Supreme Court of the United States · 1884 · Constitutional Law
110 U.S. 421 (1884)
Updated
Constitutional Lawlegal tenderUnited States notesNecessary and Proper Clauseimplied powersborrowing powernational currencysovereign powers
Facts
The defendant tendered United States notes in payment of a debt owed to the plaintiff. Those notes had originally been issued during the Civil War under acts declaring them lawful money and legal tender, later redeemed in gold coin at the Treasury, and then reissued under the Act of May 31, 1878. That 1878 act forbade further retirement of legal tender notes and required redeemed notes belonging to the United States to be reissued and kept in circulation. The plaintiff challenged the legal sufficiency of the tender on constitutional grounds.
Issue
Whether, under the Constitution, United States notes originally issued in time of war as legal tender, later redeemed in coin, and then reissued in time of peace under the Act of 1878, may validly be made legal tender in payment of private debts.
Rule
Under the Constitution, Congress may, as a means appropriate and plainly adapted to carrying into execution its powers to borrow money, coin money, regulate value, and provide a national currency, issue United States notes and impress upon them the quality of legal tender in payment of private debts, so long as the means chosen are not prohibited and are consistent with the letter and spirit of the Constitution. Whether the exigency or wisdom of using that means in war or peace exists is a political question for Congress, not the courts.
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One of 10 multiple-choice questions for this case. Pick an answer to see why.
In Cleveland, Nora Patel sold industrial equipment to Evan Ross on credit. Before payment came due, Congress enacted a statute authorizing newly issued United States treasury notes to circulate as national currency and declaring them legal tender for all private debts; Evan tendered those notes, and Nora refused them as unconstitutional because the Constitution nowhere expressly says Congress may make paper notes legal tender.
If Nora challenges the statute, how should a court rule?
Explanation. The majority held that Congress may issue United States notes and impress upon them the quality of legal tender in payment of private debts as an appropriate means of carrying into execution its powers to borrow money, coin money, regulate value, and provide a national currency. The Constitution need not expressly enumerate that precise means; under the Necessary and Proper Clause, Congress may choose appropriate and plainly adapted means not otherwise prohibited.