Briscoe v. President of the Bank of the Commonwealth

36 U.S. 257 (____) 11 Pet. 257 JOHN BRISCOE AND OTHERS v. THE PRESIDENT AND DIRECTORS OF THE BANK OF THE COMMONWEALTH OF KENTUCKY. Supreme Court of United States. *263 The case was argued by Mr. White and Mr. Southard, for the appellants; and by B. Hardin and Mr. Clay, for the appellees. Mr. White for the plaintiffs in error. *311 Mr. Justice M`LEAN, delivered the opinion of the Court. This case is brought before this Court, by a writ of error from the court of appeals of the state of Kentucky; under the 25th section of the judiciary act of 1789. An action was commenced by the Bank of the Commonwealth of Kentucky, against the plaintiffs in error, in the Mercer circuit court of Kentucky, on a note for 2,048 dollars 37 cents, payable to the president and directors of the bank; and the defendants filed two special pleas, in the first of which oyer was prayed of the note on which suit was brought, and they say that the plaintiff ought not to have, &c. because the note was given on the renewal of a like note, given to the said bank; and they refer to the act establishing the bank, and allege, that it never received any part of the capital stock specified in the act; that the bank was authorized to issue bills of credit, on the faith of the state, in violation of the constitution of the United States. That, by various statutes, the notes issued were made receivable in discharge of executions, and if not so received, the collection of the money should be delayed, &c.; and the defendants aver, that the note was given to the bank on a loan of its bills, and that the consideration, being illegal, was void. The second plea presents, substantially, the same facts. To both the pleas, a general demurrer was filed; and the court sustained the demurrer, and gave judgment in favour of the bank. This judgment was removed, by appeal, to the court of appeals, which is the highest court of judicature in the state, where the judgment of the circuit court was affirmed; and being brought before this Court by writ of error, the question is presented whether the notes issued by the bank are bills of credit, emitted by the state, in violation of the constitution of the United States. This cause is approached, under a full sense of its magnitude. Important as have been the great questions brought before this tribunal for investigation and decision, none have exceeded, if they have equalled, the importance of that which arises in this case. The amount of property involved in the principle, is very large; but this amount, however great, could not give to the case the deep interest which is connected with its political aspect. *312 There is no principle on which the sensibilities of communities are so easily excited, as that which acts upon the currency; none of which states are so jealous, as that which is restrictive of the exercise of sovereign powers. These topics are, to some extent, involved in the present case. It does not belong to this Court to select the subjects of their deliberations; but they cannot shrink from the performance of any duty imposed by the constitution and laws. The definition of the terms bills of credit, as used in the constitution, is the first requisite in the investigation of this subject; and if this be not impracticable, it will be found a work of no small difficulty. Even in standard works on the exact sciences, the terms used are not always so definite as to express only the idea intended. In works on philosophy there is, generally, still less precision of language. But in political compacts, more is often left for construction, than in most other compositions. This results, in a great degree, from the elements employed in the formation of such compacts; certain interests are to be conciliated and protected; the force of local prejudices must be met and overcome; and habits and modes of action the most opposite, are to be reconciled. This was peculiarly the case in the formation of the constitution of the United States. And instead of objecting to it, on account of the vagueness of some of its terms; its general excellence, both as it regards its principles and language, should excite our admiration. The terms bills of credit, in their mercantile sense, comprehend a great variety of evidences of debt, which circulate in a commercial country. In the early history of banks, it seems their notes were generally denominated bills of credit; but in modern times they have lost that designation; and are now called, either bank bills, or bank notes. But the inhibition of the constitution applies to bills of credit, in a more limited sense. It would be difficult to classify the bills of credit, which were issued in the early history of this country. They were all designed to circulate as money, being issued under the laws of the respective colonies; but the forms were various in the different colonies, and often in the same colony. In some cases they were payable with interest, in others without *313 interest. Funds, arising from certain sources of taxation were pledged for their redemption, in some instances; in others they were issued without such a pledge. They were sometimes made a legal tender, at others not. In some instances, a refusal to receive them operated as a discharge of the debt; in others, a postponement of it. They were sometimes payable on demand; at other times, at some future period. At all times the bills were receivable for taxes, and in payment of debts due to the public; except, perhaps, in some instances, where they had become so depreciated as to be of little or no value. These bills were frequently issued by committees, and sometimes by an officer of the government, or an individual designated for that purpose. The bills of credit emitted by the states, during the revolution, and prior to the adoption of the constitution, were not very dissimilar from those which the colonies had been in the practice of issuing. There were some characteristics, which were common to all these bills. They were issued by the colony or state, and on its credit. For in cases where funds were pledged, the bills were to be redeemed at a future period, and gradually as the means of redemption should accumulate. In some instances, congress guaranteed the payment of bills emitted by a state. They were, perhaps, never convertible into gold and silver, immediately on their emission; as they were issued to supply the pressing pecuniary wants of the government, their circulating as money was indispensable. The necessity which required their emission, precluded the possibility of their immediate redemption. In the case of Craig et al. v. The State of Missouri, 4 Peters, 410; this Court was called upon, for the first time, to determine what constituted a bill of credit, within the meaning of the constitution. A majority of the judges in that case, in the language of the Chief Justice, say, that "bills of credit signify a paper medium, intended to circulate between individuals, and between government and individuals, for the ordinary purposes of society." A definition so general as this, would certainly embrace every description of paper which circulates as money. Two of the dissenting judges on that occasion, gave a more definite, though, perhaps, a less accurate meaning, of the terms bills of credit. By one of them it was said, "a bill of credit may, therefore, be *314 considered a bill drawn and resting merely on the credit of the drawer, as contradistinguished from a fund constituted or pledged, for the payment of the bill." And, in the opinion of the other, it is said, "to constitute a bill of credit, within the meaning of the constitution, it must be issued by a state, and its circulation, as money, enforced by statutory provisions. It must contain a promise of payment by the state generally, when no fund has been appropriated to enable the holder to convert it into money. It must be circulated on the credit of the state; not that it will be paid on presentation, but that the state, at some future period, on a time fixed or resting in its own discretion, will provide for the payment." These definitions cover a large class of the bills of credit issued and circulated as money, but there are classes which they do not embrace; and it is believed that no definition, short of a description of each class, would be entirely free from objection; unless it be in the general terms used by the venerable and lamented Chief Justice. The definition, then, which does include all classes of bills of credit emitted by the colonies or states; is, a paper issued by the sovereign power, containing a pledge of its faith, and designed to circulate as money. Having arrived at this point, the next inquiry in the case is whether the notes of the Bank of the Commonwealth were bills of credit, within the meaning of the constitution. The first section of the charter provides, that the bank shall be established in the name and behalf of the commonwealth of Kentucky, under the direction of a president and twelve directors, to be chosen by joint ballot of both houses of the general assembly, &c. The second provides that the president and directors of the bank, and their successors in office, shall be a corporation and body politic, in law and in fact, by the name and style of the president and directors of the Bank of the Commonwealth of Kentucky, and shall be capable, in law, to sue and be sued, to purchase and sell every description of property. In the third section it is declared, that the stock of the bank shall be exclusively the property of the commonwealth of Kentucky, and that no individual shall own any part of it. The fourth section authorizes the president and directors to issue notes, &c.; and in the fifth section it is declared, that the capital stock *315 shall be two millions of dollars, to be paid as follows: "all moneys hereafter paid into the treasury for the purchase of the vacant land of the commonwealth; all moneys paid into the treasury for the purchase of land warrants; all moneys received for the sale of vacant lands west of the Tennessee river, and so much of the capital stock owned by the state in the Bank of Kentucky:" and as the treasurer of the state received these moneys from time to time, he was required to pay the same into the bank. The bank was authorized to receive moneys on deposite, to make loans on good personal security, or on mortgages; and by the ninth section, the bank was prohibited from increasing its debts beyond double the amount of its capital. Certain limitations were imposed on loans to individuals, and the accommodations of the bank were to be apportioned among the different counties of the state. The president was required to make a report to each session of the legislature. The notes were to be made payable in gold and silver, and were receivable in payment of taxes and other debts due to the state. All mortgages executed to the bank, gave to it a priority. By a supplementary act it was provided, that the president and directors might issue three millions of dollars. In 1821, an act was passed, authorizing the treasurer of the state to receive the dividends of the bank. The notes issued by the bank were in the usual form of bank notes, in which the Bank of the Commonwealth promised to pay to the bearer on demand, the sum specified on the face of the note. There is no evidence of any part of the capital having been paid into the bank; and as the pleas, to which the demurrers were filed, aver that no part of the capital was paid, the fact averred is admitted on the record. It is to be regretted that any technical point arising on the pleadings should be relied on in this case; which involves principles and interests of such deep importance. Had the bank pleaded over and stated the amount actually paid into it by the state, under the charter; the ground on which it stands would have been strengthened. As the notes of the bank were receivable in payment for land, and land warrants, and perhaps constituted no inconsiderable part of the circulation of the state; the natural operation would be for the treasurer to receive the notes of the bank, and pay them over to it, as *316 a part of its capital. This would be to the bank equal to a payment in the notes of other banks, as it would lessen the demand against it; leaving to the bank the securities on the original discounts. The notes of this bank, as also the notes of the bank of Kentucky, by an act of the legislature, were required to be received in discharge of all executions by plaintiffs; and if they failed to endorse on the executions, that they would be so received; further proceedings on the judgments were delayed two years. On the part of the plaintiffs in error, it is contended, that the provision in the constitution, that "no state shall coin money," "emit bills of credit," or make any thing but gold and silver coin a tender in payment of debts," are three distinct powers which are inhibited to the states; and that if the bills of the Bank of the Commonwealth were substantially made a tender, by an act of the legislature of Kentucky, it must be fatal to the action of the bank in this case. It is unnecessary to consider on this head, whether the above provision of the act of the legislature, making these notes receivable in discharge of executions, is substantially a tender law; as such a question, however it might arise on the execution, cannot reach the obligation given to the bank. If the legislature of a state attempt to make the notes of any bank a tender, the act will be unconstitutional; but such attempt could not affect, in any degree, the constitutionality of the bank. The act referred to in the present case, was not connected with the charter of the bank. So far as this act has a bearing on the bills issued by this bank, and may tend to show their proper character, it may be considered. But the main grounds on which the counsel for the plaintiffs rely, is, that the Bank of the Commonwealth, in emitting the bills in question, acted as the agent of the state; and that, consequently, the bills were issued by the state. That, as a state is prohibited from issuing bills of credit, it cannot do indirectly, what it is prohibited from doing directly. That the constitution intended to place the regulation of the currency under the control of the federal government; and that the act of Kentucky is not only in violation of the spirit of the constitution, but repugnant to its letter. These topics have been ably discussed at the bar, and in a printed argument on behalf of the plaintiffs. That by the constitution, the currency, so far as it is composed of *317 gold and silver, is placed under the exclusive control of congress, is clear; and it is contended, from the inhibition on the states to emit bills of credit, that the paper medium was intended to be made subject to the same power. If this argument be correct, and the position that a state cannot do indirectly, what it is prohibited from doing directly, be a sound one; then it must follow, as a necessary consequence, that all banks incorporated by a state are unconstitutional. And this, in the printed argument, is earnestly maintained; though it is admitted not to be necessary to sustain the ground assumed for the plaintiffs. The counsel of the plaintiffs, who have argued the case at the bar, do not carry the argument to this extent. This doctrine is startling, as it strikes a fatal blow against the state banks; which have a capital of near four hundred millions of dollars, and which supply almost the entire circulating medium of the country. But, let us for a moment examine it dispassionately. The federal government is one of delegated powers. All powers not delegated to it, or inhibited to the states, are reserved to the states, or to the people. A state cannot emit bills of credit; or, in other words, it cannot issue that description of paper to answer the purposes of money, which was denominated, before the adoption of the constitution, bills of credit. But a state may grant acts of incorporation for the attainment of those objects which are essential to the interests of society. This power is incident to sovereignty; and there is no limitation in the federal constitution, on its exercise by the states, in respect to the incorporation of banks. At the time the constitution was adopted, the Bank of North America, and the Massachusetts Bank, and some others, were in operation. It cannot, therefore, be supposed that the notes of these banks were intended to be inhibited by the constitution; or that they were considered as bills of credit, within the meaning of that instrument. In fact, in many of their most distinguishing characteristics, they were essentially different from bills of credit, in any of the various forms in which they were issued. If, then, the powers not delegated to the federal government, nor denied to the states, are retained by the states or the people; and by a fair construction of the terms bills of credit, as used in the constitution, they do not include ordinary bank notes: does it not follow *318 that the power to incorporate banks to issue these notes may be exercised by a state? A uniform course of action, involving the right to the exercise of an important power by the state governments, for half a century; and this almost without question; is no unsatisfactory evidence that the power is rightfully exercised. But this inquiry, though embraced in the printed argument does not belong to the case, and is abandoned at the bar. A state cannot do that, which the federal constitution declares it shall not do. It cannot coin money. Here is an act inhibited in terms so precise that they cannot be mistaken. They are susceptible of but one construction. And it is certain that a state cannot incorporate any number of individuals, and authorize them to coin money. Such an act would be as much a violation of the constitution, as if the money were coined by an officer of the state, under its authority. The act being prohibited, cannot be done by a state, either directly, or indirectly. And the same rule applies as to the emission of bills of credit by a state. The terms used here are less specific, than those which relate to coinage. Whilst no one can mistake the latter, there are great differences of opinion as to the construction of the former. If the terms in each case were equally definite, and were susceptible of but one construction, there could be no more difficulty in applying the rule in the one case than in the other. The weight of the argument is admitted, that a state cannot, by any device that may be adopted, emit bills of credit. But the question arises, what is a bill of credit within the meaning of the constitution? On the answer of this, must depend the constitutionality or unconstitutionality of the act in question. A state can act only through its agents; and it would be absurd to say, that any act was not done by a state which was done by its authorized agents. To constitute a bill of credit within the constitution, it must be issued by a state, on the faith of the state, and be designed to circulate as money. It must be a paper which circulates on the credit of the state; and is so received and used in the ordinary business of life. The individual or committee who issue the bill, must have the power to bind the state; they must act as agents, and of course do not incur any personal responsibility, nor impart, as individuals, any *319 credit to the paper. These are the leading characteristics of a bill of credit, which a state cannot emit. Were the notes of the Bank of the Commonwealth, bills of credit, issued by the state? The president and directors of the bank were incorporated, and vested with all the powers usually given to banking institutions. They were authorized to make loans on personal security, and on mortgages of real estate. Provisions were made, and regulations, common to all banks; but there are other parts of the charter which, it is contended, show that the president and directors acted merely as agents of the state. In the preamble of the act, it is declared to be "expedient and beneficial to the state, and the citizens thereof, to establish a bank on the funds of the state, for the purpose of discounting paper and making loans for longer periods than has been customary; and for the relief of the distresses of the community." The president and directors were elected by the legislature. The capital of the bank belonged to the state, and it received the dividends. These and other parts of the charter, it is argued, show, that the bank was a mere instrument of the state to issue bills; and that, if by such a device, the provision of the constitution may be evaded, it must become a nullity. That there is much plausibility and some force in this argument, cannot be denied; and it would be in vain to assert that on this head, the case is clear of difficulty. The preamble of the act to incorporate the bank, shows the object of its establishment. It was intended to "relieve the distresses of the community;" and the same reason was assigned, it is truly said, for the numerous emissions of paper money, during the revolution, and prior to that period. To relieve the distresses of the community, or the wants of the government, has been the common reason assigned for the increase of a paper medium, at all times and in all countries. When a measure of relief is determined on, it is never difficult to find plausible reasons for its adoption. And it would seem in regard to this subject, that the present generation has profited but little from the experience of past ages. The notes of this bank, in common with the notes of all other banks in the state, and indeed, throughout the Union, with some exceptions, *320 greatly depreciated. This arose from various causes then existing; and which, under similar circumstances, must always produce the same result. The intention of the legislature in establishing the bank, as expressed in the preamble, must be considered in connection with every part of the act; and the question must be answered, whether the notes of the bank were bills of credit within the inhibition of the constitution. Were these notes issued by the state? Upon their face, they do not purport to be issued by the state, but by the president and directors of the bank. They promise to pay to bearer on demand the sums stated. Were they issued on the faith of the state? The notes contain no pledge of the faith of the state, in any form. They purport to have been issued on the credit of the funds of the bank, and must have been so received in the community. But these funds, it is said, belonged to the state; and the promise to pay on the face of the notes was made by the president and directors, as agents of the state. They do not assume to act as agents, and there is no law which authorizes them to bind the state. As in, perhaps, all bank charters, they had the power to issue a certain amount of notes; but they determined the time and circumstances which should regulate these issues. When a state emits bills of credit, the amount to be issued is fixed by law, as also the fund out of which they are to be paid, if any fund be pledged for their redemption; and they are issued on the credit of the state, which in some form appears upon the face of the notes, or by the signature of the person who issues them. As to the funds of the Bank of the Commonwealth, they were, in part only, derived from the state. The capital, it is true, was to be paid by the state; but in making loans, the bank was required to take good securities; and these constituted a fund, to which the holders of the notes could look for payment, and which could be made legally responsible. In this respect the notes of this bank were essentially different from any class of bills of credit, which are believed to have been issued. The notes were not only payable in gold and silver, on demand; but there was a fund, and, in all probability, a sufficient fund to redeem *321 them. This fund was in possession of the bank, and under the control of the president and directors. But whether the fund was adequate to the redemption of the notes issued, or not; is immaterial to the present inquiry. It is enough that the fund existed, independent of the state, and was sufficient to give some degree of credit to the paper of the bank. The question is not whether the Bank of the Commonwealth had a large capital or a small one, or whether its notes were in good credit or bad: but whether they were issued by the state; and on the faith and credit of the state. The notes were received in payment of taxes, and in discharge of all debts to the state; and this, aided by the fund arising from notes discounted, with prudent management, under favourable circumstances, might have sustained, and it is believed did sustain to a considerable extent, the credit of the bank. The notes of this bank which are still in circulation are equal in value, it is said, to specie. But there is another quality which distinguished these notes from bills of credit. Every holder of them could not only look to the funds of the bank for payment, but he had, in his power, the means of enforcing it. The bank could be sued; and the records of this Court show, that while its paper was depreciated, a suit was prosecuted to judgment against it, by a depositor; and who obtained from the bank, it is admitted, the full amount of his judgment, in specie. What means of enforcing payment from the state had the holder of a bill of credit. It is said by the counsel for the plaintiffs, that he could have sued the state. But was a state liable to be sued? In the case of Chisholm's Executor v. The State of Georgia, in 1792, it was decided, that a state could be sued before this Court; and this led to the adoption of the amendment of the constitution, on this subject. But the bills of credit which were emitted, prior to the constitution, are those that show the mischief against which the inhibition was intended to operate. And we must look to that period, as of necessity we have done, for the definition and character of a bill of credit. No sovereign state is liable to be sued without her consent. Under the articles of confederation, a state could be sued only in cases of boundary. It is believed that there is no case where a suit has been brought, at any time, on bills of credit, against a state; and it is certain that *322 no suit could have been maintained, on this ground, prior to the constitution. In the year 1769, the colonial legislature of Maryland passed an "act for emitting bills of credit;" in which bills to the amount of 318,000 dollars were authorized to be struck, under the direction of two commissioners, whom the governor should appoint. These persons were to be styled, "commissioners for emitting bills of credit;" by that name to have succession, to sue or be sued, in all cases relative to their trust. The commissioners were authorized to make loans on good security, to draw bills of exchange on London, under certain circumstances; and they were authorized to reissue the bills issued by them. In the year 1712, it is stated in Hewit's History of South Carolina, the legislature of that colony established a public bank; and issued forty-eight thousand pounds, in bills of credit, called bank bills. The money was to be lent out at interest on landed or personal security. The bills emitted under these acts are believed to be peculiar, and unlike all other emissions under the colonial governments. But a slight examination of the respective acts will show, that the bills authorized by them, were emitted on the credit of the colonies; and were essentially different from the notes in question. The holders of these bills could not convert them into specie; they could bring no suit. The Maryland bill was as follows: "This indented bill of six dollars shall entitle the bearer hereof, to receive bills of exchange payable in London, or gold and silver at the rate of four shillings and six pence per dollar, for the said bill, according to the directions of an act of the assembly of Maryland, dated at Annapolis: signed by R. Conden and J. Clapham." If the leading properties of the notes of the Bank of the Commonwealth were essentially different from any of the numerous classes of bills of credit, issued by the states or colonies; if they were not emitted by the state, nor upon its credit, but on the credit of the funds of the bank; if they were payable in gold and silver on demand, and the holder could sue the bank; and if to constitute a bill of credit, it must be issued by a state, and on the credit of the state, and the holder could not, by legal means, compel the payment of the bill; how can the character of these two descriptions of paper be considered as identical? They were both circulated as money; but in name, in form, and in substance, they differ. *323 It is insisted that the principles of this case were settled in the suit of Craig et al. v. The State of Missouri. In that case the Court decided that the following paper, issued under a legislative act of Missouri, was a bill of credit, within the meaning of the constitution: "This certificate shall be receivable at the treasury, or any of the loan offices of the state of Missouri, in the discharge of taxes or debts due to the state, in the sum of dollars, with interest for the same, at the rate of two per cent. per annum, from the date." By the act, certificates in this form, of various amounts, were issued and were receivable in discharge of all taxes or debts due to the state; and in payment of salaries of state officers. Four of the seven judges considered that these certificates were designed to circulate as money; that they were issued on the credit of the state; and consequently were repugnant to the constitution. These certificates were loaned on good security, at different loan offices of the state; and were signed by the auditor and treasurer of state. They were receivable in payment of salt, at the public salt works," and the proceeds of the salt springs, the interest accruing to the state; and all estates purchased by officers under the provisions of the act, and all the debts then due, or which should become due to the state, were pledged and constituted a fund for the redemption of the certificates;" and the faith of the state was also pledged for the same purpose. It is only necessary to compare these certificates with the notes issued by the Bank of the Commonwealth, to see that no two things which have any property in common, could be more unlike. They both circulated as money, and were receivable on public account; but in every other particular they were essentially different. If to constitute a bill of credit, either the form or substance of the Missouri certificate is requisite; it is clear that the notes of the Bank of the Commonwealth, cannot be called bills of credit. To include both papers under one designation, would confound the most important distinctions; not only as to their form and substance, but also as to their origin and effect. There is no principle decided by the Court in the case of Craig v. The State of Missouri, which at all conflicts with the views here presented. Indeed the views of the Court are sustained and strengthened, by contrasting the present case with that one. The state of Kentucky is the exclusive stockholder in the Bank of *324 the Commonwealth: but does this fact change the character of the corporation? Does it make the bank identical with the state? And are the operations of the bank the operations of the state? Is the bank, the mere instrument of the sovereignty, to effectuate its designs; and is the state responsible for its acts? The answer to these inquiries will be given in the language of this Court, used in former adjudications. In the case of the Bank of the United States v. The Planters' Bank, 9 Wheat. 904, the Chief Justice, in giving the opinion of the Court, says, "it is, we think, a sound principle, that when a government becomes a partner in any trading company, it divests itself, so far as concerns the transactions of that company, of its sovereign character, and takes that of a private citizen. Instead of communicating to the company its privileges and its prerogatives, it descends to a level with those with whom it associates itself; and takes the character which belongs to its associates and to the business which is to be transacted. Thus, many states of the Union who have an interest in banks, are not suable even in their own courts; yet they never exempt the corporation from being sued. The state of Georgia, by giving to the bank the capacity to sue and be sued, voluntarily strips itself of its sovereign character, so far as respects the transactions of the bank; and waives all the privileges of that character. As a member of a corporation, a government never exercises its sovereignty. It acts merely as a corporator, and exercises no other power in the management of the affairs of the corporation, than are expressly given by the incorporating act." "The government becoming a corporator lays down its sovereignty, so far as respects the transactions of the corporation; and exercises no power or privilege which is not derived from the charter." "The state does not, by becoming a corporator, identify itself with the corporation." In the case of the Bank of the Commonwealth of Kentucky v. Wister and others, 3 Peters, 318, the question was raised whether a suit could be maintained against the bank, on the ground that it was substantially a suit against the state. The agents of the defendants deposited a large sum in the bank; and when the deposite was demanded, the bank offered to pay the amount in its own notes, which were at a discount. The notes were refused, and a suit was commenced on the certificate of deposite. A judgment being entered against the bank, in the circuit court of *325 Kentucky; a writ of error was brought to this Court. In the court below, the defendant pleaded to the jurisdiction, on the ground that the state of Kentucky alone was the proprietor of the stock of the bank; for which reason, it was insisted that the suit was virtually against a sovereign state. Mr. Justice Johnson, in giving the opinion of the Court, after copying the language used in the case above quoted, says, "If a state did exercise any other power in or over a bank, or impart to it its sovereign attributes, it would be hardly possible to distinguish the issue of the paper of such banks from a direct issue of bills of credit; which violation of the constitution, no doubt the state here intended to avoid." Can language be more explicit and more appropriate than this, to the points under consideration? This Court further say, "the defendants pleaded to the jurisdiction on the ground that the state of Kentucky was sole proprietor of the stock of the bank, for which reason it was insisted that the suit was virtually against a sovereign state. But the Court is of opinion that the question is no longer open here. The case of the United States Bank v. The Planters' Bank of Georgia, was a much stronger case for the defendants than the present; for there the state of Georgia was not only a proprietor, but a corporator. Here the state is not a corporator; since, by the terms of the act, the president and directors alone constitute the body corporate, the metaphysical person liable to suit." If the bank acted as the agent of the state under an unconstitutional charter, although the persons engaged might be held liable, individually; could they have been held responsible as a corporation? It is true the only question raised by the plea was, whether the bank could be sued, as its stock was owned by the state? But it would be difficult to decide this question without, to some extent, considering the constitutionality of the charter. And, indeed, it appears that this point did not escape the attention of the Court; for they say, "if a state imparted any of its sovereign attributes to a bank in which it was a stockholder, it would hardly be possible to distinguish the paper of such a bank from bills of credit;" and this, the Court say, "the state in that case intended to avoid." These extracts cover almost every material point, raised in this investigation. They show that a state, when it becomes a stockholder in a bank, *326 imparts none of its attributes of sovereignty to the institution; and that this is equally the case, whether it own a whole or a part of the stock of the bank. It is admitted by the counsel for the plaintiffs, that a state may become a stockholder in a bank; but they contend that it cannot become the exclusive owner of the stock. They give no rule by which the interest of a state in such an institution shall be graduated; nor at what point the exact limit shall be fixed. May a state own one-fourth, one-half, or three-fourths of the stock? If the proper limit be exceeded, does the charter become unconstitutional; and is its constitutionality restored, if the state recede within the limit? The Court are as much at a loss to fix the supposed constitutional boundary of this right, as the counsel can possibly be. If the state must stop short of owning the entire stock, the precise point may surely be ascertained. It cannot be supposed, that so important a constitutional principle as contended for exists without limitation. If a state may own a part of the stock of a bank, we know of no principle which prevents it from owning the whole. As a stockholder, in the language of this Court, above cited, it can exercise no more power in the affairs of the corporation, than is expressly given by the incorporating act. It has no more power than any other stockholder to the same extent. This Court did not consider, that the character of the incorporation was at all affected by the exclusive ownership of the stock by the state. And they say, that the case of the Planters' Bank presented stronger ground of defence, than the suit against the Bank of the Commonwealth. That in the former, the state of Georgia was not only a proprietor, but a corporator; and, that in the latter, the president and directors constituted the corporate body. And yet in the case of the Planters' Bank, the Court decided the state could only be considered as an ordinary corporator; both as it regarded its powers and responsibilities. If these positions be correct, is there not an end to this controversy? If the Bank of the Commonwealth is not the state, nor the agent of the state; if it possess no more power than is given to it in the act of incorporation; and precisely the same as if the stock were owned by private individuals, how can it be contended, that the notes of the bank can be called bills of credit, in contradistinction from the notes of other banks? *327 If, in becoming an exclusive stockholder in this bank, the state imparts to it none of its attributes of sovereignty; if it holds the stock as any other stockholder would hold it; how can it be said to emit bills of credit? Is it not essential to constitute a bill of credit, within the constitution, that it should be emitted by a state? Under its charter the bank has no power to emit bills which have the impress of the sovereignty, or which contain a pledge of its faith. It is a simple corporation, acting within the sphere of its corporate powers; and can no more transcend them than any other banking institution. The state, as a stockholder, bears the same relation to the bank as any other stockholder. The funds of the bank and its property, of every description, are held responsible for the payment of its debts; and may be reached by legal or equitable process. In this respect, it can claim no exemption under the prerogatives of the state. And, if in the course of its operations, its notes have depreciated like the notes of other banks, under the pressure of circumstances; still it must stand or fall by its charter. In this its powers are defined; and its rights, and the rights of those who give credit to it, are guaranteed. And even an abuse of its powers, through which its credit has been impaired and the community injured, cannot be considered in this case. We are of the opinion, that the act incorporating the Bank of the Commonwealth, was a constitutional exercise of power by the state of Kentucky: and, consequently, that the notes issued by the bank are not bills of credit, within the meaning of the federal constitution. The judgment of the court of appeals is, therefore, affirmed, with interest and costs. Mr. Justice THOMPSON, concurring. I concur in that part of the opinions of the Court which considers the bills issued by the bank, as not coming under the denomination of bills of credit, prohibited by the constitution of the United States, to be emitted by the states. The two great infirmities which attended the bills of credit which circulated as money, and come within the mischief intended to be guarded against by the constitutional prohibition; were, the want of some real and substantial fund being provided for their payment and redemption, and no mode provided for enforcing payment of the same. It is true, that in many, and perhaps in most cases where they *328 were issued, provision was made for the redemption of the bills; so far as the promise of the state, through the medium of taxation, might be said to provide the means for payment. But this was illusory, and could in no way be enforced. The bills were always signed by some person, who, upon their face, appeared to act in the character of agent of the state; and who could not, of course, be made personally responsible for their payment; and the state was not suable under the old confederation, nor under the present constitution, even before the amendment in that respect, by citizens of the same state; and those would most likely be the persons who would be the principal holders of the bills issued by the state, of which they were citizens. There being, therefore, no means of enforcing payment of such bills, their credit depended solely upon the faith and voluntary will of the state; and were therefore purely bills of credit. But that is not the situation or character of the bills of the bank in question. There is an ample fund provided for their redemption; and they are issued by a corporation which can be sued, and payment enforced in the courts of justice, in the ordinary mode of recovering debts. If I considered these bank notes as bills of credit, within the sense and meaning of the constitutional prohibition; I could not concur in opinion with the majority of the Court, that they were not emitted by the state. The state is the sole owner of the stock of the bank; and all private interest in it is expressly excluded. The state has the sole and exclusive management and direction of all its concerns. The corporation is the mere creature of the state, and entirely subject to its control; and I cannot bring myself to the conclusion, that such an important provision in the constitution may be evaded by mere form. Mr. Justice STORY, dissenting. When this cause 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. The State of Missouri, 4 Peters' R. 410. Among that majority was the late Mr. Chief Justice Marshall; a name never to be pronounced without reverence. The cause has been again argued, and precisely upon the same grounds as at the former argument. A *329 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. I offer no apology for this apparent exception to the course which I have generally pursued, when I have had the misfortune to differ from my brethren, in maintaining silence; for in truth it is no exception at all, as upon constitutional questions I ever thought it my duty to give a public expression of my opinions, when they differed from that of the Court. The first question naturally arising in the case is, what is the true interpretation of the clause of the constitution, that "no state shall emit bills of credit." In other words, what is a bill of credit, in the sense of the constitution? After the decision of the case of Craig v. The State of Missouri, I had not supposed, that this was a matter which could be brought into contestation, at least unless the authority of that case was to be overturned; and the Court were to be set adrift from its former moorings. The Chief Justice, in delivering the opinion of the Court upon that occasion, in answer to the very inquiry said; "To emit bills of credit, conveys to the mind the idea of issuing paper, intended to circulate through the community for its ordinary purposes as money, which paper is redeemable at a future day. This is the sense in which it has been always understood." Again: "The term has acquired an appropriate meaning; and bills of credit signify a paper medium, intended to circulate between individuals, and between government and individuals, for the ordinary purposes of society." Again: "If the prohibition means any thing, if the words are not empty sounds, it must comprehend the emission of any paper medium by a state government, for the purposes of common circulation." One should suppose that this language was sufficiently exact and definite to remove all possible doubt upon the point: and it has the more weight, because it came from one, who was himself an actor in the very times when bills of credit constituted the currency of the whole country; and whose experience justified him in this exposition. But, it seems, that this definition is not now deemed satisfactory, or to be adhered to; and a new exposition is sought, which, in its predicaments, shall not comprehend the bills in question. The arguments of the learned counsel for the bank, on the present occasion have, as it appears to me, sought for a definition, which shall exclude *330 any perils to their case; rather than a definition founded in the intention and language of the constitution. It appears to me, that the true nature and objects of the prohibition, as well as its language, can properly be ascertained only by a reference to history; to the mischiefs existing, and which had existed when the constitution was formed; and to the meaning then attached to the phrase "bills of credit," by the people of the United States. If we look into the meaning of the phrase as it is found in the British laws, or in our own laws, as applicable to the concerns of private individuals, or private corporations, we shall find that there is no mystery about the matter; and that when bills of credit are spoken of, the words mean negotiable paper, intended to pass as currency, or as money, by delivery or indorsement. In this sense, all bank notes, or, as the more common phrase is, bank bills, are bills of credit. They are the bills of the party issuing them, on his credit, and the credit of his funds; for the purposes of circulation as currency or money. Thus, for example, as we all know, bank notes payable to the bearer, (or when payable to order, indorsed in blank,) pass in the ordinary intercourse and business of life, as money; and circulate, and are treated as money. They are not, indeed, in a legal and exact sense, money; but, for common purposes, they possess the attributes, and perform the functions of money. Lord Mansfield, in Miller v. Rice, 1 Burr. 457, speaking on the subject of bank notes, observed, "that these notes are not like bills of exchange, mere securities, or documents for debts, and are not so esteemed; but are treated as money, in the ordinary course and transactions of credit and of business, by the general consent of mankind: and on payment of them, whenever a receipt is required, the receipts are always given as for money, not as for securities or notes." And, indeed, so much are they treated as money, that they pass by a will which bequeaths the testator's cash, or money, or property. In confirmation of what has been already stated, it may be remarked, that in the charter of the Bank of England, in 5th and 6th William and Mary, ch. 20, sec. 28, an express provision is made, by which the bill or bills obligatory, and of credit, of the bank, are declared to be assignable and negotiable. Similar expressions are to be found in the many acts of the American States, incorporating banks; as has been abundantly shown in the citations at the bar.[*]*331 The reason is obvious why they are called bills of credit; they are intended to pass as currency, or money; and they are issued on the credit of the bank, or of other persons who are bound by them. Not but that there is a capital fund or stock for their redemption; for, in general, all banks have such a fund: but that the credit is still given to the corporation, and not exclusively to any particular fund. Indeed, in many cases, (as in Massachusetts) the private funds and credit of the corporators, are by law, to a limited extent, made responsible for the notes of banks. Such then being the true and ordinary meaning applied to bills of credit, issued by banks and other corporations, that they are negotiable paper, designed to pass as currency, and issued on the credit of the corporation; there is no mystery in the application of the same terms to the transactions of states. The nature of the thing is not changed; the object of the thing is not changed, whether the negotiable paper is issued by a corporation or by a state. Mutato nomine, de te fabula narratur. A bill of credit, then, issued by a state, is negotiable paper, designed to pass as currency, and to circulate as money. It is distinguishable from the evidences of debt issued by a state for money borrowed, or debts otherwise incurred; not merely in form, but in substance. The form of the instrument is wholly immaterial. It is the substance we are to look to; the question is, whether it is issued, and is negotiable, and is designed to circulate as currency. If that is its intent, manifested either on the face of the bill, or on the face of the act, and it is in reality the paper issue of a state; it is within the prohibition of the constitution. If no such intent exists, then it is a constitutional exercise of power by the state. This is the test; the sure, and, in my judgment, the only sincere test, by which we can ascertain whether the paper be within or without the prohibition of the constitution. All other tests, which have hitherto been applied; and all other tests which can be applied, will be illusory, and mere exercises of human ingenuity, to vary the prohibition, and evade its force. Surely, it will not be pretended, that the constitution intended to prohibit names, and not things; to hold up the solemn mockery of warning with shadows, and suffering realities to escape its grasp? To suffer states, on their own credit, to issue floods of paper money as currency: and if they do not call them bills of credit, if they do not *332 give them the very form and impress of a promise by the state, or in behalf of the state; in the very form, so current, and so disastrous in former times; then they are not within the prohibition. Let the impressive language of Mr. Chief Justice Marshall on this very point, in the case of Craig v. The State of Missouri: a voice now speaking from the dead: let it convey its own admonition, and answer to the argument. "And can this (said he) make any real difference? Is the proposition to be maintained, that the constitution meant to prohibit names; and not things? That a very important act, big with great and ruinous mischief; which is expressly forbidden by words most appropriate for its description; may be performed by the substitution of a name? That the constitution, in one of its most important provisions, may be openly evaded; by giving a new name to an old thing? We cannot think so." But the argument need not be rested here. The question here is, not what is meant by bills of credit, in a mere theoretical sense. But I trust, that I shall abundantly show, that the definition which was given in the case of Craig v. The State of Missouri, and the definition which I maintain, is the true one; stripped of all mystery, and all extraneous ingredients is the true one; confirmed by the whole history of the country: and that the true meaning of bill of credit was just as well known and understood from the past and the passing events at the time of the adoption of the constitution, as the terms, habeas corpus, trial by jury, process of impeachment, bill of attainder, or any other phrase to be found in the technical vocabulary of the constitution. And I mean to insist, that the history of the colonies, before and during the revolution, and down to the very time of the adoption of the constitution; constitutes the highest and most authentic evidence, to which we can resort, to interpret this clause of the instrument: and to disregard it, would be to blind ourselves to the practical mischiefs which it was meant to suppress; and to forget all the great purposes to which it was to be applied. I trust, that I shall be able further to show, from this very history, that any other definition of bills of credit than that given by the Supreme Court in the case of Craig v. The State of Missouri, is in opposition to the general tenor of that history; as well as to the manifest intention of the framers of the constitution. Before I proceed further, let me quote a single passage from the Federalist, No. 44; in which the writer, in terms of strong denunciation and indignation, exposes the ruinous effects of the paper money *333 of the revolution, (universally in those days called by the name of bills of credit, for there was no attempt to disguise their character;) and then adds, "in addition to these persuasive considerations it may be observed, that the same reasons, which show the necessity of denying to the states the power of regulating coin; prove with equal force, that they ought not to be at liberty to substitute a paper medium instead of coin." This passage shows the clear sense of the writer, that the prohibition was aimed at a paper medium, which was intended to circulate as currency; and to that alone. But it has been said, that bills of credit, in the sense of the constitution, are those only which are made by the act creating them a tender in payment of debts. To this argument, it might be sufficient to quote the answer of the Chief Justice, in delivering the opinion of the Court in the case of Craig v. The State of Missouri. "The constitution itself," (said he) "furnishes no countenance to this distinction. The prohibition is general. It extends to all bills of credit; not to bills of credit of a particular description. That tribunal must be bold, indeed, which, without the aid of other explanatory words, could venture on this construction. It is the less admissible in this case, because the same clause of the constitution contains a substantial prohibition to the enactment of tender laws. The constitution, therefore, considers the emission of bills of credit and the enactment of tender laws, as distinct operations; independent of each other, which may be separately performed. Both are forbidden. To sustain the one, because it is not also the other; to say, that bills of credit may be emitted, if they be not a tender of debts; is in effect, to expunge that distinct independent prohibition, and to read the clause, as if it had been entirely omitted. We are not at liberty to do this." But, independently of that reasoning, the history of our country proves that it is not of the essence of bills of credit, it is not a part of their definition, that they should be a tender in payment of debts. Many instances, in proof of this, were given in the opinion so often alluded to. Not a single historian upon this subject alludes to any such ingredient, as essential or indispensable. It has been said, (and it has never been denied,) that the very first issue of bills of credit by any of the colonies, was by the province of Massachusetts, in 1690. The form of these bills was; "this indented bill of ten shillings, due from the Massachusetts colony to the possessor, shall be in value equal to money, and shall be accordingly *334 accepted by the treasurer and receivers subordinate to him, in all public payments, and for any stock at any time in the treasury." Then followed the date and the signatures of the committee authorized to emit them.[*] They were not made a tender in payment of debts, except of those due to the state. In 1702, 3 Anne, ch. 1, another emission of bills of credit for fifteen thousand pounds, was authorized in the same form: but they were not made a tender by the act; and the then duties of impost and excise were directed to be applied to the discharge of those bills, as also a tax of ten thousand pounds on polls and estates, real and personal, to be levied and collected, and paid into the treasury in 1705. A subsequent act, passed in 1712, made them a tender in payment of private debts. In 1716, art. of 3d Geo. 1, ch. 6, a further emission of one hundred and fifty thousand pounds in "bills of credit," was expressly authorized to be made in the like form; to be distributed among the different counties of the province in a certain proportion stated in the act; and to be put into the hands of five trustees in each county, to be appointed by the legislature, to be let out by the trustees on real security in the county, in certain specified sums, for the space of ten years, at five per cent per annum. The mortgages were to be made to the trustees, and to be sued for by them; and the profits were to be applied to the general support of the government. These bills were not made a tender. Now, this act is most important to show that the fact, that the bills of credit were to be let out on mortgage, was not deemed the slightest degree material to the essence of such bills. An act for the emission of bills of credit, not materially different in the substance of its provisions, had been passed in 1714, 1 Geo. 1, ch. 2. Another act for the emission of fifty thousand pounds, in bills of credit, was passed in 1720, 7 Geo. 1, ch. 9, containing provisions nearly similar; except that the trustees were to be appointed by the towns, and the profits were to be received by the towns, and a tax of fifty thousand pounds on polls and estates, was authorized to be raised to redeem the same. In 1720, the colony of Rhode Island issued bills of credit, nearly in the form of the Massachusetts bills; and they were made a tender in payment of all debts, excepting special ones; and similar bills were issued in 1710, and 1711. In 1715, another issue was authorized, to be let out by trustees and committees of towns on mortgage, for ten years. There *335 is no clause in the act declaring them a tender. The same year another emission was authorized. In 1709, the colony of Connecticut authorized an emission of bills of credit in a similar form; appropriating a tax for their redemption. There was no clause making them a tender. Numerous other acts of the like nature, were passed between that period and 1731; some of which made them a tender, and others not. In 1709, the colony of New York issued bills of credit, in a form substantially the same: and they were made a tender in the payment of debts, and these bills were to bear interest. Many other emissions of bills of credit were from time to time authorized to be made in similar forms; they were generally made a tender; and generally funds were provided for their due redemption. In 1722, the province of Pennsylvania issued bills of credit, in a form not substantially different from those of the New England states; which were delivered to trustees, to be loaned on mortgages, on land, or ground rents: and they were made a tender in payment of all debts. Other emissions, for like purposes, were authorized by subsequent laws. In the year 1739, an emission of bills of credit was authorized by the state of Delaware, for similar purposes, and in a similar form, to be loaned on mortgages. They were made a tender in payment of debts, and a sinking fund was provided. In 1733, Maryland authorized an emission of bills of credit, to the amount of ninety thousand pounds, to be issued by and under the management of three commissioners, or trustees, who were incorporated by the name of "The Commissioners or Trustees for emitting Bills of Credit;" and by that name might sue and be sued, and sell all real and personal estate granted them in mortgage, &c. These bills of credit, with certain exceptions, were to be lent out, on interest, by the commissioners or trustees, at four per cent., upon mortgage or personal security; and a sinking fund was provided for their redemption, &c., and they were made a tender in payment of debts. Another emission was authorized in 1769; and two commissioners were appointed to emit the bills, to be called "Commissioners for emitting Bills of Credit;" and by that name to have succession, and to sue and be sued. These bills also were to be let out by the commissioners, on security; and a fund was provided for their redemption. These bills were not made a tender.[*] *336 In Virginia, bills of credit were issued as early as 1755, under the name of treasury notes; which bore interest, and were made a tender in payment of debts. Emissions were subsequently made at other periods, and especially in 1769, 1771, and 1773. These three last were not made a tender. In 1778, another emission of them was authorized, which were made a tender; and a fund was pledged for their redemption. Many other issues were subsequently made, which were a tender. What demonstrates that these treasury notes were deemed bills of credit, is the fact, that by an act passed in 1777, ch. 34, it was made penal for any person to "issue or offer in payment any bill of credit, or note, for any sum of money payable to the bearer;" and that the act of 1779, ch. 24, makes it a felony for any person to steal any bill of credit, or treasury note, or "loan office certificate of the United States, or any of them;" and that the act of 1780, ch. 19, after reciting, that the exigencies of the war requires the emission of paper money, &c., authorizes the emission of new treasury notes, and proceeds to punish with death any person who shall forge "any bill of credit or treasury note, to be issued by virtue of this act." In 1748, North Carolina authorized the emission of bills of credit, which were made a tender, and a fund was provided for their redemption; and many subsequent emissions were authorized, with similar provisions. In 1703, South Carolina first issued bills of credit. They were to bear an interest of twelve per cent. Funds were provided for their redemption. They do not seem originally to have been made a tender. Many other acts for the emission of bills of credit were, from time to time, passed by the colony; some, if not all of which were made a tender. One of these acts, passed in 1712, was of a peculiar nature; but as I have not been able to procure a copy of it, I can only refer to it as it is stated by Hewitt, 1 Hewitt, Hist. of S. Car. 204; who says: "At this time the legislature thought proper to establish a public bank, and issued forty-eight thousand pounds in bills of credit, called bank bills, for answering the exigencies of government, and for the convenience of domestic commerce. This money was to be lent out at interest on landed or personal security; and, according to the tenor *337 of the act for issuing the same; it was to be sunk gradually by four thousand pounds a year, which sum was ordered to be paid annually by the borrowers into the hands of the commissioners appointed for that purpose." In 1760, Georgia authorized an emission of bills of credit to be let out at interest, and mortgages were to be taken by the commissioners. These bills were made a tender. Subsequent acts for issuing bills of credit were passed; but it is not necessary to recite them. Congress, during the revolutionary war, issued more than three hundred millions of bills of credit. The first issue was in 1775, and the confederated colonies were pledged for their redemption. None of the bills of credit issued by congress were made a tender; probably from the doubt whether congress possessed the power to make them a tender. The form of those first issued was as follows: "This bill entitles the bearer to receive Spanish milled dollars, or the value thereof, in gold and silver, according to the resolutions of congress." The last emission was made in 1780, under the guarantee of congress, and was in the following form: "The possessor of this bill shall be paid Spanish milled dollars by the 31st of December, 1786, with interest, in like money, at the rate of five per cent. per annum, by the state of according to an act of the legislature of the state of the day of 1780." The indorsement by congress was, "The United States insure the payment of the within bill, and will draw bills of exchange annually, if demanded, according to a resolve of congress of the 18th of March, 1780." These bills were expressly required by congress to issue on the funds of the individual states established for that purpose; and the faith of the United States was pledged for their payment. They were made receivable in all public payments. I will close this unavoidably prolix, though, in my judgment, very important review of the history of bills of credit in the colonies, and during the revolution, with a reference to the act of 24th of Geo. 2, ch. 53, 1751, for regulating and restraining the issues of paper money in New England. That act, in its prohibitory clause, expressly forbids the issue of "any paper bills, or bills of credit, of any kind or denomination whatsoever," except for certain purposes, and upon certain specified emergencies; and constantly speaks of "paper bills, or bills of credit," as equivalent expressions; thus demonstrating that the true meaning of bills of credit was paper emitted by the state, and intended to pass as currency; or, in other *338 words, as paper money. It further requires, that the acts authorizing such issues of "paper bills or bills of credit," shall provide funds for the payment thereof; and makes provisions for cases where such "paper bills or bills of credit" had been loaned out on security; and declares that "no paper currency or bills of credit," issued under the act, shall be a legal tender in payment of any private debts or contracts whatsoever. This historical review furnishes a complete answer to every argument which has been used on the present or on former occasions; which made the nature of bills of credit depend upon any other quality, than the simple one of being for money and negotiable, and designed to pass as paper money or paper currency. When it is said that it is of the essence of "bills of credit," that they should be a legal tender, we find that many of them never were a tender. Nay, that the enormous issues by the revolutionary congress were altogether stripped of this quality. When it is said, that to constitute bills of credit, their circulation as money must be enforced by statutable provisions; we find, that in many cases, from the very nature and character of the acts, no such compulsory circulation was contemplated. They did not in their form, generally, contain any express promise on the part of the state, to pay them, whether funds were provided or not; and the same form was used in both cases. There was, indeed, in my judgment, in every case an implied obligation and promise of the state to pay them; whether funds were provided or not. When it is said, that it is not a bill of credit unless credit is given to the state on its own express promise to pay, and not when the paper is only declared to be receivable in payment of debts due to the state; that there must be a promise to pay, and not merely a promise to receive: we find, that the very first issues of bills of credit were of this very character, and contained no promise; and yet the colonial legislatures appropriated to them the very name, as their true designation. When it is said, that a bill which is payable on demand, is not a bill of credit; nor a bill which contains no promise to pay at a future day; we find, that on their face nearly all the colonial issues were without any limitation of time, and were receivable in payments to the state, immediately upon their presentation; though funds for their redemption were not provided except in futuro. The issues by congress were, with a single exception, without any limitation of time as to payment, and were to be paid in gold or silver. *339 The emission of 1780, already stated, was to be paid at a future time. But congress made no express promise to pay any of their other issues; they simply pledged the colonies for their redemption; and yet congress called them bills of credit. When it is said, that bills of credit cannot bear interest, for that disqualifies them for a paper currency; we find, that in point of fact, such bills were issued both by the colonies and by the revolutionary congress; and indeed, since, by the United States in the form of treasury notes. When it is said, that bills of credit are such only as are issued upon the mere credit of the state, and not bottomed upon any real or substantial fund for their redemption; we find, that in most cases, the colonial bills of credit were issued upon such funds; provided by the very terms of the acts. The statute of 24 Geo. 2, ch. 53, also in terms applies the very phrase, not only to bills resting on the mere credit of the state, but also to bills having suitable funds provided for their redemption. It goes further, and prohibits the colonies, in future, from issuing such bills without providing suitable funds. In short, the history of bills of credit in the colonies, conclusively establishes, that none of these ingenious suggestions and distinctions, and definitions, were or could have been in the minds of the framers of the constitution. They acted upon known facts, and not theories; and meant, by prohibiting the states from emitting bills of credit, to prohibit any issue, in any form, to pass as paper currency or paper money, whose basis was the credit, or funds, or debts, or promises of the states. They looked to the mischief intended to be guarded against in the future, by the light and experience of the past. They knew that the paper money, issued by the states, had constantly depreciated, whether funds for its redemption were provided or not; whether there was a promise to pay, or a promise to receive; whether they were payable with or without interest; whether they were nominally payable, in presenti, or in futuro. They knew that whatever paper currency is not directly and immediately, at the mere will of the holder, redeemable in gold and silver, is, and forever must be liable to constant depreciation. We know the same facts as well as they. We know that the treasury notes of the United States, during the late war, depreciated fifty per cent.; that during the period of the suspension of specie payments, by our private banks at the same period, though with capitals supposed to be ample; their bank bills sunk from fifteen to twenty-five per cent. below their nominal value. The bills of this very bank of the Commonwealth *340 of Kentucky, of whose solid and extensive capital we have heard so much; were admitted at the argument, to have sunk fifty per cent. from their nominal value. The framers of the constitution could not, without irreverence, (not to use a stronger phrase) be presumed to prohibit names and not things; to aim a blow at the artificial forms in which paper currency might be clothed, and leave the substance of the mischief untouched and unredressed; to leave the states at liberty to issue a flood of paper money, with which to inundate the community, upon their own sole credit, funds and responsibility; so always, that they did not use certain prescribed forms of expression. If the states were to possess these attributes in ample sovereignty, it was worse than useless to place such a prohibition in the front of the constitution. It was holding out a solemn delusion and mockery to the people, by keeping the faith of the constitution to the ear, and breaking it to the sense. My judgment is, that any such interpretation of the constitution would be as unsound, as it would be mischievous. The interpretation for which I contend, is precisely that which was maintained by this Court in the case of Craig v. The State of Missouri; where all these ingenious suggestions, distinctions and definitions, to which I have alluded, were directly overruled. I might indeed have spared myself some labour in these researches, if I had not considered that case as in some measure assailed in the present decision; if, indeed, it is not shaken to its very foundation. The next question in the case is, whether the act of Kentucky establishing this bank is unconstitutional, by authorizing an emission of bills of credit in the shape of the bank bills or notes of that bank, within the prohibition of the constitution. The argument is, that the state cannot do that indirectly, which it cannot consistently with the constitution do directly; and that the bank corporation is here the sole and exclusive instrument of the state; managing its exclusive funds, for its exclusive benefit, and under its exclusive management. Even this obvious principle, that the state cannot be permitted indirectly to do, what it is directly prohibited to do by the constitution, has been denied on the present occasion; upon what grounds of reasoning, I profess myself incapable of comprehending. That a state may rightfully evade the prohibitions of the constitution, by acting through the instrumentality of agents in the evasion, instead of acting in its own direct name, and thus escape from all its constitutional obligations; is a doctrine to which I can never subscribe: and which, for the honour of the country, for the good faith and integrity *341 of the states, for the cause of sound morals, and of political and civil liberty, I hope may never be established. I find no warrant for any such doctrine in the case of Craig v. The State of Missouri; either in the opinion of the Court, or in that of the dissentient judges. The other part of the argument, from which the conclusion is drawn that the act is unconstitutional, requires a more extended consideration. But before proceeding to that, it is proper to notice the statement at the bar, that the point of the constitutionality of this act has been already decided by this Court. If so, I bow to its authority. I am not disposed to shake, even if I could, the solemn decisions of this Court, upon any great principles of law; and, a fortiori, not that which respects the interpretation of the constitution itself. But I shall require proof before I yield my assent that the point has been so decided. The case relied on is the Bank of the Commonwealth of Kentucky v. Wister, 2 Peters' R. 318. In my judgment, that case justifies no such conclusion. It was not even made or suggested in the argument. It was not touched by the judgment of the Court. What was that case? Wister brought a suit in the circuit court of the United States in Kentucky, against the bank, to recover a sum deposited in the bank. The bank filed a plea to the jurisdiction of the Court; alleging that the bank was a body corporate, established by an act of the legislature of Kentucky, and "that the whole capital stock of the said corporation, is exclusively and solely the property of the state, and that the state in her political sovereign capacity as a state, is the sole and exclusive and only member of the corporation." The Court decided, that the suit was rightfully brought against the corporation, and was within the jurisdiction of the circuit court. Why? Because the Court were of opinion, that though the corporation was created by the state, the state was not even a member of the corporation. "The president and directors alone, (said Mr. Justice Johnson, in delivering the opinion of the Court) constitute the body corporate, the metaphysical person liable to suit. Hence by the laws of the state itself, it is excluded from the character of a party, in the sense of the law, when speaking of a body corporate" And in confirmation of this view of the matter, a passage was cited from the opinion in the United States Bank v. The Planters' Bank of Georgia, 9 Wheat. R. 904. The learned judge then said, and this is the comment, on which so much reliance has been placed — "To which it may be added, that if a state did exercise any other power in or over a bank, or impart to it its sovereign attributes, it would be hardly *342 possible to distinguish the issue of the paper of such banks from a direct issue of bills of credit, which violation of the constitution no doubt the state here intended to avoid." Now this language imports, at most, only that a case might have existed, which would have been a violation of the constitution, but which was admitted not to be the case before the Court; that is, where the state imparted its sovereign attributes to the corporation. The Court do not say, that the constitution of the United States had not been violated by the issue of the bank bills; for that question was never presented for their consideration: but only say, that the state did not intend to violate the constitution, and did not intend to communicate its sovereign attributes. Neither the facts of the confession, the declaration, nor the plea to the jurisdiction, in any manner, raised or could raise any such question. The corporation, as such, was capable of suing and being sued, by the laws of Kentucky. However proper, then, the language might have been as an admonition of the danger to the bank, if their ground of objection to the jurisdiction was maintainable; it did not commit the Court in the slightest manner to any definitive opinion as to the constitutionality of its issues of bank paper. Let us now proceed to the consideration of the charter of the bank, and ascertain whether it is a mere agent of the state, and what are the powers and authorities which are given to it as to the issues of bank bills. The act of 1820, declares in the first section, that a bank shall be, and thereby is established, "in the name and on behalf of the Commonwealth of Kentucky;" under the direction of a president and twelve directors, to be chosen by the legislature from time to time by joint ballot of both houses. The second section declares the president and directors a corporation, by the corporate name, &c., conferring on the corporation the usual powers. The third section declares that the whole capital stock of the bank shall be exclusively the property of the Commonwealth of Kentucky; and no individual or corporation shall be permitted to own or pay for any part of the capital of the bank. The fourth section declares that the president and directors shall have power to issue notes not under the denomination of one dollar, nor over one hundred dollars, signed by the president, and countersigned by the cashier. These bills or notes are, by subsequent sections, authorized to be made payable to order or to bearer, and to be negotiable accordingly; and they are declared to be receivable at the treasury, and by public officers in all payments of taxes and other debts to the state, and for county levies; and are to *343 be payable and redeemable in gold and silver. The capital stock of the bank is to consist of two millions of dollars, to be raised and paid as follows: all moneys paid into the treasury for the purchase of vacant lands of the state, and so much of capital stock owned by the state in the Bank of Kentucky, (which it seems had then stopped payment) as may belong to the state, after the affairs of that bank were settled up, with the profits thereof not heretofore pledged or appropriated by law. And the treasurer of the state was required, from time to time, as he received moneys, or any of these accounts, to pay them to the bank. By other sections, the bank was authorized to discount bills of exchange and notes, and to receive deposites, and to loan money on mortgage on real estate, distributing their loans in certain proportions among all citizens of the different counties; and the interest arising from all loans and discounts, after payment of expenses, was to be considered as part of the annual revenue of the state, and subject to the disposition of the legislature. The notes of the Bank of Kentucky were also receivable in payment of all debts due to the Commonwealth Bank. Such are the principal provisions of the charter. It is clear, therefore, that the bank was a mere artificial body or corporation, created for the sole benefit of the state; and in which no other person had or could have any share or interest. The president and directors were the mere agents of the state, appointed and removable at its pleasure. The whole capital stock to be provided, consisted of the proceeds of the public lands and other property of the state, which should be paid over to the bank from time to time by the treasurer of the state. The public lands themselves, and the other funds were not originally conveyed to or vested in the corporation; but were left in the free possession of the state itself. The president and directors had no interest whatsoever in the institution, but only had the management of it, subject to the control of the state. They were not personally liable for non-payment of any of the bills, or notes, or debts of the bank; but only for their personal misconduct in any excess of issues or debts beyond double the amount of the capital stock. The state was entitled to all the profits. And though the bills and notes of the bank were declared payable in gold and silver; it seems that no human being was made directly responsible for the payment; not the president and directors in their private capacity, for they contracted no personal responsibility; and not the state, (as we have been told at the argument,) because the state had not, in its *344 own name, promised to pay them: nay, it is said, that these bills and notes were not even issued on the credit of the state. Another thing is quite clear; and that is, that as the bank existed for the sole benefit of the state, and all its officers were appointed by the state, and removable at its pleasure, the state possessed an unlimited power over the corporation. The whole fund possessed by it, whether they were capital stock, or debts, or securities, or real estate, or bank notes, belonged in fact to the state. The state was the equitable owner; and might at any time, without any violation of the rights of the corporation, which was its own exclusive agent, resume and appropriate these funds to itself, and might at its own pleasure repeal and annihilate the charter; and by its sovereign legislative act become, ipso facto, the legal owner, as it was in part the equitable owner of the property and franchise. I know of no principle of law, or of the constitution, which would have been violated by such a course; for it would have been only conferring upon the equitable owner the legal title to his own estate and property, and resuming, on the part of the principal, the funds and the business confided to his agents. The bills or notes of the bank were to circulate as currency. That is so palpable on the face of the charter, as not to have been even questioned at the argument. They were then, stripped of mere technical forms, the bills of the state issued by the agent of the state, on the exclusive funds of the state, for the benefit and profit of the state; to circulate as currency within the state, and without any other responsibility than that of the state. In what respect then do they differ from bills of credit of the state? I can perceive none. In the first place, it is said that they were not issued on the credit of the state; and that the state is not responsible, directly, or indirectly, for their payment. I confess, until I heard the argument at the bar, I had not supposed that any such proposition would be maintained, or could be maintainable. If these bills were not issued on the credit of the state, on whose credit were they issued? It is said, that they were issued on the credit of the corporation; and what is the corporation? A mere metaphysical being, the creature and agent of the state, having no personal existence, and incapable, per se, of any personal responsibility. The president and directors constituted that corporation, and were its sole members; and they were not personally liable. The official legal entity, called the president and directors, might be sued. But what then? The capital stock was *345 not vested in them, so as to be liable to be taken in execution in a suit against them. Could a creditor of the corporation seize or sell the public land, on his execution against them? No one pretends that. Suppose the state should choose, as it well might, to assume the whole agency and funds of the corporation to itself; could the creditor have any redress against the state? It is admitted that he could not have any redress, because the state is not suable. It is said that the bills are not taken on the credit of the state; because the state has not promised, in terms, to pay them. If it had so promised, the state not being suable, the holder could here have no redress against the state. But I insist that, in equity, and in justice, the bills must be treated as the bills of the state; and that if the state were suable, a bill in equity would lie against the state, as the real debtor; as the real principal: and I say this upon principles of eternal justice, and upon principles as old as the foundations of the common law itself. How can it be truly said, that these bills were not taken on the credit of the state? Were they not to be paid out of the proceeds of the public lands, and other property of the state? Were they not receivable in payment of debts to the state, for the very reason that they were the issues of the state, for its own benefit? And was not credit given to the state, upon this very ground? It has been said at the argument, that funds were provided for the payment of the bills by the provisions of the charter; and therefore no credit to the state, ultra these funds, can be inferred. But surely the case of the old colonial bills of credit answers that position. They had funds assigned for their redemption; they in many cases had mortgages upon loans authorized to be made, as they are in the present charter; and yet the legislature called them bills of credit. The colonies did not promise to pay them; and yet they deemed them their bills of credit. Why? Because in truth, and in fact, and not upon any metaphysical authorities and fictions, they were issued upon the general credit of the state: and if the funds pledged fell short of the payment, the state was bound to redeem them. The argument on this head assumes the very matter in controversy. It assumes that the state never directly, or ultimately, held itself out as responsible for the payment of the bills; but that the holder trusted, and trusted exclusively, to the funds provided for him in the charter. Now, I deny this inference altogether. Because a state assigns funds for the payment of its debts or bills, does it follow, that the holder trusts exclusively to those funds? When a creditor takes a pledge, *346 or has a security for payment of his debt, does he thereby exonerate the debtor from all personal responsibility? If the agent is authorized to pledge certain funds of his principal for the payment of the debt, does that exonerate the principal from all personal liability? No such doctrine has ever yet been established to my knowledge, in any code of law; and, least of all, in the common law. On the contrary, it is at the common law held incumbent on those who insist that there has been any exclusive credit given to a fund, to establish that fact, by clear and irresistible proofs. Suppose in this very case the corporation had circulated, as it had a right to do, its own bank bills to the amount of 5,000,000 dollars; and the funds assigned by the state, and the funds in the hands of the corporation had been wholly inadequate to redeem them; would not the state have been bound in reason, in justice, and in equity, to pay the deficiency? Would a court of equity, for a moment, tolerate any private person to escape under such circumstances, from his own responsibility for the acts and conduct of his agent, fully authorized by him? Would it not say, qui sentit commodum, sentire debet et onus? Would it be consistent with good faith, for a state to proclaim that it was not bound by the solemn obligations of its own agents, acting officially for its own exclusive benefit and interest, and upon its own funds; to the payment of debts thus justly and honestly contracted? I put these questions, because it seems to me that they can be answered only one way; and that is, by affirming the positive responsibility of the state, in foro justitiæ. The citizens must be presumed to trust, in all such cases, to the general credit and good faith of the state; and not merely to the fund contemplated or provided for their redemption. So, in similar cases, the colonies understood their own obligations. So the continental congress, and so the United States have constantly understood their own obligations. Although a fund may have been provided for payment of their bills of credit; although those bills of credit contained no direct promise of the state; although they purported, in form, to be the acts of trustees, or commissioners, or committees acting under the authority of the state; yet they well understood that the general credit of the state, for the redemption of the bills, was necessarily implied; and that without that silent necessary pledge, the bills could not, and would not have circulated at all; except upon compulsion, and by irresistible power of the government. It is obvious that whether a state be suable or not, cannot constitute *347 a test, whether an instrument of currency issued by or on behalf of a state, be a bill of credit or not. It may be a bill of credit, although the state is not suable thereon; as was, in fact, the case with all the anti-revolutionary bills of credit: for the colonies never were suable. On the other hand, the state may expressly allow itself to be sued on an instrument issued in its behalf; and yet it may not be a bill of credit. As, for example, a state may authorize suits to be brought for debts due by itself: and if it should issue, through its officers, a certificate of loan for money borrowed; if it were not intended to pass as currency, it would not be a bill of credit. But it is said that here the state was not only not suable on these bank bills, but that the corporation itself was expressly suable under the charter, and the promise to pay was made by the corporation; and the promise being made by the corporation, it, in effect, excludes any obligation on the part of the state. There is no magic in words. What was this corporation in fact? A mere legal entity; a mere agent of the state, existing for the state, with funds belonging to the state, and dealing wholly upon the credit which these bills derived from the state. The persons who were president and directors for the time being, were not, (as I have already said,) personally liable for the payment of those bills. The metaphysical personage only was liable; and the promise, if it is not to be treated as a mere delusion and phantom, was the promise of the state itself, through that personage. Suppose the state had authorized its treasurer, in his official capacity, and without any personal liability, to issue these very bank bills, saying, "I, A.B., as treasurer, promise to pay," &c., and the whole proceeds of these bills were to be for the benefit of the state, and they were to be paid out of the funds of the state, in the treasury; could there be a doubt that the state would, in truth, be the real debtor? That they would be issued on its credit? That the state would, in conscience, in common honesty, in justice, be responsible for their payment? If this would be true, in such a case, I should be glad to know in what respect that case substantially differs from the one before the Court? It is precisely the very case, and in the same predicament as the bills of credit issued by Maryland in 1733, and 1769. There the commissioners were created a corporation, and were to issue the bills, and were authorized to sue and be sued; and no one ever dreamed, and least of all, the state itself, that they were not the bills of credit of the state. It a state can, by so simple a device as the creation of a corporation, as its own *348 agent, emit paper currency on its own funds, and thus escape the solemn prohibitions of the constitution; the prohibition is a dead letter. It is worse than a mockery. If we mean to give the constitution any rational interpretation on this subject, we must look behind forms and examine things. We must ascertain for whose benefit, on whose credit, with whose funds, for what purposes, of currency or otherwise, the instrument is created, and the agency established. Whether it be the issue of a treasurer of a state, or of a corporation of a state, or of any other official personage, must be wholly immaterial. The real question must be, in all cases; whether, in substance, it is the paper currency of the state? But it has been argued, that if this bank be unconstitutional, all state banks founded on private capital, are unconstitutional. That proposition I utterly deny. It is not a legitimate conclusion from any just reasoning applicable to the present case. The constitution does not prohibit the emission of all bills of credit, but only the emission of bills of credit by a state: and when I say, by a state, I mean by or in behalf of a state, in whatever form issued. It does not prohibit private persons, or private partnerships, or private corporations, (strictly so called,) from issuing bills of credit. No evils; or, at least, no permanent evils, have ever flowed from such a source. The history of the country had furnished no examples of that sort, of a durable or widely extended public mischief. And if any should exist, it would be within the competency of the state legislatures to furnish an adequate remedy against such issues by private persons. In point of fact, prohibitions now exist in many states against private banking, and against the issue of private bank paper, with the intent that it shall pass as currency. The mischief was not there. It had never been felt in that direction. It was the issue of bills of credit, as a currency; authorized by the state on its own funds, and for its own purposes; which constituted the real evil to be provided against. The history of such a currency constituted the darkest pages in the American annals, and had been written in the ruin of thousands, who had staked their property upon the public faith; always freely given, and but too often grossly violated. The great inquiry at the adoption of the constitution, was not whether private banks, corporate or incorporate, should exist; not whether they should be permitted to issue a paper currency or not; but whether the state should issue it on its own account. The anxious inquiry then was, quis custodiet custodes? The answer is found in the *349 constitution. But it has, in my judgment, (though I am sure my brethren think otherwise,) become a mere name. Stat nominis umbra. The states may create banks, as well as other corporations, upon private capital: and so far as this prohibition is concerned, may rightfully authorize them to issue bank bills or notes as currency: subject always to the control of congress, whose powers extend to the entire regulation of the currency of the country. When banks are created upon private capital, they stand upon that capital; and their credit is limited to the personal or corporate responsibility of the stockholders, as provided for in the charter. If the corporate stock, and that only, by the charter is made liable for the debts of the bank, and that capital stock is paid in; every holder of its bills must be presumed to trust exclusively to the fund thus provided, and the general credit of the corporation. And in such a case, a state owning a portion of the funds, and having paid in its share of the capital stock, is treated like every other stockholder; and is understood to incur no public responsibility whatsoever. It descends to the character of a mere corporator, and does not act in the character of a sovereign. That was the doctrine of this Court, in The United States Bank v. The Planters' Bank of Georgia, 9 Wheat. R. 904. "It is, (said the Court on that occasion,) we think, a sound principle, that when a government becomes a partner in any trading company it divests itself, so far as concerns the transactions of that company, of its sovereign character, and takes that of a private citizen." In the present case, the legislature expressly prohibited any partnership, or participation with other persons in this bank. It set it up, exclusively upon the capital of the state, as the exclusive property of the state, and subject to the exclusive management of the state; through its exclusive agents. It acted, therefore, in its sovereign character and capacity; and could not, even for an instant, even in intendment of law, divest itself in the transactions of the bank of that character and capacity. I have not thought it necessary, in the views which I have taken of this case, to resort to the state of the pleadings, though they fortify every portion of the reasoning which I have endeavored to maintain. One of the averments in the first plea is, that the president and directors of the bank were illegally authorized, "for and on behalf of the commonwealth, and upon her credit, to make bills of credit, to emit bills or notes, to an amount not exceeding millions *350 of dollars, &c., and when so made, &c.; to emit, issue, and circulate through the community for its ordinary purposes, as money." The plea goes on to allege, that the president and directors had before the date of the note sued, on, "for, and on behalf of the commonwealth of Kentucky, and on her credit, made various bills of credit, viz: notes of various denominations, in amount, from one dollar to one hundred dollars, &c., promising therein, and thereby, to pay the person on each note mentioned, or bearer on demand, the amount therein mentioned in money, and were transferable by delivery." The demurrer admits the truth of these averments; and upon technical principles of pleading, I do not see how their conclusiveness in the present question can be avoided. But I do not rely on the state of the pleadings. I found my judgment upon the principles presented by the admitted state of the facts, that these bank bills are bills of credit, within the true intent and meaning of the constitution; that they were issued by, and in behalf of the state; upon the credit of the state; by its authorized agents; and that the issue is a violation of the constitution. I am conscious that I have occupied a great deal of time in the discussion of this grave question; a question, in my humble judgment, second to none which was ever presented to this Court, in its intrinsic importance. I have done so, because I am of opinion, (as I have already intimated,) that upon constitutional questions, the public have a right to know the opinion of every judge who dissents from the opinion of the Court, and the reasons of his dissent. I have another and strong motive; my profound reverence and affection for the dead. Mr. Chief Justice Marshall is not here to speak for himself; and knowing full well the grounds of his opinion, in which I concurred, that this act is unconstitutional; I have felt an earnest desire to vindicate his memory from the imputation of rashness, or want of deep reflection. Had he been living, he would have spoken in the joint names of both of us. I am sensible that I have not done that justice to his opinion, which his own great mind and exalted talents would have done. But with all the imperfections of my own efforts, I hope that I have shown that there were solid grounds on which to rest his exposition of the constitution. His saltem accumulem donis, et fungar inani munere. The judgment of the court of appeals of the state of Kentucky, is affirmed, with costs. NOTES [*] See the Acts establishing the Bank of New York, 1791; the Bank of Albany, in New York; the Bank of Pennsylvania, 1793; the Bank of New Jersey, 1823; the Bank of Baltimore, 1795; the Bank of Virginia; the State Bank of North Carolina, 1810; the Bank of Georgia; the Bank of Kentucky, &c. &c. [*] See 3 Story's Comment. on the Constitution, 231, note [2.] [*] I have been favoured with a sight of one of the original bills issued under the act of Maryland, of 1769. It is as follows: "This indented bill of six dollars, shall entitle the bearer hereof to receive bills of exchange, payable in London, or gold and silver, at the rate of four shillings and six pence sterling, per dollar, for the said bill; according to the direction of an act of assembly of Maryland, dated at Annapolis, this 4th day of March, A.D. 1770. R. Conden, J.C. Clapham." These gentlemen were, doubtless, the commissioners appointed under the act.