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issued by individuals, either singly or collectively, so long as they are not issued upon the authority of a State, and upon a pledge of its faith and credit.
§317. The states are also prohibited from making any thing but gold and silver coin a tender in payment of debts. No State can, therefore, compel a creditor to receive payment of his debt in bank notes, or merchandise, or any thing but gold and silver coin. The object of this restriction, together with that relating to bills of credit, and to the coining of money, was to provide a fixed and uniform currency throughout the United States.
§ 348. We have seen already (§ 332) that Congress is prohibited from passing bills of attainder or ex post facto laws; this clause, for similar reasons, extends the same prohibition to the several States.
§ 349: The States are also prohibited from passing laws impairing the obligations of contracts. This is a very important provision, and has occasioned much discussion. A contract is an agreement to do, or not to do, a particular thing. By the obligation of a contract is here meant that duty of performing it which is recognised and enforced by the laws. If the law is so changed that the means of legally enforcing this duty are materially impaired, the obligation of the contract is no longer the same.
§ 350. Laws impairing the obligation of contracts are, for instance, such as change the intention of the parties to the contract; or affect its validity, construction, duration, or effect; or deviate from its terms by changing the time of its performance; or impose new conditions, or alter those agreed upon; or declare the contract invalid, or alter, or release it.
§351. A change merely in the form or manner of the remedy upon the contract, or in the legal proceedings by
which it is enforced, provided an effectual remedy of some sort is left remaining, is not considered to impair the obligation of the contract, as it simply gives a different mode. of obtaining redress. But to take away all modes of obtaining redress, would impair and destroy the obligation of the contract.
§ 352. A law discharging the person of a bankrupt or insolvent debtor, or his future property, from liability for his debts, is a law impairing the obligation of contracts, and therefore void, if the debt was contracted before the passage of the law; but it would be otherwise if the debt were contracted after the passage of the law.
§ 353. This prohibition embraces all contracts, whether executed or to be executed; whether between private individuals, or a State and individuals, or between corporations, or between the States themselves.
§ 354. Charters of incorporation granted to private persons by a State Legislature, have been regarded as contracts between the corporations and the States, and they cannot, therefore, be altered, repealed, or impaired by the legislature, without the consent of the incorporated body, unless the power to do so is reserved in the original act of incorporation. For instance, the legislature of New Hampshire once passed an act changing the original charter of the Dartmouth College, and transferring the rights of trustees under it, to other trustees appointed by the new act; the Supreme Court of the United States, however, decided that the act of the legislature infringed this clause of the Constitution, and was therefore void. But the charters for public corporations, created for public purposes only, such as cities and boroughs, may be repealed and changed by the legislature, making compensation for any private rights which are thereby destroyed.
§ 355. Retrospective or retroactive laws, are those which operate upon controversies, suits, or facts, which existed. before their passage. The Constitution does not prohibit the States from passing such laws, though they are generally unjust, unless they amount to ex post facto laws, or impair the obligation of contracts.
§ 356. We have seen that the United States cannot grant any title of nobility, (§ 340,) The clause we are now considering extends the same prohibition to the several States. Titles of nobility create distinctions of ranks and an aristocracy, which are contrary in their nature to that political equality of all the citizens, which our free institutions are designed to establish.
[Clause 2.] "No State shall, without the consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing its inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Controul of the Congress."
§ 357. The right to lay and collect taxes, duties, imposts, and excises has been conferred upon Congress, (Art. I. sec. 8, clause 1;) and it has been declared that all duties, imposts, and excises shall be uniform throughout the United States. This uniformity could scarcely be maintained, if each of the States was at liberty, irrespective of Congress, to impose such duties on imports or exports as it thought proper.
§ 358. It is, therefore, provided that no State shall, without the consent of Congress, lay any imposts or duties
on imports or exports, except what may be absolutely necessary for executing its inspection laws; and the net produce of all duties and imposts laid by any State on imports or exports, shall be for the use of the Treasury of the United States, and all such laws shall be subject to the revision and control of Congress.
§ 359. This clause, nevertheless, leaves to the States the right to enact and enforce inspection laws. By inspection laws are meant laws requiring certain articles of commerce to be examined, and their quality, soundness, or healthfulness to be ascertained by officers called inspectors. The object of these laws is not to raise a revenue, but to protect the public from fraud and imposition, and to ascertain the character of the merchandise, so that it shall be suitable for exportation abroad or for domestic use.
§ 360. The legislature of Maryland, in 1821, passed an act requiring every importer of goods by wholesale, bale, or package, and every person selling the same by wholesale, bale, or package, to take out a license and pay for it, with certain penalties in case of refusal. The Supreme Court of the United States decided that the act was a violation of the clause we are now considering, and therefore unconstitutional and void.
§ 361. To tax the importer, or to tax the goods in the hands of the importer, was considered by the court to be in effect a tax on imports. If a tax could be levied in that form by a State, it might be levied to such a burdensome extent as to restrain importation, and thus diminish the revenue of the general government from imports, so far as it was drawn from importations into that particular State.
§ 362. But when the importer has so acted upon the
goods imported, that they have become incorporated and mixed up with the mass of property in the country, they then lose their distinctive character as imports, and are subject to be taxed by a State. While, however, they reremain the property of the importer, in his warehouse, in the original form or packages in which they were imported, a tax upon them is a duty on imports, and, as such, is prohibited by this clause.
[Clause 3.] "No State shall, without the Consent of Congress, lay any Duty of Tonnage, keep Troops, or Ships of War in time of Peace, enter into any Agreement or Compact with another State, or with a foreign Power, or engage in War, unless actually invaded, or in such imminent Danger as will not admit of Delay."
§ 363. We have already considered the nature of tonnage duties, (§ 197,) and have seen that Congress has power to lay such duties as a part of its general authority to lay and collect taxes, duties, imposts, and excises. It is also in some measure connected with the regulation of commerce, which is likewise intrusted to Congress. This clause does not absolutely prohibit the States from laying a duty on tonnage, but declares that they shall not do so without the consent of Congress, in order that Congress may have supervision and control of the whole subject.
§ 364. The States are also prohibited from keeping troops, or ships of war, in time of peace, except with consent of Congress. The power to declare war, raise and support armies and navies, and provide for the common defence, is vested in Congress, whose authority, extending over all the States, can produce uniformity in the movements, organization, and discipline of the army and navy.