is frequently called, meant rejection of the rule of the better classes, that is, the intelligent and well-to-do, but his administration, as Turner describes it, "conformed to the general drift of the tendencies of this New World democracy—a democracy which preferred persons to property, an active share by the people in government to the greater system and efficiency of a scientific administration by experts or by an established elite who dealt with the people from above." 24 It will be seen in the review of the Supreme Court under Chief Justice Taney's direction that a Court which made a marked contribution toward the protection of human rights and the preservation of local self-government veered gradually toward the constitutional interpretation so ably expounded by Marshall. This interpretation gave primary concern to the development of national supremacy and to the protection of vested rights of persons and of corporations.

ROGER

BROOKE

TANEY

BECOMES

CHIEF

JUSTICE

Roger Brooke Taney of Baltimore had been a Federalist before joining the Jacksonian Democrats. An able and highly respected lawyer, he had been selected by President Jackson as attorney general, and supported the president in his fight against the Bank of the United States. Jackson later appointed him secretary of the treasury. As head of this department, Taney removed the deposits of the federal government from the Bank of the United States and apportioned them among the "pet" state banks chosen by the Jackson administration. When Jackson, waiting until a week before the adjournment of Congress, presented Taney's name to the Senate for confirmation as secretary of the treasury, it was rejected. It seemed to Taney that the American people in the struggle with 23

Turner, The United States: 1830-1850,

p. 25.

24

Ibid., p. 28.

New Era in Constitutional Interpretation

13

the bank were facing for the first time an issue that had long confronted the older nations of the world. It remained to be determined, he thought, whether the power of the government would be exclusively in the hands of the great money-holders, or would continue where the Constitution had placed it, in the hands of a free and enlightened people. He saw in the opposing principles which had long agitated the countries of Europe an issue vastly more important than a conflict between political parties. It was, he had come to believe, a struggle for sovereignty between an economic class on the one hand, and the whole people on the other. "Now for the first time," said he, "the issue is made up, and the question boldly and distinctly presented to us, whether this noble country is to be governed by the power of money in the hands of the few, or by the free and unbought suffrages of a majority of the people. It is a new question. It has nothing to do with the ancient or modern divisions of parties." 25 T h e story of how and why Roger B. Taney came to distrust bankers and to have a fear of socalled "money-masters" has often been told and need not be repeated. 26 It was a point of view reflected in some of his most important opinions as a Supreme Court justice. Determined to reward Taney for his part in the bank war, the president nominated him for a place on the Supreme Court. When this appointment was also rejected, Jackson bided his time and soon after the death of Chief Justice Marshall sent to the Senate the nomination of Taney for the chief-justiceship. T h e action of anti-Jackson senators in twice rejecting Taney's name resulted only in his appointment to the highest judicial office in the country. Henry Clay, John C. Calhoun, and Daniel Webster led the opposition to the confirmation of Taney as chief justice; owing to the increase of Democratic strength in the Senate, their efforts were unsuccessful, and on March 15, 1836, Taney's appointment was confirmed. At the time of Taney's accession to the Supreme Court the president had appointed five of the seven justices; only Justices Story and Thompson remained from the old regime. 27 A year later the number of justices on the Court was 26 Charles W. Smith, Jr., Roger B. Taney: Jacksonian Jurist (Chapel Hill, 1936), p. 68. 26 See especially Carl B. Swisher, Roger B. Taney (New York, 1935), pp. 164 ff., 296-298. 27 T h e associates of Taney appointed by Jackson were Justices McLean, Baldwin, Barbour, and Wayne. Barbour's name was submitted at the same time as Taney's. " T h e Jacksonian period featured a bitter political irascibility. Eight nominations were denied confirmation. These constituted 44 per cent of the whole number of rejected or postponed nominations." Cortez A. M. Ewing, The Judges of the Supreme Court, 17S9-193J (Minneapolis, 1938), p. 31.

14

T h e Role of the Supreme Court, 1 8 3 5 - 1 8 6 4

increased to nine, and Jackson filled the two new vacancies just before the inauguration of Van Buren. 2 8 Taney's accession was the occasion for dire forebodings by antiJackson conservatives. Only a few Whigs conceded the chief justice's outstanding ability as a lawyer, but even they deplored his close association with the Jackson administration. Most of the conservatives affiliated with the Whig party agreed with Webster, who, in writing his wife that he expected Taney to be selected as chief justice, said: "Judge Story arrived last evening, in good health but bad spirits. He thinks the Supreme Court is gone, and I think so too; and almost everything is gone, or seems rapidly going." 2 9 T h e New York Globe expressed the opinion of most Whig leaders that Taney would be remembered as the man who had illegally removed the deposits, had aided in defeating the renewal of the bank's charter, and had helped to create panic and bankruptcy in the land. 3 0 Although admirers of Chief Justice Marshall expressed keen regret that a "political tool" should succeed to the office he left vacant, Marshall himself thought highly enough of Taney's ability to have attempted privately to aid his 28 See act of Mar. 3, 1837, 5 U.S. Stat, at L. i76. T h e day before President Jackson retired from office, Congress passed this act adding two new justices to the Court. As one of his last official actions, President Jackson on March 4, 1837, nominated William Smith of Alabama and J o h n Catron of Tennessee for the new positions. Both men were commissioned on March 8, 1837, but Smith declined to accept the appointment (probably owing to his advanced age) and was replaced by J o h n McKinley of Alabama, who was first commissioned in the recess of April 22, 1837, and then recommissioned on September 25, 1837, after receiving confirmation by the Senate. See the authorized table of Supreme Court appointments and commissions by J . C. Bancroft Davis in the special Appendix to the Reports of the Decisions of the Supreme Court of the United States from September 24, 1789 to the End of the October Term, 1888 (New York, 1889), also in 1 3 1 U.S. App., v - x . Concerning Supreme Court appointments during this period, Marquis James observes that "Jackson, in his eight years, named six, or more than any previous President except George Washington. He could have named seven, for the Court was passed on to his successor with one vacancy." Andrew Jackson: Portrait of a President (New York, •937). P- 708. w Claude H. Van Tyne, ed., The Letters of Daniel Webster (New York, 1902), p. 198, letter of J a n . 10, 1836. Webster later sought to excuse the appointment of T a n e y on the ground that a worse man might have been chosen for the position. Webster to Davis, Apr. 7, 1836, cited in Swisher, op. cit., p. 323. 80 Samuel Tyler, Memoir of Roger Brooke Taney (Baltimore, 1872), p. 240. Although little attempt was made to reply to the final outburst of criticism against the appointment, Swisher observes that " t h e Globe made an exception in the case of the prediction of a New York paper that T a n e y would always be known as the man who had illegally removed the deposits, violated the charter of the bank, and created panic and bankruptcy in the land, and was paid for doing so with the office of Chief Justice. T h e Globe replied that on the contrary the high office would be respected because of the virtue of its incumbent." Washington Globe, Apr. 2, 1836, quoted by Swisher, op. cit., p. 323.

N e w Era in Constitutional Interpretation

15

appointment as associate justice of the Supreme Court in 1833. 3 1 Not all observers agree with the frequently expressed charge that the Supreme Court was packed with the political devotees of Andrew Jackson and was therefore biased and incompetent. Marquis James voices the opinion, accepted by an increasing number of historians and legal scholars, that Taney's appointment marked the beginning of an era in the Court's history which was to remold its thought and carry into its decisions (excepting those on the Negro question) the liberal social spirit having as its goal the greater well-being of common men. 32 And it is now generally recognized that within a few years of Taney's accession to the Bench most of the resentment against the Court, prevalent during the closing decade of the Marshall regime, and most of the fears and disappointments expressed when Taney was elevated to the chief-justiceship had subsided or had disappeared altogether. T h e Supreme Court, now substantially in political harmony with the other branches of the federal government, acquired a position of confidence and respect greater than at any previous time. 33 Like his predecessor, Chief Justice Taney was elevated to the Supreme Bench from the arena of active political life. And following in the footsteps of Marshall he continued his political activities after he had become a member of the Court. After his confirmation Taney wrote a letter to the president in which he not only expressed his appreciation for the appointment, but also rejoiced that he had been elevated to the Bench despite the "vindictive persecution" of the Senate. 34 As expected, he continued his active political connections with the Jackson administration. A copy of the president's annual message to Congress was submitted to Taney with a request for his opinion. Taney also gave advice to local leaders on issues of state politics. Several months after receiving his commission in March, 1836, Taney returned to Jackson a draft of a veto message on a bill for the 81 Marshall wrote to Senator Benjamin Leigh of Virginia, " I f you have not made up your mind on the nomination of M r . T a n e y , I have received some information in his favor which I would wish to communicate." T y l e r , op. cit., p. 240. 82 James, op. cit., p. 708. See also Morison and Commager, op. cit., I, 5 5 1 if. 33 Charles W a r r e n observes that " t h e time had arrived when a change in the leadership of the Court was possibly desirable. . . . In view of the changes and reforms which were now taking place in the economic and social conditions, and the liberalization of political sentiment and processes which was marking out a new era in the country's development, he [Marshall] was clearly out of touch with the temper of the times and less fitted to deal with the new problems of the day than with the great constitutional questions of the past." The Supreme Court in United States History (Boston, 1922), II, 2 7 3 , 274. T h e attack upon T a n e y ' s appointment, W a r r e n observes, was "entirely political." Ibid., p. 285. 34

See Andrew

Jackson

Papers,

vol. 93, M a r . 17, 1836, Library of Congress.

16

The Role of the Supreme Court, 1835-1864

charter of banks in the District of Columbia. He advised the president not to veto the measure. When the Senate passed Benton's resolution expunging from its records the resolution condemning Jackson for removing the deposits from the Bank of the United States, Taney congratulated the president on his "proud and noble triumph, in which an indelible and enduring mark of reproach, which a faction endeavored to fix upon you, has, by the command of millions of people, been stamped upon their own foreheads." 3 5 Jackson's Farewell Address was largely composed by Taney, and after the president's retirement Taney kept in close touch with him by correspondence in which he freely discussed political matters. T h e chief justice was also called upon and felt it his duty to give advice to President Van Buren, particularly with regard to the currency and financial matters. Van Buren also consulted Taney as to federal appointments. Thus the judicial policy of active participation in political affairs, begun during the administrations of Presidents Washington and Adams and carried on by members of the Supreme Court under Marshall's direction, was continued with the approval of the leaders of the Democratic party. Before the Dred Scott case only a few important controversies over slavery came to the Supreme Court for decision, and in dealing with them the justices showed no distinct division along sectional lines. But the Dred Scott case and the slavery controversy, a major cause of the outbreak of armed conflict and of the bitter feelings during the war, have led to a warped and at times unfair interpretation of the Court's work under Taney. Special consideration must therefore be given to the slavery cases as well as to the continuing clashes of opinion, both legal and constitutional, over States' rights. T h e two main schools of constitutional interpretation of States' rights are best exemplified in the doctrines supported by Justice Story—regarded as the successor of Marshall in the defense of federal supremacy and nationalism—and the Democratic-Republican reliance on the ultimate authority of the states, ably defended by Abel P. Upshur in his review of Story's Commentaries on the Constitution. Chief Justice Taney was the controlling and most influential member of the Court for approximately twenty years, from 1837 to 1857. His influence and active participation in the work of the Court declined considerably after the decision in the Dred Scott case and the beginning of the Civil War. Though many of the decisions of the Court during 35 Bernard C. Steiner, Life of Roger Brooke Taney, Chief Justice of the United States Supreme Court (Baltimore, 1922), p. 241.

New Era in Constitutional Interpretation

17

these two decades show the distinctive impress of Taney's legal and juristic thinking, the period, unlike much of the long Marshall regime, was characterized by many and vigorous dissents and by frequent divisions of the justices. These dissents and divisions often make it difficult to discover the actual grounds for the judgment and decision. It is customary to emphasize that the Court, under Taney's leadership, turned away from nationalism and toward support and protection of the rights of the states. T h o u g h some decisions, such as those in the Charles River Bridge case 38 and in certain cases affecting interstate commerce, fit into this pattern, there were at the same time some nationalistic decisions of equal importance. It is well to remember that Chief Justice T a n e y had formerly been a member of the Federalist party and had been impressed, during his formative years, with its nationalistic doctrines. 37 These doctrines no doubt formed the background for some of Taney's major decisions on constitutional issues. Bank of Augusta v. Earle,3S Holmes v. Jennison,39 and Ableman v. Booth40 are among the cases in which nationalistic views were pronounced by the chief justice. A n d the gradual evolution of the Court's authority and procedure in the handling of boundary disputes between states, in which T a n e y finally triumphed, also tended to strengthen and enhance the position of the Court as a national agency. JUSTICE

JOSEPH

P.

STORY

AND

HIS

CONSTITUTIONAL

DOCTRINES

W h e n Roger B. T a n e y became chief justice, the oldest member of the Court in length of service was Joseph Story. Story's work on the Court from the time of his appointment by President Madison in 1811 to the death of Chief Justice Marshall has been dealt with in the first part of this study. N o doubt Madison and Jefferson had hoped that Story, as an avowed Republican, would help to check some of Chief Justice Marshall's already apparent tendencies toward nationalism. T h e account of Story's conversion to the view of Marshall and his gradual adoption of even stronger nationalistic principles than those of the chief justice need not be retold. 4 1 Story not only presented his ideas in judicial opinions but also revised and elaborated on them in the numerous legal treatises he prepared and published. Elected to the Nathan Dane Professorship of L a w at Harvard University in 1828, Justice Story was connected with Harvard until his death in 1845. 11 Peters 420 (1837). T h i s view is concurred in by Morison and Commager, op. cit., I, 559. 88 13 Peters 519 (1839). 89 14 Peters 540 (1840). 36

37

40

21 Howard 506 (1858). See also Genesee

41

See Haines, op. cit.,

p. 336.

Chief

v. Fitzhugh,

12 Howard 443 (1851).

i8

The

Role of the Supreme Court,

1835-1864

In 1832 his first legal treatise, Commentaries on Bailment, was published. A n d , in rapid succession for works of this character, there came from the press Commentaries on the Constitution in 1833, treatises on the Conflict of Laws in 1834, Equity Jurisprudence in 1836, Equity Pleading in 1838, Agency in 1839, Partnership in 1841, Bills of Exchange in 1843, a n d Promissory Notes in 1845. A l o n g with Chancellor Kent, Story may well be regarded as the creator of the American system of common law. 42 But for the present we are chiefly interested in his constitutional views and doctrines. Story's Commentaries on the Constitution from the time of its publication took a high place in the field of legal scholarship. Its favorable reception by the bench and bar led to the preparation of a condensed version. In a pamphlet published in 184043 A b e l P. Upshur carefully reviewed Story's treatise and refuted what he deemed to be its nationalistic theories. T h e refutation was so well done that in 1863 Northern Democrats reprinted Upshur's pamphlet as a means of setting forth the philosophy of the Confederacy. Upshur thought it surprising that a work so elaborate as Story's Commentaries and one so likely to have a marked influence on public opinion should have been so little discussed by those who did not concur in the author's views. A f t e r commenting on Story's great learning, Upshur observed that "he has also been an attentive observer of political events, and although by no means obtrusive in politics, has yet a political character, scarcely less distinguished than his character as a jurist." 4 4 T u r n i n g to the partisan features of this constitutional treatise, Upshur noted that many of the powers claimed for the federal government by Story's political party depended upon a denial of the separate existence, sovereignty, and independence uniformly claimed for the states by the opposing party. Story's prime objective was to impress upon his readers the idea that the inhabitants of the 42 Roscoe Pound, " T h e Place of Judge Story in the Making of American Law," 48 American Law Review (1914), 676. 13 A Brief Enquiry into the True Nature and Character of Our Federal Government Being a Review of Judge Story's Commentaries on the Constitution of the United States (Philadelphia, 1863). Reprinted from original Petersburg edition of 1840. Abel Parker Upshur (1791-1844) was a Virginia jurist who belonged to the prominent planter-philosopher group of that State. He served for several sessions as a member of the State legislature, as a member of the Virginia Constitutional Convention of 1829-1830, and as a justice of the Supreme Court of Virginia from 1826 to 1841. From September, 1841, until his death he was a member of the president's cabinet, serving first as secretary of the navy and later as secretary of state. Upshur was one of the Southern statesmen who believed that the South constituted the only bulwark of conservatism in the United States to offset the rising tide of democracy. " Upshur, op. cit., p. 7.

New Era in Constitutional Interpretation

ig

several colonies formed "one people," a hypothesis known as the "organic theory" of the formation of the federal union. 4 3 Upshur explained it in this way: T h e great effort of the author, throughout his entire work, is to establish the doctrine, that the Constitution of the United States is a government of "the people of the United States," as contradistinguished from the people of the several states; or, in other words, that it is a consolidated and not a federative system. His construction of every contested federal power depends mainly upon this distinction; and hence the necessity of establishing a one-ness among the people of the several colonies prior to the Revolution. 48

But the term "one people" in a real political sense implies a common sovereign to which the people owe allegiance. Tested by this criterion the people of the American colonies were in no conceivable sense one people. T h e y owed allegiance to the king but not to any common sovereign. T o support his hypothesis Story maintained that the first Congress of the Revolution was "a general or national government" and that "it was organized under the auspices and with the consent of the people, acting directly in their primary, sovereign capacity, and without the intervention of the functionaries to whom the ordinary powers of government were delegated in the colonies." H e inferred from its exercise of powers, which were ill-defined and in part usurped, that "from the moment of the declaration of independence, if not for most purposes at an antecedent period, the United Colonies must be considered as being a nation de facto."*7 T h u s the organic theory of the national government as the agency of a unitary state was expressly and emphatically approved. Upshur criticized as not in accord with the facts Story's defense of the organic view with respect to the purpose and effect of the Declaration of Independence. T h e representatives of the various states, he maintained, . . . were strictly agents or ministers of independent states, acting each under the authority and instructions of his own state, and having no power except such as those instructions conferred. T h e states themselves were not bound by the resolves of Congress, except so far as they respectively authorized their own delegates to bind them.

A n d , contrary to the organic method of interpretation, Upshur did not regard the Continental Congresses as constituting a "government" in the sense that Story attached to the word. T h e y lacked the quality of 4B For a brief treatment of the organic theory see Haines, op. cit., pp. 99 ff. Compare Alpheus T . Mason, " T h e Nature of Our Federal Union Reconsidered," 65 Political Science Quarterly (1950), 502. " U p s h u r , op. cit., p. 13. "Ibid., p. 18.

20

T h e Role of the Supreme Court, 1835-1864

p e r m a n e n c e i m p l i e d in the n o t i o n of a real g o v e r n m e n t . T h e y c o u l d n o t pass or devise o b l i g a t o r y laws, n o r c o u l d they devise o b l i g a t o r y sanctions by v i r t u e of any inherent powers. B y the D e c l a r a t i o n of Ind e p e n d e n c e the colonies b e c a m e i n d e p e n d e n t states, a n d f r o m then u n t i l the Articles of C o n f e d e r a t i o n were a d o p t e d the only governm e n t a l a u t h o r i t y was that derived f r o m the consent a n d acquiescence of the several states. U p s h u r therefore regarded as u n w a r r a n t e d the assertion that the C o n t i n e n t a l Congresses exercised de facto a n d de jure a sovereign a u t h o r i t y , not as delegated agents of the de facto governments of the colonies or states, b u t by v i r t u e of o r i g i n a l powers d e r i v e d f r o m the people. U p s h u r c o m m e n t e d o n the fact that b o t h Justice Story a n d C h i e f Justice M a r s h a l l in their j u d i c i a l o p i n i o n s assumed the u n i t y a n d consequent sovereignty of the p e o p l e of the U n i t e d States. T h i s assumption was based o n the insecure g r o u n d of the phrase in the P r e a m b l e , " W e , the p e o p l e of the U n i t e d States." U p s h u r readily demonstrated that, in a d o p t i n g this phrase, the makers of the C o n s t i t u t i o n h a d n o i n t e n t i o n to create a c o m p u l s i v e f e d e r a t i o n instead of a c o n f e d e r a t i o n of states. N o r , h e t h o u g h t , d i d Story's r e a s o n i n g s u p p o r t his position that the C o n s t i t u t i o n was n o t a c o m p a c t b u t a " g o v e r n m e n t " or federation. N e w H a m p s h i r e a n d Massachusetts expressly called the Constitution a c o m p a c t . N o t i n g the weakness of the a r g u m e n t o n this p o i n t , U p s h u r observed: Those who contend that our Constitution is a compact, very properly place their principles upon much higher ground. T h e y say that the Constitution is a compact, because it was made by sovereign states, and because that is the only mode in which sovereign states treat with one another. T h e conclusion follows irresistibly from the premises; and those who would deny the one, are bound to disprove the other. O u r adversaries begin to reason at the very point at which reasoning becomes no longer necessary. Instead of disproving our premises, they assume they are wrong, and then triumphantly deny our conclusion, also. If we establish that the Constitution was made by the states, and that they were, at the time, distinct, independent and perfect sovereignties, it follows that they could not treat with one another, even with a view to the formation of a new common government, except in their several and sovereign characters. T h e y must have maintained the same character when they entered upon that work, and throughout the whole progress of it. Whatever the government may be, therefore, in its essential character, whether a federative or a consolidative government, it is still a compact, or the result of a compact, because those who made it could not make it in any other way. In determining its essential character, therefore, we are bound to regard it as a compact, and to give it such a construction as is consistent with that idea. W e are not to presume that the parties to it designed to change the character in which they negotiated with one another. Every fair and legitimate inference is otherwise. Its sovereignty is the very last thing which a nation is willing to surrender; and noth-

New Era in Constitutional Interpretation

21

ing short of the clearest proof can warrant us in concluding that it has surrendered it. In all cases, therefore, where the language and spirit of the Constitution are doubtful, and even where their most natural construction would be in favor of consolidation, if there be any such case, we should still incline against it, and in favor of the rights of the states, unless no other construction can be admitted. 48

Upshur also attacked Story's claim of supremacy or finality for decisions of the Supreme Court, especially the contention that these decisions are absolutely binding on the states and their people. According to Upshur, the federal courts performed no more than the ordinary functions of the judiciary in any country. It was their proper province to interpret the law, but their decisions were binding only on the parties litigant. Upshur asserted, however, that there were . . . many cases involving questions of the powers of government, state and federal, which cannot assume a proper form for judicial investigation. Most questions of mere political power, are of this sort; and such are all questions between a state and the United States. As to these, the Constitution confers no jurisdiction on the federal courts, and, of course, it provides no common umpire to whose decision they can be referred. In such cases, therefore, the state must of necessity decide for itself. But there are also cases between citizen and citizen, arising under the laws of the United States, and between the United States and the citizen, arising in the same way. So far as the federal tribunals have cognizance of such cases, their decisions are final. If the constitutionality of the law under which the case arises should come into question, the court has authority to decide it, and there is no relief for the parties, in any other judicial proceeding. . . . These examples are sufficient to show that there is a large class of "constitutional controversies" which could not possibly be brought under the cognizance of any judicial tribunal, and still less under that of the federal courts. As to these cases, therefore, each state must of necessity, for the reasons already stated, be its own "final judge or interpreter." T h e y involve the mere question of political power, as between the state and federal governments; and the fact that they are clearly withheld from the jurisdiction of the supreme court, goes far to prove that the states in framing the Constitution did not design to submit to that court any question of the like kind, in whatever form or between whatever parties it might arise, except so far only as the parties themselves were concerned."

In opposition to the view Story advanced in his Commentaries on the Constitution, Upshur stated his own political philosophy. T h o u g h he presented no particularly new doctrines, it is apparent that he reformulated and revitalized the political ideas and principles of Jefferson, Roane, and T a y l o r . Sovereignty, he asserted, did not reside in any government. Government was merely the agent of the people who created it and was subject to their will. In the states, sovereign power remained with and could be exercised only by the people. T h e r e was no such thing as the sovereignty of the people of the United States, 48

Ibid., p. 71.

49

Ibid., pp. 86-89.

22

The

Role of the Supreme Court,

1835-1864

for no such people participated in the framing of the federal Constitution. T h a t document was prepared by the representatives of and approved by the people of the states. T h e federal government was merely the agency through which a portion of the sovereignty residing in the people of the states was exercised; it possessed no sovereignty, but only such powers as its constituents conferred upon it. According to this reasoning, the federal Constitution was a compact formed by each state agreeing with every other state as to its terms and conditions. T h e federal government was in no respect a party to this compact, but was the mere creature resulting from the agreement among the states to carry out those terms and conditions. 50 W i t h this background, Upshur stated what he regarded as the sound method of interpreting the Constitution: Strictly speaking, then, the Constitution allows no implication in favor of the federal government, in any case whatever. Every power which it can properly exert is a granted power. A l l these are enumerated in the Constitution, and nothing can be constitutionally done, beyond that enumeration, unless it be done as a means of executing some one of the enumerated powers. These means are granted, not implied; they are given as the necessary component parts of it, because the power would be imperfect, nugatory and useless, without them. It is true, that in regard to these incidental powers, some discretion must, of necessity, be left with the government. But there is, at the same time, a peculiar necessity that a strict construction should be applied to them; because that is the precise point at which the government is most apt to encroach. W i t h o u t some strict, definite and fixed rules upon the subject, it would be left under no restraint, except what is imposed by its own wisdom, integrity, and good faith. In proportion as a power is liable to be abused, should we increase and strengthen the checks upon it. 51

It is apparent, of course, that Upshur adopted the Jeffersonian rather than the Hamiltonian interpretation of the language of the Constitution, especially in defining the meaning of the "necessary and proper" clause in the grants of authority to Congress. Using this clause and the Hamiltonian doctrine of implied powers, Upshur found that the lovers of a strong consolidated government had labored strenuously and with too much success to remove every available restriction upon the powers of Congress. T h e tendency of their reasoning and practice, he thought, was to approve and adopt the English principle of legislative supremacy and thus to make a written constitution useless. Admitting that the Commentaries was an able work evidencing much learning and research, and that it would be useful to lawyers, Upshur believed that the political views expressed in the work were its most significant feature and that they would, on the whole, have a detrimental effect upon the public mind. T h e forced constructions of M

Ibid., pp. 92, 93.

51

Ibid., p. 98.

New Era in Constitutional Interpretation

23

different parts of the Constitution to bring the document into accord with the author's political theories and ideals were deemed particularly reprehensible. 52 Government, as conceived by Upshur, was founded not in the virtues but in the vices of mankind, and its object was to protect the weak, to punish the vicious, and to compel all to perform the duties men owed each other in a social state. And since, as he believed, the majority were likely to tyrannize over the minority, some redress should be provided to protect minority rights. T h e special devices suggested for this purpose were the doctrine of the separation of powers and the system of checks and balances provided in the federal government. Upshur held, however, that the duty of maintaining this delicate system of checks and balances did not belong primarily to the judiciary. 5 3 T o Justice Story, national supremacy as envisaged by the Constitution meant that all matters that could be regulated more advantageously by the federal government should, so far as possible by legislative and judicial constructions, be brought under its control. T o Upshur the states as sovereigns delegated only limited and explicit powers to the national government; hence the extension of these powers by the processes of interpretation or construction was a violation of the compact among the states when they adopted the Constitution. T o change the established relationship of express powers to the national government and reserved powers to the states was, unless approved through the amending procedure, equivalent to a revolutionary and unwarranted transfer of final authority or sovereignty from the states, where it legally resided, to the national government. T h e nationalistic doctrines expounded by Justice Story in his Commentaries on the Constitution were formulated very effectively by Alexander Hamilton, developed in the decisions of Chief Justice Marshall and Justice Story, and eloquently defended in the orations and public addresses of Daniel Webster. On the other hand, Upshur presented in concise and convincing form the doctrine formulated by Thomas Jefferson, Spencer Roane, and John Taylor. It is significant to note that the conflict of ideas and political philosophies so well portrayed in Upshur's review of Story's work gives a clue to many of the political and legal controversies that engaged public attention in the decades from 1840 to 1860.54 52 31

Ibid., pp. 122, 123.

"Ibid., pp. 126, 127.

Concerning the Story-Upshur debate, the historian William E. Dodd observed: " R o a n e had solemnly warned Virginia in . . . his replies to Marshall that slavery would be doomed under such a Constitution as his opponent expounded; he spoke of secession as a l a w f u l alternative to submission to the Supreme Court; and yet

24

The Role of the Supreme Court, 1835-1864

T h e issue which had brought threats of the use of force to preserve the rights of the states, and had led state authorities not infrequently to the verge of nullification and secession prior to South Carolina's attempt to nullify an act of Congress, continued to create dissension, endangered the harmonious relations between nation and states from 1840 to i860, and, on several occasions, brought the states close to active defiance of federal officers and agencies. Among these conflicts was a long and acrimonious dispute between Massachusetts and Rhode Island regarding their common boundary. Ohio for some time effectively resisted federal court decisions by declaring invalid the policy of taxing banks chartered by the State. Massachusetts successfully brought about a change in the federal interpretation of the Bankruptcy Act of 1841. Vermont contested federal control over the policy and practice of extradition. Rhode Island objected to federal interference over the acts and consequences arising from Dorr's Rebellion. And the most dangerous and critical conflicts, so far as the continuance of satisfactory and stable federal-state relations was concerned, arose from divergent views as to the authority to control and regulate property in slaves. Discussions of the question as to whether state attempts to protect property in slaves did not controvert the commerce clause of the Constitution began about 1840. In retaliation for the failure of Northern states to enforce fugitive slave laws, certain Southern states passed laws restricting the departure of slaves on vessels sailing to Northern ports. A Mississippi law placing restrictions on the importation of slaves into the State as merchandise brought one of the first important slavery cases to the Supreme Court. 55 Persistent conflicts between state and federal authorities over enforcement of fugitive slave laws brought to the Supreme Court other cases involving disputes between Pennsylvania and Maryland 5 8 and between Kentucky and Ohio. 57 Certain cases of minor significance relating to the rights of admitted that forcible resistance would be revolution. But Virginia was not then ready to cross the Rubicon, and Roane died six months after the inglorious close of his 'movement,' thinking that his work had all been in vain. T h e 'shoe pinched' in South Carolina within the space of a single twelvemonth. Robert Barnwell Rhett of that state 'began where Roane left off, and drawing constantly upon the Virginia magazine so recently filled he began and continued an agitation which forced Calhoun to recant his ardent nationalism in 1828, and which swept the South two decades later into Texas annexation, ceasing not until the Roane-Marshall debate was settled in the awful tribunal of civil war." See "Chief Justice Marshall and Virginia, 1 8 1 3 - 1 8 2 1 , " 12 American Historical Review (1907), 787. 65 Groves v. Slaughter, 15 Peters 449 (1841). 68 Prigg v. Pennsylvania, 16 Peters 539 (1842). 57 Jones v. Van Zandt, 5 Howard 215 (1847).

New Era in Constitutional Interpretation

25

slaveowners continued to come before the Supreme Court, but there is little in the record to sustain the frequently made charge that the Court was proslavery. Bitter resentment against the Court was aroused by two cases which came before it on the eve of the Civil War: one involved enforcement of the fugitive slave law in Wisconsin; 5 8 the other concerned the rights of a Negro to sue as a citizen in the federal courts. 59 T h e nearly half a century between the establishment of the federal government and the appointment of Chief Justice T a n e y witnessed great changes in the position, authority, and prestige of the Supreme Court. T h e Constitution provided for the Court as a coordinate department of the federal government; Congress through various acts supplemented the provisions of the Constitution, set up a system of inferior federal courts and defined their jurisdiction, and defined the appellate jurisdiction of the Supreme Court; and President Washington appointed able men as justices on the Supreme Court. But it was apparent from the beginning that there would be relatively little for the federal justices to do, and Congress therefore undertook to give them duties that were not strictly judicial. T h e strongly Federalist bias of the Supreme Court justices and inferior court judges made the courts unpopular and inclined the people to avoid taking cases to them. Since Chief Justice Marshall was determined to use the Supreme Court as a medium for asserting the doctrines of Hamiltonian Federalism at a time when a preponderant majority of the people supported the ideas and doctrines of the Democratic-Republican party, it was to be expected that the president, Congress, and state governments would be critical of its work. T h e conflicts aroused by attempts of the federal courts to assert their jurisdiction over the states tended to weaken public confidence in the courts. T h e r e was, indeed, good ground for the gloom that embittered the closing years of the chief-justiceship of John Marshall. But the dire prophecies of Marshall and Story as to the future of the Court were not to be realized. T h e r e were phases of the situation which were not readily apparent during the administration of President Jackson. T h o u g h during the early years of the Republican administrations the majority of the Supreme Court justices belonged to the opposition party, the Supreme Court as an institution was gradually gaining the respect and confidence of the people, irrespective of party affiliations. Most of those w h o disagreed with the extreme nationalistic views of Marshall 58 69

Ableman v. Booth, 21 H o w a r d 506 (1858). Dred Scott v. Sanford, 19 H o w a r d 393 (1856).

26

The Role of the Supreme Court, 1835-1864

and Story respected and honored them personally. And the espousal by Jackson of doctrines opposed to nullification and secession gave executive sanction and approval to some of the judicial decisions most strongly attacked. Appointment to the Supreme Court, formerly regarded as not worthy of the talent and ability of first-rate men, was now an honor to which men of national and state prominence aspired. T h e Constitution, once looked upon as a doubtful experiment, was now approved by all parties. Something approximating worship of the Constitution was developing, and marked indications of deference and respect were beginning to surround the Supreme Court in its great work of constitutional interpretation.

CHAPTER

II

The Decision of Cases Left Over from the Marshall Period O n J a n u a r y 12, 1836, the Supreme Court, composed of Justices Story, T h o m p s o n , McLean, Baldwin, and Wayne, met without the chief justice, whose death on July 6, 1835, was recorded by the reporter. 1 Resolutions of the bar paying tribute to the memory of Chief Justice Marshall were entered upon the records. O w i n g to the delay in the confirmation of Jackson's appointment of Roger B. T a n e y and Philip P. Barbour, Justice Story presided over the Court during the 1836 term. 2 N o cases of special importance came u p during the year, but the issue determined in Hagan v. Lucas3 deserves brief mention. T h i s case was the first instance in many years of a conflict between State and federal authorities in which the Court decided in favor of the State. T h e controversy related to the title to certain slaves. A sheriff had seized the slaves intending to hold them while title was being determined. In a proceeding before a district court of the United States a federal marshal levied on the slaves and attempted to secure possession of them. T h e issue before the Supreme Court was whether the slaves were liable to be taken in execution by the marshal under the circumstances of the case. It was held, Justice McLean speaking for the Court, that the first levy, whether made under See John Marshall's obituary, 10 Peters v (1836), and resolution, ibid., VII. Commenting on the fact that Marshall had given "a permanent and systematic character to the decisions of the Court, and settled many great constitutional questions favorably to the continuance of the Union," John Quincy Adams thought that it was "much to be feared that a successor will be appointed of a very different Character. T h e President of the United States now in office has already appointed three Judges of the Supreme Court; with the next appointment he will have constituted the Chief Justice and a majority of the Court. He has not yet made one good appointment. His Chief Justice will be no better than the rest." Charles Francis Adams, ed., Memoirs of John Quincy Adams (Philadelphia, 1874-1877), IX, 1

2

243. 244. July ">.

l 8 35-

On the other hand, Charles Warren thinks that Jackson's appointees—McLean, Baldwin, Wayne, and Barbour—were men of as high personal character and as eminent legal ability as were the associate justices appointed by Presidents Washington and Adams. The Supreme Court in United States History (Boston, 192a), II, 279. 3 1 0 Peters 400 (1836); Warren, op. cit., II, 293.

[27]

28

T h e Role of the Supreme Court,

1835-1864

federal or State authority, withdrew the property from the reach of the process of the other, for, said the justice, " A most injurious conflict of jurisdiction would be likely, often, to arise between the federal and state courts, if the final process of the one could be levied on property which had been taken by the process of the other." T h e charge to the jury in the district court to respect the pendency of the suit in the State court was declared to be substantially correct. T h e assumption that a simple and clear-cut line could be drawn led in this instance to the support of the State's power. 4 Soon after the opening of the 1837 term, when Chief Justice Taney and Justice Barbour took their seats, a case of considerable significance in the political and economic development of the United States was reargued before the Court. This case marked a distinct step in the legal implementation of one phase of the Jacksonian democratic movement; and it signalized a reversal of the previous policy of the Supreme Court, manifested in certain important decisions, to serve as the guardian of private rights and privileges. Because the case ranks among the great landmarks in American constitutional interpretation, a brief survey of some of the political and economic factors behind the controversy will aid in the evaluation of its significance. T h e controversy over the bridges on the Charles River connecting the growing city of Boston with Charlestown and with Essex and Middlesex counties became a struggle between Bostonians who were profiting from investments in several bridge companies and farmers living northwest of Boston who paid tolls for using the bridges. As early as 1640 the Legislature of Massachusetts authorized the establishment of a ferry between Boston and Charlestown and provided, through other legislative acts, that after 1672 the revenues and profits of the ferry were to belong exclusively to Harvard College. T h e ferry did not prove to be a great source of revenue to the college. 5 * For McLean's views on federal and state relations, cf. Francis P. Weisenburger, The Life of John McLean, A Politician on the United States Supreme Court (Columbus, 1937), p. 163. '"During the 18th Century, the ferry was not a great source of revenue, owing to the cost of maintenance. Between 1775 and 1781, it had been supported at an actual loss. In 1785, however, when the College had just expended 300 pounds . . . it was beginning to receive 200 pounds annual rent." Charles Warren, History of the Harvard Law School and of Early Legal Conditions in America (New York, 1908), I, 507. See also Carl B. Swisher, Roger B. Taney (New York, 1935), pp. 361 ff. A sketch of the history and government of Harvard University discloses that the "College in early days had been largely dependent for financial support on the State, and on the New England community as a whole. The Boston-Charlestown ferry, granted to the College by the General Court in 1640, was an important source of revenue until 1828. . . . Between 1786 and 1814 the College received no money from the State,

Cases Left Over from Marshall Period

29

T h e college maintained the ferry until March 9, 1785, when the Massachusetts Legislature passed an act incorporating a company— T h e Proprietors of the Charles River Bridge—to build a bridge to supplant the ferry. John Hancock and Thomas Russell, the proprietors who secured the charter from the legislature, agreed to pay the college £200 a year for forty years, at which time the bridge was to become the property of the Commonwealth. In 1792, soon after completion of the bridge, the legislature authorized the construction of a bridge between Boston and Cambridge—the West Boston Bridge— and although Harvard College objected, a committee of the legislature reported that the Charles River Bridge proprietors did not have exclusive rights to transportation across the river. Recognizing, however, that the interests of the college could be impaired by such a ruling, the legislature provided that the college be paid an annuity of £300 in lieu of diminished emoluments, and extended the rights and privileges of the Charles River Bridge Company from forty to seventy years. Although the legislature subsequently authorized the construction of two other bridges over the Charles River, 8 the West Boston Bridge (completed in 1793) and the Charles River Bridge proved to be profitable investments. T h e passage of time brought about great increases in the population and expanded the industrial development of Boston and its environs, and as a consequence travel over the bridges became very heavy. Under these conditions the investors in the Charles River Bridge enterprise naturally enjoyed high profits. 7 By 1825, when the original period of forty years expired, there was considerable resentment because the company, having already collected thirty times the cost of the bridge, was to receive tolls for another thirty years. This feeling was aggravated because speculation in the stocks had virtually removed them from the hands of the original investors. but in the ten years 1 8 1 4 - 2 3 , it shared with other Colleges of the Commonwealth the proceeds of a state bank tax, Harvard's share being $10,000 per annum. T h e payment of this sum in 1 8 2 3 is the last grant that the University has received from the Commonwealth, or from any other public body." Official Register of Harvard University, General Catalogue Issue (Cambridge, 1944), p. xiv. 0 Other bridge charters affecting the college and the city of Cambridge were granted to the Canal Bridge Company on February 27, 1807, and to the Prison Point D a m Corporation on J u n e 2 1 , 1806. See The Ferry, The Charles River Bridge, and the Charlestown Bridge; Historical Comment Prepared for the Boston Transit Commission by its Chairman (Nov. 27, 1899). ' S h a r e s whose original p a r value was $ 3 3 3 . 3 3 sold for $1,650.00 in 1805, and several shares sold for $2,080.00 in 1814. T h e original capitalization of the company had been $50,000, but in 1823 the company claimed that the value of its property was $280,000. W a r r e n , History of the Harvard Law School . . . , I, 5 1 3 .

30

T h e Role of the Supreme Court,

1835-1864

There were specific groups whose interests in particular were adversely affected by the bridge monopolies. Among these were the farmers in the counties surrounding Boston, who felt the burden of the tolls and who objected to paying them for the benefit of private owners. 8 This resentment crystallized into a free-bridge demonstration against the well-to-do speculators, which reached its climax in 1827. It was at this point that the bridge controversy became involved in the political contest in Massachusetts. 9 T h e free-bridge controversy, as part of Jacksonian democracy in Massachusetts, was based on political developments of the 1820's, when the Federalist and old Republican parties disappeared and the National Republican (later Whig) and Democratic organizations came into being. Massachusetts had for many years been a stronghold of the Federalist party, but at this time political alignments were shifting. T h e majority of the Federalists merged with the more conservative Republicans to cast the State electoral vote for John Quincy Adams in 1824, though certain elements from both original groups supported William Henry Crawford. Seacoast Federalists opposed Adams' protective tariff theories, and radical Republicans regarded Adams as too aristocratic and conservative. 10 T h e latter combination was the basis for the dissenting Republican group that later became the Democratic party of the State. David Henshaw and Marcus Morton were the leaders of this group and the founders of the Democratic party in Massachusetts. 11 Henshaw, who had worked up from a druggist's apprentice to a position of wealth and prominence in Boston civic affairs, was not accepted by the exclusive financial clique that ruled the city. He became interested in politics and wrote and published several pamphlets, and in 1821 became a political factor in the city when he and his friends established a newspaper, the Boston Statesman. Henshaw represented the growing group of Bostonians who were shut out from the traditionally privileged class. One of the questions that clearly divided the interests of the two contending groups and caused the break between the Hen8 A. B. Darling, "Jacksonian Democracy in Massachusetts, 1824-1848," 29 American Historical Review (1924), 277. "Warren says that as a rule the Democrats and country legislators favored a new bridge, and that Whigs, lawyers, merchants with Federalist affiliations, and city legislators supported the old bridge. History of the Harvard Law School . . . , I, 516. 10 H. U. Faulkner, "Political History of Massachusetts (1825-51)," in Albert Bushnell Hart, ed., Commonwealth History of Massachusetts (New York, 1930), IV, 77. 11 Morton, leader of the rural Republicans, was elected to a number of important offices and then accepted an appointment to the State Supreme Court. As a member of the court he supported the claims of the proprietors of the new bridge.

Cases L e f t Over from Marshall Period

31

shaw followers and the supporters of Adams was the free-bridge controversy. In 1826 Henshaw and his associates, who were interested in certain real-estate developments, petitioned the legislature to build a bridge from Boston to the flats of South Boston which, after building and maintenance costs were paid, would become a free bridge. A bill carrying out this proposal was passed by the Massachusetts Legislature in 1827, but was vetoed by Governor Levi Lincoln, a member of the Adams Republican group. This veto created a clear-cut issue between those who supported the vested rights of property and those who thought first of community welfare. 1 2 A year later, when a group known as the Warren Bridge Company sought permission to build another bridge from Boston to Charlestown, those interested in the Charles River Bridge, including Harvard College, opposed the project. But on March 12, 1828, the legislature granted a charter to the proprietors of the Warren Bridge Company, and the "bridge, by the terms of the charter, was to be surrendered to the state, as soon as the expenses of the proprietors in building and supporting it should be reimbursed; but this period was not in any event to exceed six years from the time the company commenced receiving toll." 1 3 Those sponsoring the free bridge were called "radicals" by the coalition of manufacturers, bankers, anti-Warren Bridge Republicans, and conservative interests, who had effected a formal union led by Adams, Webster, and Levi Lincoln. About this time Henshaw formed an alliance with the Jacksonian Democrats, now the chief opponents of the conservatives, and unsuccessfully stood for election to Congress in July, 1827, a s representative of the "Republican friends of Jackson." A new party was formed which became the Jackson party machine in Boston with David Henshaw as its leader. By the year 1828, the fight for the Warren Bridge was won and the company was incorporated; Henshaw, favored over an older faction, was selected as collector of the port of Boston. T h e patronage of this office made him Democratic boss of Massachusetts, and he operated as a skillful political organizer. T h e Democrats were unable to gain control of the State, but the national Democratic administration ensured political rewards to the leaders of this group. 14 While Jackson and Taney were carrying on the fight against the national bank and its financial monopoly, Henshaw, supported by a 12 Faulkner, op. cit., p. 79; Arthur B. Darling, Political Changes in Massachusetts, 1824-1828: A Study in Liberal Movements in Politics (New Haven, 1925), p. 49. T h e lower house of the State legislature passed the bill over Governor Lincoln's veto, but the upper house did not. Warren, History of the Harvard Law School . . . , I, 517. 13 1 1 Peters 427 (1837). " Faulkner, op. cit., p. 85.

32

T h e Role of the Supreme Court, 1 8 3 5 - 1 8 6 4

group of Boston financiers, struck against the same interests locally. They proposed to establish another bank in its place, a Democratic bank where "middling classes" might have an opportunity to invest. 15 When Taney, three days after his appointment as secretary of the treasury, named the first "pet banks" that were to receive government deposits, Henshaw's Commonwealth Bank was one of the two Boston banks selected. 16 T h e conservative interests of the State, led by Adams and Webster, were highly critical of Henshaw and the other supporters of Jackson, describing them as "low political intriguers." Adams wrote that the salaries of those receiving federal patronage were used to pay the debts of Henshaw's paper, the Statesman, and that he and the Jackson men were behind schemes to discredit Adams in the hope of holding on to their jobs. 1 7 By 1837-38, though still hoping for a cabinet post, 18 Henshaw saw his influence decline, and he finally lost control of the Democratic organization in Massachusetts. Thus the history of the controversy over the building of a free bridge, which brought the Charles River Bridge case to the courts, was the result of economic and political differences between the rising demands of the common people as championed by the Jacksonian Democrats, and the tenets of those who supported the old order—former Federalists, conservatives, and groups enjoying special privileges. T h e case was first brought to the State courts by the proprietors of the Charles River Bridge Company, who presented a bill in equity requesting an injunction to restrain the Warren Bridge Company from building a bridge. 19 Daniel Webster and Lemuel Shaw, attorneys for the plaintiffs, contended that the new bridge was a nuisance and that it destroyed legally vested rights. Chief Justice Parker ruled for the court that an injunction could not be granted and refused to consider the question of the constitutionality of the State act as an interference with vested rights. Failing in the first attempt to stop the building and operation of the new bridge, the attorneys filed a supplemental bill in equity charging specifically that the charter was unconstitu115

Darling, "Jacksonian Democracy in Massachusetts, 1 8 2 4 - 1 8 4 8 , " p. 280. Swisher, op. cit., p. 238. For an account of the failure of Henshaw's bank, cf. A Memoir of Benjamin Robbins Curtis, LL.D., with Some of His Professional and Miscellaneous Writings (Boston, 1879), I, 79-80. 17 Memoirs of John Quincy Adams, V I I I , 3 0 1 , 393. 18 H e was later to realize that ambition. H e was named secretary of the navy by T y l e r on J u l y 23, 1843, but served only six months because the Senate refused to confirm his appointment " i n deference to Webster and other W h i g s . " A r t h u r B. Darling, " D a v i d Henshaw," Dictionary of American Biography (New York, 1932), V I I I , 563. 18 Charles River Bridge v. Warren Bridge, 6 Pick. 376 (Mass., 1828). 10

Cases Left Over from Marshall Period

33

tional because it appropriated property without just compensation. T h e y admitted that the legislature, by authorizing the building of the canal bridge some thirty-six years before, had denied the alleged exclusiveness of the Charles River Bridge contract, but Webster nonetheless argued that the later act was void as impairing the obligation of contract. Arguing along the lines of the Dartmouth College case,20 Webster claimed that any legislative act appropriating private property for public use was invalid except when just compensation was made. In the second case, the judges were evenly divided on the validity of the State act and delivered their opinions seriatim. Judges Morton and W i l d e agreed that the Charles River Bridge had no exclusive grant and that the plaintiffs' rights could not be extended by implication, particularly when public interests would be detrimentally affected. Chief Justice Parker and Justice Putnam maintained that a legislative grant of vested property rights to an individual or a corporation could not be repealed or annulled unless provision was made for just compensation. Citing Fletcher v. Peck, Parker declared that this principle "clearly and necessarily results from the original constitution of free governments, and the maxims of universal justice, that it never could be called in question but in times of misrule and anarchy." A decree was rendered against the plaintiffs in order that the case might be appealed to the Supreme Court of the United States where the rights of the parties could ultimately be determined. In the Dartmouth College case Chief Justice Marshall had expressed his solicitude for property rights secured by corporate charters. W i t h the help of Daniel Webster, the chief justice in this opinion had placed the authority of the federal judiciary solidly behind the grantees of corporate franchises as the possessors of property rights guaranteed by the contract clause of the federal Constitution against any subsequent interference by state legislatures. Other cases had tended to uphold and strengthen the rights granted to corporate bodies by state legislative acts. 21 It was against this constitutional background that the case of Charles River Bridge v. Warren Bridge was presented to the Supreme Court. T h e controversy over the rights of the proprietors of the Charles River Bridge arose during a period when people were just beginning to realize the value of the corporate organization as an appropriate means of building bridges, roads, and canals. 22 21 See chap, iii, below. 4 Wheaton 518 (1819). Before 1800, no less than twenty-five private corporations were granted charters for the purpose of operating toll bridges in Massachusetts. Simeon E. Baldwin, "Pri20 22

34

The Role of the Supreme Court, 1835-1864

In addition to political views and affiliations that might have some bearing upon his reaction to the free-bridge controversy, soon to be reargued before the Supreme Court, Chief Justice Taney had a dislike for special legislative grants to private corporations. As a member of the State senate in Maryland, he had seen at first hand the activities of those who lobbied for charters and for special privileges. He distrusted the grasping of the merchant class and was convinced of the inefficiency and untrustworthiness of corporations, which in his day seemed to many people to be a menace. This feeling led him to favor the building of the Chesapeake and Ohio Canal by the government rather than by private capital. In 1833 Taney was requested to give an opinion on an issue closely akin to the alleged impairment of the Charles River Bridge contract in the Camden and Amboy Railroad case. 23 T h e charter granted this company by the New Jersey Legislature stipulated that without the company's consent no one should be permitted to build or to operate competing transportation services. Taney observed with regard to this provision that "the legislative body is not the depository of the entire sovereignty of the State and capable of binding the people by its acts in all cases whatsoever. It is the agent of the sovereign power, appointed for the purpose of executing certain trusts, and when it steps beyond the limit of its authority, its acts are void and do not bind the people by whom it was chosen." After referring to the express restraints on legislative power provided in the State constitution, he added, "There are obviously other limitations necessarily to be implied from the nature of other institutions and the principles of free representative government." Recognizing that such grants had been made by both federal and state governments, Taney expressed the belief that a legislative body, holding a limited authority under a written constitution, could not by contract or otherwise limit the legislative power of its successors. " T h e existence of such a power in a representative body," he maintained, . . . has no foundation in reason, or in public convenience, and is inconsistent with the principles upon which all our political institutions are founded. For if a legislative body may thus restrict the power of its successors, a single improvident act of legislation, may entail lasting and incurable ills on the people of a state. It may compel them to forego the advantage which their local situation affords, and prevate Corporations, 1 7 0 1 - 1 9 0 1 , " in Two Centuries' Growth of American Law, ijoi1901 (New York, 1901), p. 296. 23 Bonaparte v. Camden and Amboy Railroad Co., 1 Baldwin's Circuit Court Reports 220.

Cases Left Over from Marshall Period

35

vent them from using the means necessary to promote the prosperity and the happiness of the community. 24

In his opinion the monopoly provisions of the State act granting a charter to the company were void and hence a company could legally be chartered to build a competing railroad. Similar views had been expressed in an opinion T a n e y gave as attorney general concerning the Norfolk Drawbridge Company, when he declared that "an act of incorporation of this description can never be considered as having been granted for the exclusive benefit of the corporators. Certain privileges are given to them, in order to obtain a public convenience; and the interest of the public must, I presume, always be regarded as the main object of the charter for a toll-bridge or a turnpike road." 2 5 T h e Charles River Bridge case was first argued before the United States Supreme Court in March, 1831, by Daniel Webster and Warren Dutton for the old bridge, and Walter Jones and W i l l i a m W i r t for the new bridge. T h e justices were divided upon the question. Marshall, Story, and T h o m p s o n supposedly favored reversing the decree of the Massachusetts Supreme Court supporting the proprietors of the new bridge. Justice McLean was uncertain as to whether the Court had jurisdiction. Justice Baldwin was prepared to file a dissenting opinion, and Justices Johnson and Duvall were absent. T h e case was not decided at the 1832 term, and it was again ordered continued because one justice was absent and the other justices could not agree on its proper disposition. Six years elapsed between the first argument of the case 26 and the date it was decided, and in that period three new justices, Wayne, T a n e y , and Barbour, were appointed. PROPRIETORS

OF

THE

CHARLES

WARREN

RIVER

BRIDGE

BRIDGE

AND

V.

PROPRIETORS

OF

THE

OTHERS27

W i t h new members on the Court and some marked changes in circumstances since the case had first been argued, it was necessary to have a reargument, which took place in January, 1837. Warren Dutton, appearing for the proprietors of the Charles River Bridge, 24 Niles' Weekly Register, X L V (Nov. 2, 1833), 151-152. See this doctrine in Justice Chase's opinion in Calder v. Bull, 3 Dallas 386 (1798), and in Justice Story's in Wilkinson v. Leland, 2 Peters 653 (1829). 26 2 Opinions of the Attorney General 512-514 (1832). 28 Reargument was ordered in February, 1833, but owing to the illness of Justice Baldwin the case was again deferred. During the 1834 term Justice Duvall was ill, and Justice Johnson died. See Donald G. Morgan, " M r . Justice William Johnson and the Constitution," 57 Harvard Law Review (1944), 328. T h e death of Chief Justice Marshall came the next year. 2 7 1 1 Peters 438 (1837).

36

The Role of the Supreme Court, 1835-1864

maintained that the company's charter awarded the grantees an exclusive right which could not be taken away without their consent. T h e proposition strongly urged by two of the judges in the State court—that under the general rule of law nothing passed by implication in governmental grants—was denied. Quoting dicta from Calder v. Bull and Fletcher v. Peck,2S Dutton argued that the legislative power was restrained and limited by the principles of natural justice. And paraphrasing some of the language of Justice Chase and Chief Justice Marshall, he further urged that " T h e exercise of this ultimate conservative power, constitutes one of the highest functions of this Court. T h e wise men who framed this constitution, clearly discerned in the multiform operations of human passions and interests, the necessity for some calm, controlling power; and in conferring it upon this Court, they exhibited the most profound wisdom, guided by human experience." He characterized the Massachusetts law authorizing the new bridge as an act of confiscation which could legally be exercised only under the power of eminent domain. Speaking in a prophetic vein, Dutton said: I have as much respect for, and confidence in legislative bodies as reason and experience will warrant: but I am taught by both, that they are not the safest guardians of private rights. I look to the law; to the administration of the law: and above all to the supremacy of the law, as it resides in this Court, for the protection of the rights of person and property, against all encroachment, by the inadvertent legislation of the states. So long as this Court shall continue to exercise this most salutary and highest of all functions, the whole legislation of the country will be kept within its constitutional sphere of action. 2 9

Mr. Greenleaf, arguing for the proprietors of the Warren Bridge, 3 0 noted that the new bridge was now the property of the Commonwealth since, under the agreement with the company, the cost of construction had been met by tolls and the bridge was henceforth to be 28 6 Cranch 87 (1810). See also Chief Justice Marshall's dissenting opinion in Ogden v. Saunders, 12 Wheaton 332 ff. (1827). 2 9 11 Peters 461. 30 William Wirt, who died in February, 1834, was replaced as counsel for the Warren Bridge proprietors by Simon Greenleaf. Admitted to practice before the Supreme Court of the United States in 1837, Greenleaf first entered the case at the time of the second argument. 11 Peters v. See excerpt from Greenleaf's letter to Charles Sumner, January 24, 1837, describing the second argument of the case, in Charles Warren, A History of the American Bar (Boston, 1911), pp. 423-424. T h e original of this letter is in the Sumner Papers in the Harvard College Library. Greenleaf, who was a professor of law in the Harvard Law School and thus an associate of Justice Story, had some doubts about the propriety of his serving as counsel in the case and secured the prior approval of the Harvard Corporation before agreeing to do so. Warren, History of the Harvard Law School . . . , I, 526.

Cases Left Over from Marshall Period

37

31

free. He defended the general principle of public law that any private property could be taken for public use or destroyed, or private rights could be sacrificed, whenever the public good required it. He declared emphatically that the issue was the doctrine of privilege against public right. And Greenleaf urged for the first time the existence of a police power, which Chief Justice Taney accepted in announcing the Court's opinion and which was to become so important in future constitutional interpretation. Greenleaf explained that A m o n g the powers of government, which are essential to the constitution and well-being of civil society, are; not only the power of taxation, and of providing for the common defense, but that of providing safe and convenient ways for the public necessity and convenience; and the right of taking property for public use. . . . T h e y are intrusted to the legislature, to be exercised, not bartered away; and it is indispensable that each legislature should assemble, with the same measure of sovereign power, that was held by its predecessors. 32

Fletcher v. Peck, New Jersey v. Wilson,33 and Dartmouth College v. Woodward were distinguished as cases in which the parties affected held rights under private rather than public acts. T h e only complaint that could be made in this case, Greenleaf thought, was that property had been taken for public use without just compensation. But this question, he contended, was for the Massachusetts courts to decide and they had decided in favor of the new bridge. Daniel Webster, in the concluding argument for the plaintiffs, maintained that the issue at stake concerned private rights and the fair construction of a contract. " T h e promotion of public accommodations," he said, "is no reason for taking away a privilege held under a legal grant. . . . T h e income derived from these rights shall not be diminished." As he saw it, the approval of the violation of a contract, as proposed in this case, "would be fatal to the confidence of the governed in those who govern; and would destroy the security of all property, and all rights derived under it." In Webster's opinion, the law providing for the building of a new bridge had been passed with the understanding that if rights protected under the charter granted to the Charles River Bridge Company were impaired the Supreme Court of the United States could set the law aside. T o Webster, the prime duty of the Supreme Court was to preserve and protect private property rights. 34 81 T h e new bridge had paid for itself within two years after its construction. Payment of tolls was continued while the case was pending in the State courts and the annuity to Harvard College was paid until March, 1836. 82 33 1 1 Peters 466. 7 Cranch 164 ( 1 8 1 2 ) . " T h e reporter for the Supreme Court expressed disappointment that Webster

38

T h e Role of the Supreme Court,

1835-1864

Chief Justice Taney, delivering the opinion of the Court, referred to the gravity of the issues involved and declared that it was the duty of the Court to guard the rights of property, insofar as it had the power, and at the same time to abstain from encroaching on the reserved rights of the states. T h e chief justice thought it appropriate to announce that the Supreme Court of Massachusetts was equally divided on the question as to whether the act incorporating the Warren Bridge impaired the obligation of contract with the proprietors of the Charles River Bridge, and had issued a decree dismissing the bill for an injunction so that the complainants could take the case to the federal Supreme Court. 3 5 It was clear, according to Taney, that the plaintiffs could not support themselves on the principle that the law divested vested rights, for "it is well settled by the decisions of this Court that a state law may be retrospective in character, and may divest vested rights, and yet not violate the Constitution of the United States unless it also impairs the obligation of contract." 36 Then Taney turned to the claim that the original ferry rights secured by Harvard College contained an exclusive grant and that the same privileges were transferred to the Charles River Bridge Company. T h e evidence, he thought, did not support this claim but showed rather that the ferry rights and privileges were to be extinguished. T h e grant to the college "cannot, by any sound rule of construction, be used to extend the privileges of the bridge company beyond what the words of the charter naturally and legally import. . . . T h e charter to the bridge is a written instrument which must speak for itself, and be interpreted by its own terms." As to the charter itself, Taney held that the well-settled rule of construction that any ambiguity in the terms of the contract must operate against the grantees and in favor of the public applied here; the grantees could claim nothing that was not clearly given them by the act. Among the American cases sustainhad sent him neither his argument nor his notes, with the result that he could not present a satisfactory summary of the argument. 1 1 Peters 5 1 4 n. 36 On February 1 1 , 1837, Justice Story, writing to Professor Greenleaf, said: " T o morrow (Monday) the opinion of the Court will be delivered in the Bridge case. You have triumphed. A l l the Judges, except M c L e a n , are of opinion that the Supreme Court has jurisdiction. J u d g e M c L e a n is for the defendants on this sole ground. T h e Chief Justice, and Judges Baldwin, B a r b o u r and W a y n e , are for affirming the judgment of the State Court, dismissing the Bill. T h o m p s o n and Story are against the judgment, totis viribus, and M c L e a n J . on the merits, totis viribus, on the same side. T h e Chief Justice will deliver his separate opinion on all the grounds. Story, J . will deliver the joint opinion of himself and T h o m p s o n , J . . . . " W i l l i a m W . Story, Life and Letters of Joseph Story (Boston, 1 8 5 1 ) , I I , 2 6 7 - 2 6 8 . 36

1 1 Peters 539. See Watson v. Mercer,

8 Peters 88 (1834).

Cases L e f t O v e r from Marshall Period ing this rule Providence Bank v. Billings37 followed. T a n e y observed:

39

was particularly cited and

T h e taxing power is not the only one which should be preserved for the object and end of all government is to promote the happiness and prosperity of the community by which it is established; and it can never be assumed that the government intended to diminish its power of accomplishing the end for which it was created. And in a country like ours, free, active, enterprising, continually advancing in numbers and wealth, new channels of communication are daily found necessary, both for travel and trade, and are essential to the comfort, convenience, and prosperity of the people. A State ought never to be presumed to surrender this power, because, like the taxing power, the whole community have an interest in preserving it undiminished. 88

T h i s was one of the first formulations of the doctrine of state police power whereby states, acting for the public interest and welfare, could detrimentally affect private rights and interests which would otherwise normally be protected against such interference. T a n e y found that no exclusive privilege was given to the proprietors of the Charles River Bridge. T h e charter contained no right to erect another bridge nor to prevent other persons from erecting one. A l l the franchise rights of property granted in the charter remained unimpaired. Only the income that the proprietors were accustomed to receive was lessened by a competing free bridge. 3 9 T h e inquiry as to whether there was any impairment of contract in the building of the Warren Bridge was answered by applying the rule of construction stated above, that the granting of charters to private corporations took from the public no rights beyond those conveyed by the natural and proper construction of the words of the charter. Defining the effect of the police power in the interpretation of such contracts, T a n e y said that the community's "right of advancing the public prosperity, by providing safe, convenient, and cheap ways for the transportation of produce and the purposes of travel, shall not be construed to have been surrendered or diminished by the State, unless it shall appear by plain words that it was intended to be done." T a n e y interpreted in a somewhat novel way the act renewing the charter of the Charles River Bridge Company and at the same time authorizing 38 n Peters 547-548. 4 Peters 514 (1830). " Many years later, under the due process clause, impairment of income from property was treated as the taking of the property from which it was derived and therefore unconstitutional without just compensation. Chicago, Milwaukee and St. Paul Railway Co. v. Minnesota, 134 U.S. 418 (1890). See John R . Commons, Legal Foundations of Capitalism (New York, 1939), chap. 2, and Howard Jay Graham, "Procedure to Substance—Extra-judicial Rise of D u e Process," 40 California Law Review (1953), 483. 37

40

The

Role of the Supreme Court,

1835-1864

construction of the competing West Boston Bridge. He reversed the Marshall method of constitutional construction which implied limitations on legislative powers: It would, indeed, be a strong exertion of judicial power, acting upon its own views of what justice required, and the parties ought to have done, to raise, by a sort of judicial coercion, an implied contract, and infer from it the nature of the very instrument in which the legislature appear to have taken pains to use words which disavow and repudiate any intention, on the part of the State, to make such a contract."

Realizing that far-reaching consequences were at stake in the decision and that the appropriate and effective use of millions of dollars of property involved the danger that "we shall be thrown back to the improvements of the last century, and obliged to stand still, until the claims of the old turnpike corporations shall be satisfied," the chief justice held that the decision of the Massachusetts Supreme Court must be affirmed. T a n e y admitted, however, that when the legislature was expressly granted authority to make a contract, any contracts entered into under this authority were binding on future legislatures. T h u s the main principle approved by Chief Justice Marshall in Fletcher v. Peck and Dartmouth College v. Woodward, that state legislative acts in the nature of contracts could not be changed so as to divest rights vested under the contracts, was accepted by T a n e y as a correct interpretation of the Constitution. In a lengthy opinion, Justice M c L e a n indicated that he thought the merits of the case were on the complainant's side, but felt the bill should be dismissed for want of jurisdiction. M c L e a n believed "that acts of incorporation, when granted on a valuable consideration, assume the nature of contracts; and vested rights under them are no more subject to the legislative power than any other vested rights." 4 1 Governments could not justly appropriate private property for public purposes without making compensation, and the taking of a franchise would be as much an appropriation of private property for public use as would the taking of land for a turnpike or a railroad. T h o u g h McLean's opinion made it clear that he felt vested rights had been disturbed and that compensation should have been made, he thought that the State alone could supply the remedy. Justice Story, w h o had written what he thought would be the majority opinion of the Supreme Court, now presented a long and elaborately documented dissent stating the views in which Chief Justice 10

11 Peters 551.

41

Ibid., p. 568.

Cases Left Over from Marshall Period

41

Marshall and Justice Thompson had probably concurred after the first argument of the case. T h e second argument, he said, tended only to confirm the opinion originally found. Justice McLean's contention that the Supreme Court lacked jurisdiction was readily disposed of in accordance with the reasoning of Cohens v. Virginia42 and Osborn v. Bank of United States.43 After reviewing the terms of the act of incorporation of the Charles River Bridge Company, Story maintained that it was the Court's duty to ascertain the legislative intent and then to permit its full and liberal operation. He emphatically denied the claim that the legislative grant was in derogation of the rights and interests of the people, or that a liberal interpretation of its provisions was likely to interpose an effectual barrier against general improvements in the country. Story also took a firm stand against the contention that the plaintiffs could claim nothing by implication. T o him the legislative grant carried with it an exclusive franchise to a reasonable length of the river, so that ordinary travel to the bridge might not be diverted by a new bridge to the injury or ruin of the bridge owners. Falling back on general principles as Chief Justice Marshall had done in Fletcher v. Peck, Story declared that "it would be against the first principles of justice to presume that the legislature reserved the right to destroy its own grant." Insisting that such grants must be interpreted in accordance with the common law, and reviewing some leading English cases, Justice Story concluded: T o sura up, then, the whole argument on this head; I maintain, that, upon the principles of common reason and legal interpretation, the present grant carries with it a necessary implication that the legislature shall do no act to destroy or essentially to impair the franchise; that . . . there is an implied agreement that the State will not grant another bridge between Boston and Charlestown, so near as to draw away the custom from the old one; and . . . that there is an implied agreement of the State to grant the undisturbed use of the bridge and its tolls, so far as respects any acts of its own, or of any persons acting under its authority. In other words, the State, impliedly, contracts not to resume its grant, or to do any act to the prejudice or destruction of its grant."

As is well known the decision of the Court was strongly approved by the Democrats and vigorously assailed by the Whigs, as well as by the followers of Federalist principles. 45 T o them the decision indicated that the Marshall doctrines of constitutional construction would gradually be abandoned, as Justice Story suggested: " T h e old constitutional 43 44 " 6 Wheaton 264 (i8ai). 9 Wheaton 738 (1824). " Peters 646. 16 For extracts supporting and criticizing the decision see Swisher, op. cit., pp. 376 ff., and Warren, The Supreme Court in United States History, II, 302 ff.

42

The Role of the Supreme Court, 1835-1864

doctrines are fading fast away, and a change has come over the public mind, from which I augur little good." 4 6 Webster, who for the first time was not sustained in his arguments of constitutional issues before the Supreme Court, thought the decision could not stand; and Chancellor Kent, who abhorred the view that the legislature was not bound by everything implied in a contract in order to give it effect and value, said he had lost his confidence in and hopes for constitutional guardianship and protection by the Supreme Court. These pessimistic predictions were, of course, unwarranted. T h e decision started a method of interpreting charter provisions which was designed to protect public rather than private interests. In the opinion of two outstanding historians, there appeared in the Court's reasoning for the first time the modern doctrine of the social responsibilities of private property. 47 It is difficult to evaluate the significance of the Supreme Court decision in the Charles River Bridge case. T h e principle of the Dartmouth College case, as Carson observed many years ago, was limited in its application before it had been carried to such an extreme as to cripple seriously the powers of state legislatures. 48 Entrepreneurs could develop improved methods of transportation, including railways, without purchasing stagecoach or turnpike companies, or paying for their losses in revenue. But the influence of the decision might easily be overestimated, for this was an era of rapid economic growth and industrial expansion, and state legislatures competed with one another in the grants of liberal privileges and advantages to corporations. Though the Charles River Bridge decision made it more difficult to establish and maintain an exclusive privilege or monopoly, 49 the "Story, Life and Letters, II, 272. T h e justice wrote to Mrs. Story that "a case of grosser injustice, or more oppressive legislation, never existed." Ibid., p. 268. The decision in this case, said Kent, "abandons, or overthrows, a great principle of constitutional morality, and I think goes to destroy the security and value of legislative franchises. It injures the moral sense of the community and destroys the sanctity of contracts." Ibid., p. 270. T o Kent, it was settled and fundamental doctrine that the government had no right to take private property for public purposes without giving just compensation. James Kent, Commentaries on the American Law (2d ed.; New York, 1832), II, 339 n. "Samuel E. Morison and Henry S. Commager, The Growth of the American Republic (3d ed.; New York, 1942), I, 560. Cf. Benjamin F. Wright, The Contract Clause of the Constitution (Cambridge, 1938), passim. 48 Hampton L. Carson, The Supreme Court of the United States: Its History (2d ed.; Philadelphia, 1902), I, 309. 49 Charles Warren believes that if "the Charles River Bridge Proprietors had not been regarded as the 'grasping monopoly' of Boston, and as the 'octopus corporation' of its times, it is highly probable that the court would have reached a different conclusion," History of the Harvard Law School . . . , I, 508.

Cases Left Over from Marshall Period

43

Dartmouth College case made it difficult to protect public interests and to give private enterprise advantages which under existing conditions could not be seriously curtailed. Moreover, by the time the states had found methods of circumventing the Dartmouth College decision, the due process of law clause in state and federal constitutions was being so interpreted as to strengthen the protection of private property which that decision fostered. CITY

OF N E W

YORK v.

MILN50

Chief Justice T a n e y and his associates found it necessary to dispose of two other cases in which no decisions had been rendered because of the marked differences of opinion among Chief Justice Marshall and his brethren. 5 1 City of New York v. Miln arose out of an action of debt by the city of New York to recover of the defendant, as consignee of the ship Emily, certain penalties imposed by a State law. T h e act provided that the master of any ship arriving at the port of New York from any country or state outside of New York must, within a specified time after arrival, report to the mayor in writing the place of birth, previous residence, age, and occupation of every person brought in as a passenger. Noncompliance incurred a fine of $75 for each person unreported. Miln refused to make the report as required by statute and was sued for penalties. Attorneys for M i l n contended that the State act was a regulation of commerce, and that the power to regulate commerce was vested exclusively in Congress. 52 T h e y further argued that the New York law regulated navigation and not merely the admission of passengers into the city, citing Gibbons v. Ogden53 as authority for the conclusion that commerce included navigation and commercial intercourse, and hence necessarily embraced the transportation of passengers. By this reasoning it was observed that many of the State laws cited by attorney Blount for the city of New York were necessarily invalid. In answering this contention attorneys for the city made certain distinctions destined to create much doubt and difficulty in subsequent interpretations of the commerce clause. T h e powers of Congress, they 11 Peters 102 (1837). T h e complicated R h o d e Island-Massachusetts boundary controversy was before the Court during this term, but no action was taken to settle it because the senior counsel for R h o d e Island was prevented by illness f r o m attending the Court. T h e case was ordered continued until the following term. 11 Peters 226. See chap. vii. t2 Attorneys B l o u n t and O g d e n appeared for the plaintiff, the city of New York, and attorneys W h i t e and Jones represented the defendant, George Miln. 11 Peters 105 (1837). 58 9 W h e a t o n 1 (1824). Cf. Wilson v. Maryland, 12 W h e a t o n 445, 447 (1826). w

51

44

T h e Role of the Supreme Court, 1835-1864

maintained, were exclusive only (1) when they were granted in terms expressly exclusive, (2) when the states were prohibited from exercising them, and (3) when they were exclusive in their nature. Class 3 was regarded as the only one under which the State law could possibly fall. Since there was no conflicting law, as there was in Gibbons v. Ogden, it was claimed that the Supreme Court was now being called upon to declare void all state laws affecting commerce. D. B. Ogden, arguing for the city of New York, said: "It is the high prerogative of this Court to examine the laws of the different states, and of congress, and the constitution of the United States. T o do this is the duty imposed upon the court by the constitution, confided to it by the people; and from the discharge and performance of which it will not shrink." 5 4 He did not cite the constitutional or statutory provisions on which this "high prerogative" of the Court was based. It was apparent that, like Chief Justice Marshall, he was willing, if the express language of the Constitution and of the statutes was not clear on this point, to rest his argument on higher law doctrine. " M r . Ogden stated that he did not belong to that school of politicians, or lawyers, w h o are in favor of giving to the constitution of the United States a construction restricted to its words." 5 5 H e repudiated the doctrine of state sovereignty, maintaining that state governments could not form constitutions like the federal Constitution; no such powers had been delegated to them. T h e people were the source of this power in both state and general governments. Ogden spoke of the New York law as a police regulation coming not from the authority to regulate commerce but from "a much higher source—from those great conservative rights which all governments have, and must have. . . ." Ogden urged the doctrine that, though the authority of Congress over commerce was supreme, a state law had to be deemed valid until Congress had acted and a resulting conflict had occurred. New York's law was described as a "police regulation" intended to protect the people of the State. A construction that would vest such a power exclusively in Congress would, Ogden thought, be contrary to the design of the general government, that is, to entrust local interests to local authorities and to grant Congress only the powers necessary to preserve and protect the general welfare. 5 6 56 Ibid. 11 Peters 122. See ibid., pp. 114, 115, for a long list of matters regulated by the states relating to quarantine, passengers, pilots, wrecking, Negro seamen, and harbors. Attorney Blount noted that the precedent for regulating the transportation of passengers stemmed from a resolution of the Continental Congress and from certain state acts passed in pursuance thereof. O n September 16, 1788, the Continental Congress re54

50

Cases Left Over from Marshall Period

45

There was little debate in the Constitutional Convention on the clauses concerning the regulation of commerce, and most of it related to the regulation of duties on imports and tonnage. Few serious controversies over the meaning of the commerce clause arose during the first few decades after 1789, but two competing theories were gradually formulated by those who were called upon to interpret the provision authorizing Congress to regulate interstate and foreign commerce. First, it was maintained that the language of this provision, literally interpreted, denied the states all power to regulate interstate and foreign commerce—this came to be known as the exclusive theory. Second, many statesmen and jurists thought that, by the language of the Constitution, the states retained all powers with respect to both foreign and domestic commerce which Congress had not under its grant of authority regulated by any specific act—this was known as the concurrent theory. The latter theory was commonly accepted and followed in practice until doubts regarding it were raised in Gibbons v. Ogden, when Chancellor Kent of New York strongly defended the concurrent theory for the interpretation of this provision.57 On the other hand, Chief Justice Marshall, who rendered the Supreme Court's opinion in this case, has been quoted as arguing for both theories in different parts of the opinion.58 In reply to Daniel Webster's argument favoring the exclusive theory, Marshall said: "There is great force in this argument, and the Court is not satisfied that it has been refuted." 59 Whatever may have been Marshall's personal views at the time, he rejected the exclusive theory so far as it concerned state authority to enact inspection, quarantine, and health laws, as well as acts regulating the internal commerce of states.60 Though the conflict of opinion regarding the meaning of the commerce clause was strongly pressed upon the Court for considerasolved that "it is hereby recommended to the several states, to pass proper laws for preventing the transportation of convicted malefactors from foreign countries into the United States." Journals of the American Congress, 1774-1788 (Washington, 1823), IV, 867. Three States, Virginia, South Carolina, and Georgia, were the first to respond to the request of Congress by enacting, on November 13, 1788, appropriate passenger laws. New Hampshire and Massachusetts also enacted such laws in 1791. 11 Peters 1 1 2 - 1 1 3 . 67 See Livingston v. Van Ingen, 9 Johns 576 (N.Y., 1812), and Ogden v. Gibbons, 4 Johns Ch. 150 (N.Y., 1819). K See Charles Grove Haines, The Role of the Supreme Court in American Government and Politics, 1789-183; (Berkeley and Los Angeles, 1944), pp. 488 ff. M 9 Wheaton 209. See, however, William Rawle, View of the Constitution (2d ed.; Philadelphia, 1829), pp. 81-84. °° See 9 Wheaton 203; Willson v. Black-Bird Creek Marsh Co., 2 Peters 249 (1829); and Joseph Story, Commentaries on the Constitution (Boston, 1833), p. 5 1 3 .

46

The Role of the Supreme Court, 1835-1864

tion, the judgment arrived at made a decision on the issue unnecessary. Chief Justice Taney, busy preparing the opinion of the Court in the Charles River Bridge case, requested Justice Thompson to write the opinion in City of New York v. Miln. Thompson complied, but when his opinion was read in conference a majority of the Court objected to certain of its arguments. Justice Barbour was then selected to prepare the opinion, which appears in the report of the case as that of the majority. It was subsequently attacked and criticized by both Justices Taney and Wayne who, at the time the Passenger Cases were before the Court, explained by way of obiter dicta what they thought the Court had actually decided. 61 Justice Barbour stated that the Court had decided that the State act was not a regulation of commerce but an exercise of the police power to protect the community against paupers and criminals, a power not in conflict with any federal statute and rightfully belonging to the State. It was not necessary, therefore, to pass on the troublesome question of whether or not the power to regulate commerce was exclusive with the federal government. Apparently Barbour accepted the view espoused by Chancellor Kent in the steamboat monopoly case, that even if a state law affected commerce it should be deemed valid so long as no conflicting federal law was enacted. 62 Although he believed the reasoning of Chief Justice Marshall in 61 7 Howard 429 (1849). Barbour's opinion was attacked as not having the concurrence of a majority of the Court. T h e Court h a d split f o u r to three in the discussions of the case; the majority favored following Gibbons v. Ogden a n d Brown v. Maryland to hold the power of Congress over commerce as exclusive. Another point of difference split the Court three to three, with one justice refusing to participate in the discussion of whether commerce included passengers and persons in vessels. Wayne argued that Barbour's opinion, therefore, did not have the concurrence of a majority of the Court, except insofar as it held the act in question unconstitutional. Ibid., p. 428. T h e opinion was read in Court, six justices present, Baldwin absent. "In the course of that morning's sitting, or immediately after it, Mr. Justice Baldwin, having examined the opinion, objected to its being considered the opinion of the court, on account of what was said in it concerning the power of Congress to regulate commerce, and what was commerce. H e sought Mr. Justice Barbour, with the view of having it erased f r o m the opinion, declaring, as all the rest of us knew, that his objection to the opinion of Mr. Justice T h o m p s o n was on account of what it contained u p o n the subject of commerce; that his objection to the reasoning u p o n the same matter in Mr. Justice Barbour's opinion was stronger. . . . W i t h o u t his concurrence, no opinion could have been written." Ibid., pp. 431-432. Unfortunately, Barbour left t h e Court immediately after reading his opinion and boarded a steamer for Washington. Baldwin did not see him, and the Court adjourned. Justice Baldwin sought to neutralize the effect of this in his own opinion, which was accidentally omitted from its proper place in Peters' Supreme Court Reports. Ibid., p. 429. 05 11 Peters 132-139.

Cases Left Over from Marshall Period

47

Gibbons v. Ogden was inapplicable, Justice Barbour did not base his conclusion solely on this ground, for We choose rather to plant ourselves on what we consider impregnable positions. They are these: That a state has the same undeniable and unlimited jurisdiction over all persons and things, within its territorial limits, as any foreign nation; where that jurisdiction is not surrendered or restrained by the constitution of the United States. That, by virtue of this, it is not only the right, 'but the bounden and solemn duty of a state, to advance the safety, happiness and prosperity of its people, and to provide for its general welfare, by any and every act of legislation, which it may deem to be conducive to these ends; where the power over the particular subject, or the manner of its exercise is not surrendered or restrained, in the manner just stated. T h a t all those powers which relate to merely municipal legislation, or what may, perhaps, more properly be called Internal Police, are not thus surrendered or restrained; and that, consequently, in relation to these, the authority of a state is complete, unqualified, and exclusive.63

Justice Barbour admitted that it was difficult to define precisely and accurately the subjects that belonged to the control of the states, but in an attempted definition he included every law . . . which concerned the welfare of the whole people of a state, or any individual within it; whether it related to their rights, or their duties; whether it respected them as men, or as citizens of the state; whether in their public or private relations; whether it related to the rights of persons, or of property, of the whole people of a state, or of any individual within it; and whose operation was within the territorial limits of the state, and upon the persons and things within its jurisdiction.

Thus the "police power" doctrine formulated by Chief Justice Taney in the Charles River Bridge case was given both more specific and more extensive content. Since it was generally admitted that the states could pass inspection and quarantine laws, Barbour thought that it was as necessary for a state to provide precautionary measures against the moral pestilence of paupers, vagabonds, and possible convicts as it was to guard against physical pestilence which might arise from unsound and infectious articles. In a concurring opinion, Justice Thompson maintained that, regardless of whether the State was exercising its police power or its commercial power, the act was valid in the absence of any conflicting federal legislation. Justice Story, dissenting, maintained that the reasoning and judgments of the court in Gibbons v. Ogden and Brown v. Maryland64 precluded the judgment of the majority in City of New York v. Miln. It was expressly decided in Gibbons v. Ogden that the carrying of passengers was commerce and hence within the power expressly granted to "Ibid.,

p. 139.

64

12 Wheaton 419 (1827).

48

T h e Role of the Supreme Court, 1835-1864

Congress. Story emphatically denied the claim that the State law, even if it was a regulation of commerce, was valid because Congress had passed no conflicting law. He said: " T h e power given to Congress to regulate commerce with foreign nations, and among the States, has been deemed exclusive, from the nature and objects of the power, and the necessary implications growing out of its exercise. Full power to regulate a particular subject implies the whole power, and leaves no residuum; and a grant of the whole to one is incompatible with a grant to another of a part." Story predicted that the upholding of such a law as that enacted by New York would justify much discriminatory legislation relating to the transportation of passengers from one state to another, and concluded that "in this opinion I have the consolation to know that I had the entire concurrence, upon the same grounds, of that great constitutional jurist, the late Mr. Chief Justice Marshall. Having heard the former arguments, his deliberate opinion was that the act of New York was unconstitutional, and that the present case fell directly within the principles established in the case of Gibbons v. Ogden and Brown v. Maryland."65 T h u s Justice Story favored, in its most extreme form, the exclusive theory of the control of Congress over commerce. BRISCOE V. B A N K OF

KENTUCKY66

A third case which the justices were unable to decide during Marshall's chief-justiceship was Briscoe v. Bank of Kentucky. By an act passed in 1820, the State of Kentucky had chartered a bank whose president and directors were to be chosen by the legislature. T h e bank was declared to be the property of the Commonwealth and was authorized to engage in customary banking functions, including the 11 Peters 161. Ibid., p. 257 (1837). W h e n the Miln and Briscoe cases were first considered by the Supreme Court in 1834, Chief Justice Marshall observed that ". . . the practice of this Court is not (except in cases of absolute necessity) to deliver any judgment in cases where constitutional questions are involved, unless four judges concur in opinion, thus making the decision that of a majority of the whole Court. In the present cases four judges do not concur in the opinion as to the constitutional questions which have been argued. T h e Court therefore directs these cases to be re-argued at the next term, under the expectation that a larger number of judges may then be present." 86

60

Justices Duvall and Johnson were absent from the Court at this term. During the 1835 term the Court was asked when the case would be decided, and Marshall replied that "the Court cannot know whether there will be a full Court during the term; but as the Court is now composed, the constitutional cases will not be taken up." 8 Peters 118 (1834); 9 Peters 85 (1835). Cf. David Loth, Chief Justice John Marshall and the Growth of the Republic (New York, 1949), pp. 374 ft.

Cases Left Over frqm Marshall Period

49

issuance of notes. T h e bank brought suit against John Briscoe and others on a promissory note for which the bank's notes had been given, as a loan, to the drawers of the note. 67 Briscoe and his associates claimed that the note they gave was void because the notes of the bank were "bills of credit" issued by the State of Kentucky contrary to the provisions of the Constitution of the United States. It was argued in their favor that the bank's charter was invalid so far as it authorized the issuance of notes, for "the constitution was intended to prohibit all those paper substitutes for money, whatever were their particular forms or shades of difference, which had, before that time, gone by the general name of bills of credit." So far as the prohibition of the Constitution was concerned, bank bills and bills of credit were regarded as substantially the same. Attorneys for Kentucky pointed out that the State act had been passed because of emergency conditions which grew out of the War of 1812; that the notes issued by the bank had been, or soon would be, redeemed; and that the public lands pledged for their redemption were being distributed for school and road purposes. T h e differences between notes issued by a state in its sovereign capacity and notes issued by a corporation established by a state were stressed. It was contended that if the issuance of these notes was prohibited, the issuance of notes by all state banks would also have to be prohibited. Henry Clay, defending the State action, admitted that he had concurred with many of his fellow citizens at the time the act was passed, but that now he deemed the act impolitic and inexpedient and thought that its inexpedience was generally admitted. He was pleased to report that, though the bank's notes had depreciated in value, they were now restored to par and that the bank's financial standing was as good as that of any other moneyed institution. In Craig v. Missouri the notes had been issued for the State by State officers and not, as in this case, by the officers of a corporation established by the State. Justice McLean, rendering the opinion of the Court, defined bills of credit as paper issued by the sovereign power, containing a pledge of its faith, and designed to circulate as money. He then noted that, if it was true that a state could not do indirectly what it was prohibited from doing directly and if the Court adopted the broad scope of constitutional inhibition contended for by the plaintiffs, nearly $400 " T h i s case came before the Kentucky Supreme Court in 1832 and Judge Nicholas, delivering the opinion, ruled that the decision of the federal Supreme Court in Craig v. Missouri, 4 Peters 410 (1830), was inapplicable and not binding on the Kentucky court, and hence that the State bank act was constitutional. Briscoe v. Bank of Kentucky, 7 J . J . Marshall 350 (Ky., 1832).

50

T h e Role of the Supreme Court, 1835-1864

million of bank notes, or almost the entire circulating medium of the country, would be destroyed. T h e Court was unwilling thus to undermine the credit system of the country. M c L e a n distinguished Craig v. Missouri by pointing out that four of the seven judges in that case considered that the certificates issued by Missouri were designated to circulate as money; that they were issued on the credit of the State; and that consequently they were repugnant to the Constitution. T h e notes of the Kentucky bank circulated as money and were receivable on public account, but in every other particular they were essentially different. It was therefore held that the Kentucky act was a constitutional exercise of power by the State, and that the notes issued by the bank were not bills of credit within the meaning of the prohibition of the Constitution. Justice Story, dissenting, observed that W h e n this case was formerly argued before this Court, a majority of the judges, who then heard it, were decidedly of opinion that the act of Kentucky establishing this bank, was unconstitutional and void; as amounting to an authority to emit bills of credit, for and on behalf of the State, within the prohibition of the constitution of the United States. In principle it was thought to be decided by the case of Craig v. State of Missouri. A m o n g the majority was the late Mr. Chief Justice Marshall; a name never to be pronounced without reverence. T h e cause has been again argued, and precisely upon the same grounds as at the former argument. A majority of my 'brethren have now pronounced the act of Kentucky to be constitutional. I dissent from that opinion, and retaining the same opinion which I held at the first argument, in common with the Chief Justice, I shall now proceed to state the reasons on which it is founded. 88

T h e meaning of bills of credit, Story thought, had been fixed by the decision in Craig v. Missouri, unless the Court was to be set adrift from its former moorings. For Chief Justice Marshall had defined the term to include any kind of paper intended to circulate as money and to be redeemable at a future day. From a history of their issuance, Story concluded that the nature of bills of credit depended upon the single quality that they were used as money and were negotiable. Story vigorously protested against the right of a state to evade constitutional prohibitions by acting through its agents; this 68 11 Peters 328-329. See Griffith v. Commonwealth Bank of Kentucky, 4 Missouri 255 (1836), in which the Kentucky Bank Act was held unconstitutional following the reasoning of Craig v. Missouri. W h e n this case was brought for review to the Supreme Court of the United States, Chief Justice T a n e y announced the Court's judgment: because the State court had decided against the validity of the State act, the Supreme Court under the authority granted by section 25 of the Judiciary Act of 1789 could not review the decision. 14 Peters 58 (1840). T h i s was changed by a subsequent amendment to the Judiciary Act, 36 U.S. Stat, at L. 1156-1157 (Mar. 3, 1911).

Cases Left Over from Marshall Period

51

was a doctrine to which he could never subscribe. He saw nothing to fear in the issuance of state bank notes when the notes were issued by private persons, private partnerships, or private corporations. Justice Henry Baldwin presented his views concerning the Charles River Bridge, Miln, and Briscoe cases in a pamphlet published in 1837. 69 Though it is impossible to give a detailed analysis of Baldwin's separate treatment of the cases, his point of view on constitutional issues deserves attention. T h e justice first pointed to the difference between his approach to constitutional issues and the usual approach. By considering the Constitution as created by the people of the several states, instead of by the people of the United States in the aggregate—which was the method frequently followed by Chief Justice Marshall and Justice Story—he found an easy solution to the questions facing the Court. Then he remarked that changes of justices and of opinions while cases were before the Court created further complications: None of the Judges who sat during the former arguments, concur in all the present opinions of the majority. In the case of the Commonwealth I was in the minority; in the Charles River

Bridge

alone after the argument in 1 8 3 1 ; the Tennessee scales; and in the New

Bank

of

Kentucky,

Case, it now appears that I stood Boundary

Case70 hung in doubtful

York Case, I was one of a bare majority. B y changes of judges

and of opinions, there is now but one dissentient in three of the cases; and though my opinion still differs from three of my brethren, w h o sat in the hearings six years ago, it is supported by the three who have since been appointed.

As Justice Baldwin saw it, the Constitution, despite the adjudications of the Supreme Court, remained as unsettled in political, professional, and judicial opinions as it was immediately after its adoption. Commenting on the tendency of constitutional arguments to become more political and less legal, Baldwin noted that . . . we have been referred for the true interpretation of the Constitution to books, essays, arguments, opinions, speeches, debates in conventions and legislative bodies, by jurists and statesmen, and by some who were neither; which would not be offered, or suffered to be read in any court, as entitled to respect in construing an ordinary act of legislation, or a contract between individuals. T h i s reference has not been confined to expositions contemporaneous or near to the time of the adoption of the Constitution, the views of its framers, or those opinions to which courts 89 H e n r y Baldwin, A General View of the Origin and Nature of the Constitution and Government of the United States . . . together with Opinions in the Cases Decided at January Term, 1837, Arising on the Restraints on the Powers of the States (Philadelphia, 1837), published also as an appendix to 9 Supreme Court Reports (law. ed.) 869-969. For a recent view of this issue see Robert H . Jackson, The Supreme Court in the American System of Government (Cambridge, 1955), chap. iii. 70 Burgess Poole et al. v. Lessee of John Fleeger, 1 1 Peters 185.

52

The Role of the Supreme Court, 1835-1864

of justice can consistently with their duty defer their own; but the range has been of the widest kind, embracing whatever has appeared in print on the various subjects involved, either here or abroad, and up to the present time, while these suits have been depending in this court for re-argument. 71

Instead of being guided and influenced by a medley of historical, political, economic, and other extraneous data, Justice Baldwin thought that Supreme Court justices should interpret the Constitution according to the established rules and maxims of the common law. B u t the real difficulty in confining judicial interpretation to the Constitution and to the accepted procedure of the common law was the existence of three schools which were radically different in their approach to constitutional questions. T h e first school, fearing the evils of the Confederation, adopted the most liberal rules of construction in order to enlarge the powers granted to the central government and hence to place more restrictions upon the states than were obviously intended by the language of the Constitution. Another school, foreseeing the gradual absorption through the process of interpretation of the powers and indispensable functions of the states and the consequent turning of the central government into a consolidated one with the states as subordinate administrative units, was inclined to adopt the narrowest possible construction of the words of the Constitution and to place primary emphasis on the reserved powers of the states. A small group of statesmen and jurists still belonged to the third school, which was willing "to take the Constitution with its amendments as it is, and to expound it by the accepted rules of interpretation; whatever might be the result on the powers granted, restricted, excepted or reserved; if it was the meaning and intention of the Supreme L a w of the land, it was their rule of action." Justice Baldwin, rejecting the first two schools of interpretation and placing himself in the third, said that his sole objective was to find the meaning of the Constitution by analyzing its words according to the canons of interpretation of the common law. T h o u g h the first two schools of constitutional interpretation to which Justice Baldwin referred can be clearly recognized, and the paths they followed were fairly well defined, this was not true of his "third class or school." It is difficult, if not impossible, to interpret the words or provisions of the fundamental document without accepting the basic assumption of one or the other of the two main schools of thought and without making use of extraneous materials. For only a small part of the Constitution could the common law be used as a guide for interpretation. A n d the occasional lack of clarity and definite71 Henry Baldwin, A General View of the Origin and Nature and Government of the United States . . . , pp. 3 ff.

of the

Constitution

Cases Left Over from Marshall Period

53

ness in Justice Baldwin's own reasoning on the above three cases demonstrates that the method of applying the provisions of the Constitution used by the third school was not well known or understood. It was difficult for Baldwin to explain and justify the different conclusions he had arrived at in the Craig and Briscoe cases. In the Craig case he agreed with Chief Justice Marshall that the certificates issued by the State were in effect bills of credit. Apparently he agreed with the judgment but not the reasoning of the chief justice, for he said: . . . the case of Craig v. Missouri, so far from being an authority in favour of the proposition that it is not necessary to constitute a bill of credit that the faith of the State should be pledged for its payment, it must be taken as negativing it by the opinion of four judges. On the other hand, four judges were of opinion that it was not necessary that the certificates should have been made a legal tender for any purpose, in order to make them bills of credit. T h u s understood, I adhere to the decision of the court in that case, as it was judicially before it on the record; and yet retaining the same opinion now which I then expressed to the judges, I cannot feel myself precluded from acting on it in this case, because the opinion of the court, as delivered, did not take the same course as mine, in leading the majority to the conclusion they formed. T o now abandon the deliberate result of my best judgment, formed and expressed in that case, which has been confirmed on the successive arguments in this, would look more like yielding to a train of reasoning on a part of a case, than respecting the judgment of the court on the whole record. It would also place me in a position of inextricable difficulty, to now surrender my judgment to the same reasoning and illustrations, which failed to convince me seven years since, the more especially when the intervening investigation which it has been my duty to make on this subject, has led my mind to the conclusion it first formed. 72

On the other hand, Justice Baldwin maintained that in the Briscoe case Kentucky had not pledged her faith to redeem the notes of the bank, nor made them legal tender in payment of debt. In the Charles River Bridge case Justice Baldwin concurred with both the judgment of the Court and the reasoning of Chief Justice Taney, but wrote a separate opinion in which he largely accepted the Marshall doctrine that the Constitution placed all grants, charters, and other contracts affecting property rights beyond legislative control. He disagreed with this doctrine in part, however, maintaining that, according to a well-settled common-law rule, grants that tended to create monopolies should be interpreted with the utmost strictness and their powers should not be extended by implication when detri71 Ibid., p. 116. Justice Baldwin noted that after the first argument in the Craig case two judges died, three of the remaining five were of the opinion that the paper issued by Missouri was bills of credit, and two disagreed with this opinion. A t the reargument in 1830, two new judges were present and Baldwin was the justice who joined the original majority of three, thus forming a judgment to reverse the Supreme Court of Missouri. T h o u g h Baldwin agreed with the judgment but not the reasoning of Chief Justice Marshall, as a new member of the Court he did not at this time write a separate opinion. Ibid., pp. 113, 114.

54

The Role of the Supreme Court, 1835-1864

mental to the public interest. Following the reasoning in the Miln case that New York's law came within the scope of police regulations and not within the grant of powers to the federal government, he agreed with the Court's judgment that the State act was valid. For this reason he did not deem it necessary to consider its effect on interstate commerce. Contemporary reactions to the work of the Court under the leadership of Chief Justice Taney were extremely varied, and no clear and settled verdict has emerged in subsequent writings. One writer, reviewing volume 1 1 of Peters Reports, thought that everyone who surveyed its contents could not help but see that a considerable change had come "over the spirit of our Supreme National Judicature upon this great class of (Constitutional) questions. . . . What was the law of the Court upon some important points remains so no longer." 73 Another reviewer of the same volume, after carefully examining the grounds of these decisions, concluded: We delight, while examining judgments so harshly reviewed, from such a quarter, to cite in their support the former decisions of the Supreme Court when Judge Marshall was at its head; for it thence becomes transparent that the real complaint is, not that the present judges have receded from the ground formerly occupied, but that they will not go any further. T h u s far they have stood by the old decisions (some of which we, for our part, would have been very little disposed to complain if they had reversed), and steadily refused to receive dicta as judgments, or to make old cases the stepping-stones to new aggressions upon State rights.™

A third view maintains that all but a few of those who still adhered to the extreme and outmoded views of the Hamiltonian Federalists conceded that a change in constitutional construction was not merely welcome, but indispensable to meet the political, economic, and social transformations characteristic of the decades from 1830 to 1850. And, as has been the custom at other times in the nation's evolution, the Court moved forward to keep in step with the new order and tempo. It is probably true to say that this view and the facts upon which it is based are overdrawn when, as sometimes happens, they support a conclusion that the Court was a defender of localism and States' rights. 75 Certain it is that, although these cases upheld the power of the states, subsequent decisions hardly fit the pattern. It is to them that attention must now be directed. 73 46 North American Review (Jan., 1838), 126 (F. And see Chancellor Kent's views quoted in Warren, The Supreme Court in United States History, II, 302-303. 71 7 Democratic Review (June, 1840), 5 1 1 . This view is shared by Warren, The Supreme Court in United States History, II, 301-302, and by Morison and Commager, op. cit., pp. 559 fE. 76 See Carson, op. cit., I, 288-289.

CHAPTER

III

The Interpretation of the Status and Rights of Corporations

N

o MORE I M P O R T A N T issue has come up for consideration by the federal courts than determination of the position, powers, and rights of corporations chartered by state legislatures. T h e corporate form of organization for carrying on certain private or quasi-public functions was frequently resorted to in the decades immediately before and after the establishment of the federal government. It has been estimated that more than 300 corporations were formed before 1800, most of them for the quasi-public purpose of building and improving roads, bridges, and canals. Charters were also granted to a large number of banks and insurance companies. 1 There were vigorous opponents as well as enthusiastic defenders of this form of group activity. T h e political philosophies of those who argued for or against corporate rights and privileges depended largely, as in other partisan contests, upon the classes to which the participants belonged. Democratic and liberal groups usually identified corporations with concepts of monopoly and exclusive franchises, and hence regarded them as undesirable. Conservative and aristocratic leaders such as Alexander Hamilton, James Wilson, and Robert Morris favored the use of the corporate device to carry out fiscal or commercial programs. 2 But there is no reason to believe that these conservative leaders envisaged an arrangement whereby a state would have the power to create a corporation entitled to be recognized and to do business freely in other states. An able writer on this phase of American law, Gerard C. Hender1 Two Centuries' Growth of American Law, ijoi-ipoi (New York, 1901), p. 276; see also Ernest L . Bogart and Donald L . Kemmerer, Economic History of the American People (New York, 1947), p. 354. " A corporation is simply an organized body of men acting as a unit, and with a will that has become unified through the singleness of their purpose. W e assume its reality. W e act upon the assumption. . . . It is clear enough that unless we treat the personality of our group persons as real and apply the fact of that reality throughout the whole realm of law, what we call justice will, in truth, be no more than a chaotic and illogical muddle." Harold J . Laski, " T h e Personality of Associations," 29 Harvard Law Review (1916), 424. 2 T h e Constitutional Convention of 1787 considered whether Congress should be given the power to create corporations. Both Madison and Pinckney introduced

[55]

56

The Role of the Supreme Court, 1835-1864

son, has noted that two opposing theories appeared at this time and continued throughout the nation's history in discussions of the nature and status of corporations. Some authorities favored a theory which made a corporate unit subject to peculiar burdens and restrictions and prohibited it from operating outside the state granting its charter. 3 In fact, extremists among this group were disposed to deny even the right of corporate existence. Others tended toward the more liberal theory 4 that the property and activities of corporations should be placed under the protection of international or constitutional law, and that foreign corporations should be accorded equality with domestic corporations. " I n broad outline," says Henderson, "the history of foreign corporations in American public law has taken the form of a gradual evolution from the extreme restrictive theory through various stages of compromise toward a close approach to the doctrine of compulsory recognition." This change, as will be seen, came about largely through the process of judicial interpretation, and the Supreme Court under Chief Justice Taney's leadership took important steps in this direction, to bring about what amounted to a radical and in effect a revolutionary innovation. T h e extreme restrictive theory of the rights of foreign corporations was frequently expressed in early legal and political literature. Madison was among the few prominent men of his period who thought that the grant of a charter by one state would give a corporation a legal existence in every state. 5 Even with respect to the first national bank, although chartered by the federal government, it was assumed that the corporation could exercise its powers in all states only when such powers were not repugnant to local laws or constitutional provisions. Speaking of early state grants of charters to corporations, Henderson says, "It is impossible to read the accounts of the organization of the first of these corporations without feeling that we are in the preserve of a genuine and bold legal invention." 6 resolutions designed to accomplish this end, but both resolutions failed in committee. Erastus H . Scott, ed., Journal of the Federal Convention, Kept by James Madison (Chicago, 1893), p. 549. 3 Gerard C. Henderson, The Position of Foreign Corporations in American Constitutional Law (Cambridge, 1918), p. 6. For a general discussion of this theory see E . Hilton Young, Foreign Companies and Other Companies (Cambridge, 1912), pp. 16 ff. * Cf. " T h e Adoption of the Liberal T h e o r y of Foreign Corporations," 79 University of Pennsylvania Law Review (1931), 1 1 1 9 , and Paul Vinogradoff, " J u r i d i c a l Person," 24 Columbia Law Review (1924), 600. 5 Gaillard H u n t , ed., The Writings of James Madison (New York, 1 9 0 0 - 1 9 1 0 ) , II, 105. ' Op cit., p. 28. T h e Supreme Court of the United States, Henderson notes, has

Status and Rights of Corporations

57

L o n g before Chief Justice Marshall's decision in the Dartmouth College case,7 it was taken for granted that a corporation charter was in the nature of a contract. 8 A n d with respect to bringing a suit a foreign corporation was deemed to be on a plane with a foreign individual. In 1823, Justice Washington observed that the judgment and reasoning in prior cases made it obvious that there were no circumstances peculiar to private eleemosynary institutions which distinguished them, so far as the protection of civil rights was concerned, from natural persons; on the contrary, he thought, they were placed upon precisely the same ground. 9 State courts also assumed that they had a right to exercise jurisdiction in cases involving suits by or against foreign corporations. 10 But a crucial problem remained for a long time undetermined: Could a foreign corporation without an express grant of authority transact business within a state to the extent of making an enforceable contract? T h i s problem was first presented to the Supreme Court in Bank of Augusta v. Earle.11 W h e n asked whether a corporation could make contracts in states other than the one granting its charter, Chancellor Kent, an extreme conservative and a member of the Federalist party, 1 2 said that a corporation undoubtedly had such authority unless a state or foreign country specifically prohibited the making of contracts by foreign corporations. He could in fact see no reason why a corporation as an artificial entity did not have the right to sue and contract in its corporate character just as a natural person did. Kent found justification not yet adopted the liberal theory, but "in a striking series of decisions, one element after another of the restrictive theory has been sacrificed, and one tenet after another of the liberal theory adopted." Ibid., p. 7. For an account of the early history of corporations see Harold J. Laski, Early History of the Corporation in England," 30 Harvard

Law Review

T h o m a s T h a c k e r , "Corporations at Home and A b r o a d , " 2 Columbia

"The

(1917), 561; Law

Review

(1902), 350; Frederick Pollock, " H a s the C o m m o n L a w Received the Fiction T h e o r y of Corporations?" 27 Law

Quarterly

Review

(1911), 219.

"4 W h e a t o n 518 (1819). 8

See especially the views of James Wilson in James D . Andrews, ed., The

Works of

James Wilson (Chicago, 1896), I, 565, and of others mentioned by Henderson, op. cit., pp. 26-35. 9

Henderson, op. cit., p. 38.

10

Society

for the Propagation

of the Gospel

v. New

Haven,

8 W h e a t o n 481, 482

(.823). 13

T h e leading cases in which state courts allowed corporations to sue are sum-

marized by Henderson, op. cit., pp. 40 ff. See also Chief Justice Jay's opinion "that one citizen may sue forty thousand; for where a corporation is sued, all the members of it are actually

sued, though not personally sued." Chisholm

v. Georgia,

2 Dallas

472 (i793>12

Compare John T .

(New York, 1939).

Horton, James

Kent:

A

Study

in

Conservatism,

1J63-184J

58

T h e Role of the Supreme Court, 1835-1864

for this doctrine in what he called "a species of international law throughout the commercial world." 1 3 " C a n it be possible," asked Kent, that in this great American Republic, when we are one nation for all national purposes, and one people in commercial pursuits, with the same common interests, sympathies, intercourse, and principles of jurisprudence, and entitled to an equal intercommunity of "privileges and immunities as citizens" throughout the land, that these corporate associations shall not have the liberty to make contracts, and to have free access to the courts of justice in one State as well as another? 14

A n d he concluded that . . . whenever a civil corporation, duly created in one state or country, enters, by its competent agent, into contracts in another, and such contracts are not in violation of its charter, but within its lawful powers, and are consistent with dealings of a like nature, held lawful to the citizens of the State in which they take place, and are not forbidden by positive law to be made by corporate persons, the foreign corporation is entitled of right in every case to the protection and assistance of the courts, equally with resident citizens. 15

A t the same time, the threatening power of money through corporate organizations was feared vaguely by the masses and realized clearly by some leaders of the democratic movement, such as Andrew Jackson, James Buchanan, T h o m a s H. Benton, and Charles J. Ingersoll. T h e Bank of the United States had grown so influential as to be accused of controlling high government officials, maintaining a powerful Washington lobby, and playing politics, even to the extent of challenging Jackson's administration to battle in a presidential contest. 16 It served as a reminder of the dangers of concentrated money power. 1 7 In strong language Benton pointed out the "flagrant" activi13 1 Law Reporter, ed. by T . K. Ramsay and L. S. Morin (July, 1838), 57, 58. T h e r e was, however, no case in the English reports before 1839 of a suit brought by a foreign corporation on a contract made in England. Cf. Two Centuries' Growth of American Law, ijoi-ipoi, p. 281. 14 i Law Reporter 5g. 15 Ibid., p. 62. Holdsworth traces the origin of the incorporate person back to the medieval period, and cites Lord Coke's opinion in the case of Sutton's Hospital (10 Coke's Reports la, 29b, 1613 K.B.) as summarizing the medieval rules of corporations and laying down the first principles of the modern rules. H. S. Holdsworth, "English Corporation Law in the 16th and 17th Centuries," 31 Yale Law Journal (1922), 382. " J o h n D. Hicks, The Federal Union, A History of the United States to 1865 (Boston, 1937), pp. 421, 422; Marquis James, Andrew Jackson: Portrait of a President (New York, 1937), especially chap. xi. 17 See "Bank of the United States—Memorial to the Senate and House of Representatives of this United States of America in Congress Assembled," Niles' Weekly Register, IX (Dec. 21, 1833), 277-285.

Status and Rights of Corporations

59

ties of the bank in securing and maintaining its charter in Pennsylv a n i a as an indication of the abuses of power possible in such an organization. 1 8 Implicit in the revolt of the people d u r i n g the Jacksonian period was an uncompromising hostility toward leaders w h o controlled banking a n d were the beneficiaries of the privileges enjoyed by these institutions. J a m e s B u c h a n a n , speaking in Congress in M a r c h , 1840, for the independent treasury bill, expressed views similar to Benton's. H e pointed to the ruinous consequences of

fluctuations

of credit and cur-

rency due to the manipulations of banks, the frequent suspension of specie payments, and the dire, continuing influence of the B a n k of the U n i t e d States, n o w chartered in Pennsylvania; and he deplored its increased freedom a n d scope of activities outside Pennsylvania

and

even abroad. I n a letter referring to the defeat of the governor's proposals to impose restrictions on banks in Pennsylvania,

Buchanan

expressed the attitude of the Democrats toward b a n k i n g control after the failure to recharter the B a n k of the U n i t e d States: The Democracy and the Banks are now engaged in a desperate conflict on this question; and we must deprive these Banks of their destructive privileges and confine them to their legitimate business, or they will continue to be the masters of the people, instead of their servants,—their destroyer, instead of their useful agents. The Democracy never can and never will abandon the principle of Bank reform, without first abandoning their own principles. . . . But reform, radical reform and not destruction ought to be our motto." T h e period was one of financial confusion. A f t e r the w i t h d r a w a l of deposits from the B a n k of the U n i t e d States, the way was open for 18 The feeling, shared by many people, is revealed in Benton's exaggerated description of the corrupt methods the bank used in securing its charter from the Legislature of Pennsylvania. He said, "Every circumstance of its enactment announced corruption—bribery in the members who passed the act, and an attempt to bribe the people by distributing the bonus among them: and the outburst of indignation throughout the State was vehement and universal. People met in masses to condemn the act, demand its repeal, to denounce the members who voted for it, and to call for investigation into the manner in which it passed. . . . The illegality of the whole proceeding was as flagrant as it was corrupt. . . . And yet it was this broken and rotten institution . . . that was still able to set up for a power and a benefactor! still able to influence federal legislation . . . and the business of the country. It is for the part she acted—the dominating part—in contriving the financial distress and the general suspension of the banks in 1837—the last one which has afflicted our country,—that renders necessary and proper this notice of her corrupt transit through the General Assembly of the State of Pennsylvania." Thomas H. Benton, Thirty Years' View, 1820 to 1850 (New York, 1854), II, 25. " J o h n Bassett Moore, ed., The Works of James Buchanan (Philadelphia, 19081911), IV, 264.

6o

T h e Role of the Supreme Court, 1835-1864

local banks to expand circulation and thus to take advantage of the profit that the speculative spirit of the times seemed to promise. 20 T h e resulting riot of speculation was abruptly halted by the Panic of 1837, which brought financial ruin to many and started a long depression, and for about a decade the number of banks and their business remained fairly steady. 21 T h e Bank of Augusta case was, as Henderson observes, an aftermath of Andrew Jackson's contest with the Bank of the United States. T h o u g h the bank had been discontinued, it had for a number of years undertaken a growing volume of business in bills of exchange, purchasing them at a discount at its branch offices throughout the United States. State banks wished to secure this business and the question arose whether the Bank of the United States, with its charter from Pennsylvania, could legally carry on certain phases of the banking business through agencies in other states. 22 T h e issue in the Bank of Augusta case arose from Alabama's attempt to solve her banking problem by a legislative prohibition against all foreign banks. 23 T h e State constitution provided that One state bank may be established, with such number of branches as the General Assembly may, from time to time, deem expedient; provided that no branch bank shall be established, nor bank charter renewed, under the authority of this State, without the concurrence of two-thirds of both houses of the General Assembly; . . . nor shall any bank or branch bank be established, or bank charter renewed, but in conformity with the following rules: 1. A t least two-fifths of the capital stock shall be reserved for the State. 2. A proportion of power in the direction of the bank shall be reserved to the State, equal at least to its proportion of stock therein. 3. T h e State, and the individual stockholders, shall be liable, respectively, for the debts of the bank, in proportion to their stock holden therein. 4. T h e remedy for collecting debts shall be reciprocal for and against the bank. 5. No bank shall commence operations until half the capital stock subscribed for shall be actually paid in gold and silver, which amount shall in no case be less than one hundred thousand dollars.

A l t h o u g h these provisions seem designed on their face to establish a state monopoly of the banking business, they did not specifically include bills of exchange in the business of banking. It was customary at the time to use bills of exchange for most transactions between different sections of the country. T h e y were, for example, frequently Fred A. Shannon, America's Economic Growth (New York, 1940), pp. 290-293. See Bogart and Kemmerer, op. ext., pp. 319-328, for an account of the bank-note method of extending credit and loans employed by banks in the pre-Civil War period. 22 Henderson, op. cit., p. 45. 23 It was a common practice for the states to prohibit private banking, and such laws were frequently held valid. Cf. ibid., pp. 45 B. 20

21

Status and Rights of Corporations

61

used in the handling of cotton, the chief product of Alabama. Alabama banks regarded this business as banking, and assumed that under State law they had a monopoly of it. Banks in other states, about to lose a profitable part of their business, refused to acknowledge the monopoly and continued to purchase bills of exchange in Alabama. T h e courts were called upon to settle the controversy. T h e immediate circumstances that brought this question to test in the Supreme Court involved the right of three corporations, chartered with banking powers by other States, to purchase bills of exchange in Alabama. The Bank of Augusta, chartered in Georgia, the Bank of the United States, now chartered by Pennsylvania, and the New Orleans and Carrollton Railroad Company, a Louisiana corporation with banking powers, had through their agents purchased certain bills of exchange in Alabama. The makers of these bills, citizens of Alabama, subsequently refused to pay them on the ground that such purchases were not valid contracts under the laws of Alabama. T h e parties had stipulated to the facts and had asked the court to decide whether they constituted a defense against the action for payment, in which event the judgment would be for the makers of the bills, or otherwise, in which event it would be for the foreign corporations. In all three cases the Circuit Court of the United States for the District of Alabama decided in March, 1837, through the opinion of Justice McKinley, for the makers of the bills on the ground that the contracts were invalid. 24 BANK

OF A U G U S T A v .

EARLE

This case, involving economic and political conflict, was submitted to the Supreme Court during the January term, 1839, when the corporations concerned sought a reversal of the decision of Justice McKinley on circuit. 25 T h e justice had held that a corporation created in 24 It was predicted that disastrous results would follow this decision. See Justice Story's letter to Charles Sumner, J u n e 17, 1838, quoted in Charles Warren, The Supreme Court in United States History (Boston, 1922), II, 324, and Story's letter to Justice McLean, May 25, 1838, McLean Papers, 2 1 5 6 - 2 1 5 7 , Library of Congress. 26 Three suits that came to the Supreme Court at the same time involved similar issues and were argued and decided together. Because of their significance to the business and commercial interests of the country, eminent counsel were engaged for the arguments before the Supreme Court. David B. Ogden appeared for the plaintiff in Bank of Augusta v. Earle, and Charles J . Ingersoll, regarded as an inveterate foe of corporations, represented the defendant. Ogden was also counsel for the plaintiff in New Orleans and Carrollton Railroad Co. v. Earle. In Bank of United States v. Primrose, John Sergeant, a leading member of the Philadelphia bar, and Daniel Webster appeared for the plaintiff, and attorneys C. J . Ingersoll, G. R . Vandegraff, and William H. Crawford for the defendant.

62

T h e Role of the Supreme Court, 1835-1864

one state had no right to contract or to operate in another state, either directly or by an agent, without a special grant or permit. T h e Bank of Augusta, incorporated in Georgia, brought suit against Earle, a citizen of Alabama, on a bill of exchange which was protested for nonpayment. 2 6 T h e Bank of Augusta was the owner of bills of exchange drawn on persons in Mobile, which they had purchased and remitted to Mobile where they were paid. T h e funds thus obtained were invested in a bill of exchange which became the subject of this suit. T h e question for determination was whether the bank had authority to make the purchase. 27 D. B. Ogden, defending the bank, maintained that transactions of the kind now before the Court had continued from Colonial times and had been quite extensive, and, he thought, had been found uniformly beneficial. T h e proposition of the circuit court that a corporation of one state could do no commercial business in another without express permission was thought to be especially injurious in the United States, where associated capital was necessary for many of the operations of commerce. A l t h o u g h it was customary for corporations in foreign nations to institute suits in nations other than those creating them, the Alabama theory now propounded was that the states of the American U n i o n were in a different category. Ogden felt that a principle applicable to foreign corporations should be all the more applicable to corporations in their dealings in different states. Every principle of law 28 T h e question of whether corporations could bring suits in the federal courts under the diversity of state citizenship provision of the Constitution was first presented to the Supreme Court in three cases arising in 1809—Bank of United States v. Deveaux, Hope Insurance Co. v. Boardman, and Maryland Insurance Co. v. Woods, 5 Cranch 57 (1809). T h e cases were similar in that all of them involved corporations, questioned the jurisdiction of the circuit courts, and called upon the Supreme Court to interpret the provision of the Judiciary Act of 1789 which gave circuit courts jurisdiction in suits "between a citizen of the State where the suit is brought and a citizen of another State." In Bingham v. Cabot, 3 Dallas 382, decided in 1798, it was held that, for the circuit courts to take jurisdiction, diversity of citizenship must be shown by averments in the record. T h e issue here was the sufficiency of the averments shown. T h e Supreme Court held the averments to be sufficient in the Deveaux and Woods cases, but insufficient in the Boardman case. Dudley O. McGovney notes that " W h a t is commonly called the principle or doctrine of the Deveaux case embraces all three decisions. It includes the proposition that a corporation, as such, is not a citizen, and the proposition that when, and only when, there is a complete diversity of state citizenship between the shareholders of a corporate party and the opposing party the requisite diversity of citizenship exists." " A Supreme Court Fiction: Corporations in the Diverse Citizenship Jurisdiction of the Federal Courts," 56 Harvard Law Review (1943), 866. T h e Court's decisions were affirmed in a number of instances. See Sullivan v. Fulton Steam Boat Co., 6 Wheaton 450 (1821); Breithaupt v. Bank of Georgia, 1 Peters 238 (1828); Bank of United States v. Martin, 5 Peters 478 (1831); Commercial and Rail Road Bank of Vicksburg v. Slocomb, Richards and Co., 14 Peters 60 (1840). 2 7 13 Peters 519 (1839).

Status and Rights of Corporations

63

allowing foreign nations to sue in the courts of other countries, he thought, applied to corporations, and he could see no controlling distinction between the right to sue and the right to contract. 28 John Sergeant, speaking for the Bank of the United States, followed previous efforts to establish the Supreme Court as the protector and guardian of business interests whose continued expansion demanded freedom from local restrictions. He noted that many states had adopted statutes forbidding certain acts of foreign corporations, and it seemed to be assumed that foreign corporations limited by those acts were otherwise free to conduct business in such states so far as their corporate powers and purposes permitted. Though a corporation was an artificial entity for many purposes, the corporate body as well as the incorporators were deemed to have the rights and obligations of citizens. In his opinion a corporation had a twofold claim: first, to respect the law of its creation, and second, to respect the rights and privileges of the individuals composing it. 29 Daniel Webster, counsel with Sergeant for the United States Bank, maintained that the power to buy and sell bills of exchange was conferred upon the bank by its charter, and that this power and others similarly conferred were intended to place the bank upon the same footing as individuals—to enable it to do what the members of the corporation could unquestionably do as individuals. "We say, undoubtedly," he argued, "that they cannot acquire power under the Pennsylvania charter to do acts in Alabama, which they cannot do as individuals, but we say that the corporation may do in their corporate character, in Alabama, all such acts, authorized by their charter, as the members thereof would have a right to perform as individuals." 30 Webster interpreted the privileges and immunities clauses of the Articles of Confederation and the Constitution as empowering the inhabitants of each state, whether acting as individuals or as members of a corporate board, to exercise the same rights and privileges in every other state. Even if the Constitution did not confer upon the citizens of one state political rights in other states, Webster went on to say, yet "for the purposes of trade, commerce, buying and selling, it is evidently not in the power of any State to impose any hindrance or embarrassment, or lay any excise, toll duty, or exclusion, upon the citizens of other States, to place them, coming there upon a different footing from her own citizens." 31 Though the arguments for the Bank of the United States were predicated primarily on the provisions and implications of American law, he pointed out that as a principle of comity in the law of nations it was customary to recognize that a corpora™ Ibid., p. 525.

^ Ibid., p. 547.

30

Ibid., p. 550.

31

Ibid., p. 552.

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T h e Role of the Supreme Court, 1835-1864

tion chartered by a state could make contracts beyond the limits of that state. T h e result, in his opinion, of such a rule of comity was "that this very right to carry away property, the proceeds of trade from a foreign country, by exchange, is a well understood and positive part of the law of nations." 3 2 Webster denied that the constitution or laws of Alabama prevented the making of such a contract. For, he said, there was nothing in the State laws to show that banking meant more than the circulation of bills as currency, and there was no explicit prohibition against dealing in bills of exchange by banks other than the banks of Alabama. Implicit in this argument is the notion that not the people and the judicial tribunals of A l a b a m a but the Supreme Court of the United States was to interpret the internal policy of that State, so far as some of the most important business interests were concerned. Webster paid his respects to the Supreme Court as the prime protector of these interests: It is not, however, for the learned gentleman, nor for myself, to say here that we speak for the country. We advance our sentiments and our arguments, but they are without authority. But it is for you, Mr. Chief Justice and Judges, on this, as on other occasions of high importance, to speak and to decide for the country. T h e guardianship of her commercial interests; the preservation of the harmonious intercourse of all her citizens; the fulfilling, in this respect, of the great object of the Constitution, are in your hands; and I am not to doubt that the trust will be so performed as to sustain at once high national objects and the character of this tribunal.33

Webster expressed regret that the newspapers had treated the decision of the circuit court scornfully. For he believed that the learned judge had doubtless acted from a high sense of duty. He also deplored a press dispatch written in a tone of command as to what was expected of the Supreme Court. Such conduct, he said, was discreditable to the character of the country and was disrespectful and injurious to the Court. 3 4 T h u s at the same time that he urged the Court to decide important questions of public policy, Webster held the free expression of popular opinion and criticism of the Court to be improper; the tribunal must be regarded as aloof and beyond such influences. He concluded his argument with another appeal to policy and expedience, for, in his opinion, " T h e decision now under revision by this Court is, in its principle, anti-commercial and anti-social, new and unheard of in our system, and calculated to break up the harmony which has so long prevailed among the States and People of this Union." 3 5 "Ibid.,

p. 557.

33

Ibid.,

p. 567.

31

Ibid.,

p. 566.

35

Ibid.,

p. 567.

Status and Rights of Corporations

65

Alabama, he maintained, could not create a monopoly to the prejudice of the citizens of other states. Attorneys for the defendant in Bank of Augusta v. Earle based their argument primarily on the State law that forbade banking operations of this kind. O n the basis of general principles, however, they asserted that laws could have no force beyond the territories of those who made them; comity as between nations was inapplicable to states, districts, or cities within a nation. W i t h a franker approach than usual in lawyers' briefs, the attorneys said that although "the States are sovereign within themselves as to all the powers not granted to the United States, and foreign to each other as to all others," the determination of issues on the border line of powers between the nation and the states belonged rather to politics than to jurisprudence. A n d they believed that the crucial test of the case lay in the query whether the federal judiciary could by its decisions add to or materially change state laws. 36 T h e defendant's attorneys attributed the prediction of ruinous consequences, should Justice McKinley's decision not be overruled, largely to political prejudices. T o them it appeared indisputable that a corporation could exist and could do business only by the express permission of the state incorporating it. From this proposition it followed that no corporation could do business in a state until expressly granted permission by the state. In something of a prophetic vein, in view of the modern state practice of granting charters, 37 the attorneys said that it was possible, unless the above principle was accepted and applied, for the smallest state in the union to legislate for and govern all the rest. 38 T h e y also predicted that an opinion adverse to Alabama would transform sovereign states and subject corporations into sovereign corporations and subject states. 39 36 " T h e question is," said Charles J. Ingersoll, "not whether even one state, or the judicature of one state, can by comity adopt the law of another state; but it is whether this great addition to the law of a state can be made by the judiciary of the United States; not for the United States: but whether the federal judiciary can by comity incorporate the law of one of these United States with that of another." 13 Peters 570. " C o m p a r e , for example, the granting of charters to corporations by New Jersey and Delaware. 3 8 13 Peters 580. 39 On this point Ingersoll observed that "it is confidently submitted to this Court, that it will best fulfill its duties by holding the States united by sovereign ties, by the States remaining sovereign, and corporations remaining subject; not by sovereign corporations and subject States," and, he continued, "every charter involves questions of political advantage, regarding which no State looks beyond itself, but simply to its own good, of which no foreign Court can judge. A l l a Court can do is to ascertain the

66

T h e Role of the Supreme Court, 1835-1864

T h e opinion of the Court, written by the chief justice, was concurred in by Justices Story, Thompson, McLean, Wayne, Barbour, and Catron. Justice Baldwin delivered a separate concurring opinion, not reported, which agreed with Webster's contention that a state could not prevent a corporation of another state from doing business within its borders. Justice McKinley still adhered to the opinion he expressed in the lower court despite the eloquent language of Webster and his colleagues. 40 T h e chief justice began his opinion by pointing out that the questions under consideration were of a "very grave character," inasmuch as the decision would in effect determine the validity of many contracts that "have undoubtedly been made by different corporations out of the jurisdiction of the particular State by which they were created." 4 1 H e then proceeded directly to his first consideration, the contentions on the part of the plaintiff in error that a corporation composed of citizens of other states was entitled to the benefit of the privileges and immunities clause, and that the Court should look behind the act of incorporation and see that the Bank of Augusta was composed of citizens of Georgia and so was entitled to the protection afforded citizens of foreign states. T h e chief justice then explained that in the course of the argument too broad a scope had been given to the Court's decision in Bank of United States v. Deveaux.i2 T h i s case, he thought, merely determined that for the purpose of establishing jurisdiction through diversity of citizenship the courts had to inquire into the character of the persons composing a corporation. It did not follow from this will of its own government; and if it finds that that government has not sanctioned the corporation, by express authority for that State, then such corporation cannot be acknowledged by the Court." 10 13 Peters 597; Niles' National Register, L V I (Mar. 23, 1839), 50. " 13 Peters 585. " 5 Cranch 61 (1809). See n. 26, above. T h e original action in Bank of United States v. Deveaux, Fed. Cas. No. 916 (1808), arose in the Circuit Court for the District of Georgia, and was decided per curiam in May, 1808. T h e circuit court said: " A corporation cannot with propriety be denominated a citizen of any state, so that the right to sue in this court under the constitution can only be extended to corporate bodies by a liberality of construction, which we do not feel ourselves at liberty to exercise. As a suit in right of a corporation can never be maintained by the individuals who compose it, either in their individual capacity or by their individual names, how is the citizenship of the individuals of the corporate body ever to be brought into question by the pleadings?" T h e action involved the right of Georgia to tax a branch of the bank at Savannah and was heard on a demurrer to a plea to the jurisdiction of the circuit court. T h e demurrer was overruled. On appeal to the Supreme Court the circuit court was reversed.

Status and Rights of Corporations

67

decision that the members of a corporation were to be regarded as individuals carrying on business in a corporate name, and that therefore the corporation was possessed of the privileges of citizens in matters of contract as well as of their obligations. T h e interpretation contended for would give the citizens of other states far greater privileges than those enjoyed by the citizens of the state itself, and the other states would be deprived of their control over corporate franchises granted by the state. T h e Court held, therefore, that a contract made by a corporation was a contract of the legal entity and not a contract of the individual members. T h e only rights the corporation could claim were the rights granted to it, and not the rights belonging to its members as citizens of a state. 43 T a n e y said it was clear from the charter that the Bank of Augusta was authorized to deal in bills of exchange not only in Georgia but also in other states, foreign or domestic. T o the contention that the provisions of the charter were void insofar as they gave effect to transactions beyond the jurisdiction of Georgia, T a n e y replied: It is very true that a corporation can have no legal existence out of the boundaries of the sovereignty by which it is created. It exists only in contemplation of law, and by force of the law; and where that law ceases to operate, and is no longer obligatory, the corporation can have no existence. It must dwell in the place of its creation, and cannot migrate to another sovereignty." But although it must live and have its being in that state only, yet it does not by any means follow that its existence there will not be recognized in other places; and its residence in one state creates no insuperable objection to its power of contracting in another. It is indeed a mere artificial being, invisible and intangible; yet it is a person, for certain purposes in contemplation of law, and has been recognized as such by the decisions of this Court. . . . Now, natural persons through the intervention of agents, are continually making contracts in countries in which they do not reside; and where they are not personally present when the contract is made; and nobody has ever doubted the validity of these agreements. A n d what greater objection can there be to the capacity of an artificial person, by its agents, to make a contract within the " 13 Peters 586, 587. " Chief Justice Waite called attention to some of the important qualifications of Taney's dictum that a corporation "must dwell in the place of its creation, and cannot migrate to another sovereignty." See Canada Southern Railway Co. v. Gebhard, 109 U.S. 537 (1883); cf. also Justice Brewer's opinion in Adams Express Co. v. Ohio, 166 U.S. 217 (1896). For confirmation of some of Taney's reasoning, see Paul v. Virginia, 8 Wallace 168 (1868). See Ohio and Mississippi Railroad Co. v. Wheeler, decided in 1861 (1 Black 286), wherein Chief Justice T a n e y affirmed his holding in the Bank of Augusta case, declaring that it was now a rule of law "that the artificial person or legal entity known to the common law as a corporation can have no legal existence out of the bounds of the sovereignty by which it is created; that it exists only in contemplation of law, and by force of law; and where that law ceases to operate, the corporation can have no existence. It must dwell in the place of its creation." Ibid., p. 295.

68

The Role of the Supreme Court, 1835-1864

scope of its limited powers, in a sovereignty in which it does not reside; provided such contracts are permitted to be made by them by the laws of the place? Every power, however, of the description of which we are speaking, which a corporation exercises in another state, depends for its validity upon the laws of the sovereignty in which it is exercised; and a corporation can make no valid contract without their sanction, express or implied. A n d this brings us to the question which has been so elaborately discussed; whether, by the comity of nations and between these states, the corporations of one state are permitted to make contracts in another. It is needless to enumerate here the instances in which, by the general practice of civilized countries, the laws of the one, will, by the comity of nations, be recognized and executed in another, where the right of individuals are [sic] concerned. 45

Taney, referring to the right of English corporations to sue in American courts, said he could not imagine that a court in the United States would refuse to execute a contract by which an American corporation had borrowed money in England. "It has, however, been supposed," said the chief justice, . . . that the rules of comity between foreign nations do not apply to the states of this Union; that they extend to one another no other rights than those which are given by the Constitution of the United States; and that the Courts of the general government are not at liberty to presume, in the absence of all legislation on the subject, that a state has adopted the comity of nations towards the other states, as a part of its jurisprudence; or that it acknowledges any rights but those which are secured by the Constitution of the United States. T h e Court thinks otherwise. T h e intimate union of these states, as members of the same great political family; the deep and vital interests which bind them so closely together; should lead us, in the absence of proof to the contrary, to presume a greater degree of comity, and friendship, and kindness towards one another, than we should be authorized to presume between foreign nations. And when (as without doubt must occasionally happen) the interest or policy of any state requires it to restrict the rule, it has but to declare its will, and the legal presumption is at once at an end. But until this is done, upon what grounds could this Court refuse to administer the law of international comity between these states? T h e y are sovereign states; and the history of the past, and the events which are daily occurring, furnish the strongest evidence that they have adopted towards each other the laws of comity in their fullest extent."

T h e silence of the states while these events were taking place, T a n e y thought, showed their assent to the laws of comity which permitted a corporation to make contracts in another state. It was taken for granted that the right of a corporation from one state to sue in another, which was common practice, implied the right to make contracts and to engage in such business as was not prohibited by state law. " 13 Peters 588-589.

"Ibid.,

p. 590.

Status and Rights of Corporations

69

T a n e y reviewed the laws of the states to show that there was a comity of contract as well as of suit. 47 A review of state and national legislation indicated to T a n e y that existing comity permitted corporations to make contracts. After examining the provisions of Alabama's constitution and laws, T a n e y concluded it was the State policy to limit the legislatures' power to issue bank charters, and to secure to the State a large portion of the profits of banking in order to provide a public revenue. B u t Alabama had not made known her policy on the question of whether she intended to exclude all competition between her own banks and the corporations of other states, or to inhibit the circulation of the notes of other banks, the discount of notes, the loan of money, the purchase of bills of exchange, and other such activities. T h e Court could therefore not define State policy, because . . . these questions must be determined by the State itself, and not by the courts of the United States. Every sovereignty would without doubt choose to designate its own line of policy; and would never consent to leave it as a problem to be worked out by the courts of the United States, from a few general principles, which might very naturally be misunderstood or misapplied by the court. . . . Such a course would savour more of legislation than of judicial interpretation. 18

Yet, in spite of Taney's statement that the Court «ught not to determine Alabama's policy on this important question, it would seem that the Court did precisely that by "adopting" comity as the State's policy, and then by presuming legally that her banking laws did not, contrary to her own interpretation, apply to the exercise of this specific power by foreign banking corporations. In arguing the case of Bank of Augusta v. Earle, counsel appealed to the Supreme Court on the ground that the Constitution placed the guardianship of the country's commercial interests in the hands of the " T h i s doctrine of comity, as originated and sanctioned by European jurists, wa» expounded by Justice Story in his Conflict of Laws; see section 35 of the first edition (1834). It has been noted that Story, owing to his acquaintance with the principles of Roman and French law, was responsible for some important innovations in American law. Cf. Two Centuries' Growth of American Law, 1701-1901, p. 290. Taney's application of the doctrine of comity to the law of foreign corporations arose from what is called "a fundamental misconception as to the real nature of a corporation; at most comity is a conclusion, not an explanation." Editorial note signed W . B. R., " T h e Adoption of the Liberal T h e o r y of Foreign Corporations," 79 University of Pennsylvania Law Review (1931), 956, 1119, reprinted in Selected Essays on Constitutional Law (Chicago, 1938), III, 1494. 1 8 1 3 Peters 594. T h e State took advantage of this part of the Court's opinion and quickly passed a law nullifying the effects of the judgment in the Bank of Augusta case. Cf. Laws of Alabama, 1839-1840, p. 69.

7