PAGE TWO
HEPPNER GAZETTE TIMES, HEPPNER, OREGON,
THURSDAY, AUG. 22, 1935.
BACKGROUND
OF NEW DEAL DECISIONS
IV
THE GREENBACK ISSUE AND
LEGAL TENDER OF DE
VALUED PAPER.
By JAMES H. GILBERT.
The question which the Supreme
Court was called upon to decide in
the famous gold clause cases was
not new. In essence it was the eame
issue that confronted the court in
several cases during the flat money
regime and depreciated paper.
In fact, the precise parallel of the
devaluation is found in the Federal
Act of 1834 by which the weight of
the gold dollar was reduced by six
per cent So far as effects on
debtor and creditor are concerned,
a forty per cent reduction in the
metallic content of the dollar is
more important than a six per cent
cut but there is no difference in
principle or legal validity.
Finding difficulty in meeting its
pressing obligations through tax
revenues or the sale of bonds, the
Federal Government in February,
1862, authorized the issue of $150,
000,000 of United States notes pop
ularly known as "greenbacks." Al
though these notes were irredeem
able and worth less than face value
from the time of their issue they
made legal tender in the payment
of all debts with the exception of
import duties and interest on the
public debt
Apparently the government ex
pected that the tariff receipts in
gold wodld be enough to pay the
interest on the bonded debt and
the credit of the government would
be improved by the device of gold
payment in part
As the volume of greenbacks in
creased by successive issues, prices
rose and the value of paper money
fell in terms of gold. Indeed at one
time it took $2.85 in paper to buy
one dollar in gold.
In obedience to Gresham's law
cheap money drove dear money out
of circulation and in all parts of
the United States except the Pa
cific Coast gold and silver even in
the smallest denominations slipped
quietly out of circulation.
In Oregon and California where
gold and silver came in abundance
from the mines and where custom
favored the issue of hard money,
specie remained the standard and
the chief medium of exchange thru
out the Civil War. Greenbacks
were used to some extent but at
their market value in coin.
When greenbacks were worth 50
cents in gold a man with a ten dol
lar debt to pay had the option of
paying a ten dollar gold piece or
twenty dollars in United States
notes. If he insisted on the ac
ceptance of greenbacks at full face
value he would be boycotted by the
business community.
Long-standing laws in Oregon
had required the payment of taxes
in gold and silver coin but tax col
lectors were continually under
pressure to accept the depreciated
notes in payment of tax bills.
The sheriff of Lane county, find
ing plenty of greenbacks among his
tax receipts, tried to pay the coun
ty's share of state taxes in the same
medium. Refusal of state author
ities to accept anything but hard
money carried the case to the Uni
ted States Supreme Court in the
famous case of Lane County v. Or
egon. The higher court held that the
State had a right to determine the
medium in which taxes sould be
paid. The Federal law making
greenbacks lawful tender for debts,
public and private, did not apply to
state taxes. A tax Is not a debt
The latter is an obligation volun
tarily entered into while a tax is a
coerced payment for public serv
ices. Naturally the question, of the le
gality of greenbacks as a tender for
debts contracted prior to the date
of issue was bound to arise.
At a time when gold and silver
were the only lawful tender, both
parties to a contract expected set
tlement in specie. Creditors were
reluctant to accept United States
notes, at one time worth only thirty-four
cents, in terms of gold, in
the payment of debts originating
before flat money displaced the
specie standard.
This issue came squarely before
the courts in the famous case of
Hepburn v. Griswold which arose
in the State of Kentucky. Mrs.
Hepburn had given a note to Gris
wold two years before the first is
sue of greenbacks, when "there was
no lawful money which could be
lawfully tendered in payment of
private debts but gold and silver."
Following the issue of greenbacks,
Mrs. Hepburn offered in March,
1864, the requisite amount of Uni
ted States notes. The State court
held the debt was satisfied in full.
The case came up to the Supreme
Court which held that the legal
tender quality of the notes applied
only to debts contracted subsequent
to the issue and did not apply to
pre-existing debts.
The clear Intent of parties in the
case of pre-existing debts was that
payment should be made in gold or
silver which had "intrinsic value"
and not in United States notes that
"had no intrinsic value" but "pur
chasing power determined by the
quanitiy in circulation," the court
held.
The forced acceptance of the Uni
ted States notes at face value would
infringe the obligation of contract
which is contrary to the spirit if
not the letter of the Constitution
and would be contrary to justice
and equity, it added.
Chief Justice Chase, who wrote
the opinion, drew a sharp distinc
tion between the pawer to issue le
gal tender notes and the power to
coin money.
" (the power to issue notes) is
certainly not the same power as
the power to coin money," he said.
The practical Import of this de
cision, if allowed to stand, would
be to increase the long-standing
debts of corporations by about
twenty per cent
At the time the decision was
handed down (1870) gold command
ed a premium of twenty per cent
It was certain that influence would
be brought to bear to secure a re
versal. What followed reflects in some
degree on the honor of the Court
The Court was in process of being
reduced to seven members under
the operation of a law of 1866 pro
viding that no vacancy should be
filled until the body was reduced to
seven. This act was repealed and
the number of judges increased to
nine. Justices Strong and Bradley,
whose stand on the greenback issue
could have been inferred from pre
vious decisions and opinions, were
appointed to till the vacancies.
In the legal tender cases that
came before the court the decision
in the Griswold case was violently
reversed. The greenbacks were
held lawful tender for pre-existing
debts as well as those entered
into after the issue was authorized.
A contract to pay money is a
contract to pay not that which was
lawful tender at the time the con
tract was drawn, but only that
which is designated as money at
the time of maturity and payment
the court held. The forced accept
ance of paper, depreciated as it may
be, does not infringe the obligation
of contract it said.
Even if it did the Federal Govern
ment is not bound by the Constitu
tion from infringing the obligation
of contract This prohibition is
clearly against the state and not
the national government
Another case decided in 1868
seemed more or less inconsistent
with the stand taken in the legal
tender cases. This was Bronson v.
Rodes and involved the legality of
a tender of greenbacks for a debt
contracted in 1851 and specifically
payable in gold and silver coin.
Rodes ,the debtor in the transac
tion, tendered the requisite amount
in depreciated paper. At the time
of the tender a dollar in gold was
worth $2.25 in terms of greenbacks.
State courts had upheld the legal
ity of the tender and ordered the
cancellation of the mortgage in
volved. On appeal to the Supreme Court
the higher tribunal held that it was
the "purpose of courts to enforce
contracts according to the lawful
interest and understanding of the
parties" and that the clear intent
of both creditor and debtor in 1851
was that the debt be discharged in
gold and silver.
This contract was in reality "an
agreement to deliver a certain
weight of standard gold." It was
in fact "not distinguishable from
a contract to deliver a certain
weight of bullion."
There were two standards in use
at the time recognized by state and
federal laws. Parties to the con
tract and chosen the specie stand
ard in preference to the other.
As the Supreme Court faced the
momentous gold clause decision the
precedents were not very clear.
If the tribunal followed the de
cisions in Hepburn v. Griswold or
Benson v. Rodes it appeared that
Congress could not be sustained in
abrogating the gold clause in bil
lions of pre-existing contracts.
If, however, the court accepted
the principle of the legal tender
cases that a contract to pay money
is a contract to pay whatever is
money at maturity, whether it be
depreciated paper or a devalued
dollar, the way was open to sustain
Congressional action.
IV.
THE DOCTRINE OF JUDICIAL
REVIEW AND THE AD
VISORY OPINION.
By WAYNE L. MORSE.
In a very real sense, the doctrine
of judicial supremacy makes it pos
sible for us in this country to ex
perience a social revolution through
the orderly processes of law to the
extent that our courts adjust con
stitutional concepts to social demands.
Such adjustments are going on
at the present time in a dramatic
fashion, and we are all familiar
with the part that the supreme
court is playing in that revolution.
However, the recent decisions of
the court on constitutional law is
sues, especially the decision in the
Schecter poultry case declaring un
constitutional much of the N. I. R.
A., have brought forth again cer
tain proposals aimed at limiting the
doctrine of judicial review.
Even prior to the gold clause de
cision, articles began to appear in
leading American periodicals ques
tioning the desirability of contin
uing to vest in the supreme court
the sweeping power of Judicial re
view. , There was open suggestion that
attempts might be made to enlarge
the court in order to bring about a
reversal of such decisions, and his
torical precedent was cited for it
Although it is true that both
President Lincoln and President
Grant have been charged by some
historians with having packed the
court in order to secure decisions
desired by them, It is gratifying to
note that President Roosevelt has
indicated rather clearly that New
Deal legislation must be adjusted in
accordance with the constitutional
Interpretations rendered by the su
preme court However, there are
significant groups in our citizenry
who are making specific proposals
to check the powers of the supreme
court
The view of the ultra conservative
that such action would result in
chaos or that It would even destroy
constitutional government Is a fear
argument rather than a fact argu
ment because it Is possible to have
a written constitution and still
check the powers of the supreme
court to declare acts of congress
unconstitutional.
Thus, Justice Holmes has written,
"The United States constitution
would not come to an end if the
court lost its power to declare acts
of congress void."
However, any such change entails
significant modifications in our
theory of separation of government
al powers and on the basis of the
long time record of the United
States supreme court I think that
we as a people should be most hesi
tant in checking the powers of that
court
Nevertheless, there is a great deal
of merit in the criticism of those
who claim that the present power of
judicial review results In a great
deal of waste.
Obviously, no business could suc
ceed if it purchased expensive ma
chinery, installed it and started to
run it before it determined whether
or not that machinery would manu
facture the goods for which it was
purchased.
In a sense that is what is now
done in this country in regard to
legislative machinery. It costs mil
lions of dollars to put important
federal legislation into operation.
Yet our system permits the su
preme court to declare such legis
lation unconstitutional and thus in
effect wipe it off the books at a
great financial loss, not only to the
government but to business men
who have endeavored to adjust to it
It has been suggested that one
way to prevent such a waste would
be to create a separate department
of the supreme court whose sole
task it would be to pass upon con
stitutional questions involved in
major legislation prior to its final
enactment
A proposal somewhat similar was
submitted to the constitutional con
vention in 1787 by Randolph of
Virginia and rejected by the fram
ers of the constitution. The Ran
dolph plan proposed to associate a
certain number of the judges with
the executive in the exercise of a
revisionary power over laws passed
by Congress.
However, that is not exactly the
same plan as the proposal for a de
partment to pass judgment upon
the constitutionality of acts of Con
gress in advance.
Some of the arguments advanced
against the proposal for advisory
opinions are that such a plan would
be an encroachment upon the doc
trine of judicial review and the in
dependence of the court
This argument is of questionable
validity because under the proposal
the court would have the same pow
er that it now has to determine the
constitutionality of acts of Con
gress, but when requested by the
executive or by Congress it would
determine the matter of conatitU'
tionality before the law is put into
effect.
It is contended that such a pro
posal would in effect turn that de
partment of the court into a legis
lative drafting bureau, but obvious
ly this would not be the case be
cause the decisions would not vary
in form from those now given.
At the present time the court does
not tell Congress how to make a
certain act constitutional, but rath
er tells Congress why a certain act
is unconstitutional.
It is also claimed that the ad
visory opinion plan would be un
desirable because decisions would
be rendered upon the basis of hypo
thetical cases, thus varying from
the present well-established prac
tice of determining constitutionality
upon the basis of actual litigation.
This objection is of doubtful val
idity because many cases now are
purely test cases of little conse
quence as far as the interests of
the party litigants are concerned
when viewed in light of the major
constitutional questions involved.
The advisory plan, on the other
hand, would give the court greater
latitude In rendering, its constitu
tional decisions, in that all features
of a given act could be 'decided as
to their constitutionality while at
the present time the facts of a giv
en case often involve only a part of
an act and so its constitutionality
is decided piecemeal.
Perhaps a more valid objection
would be that the proposal would
involve a task Impossible of per
formance by a separate department
of the court, if all, or even most
of the acts of congress were to be
submitted to the court In advance.
let alone the acts of state legisla
tures, wnich might possibly be in
conflict with the federal constitu
tion. If such a plan is to be feasible, it
would have to be limited in some
way so that only major legislation
would be submitted to the court in
advance.
If the power of judicial review is
finally curtailed, the chief reason
for such action will be the dissat
isfaction of large numbers of our
people with the delay, uncertainty,
CAN IT BE THAT
YOU ARE NOT AWARE
of the convenience of Banking-by-Mail
Occasionally depositors come in with
checks that are months old or that have
passed from person to person until they
carry half a dozen endorsements on the
back.
Such checks can always be SENT IN
BY MAIL and deposited to your check
ing or savings account, thus making the
funds immediately available to you and
assuring their safety.
If you are too busy to drive into town
or have not time to come into the bank
with your deposits, why not use our
BANK-BY-MAIL service? If you have
no account here, a new one can be op
ened. Write us about this time saving,
safe plan of BANKING BY MAIL.
E. L. Morton, Manager
HEPPNER BRANCH
The FIRST NATIONAL DANK
Of POBTLAMB
wnrormt
Afmt
PLAN TO FOLLOW
Your Horses and Riders to
Gilliam County Fair
and RODEO
Condon, Oregon
THURSDAY : FRIDAY : SATURDAY
Aaag.29,3D,3li
Old-Time Dance Thursday; Modern Dances
Friday and Saturday with Music by Red
River Riders, Cowboy Dance Band, and
Geo. French's Rhythm Boys.
For Concession Privileges write
STEWART HARDIE, Condon
and waste entailed in the present
procedure.
A perfected advisory opinion plan
might prove to be an effective way
of retaining the court's right to ex
ercise the doctrine of judicial re
view and at the same time make
possible the speedy adjustment of
major legislation to the constitu
tion. If the principle of such a plan Is
sound and desirable, the mechanics
for its operation should not prove
difficult of solution.
Huckleberry Time Here;
Recipes Are Available
With the evergreen huckleberries
now ripening along the Oregon
coast and other varieties in the
mountains, many homemakers are
planning to obtain quantities of this
delicious fruit for canning, for
making jams and jellies, and for
serving fresh in pies, puddings, fro
zen or gelatin desserts, and in many
other waya The crop this season
promises to be the best in several
year, reports George Waldo, fed-
HI
New Improved Ceresan
has more good points
than any other dust
and costs you LESS to use
Consider everything, and you will
treat seed wheat with New Improved
CERESAN I
It is cheaper to use than other
dusts; costs less than 3c an acre at
the average seeding rate. It is
recommended by the U. S. Dept. of
Agriculture. It can be applied in a
gravity treater without labor of turn
ing. Does not clog or injure drill,
little or no free dust to breathe in
treating for all you use is Y ounce
per bushel of seed I Yet you get better
control of stinking smut, and fre
quently a bigger yield. The average
acre increase in tests has been 1.13
bushels on clean seed, even more on
smutted seedl
Use New Improved CERESAN 'on
barley, too. Costs less than 4c an
acre and controls covered smut,
stripe, black loose smut, seedling
blight. Ask dealer or write to Bayer
Semesan Co., Inc., Wilmington, Del.,
for free Cereal Pamphlet 103-A
TREAT SEED EVERY YEAR
-IT PAYS
eral specialist in small fruits, sta
tioned at Oregon State college.
The evergreen huckleberry, also
known as the "shot" and the "coast"
huckleberry. Is really a blueberry,
according to Dr. George Darrow,
senior horticulturist of the U. S.
department of agriculture. That
is, he says, It is one of the group
having many very small, soft seeds,
rather than' 10 large bony seeds as
the true huckleberries have.
Several years ago Miss CJaribel
Nye, state leader of home econom
ics extension, concluded that more
people would be enjoying the huc
kleberries if more information on
varied ways of using them were
available. Accordingly she issued
a public request for huckleberry
recipes. The response brought "fa
vorite" recipes from 13 counties In
Oregon, Washington and California.
Each recipe was tested, and from
all those received 18 of the choicest
were selected and published in bul
letin form for free distribution. This
bulletin, HE 382, is still available
on request from county extension
offices or from the college at Cor
vallis. One of the simple but very de
licious recipes included in the bul
letin is huckleberry pudding, which
Is made as follows:
Huckleberry Pudding
3 cups huckleberries
IVi cups sugar.
1 tbsp. flour.
3 tbsp. lemon juice.
Put all ingredients (except lem
on juice) in a deep baking pan and
cook until slightly thick; add lemon
juice; pour a thin baking powder
dough over berries; bake in a mod
erate oven 20 to 30 minutes. The
baking powder dough may be made'
a little thicker and cut into biscuit
shapes and placed in the berries
and baked. Serve with cream.
Thank you
We wish to express our appreciation
of the consideration, cooperation and
neighborliness shown by our customers
during the recent interruption of serv
ice caused by the fire between The
Dalles and Hood River.
Interruptions of this sort are re
grettable and at times unavoidable.
When they occur, the duty of the or
ganization is to restore service at the
earliest possible moment. In our opin
ion, the men of the Pacific organization
who rebuilt practically a mile of line in
less than twenty-four hours did an out
standing job. We express publicly our
sincere appreciation of the work clone
by these men. Loyalty and efficiency
such as they displayed are indispensa
ble elements in the maintenance of Pa
cific Power & Light Company service.
We share in the public gratitude to
the men of the Forest Service and the
CCC and SERA workers for their val
iant efforts in controlling the fire.
Pacific Power & Light Company
Always at your service
ou are
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