ARTICLE I (continued 6)
Reading edition
ALIEN ENEMIES
The status of alien enemies was first considered in connection with the passage of the Alien Act of 1798,[1317] whereby the President was authorized to deport any alien or to license him to reside within the United States at any place to be designated by the President. Critics of the measure conceded its constitutionality so far as enemy aliens were concerned, because, as Madison wrote, "The Constitution having expressly delegated to Congress the power to declare war against any nation, and, of course, to treat it and all its members as enemies."[1318] The substance of this early law was reenacted during the first world war. Under it the President is authorized, in time of war, to prescribe "the manner and degree of the restraint to which [alien enemies] shall be subject and in what cases, and upon what security their residence shall be permitted," or to provide for their removal from the United States.[1319] This measure was held valid in Ludecke v. Watkins.[1320]
EMINENT DOMAIN
An often-cited dictum uttered shortly after the Mexican War asserted the right of an owner to compensation for property destroyed to prevent its falling into the hands of the enemy, or for that taken for public use.[1321] In United States v. Russell,[1322] decided following the Civil War, a similar conclusion was based squarely on the Fifth Amendment, although the case did not necessarily involve the point. Finally, in United States v. Pacific Railroad,[1323] also a Civil War case, the Court held that the United States was not responsible for the injury or destruction of private property by military operations, but added that it did not have in mind claims for property of loyal citizens which was taken for the use of the national forces. "In such cases," the Court said, "it has been the practice of the government to make compensation for the property taken. * * *, although the seizure and appropriation of private property under such circumstances by the military authorities may not be within the terms of the constitutional clauses."[1324] Meantime, however, in 1874, a committee of the House of Representatives, in an elaborate report on war claims growing out of the Civil War, had voiced the opinion that the Fifth Amendment embodied the distinction between a taking of property in the course of military operations or other urgent military necessity, and other takings for war purposes, and required compensation of owners in the latter class of cases.[1325] In determining what constitutes just compensation for property requisitioned for war purposes during World War II, the Court has assumed that the Fifth Amendment is applicable to such takings.[1326]
Clause 15. The Congress shall have Power * * * To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions.
Clause 16. The Congress shall have Power * * * To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress.
The Militia Clauses
CALLING OUT THE MILITIA
The States as well as Congress may prescribe penalties for failure to obey the President's call of the militia. They also have a concurrent power to aid the National Government by calls under their own authority, and in emergencies may use the militia to put down armed insurrection.[1327] The Federal Government may call out the militia in case of civil war; its authority to suppress rebellion is found in the power to suppress insurrection and to carry on war.[1328] The act of February 28, 1795,[1329] which delegated to the President the power to call out the militia, was held constitutional.[1330] A militiaman who refused to obey such a call was not "employed in the service of the United States so as to be subject to the article of war," but was liable to be tried for disobedience of the act of 1795.[1331]
REGULATION OF THE MILITIA
The power of Congress over the militia "being unlimited, except in the two particulars of officering and training them, * * *, it may be exercised to any extent that may be deemed necessary by Congress. * * * The power of the State government to legislate on the same subjects, having existed prior to the formation of the Constitution, and not having been prohibited by that instrument, it remains with the States, subordinate nevertheless to the paramount law of the General Government, * * *"[1332] Under the National Defense Act of 1916,[1333] the militia, which hitherto had been an almost purely State institution, was brought under the control of the National Government. The term "militia of the United States" was defined to comprehend "all able-bodied male citizens of the United States and all other able-bodied males who have * * * declared their intention to become citizens of the United States," between the ages of eighteen and forty-five. The act reorganized the National Guard, determined its size in proportion to the population of the several States, required that all enlistments be for "three years in service and three years in reserve," limited the appointment of officers to those who "shall have successfully passed such tests as to * * * physical, moral and professional fitness as the President shall prescribe," and authorized the President in certain emergencies to "draft into the military service of the United States to serve therein for the period of the war unless sooner discharged, any and all members of the National Guard and National Guard Reserve," who thereupon should "stand discharged from the militia."
Clause 17. Congress shall have power * * * To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings;—And
The Seat of Government
The jurisdiction of the United States over the District of Columbia vested on the first Monday of December, 1800.[1334] By the act of February 27, 1801,[1335] the District was divided into two counties and in the following year the city of Washington was erected into a municipality.[1336] The present form of government dates from 1876; all legislative powers with respect to District affairs are retained by Congress, while an executive board of three commissioners vested with ordinance powers is appointed by the President.[1337] As a municipal corporation, the District has the legal capacity to sue and be sued.[1338] But the District Commissioners are merely administrative officers, having only the ministerial powers given them by statute; accordingly they were found to have no power to submit a claim against the District to arbitration.[1339]
NATURE AND EXTENT OF RIGHTS CEDED TO UNITED STATES
In ceding the territory which became the District of Columbia, both Maryland and Virginia provided that the United States should not acquire any right of property in the soil except by transfer by the individual owner. This proviso was held not to prevent the Federal Government from exercising the power of eminent domain within the District.[1340] Under the agreement made between the original proprietors of the land on which the city of Washington was laid out, and the Commissioners appointed by the President to survey, define and locate the district for the seat of government, the United States became the owner in fee of the streets of the city although the trustees never carried out their agreement to convey them.[1341] Both the right of dominion and of property of navigable waters and of the soil under them in the District, which originally had been granted by Charles I, King of England to the Lord Proprietary of Maryland, and to which Maryland succeeded upon the American Revolution, became vested in the United States by the cession from Maryland.[1342]
RETROCESSION OF ALEXANDRIA COUNTY
Originally the District of Columbia embraced the maximum area permitted by the Constitution. In 1846, however, Congress authorized a referendum on the question of retroceding Alexandria County to Virginia, and declared that jurisdiction should be relinquished to that State if a majority of the voters in the county voted in favor of the change. The proposal was approved, whereupon, without any further action by Congress, Virginia declared the county annexed and resumed full jurisdiction over it. Thirty years later, in a suit to recover taxes paid to the State, the Supreme Court called the retrocession "a violation of the Constitution" but held that since Congress had recognized the transfer as a settled fact, a resident of the county was estopped from challenging it.[1343]
CONTINUANCE OF STATE LAWS
Under the act of July 16, 1790,[1344] which provided for the establishment of the seat of government, State laws were continued in operation until Congress created a government for the District. The Supreme Court intimated that this was "perhaps, only declaratory of a principle which would have been in full operation without such declaration."[1345] In 1801 Congress declared that the laws of Virginia and Maryland "as they now exist, shall be and continue in force" in the respective portions of the District ceded by those States.[1346] The only effect of the cession upon individuals was to terminate their State citizenship and the jurisdiction of the State governments over them;[1347] contract obligations were not affected,[1348] and liens on property for debt were continued.[1349]
STATUS OF THE DISTRICT TODAY
Chief Justice Marshall ruled in the early case of Hepburn v. Ellzey[1350] that the District of Columbia is not a State within the meaning of the diversity of citizenship clause of article III. This view was consistently adhered to for nearly a century and a half in the interpretation of later acts of Congress regulating the jurisdiction of federal courts.[1351] In 1940, however, Congress expressly authorized those courts to take jurisdiction of nonfederal controversies between residents of the District of Columbia and citizens of a State. By a five-to-four decision that statute was held constitutional, but the Justices who voted to sustain it were not in agreement as to the grounds of the decision.[1352] Three found it to be an appropriate exercise of the power of Congress to legislate for the District of Columbia without reference to article III.[1353] Six members of the Court rejected this theory, but two of the six joined in upholding the act on another ground which seven of their brethren considered untenable,—namely, that Hepburn v. Ellzey was erroneously decided and that the District of Columbia should be deemed to be a "State" within the meaning of article III, section 2.[1354]
It is not disputed that the District is a part of "the United States," and that its residents are entitled to the privilege of trial by jury, whether in civil or criminal cases,[1355] and of presentment by a grand jury.[1356] Legislation which is restrictive of the rights of liberty and property in the District must find justification in facts adequate to support like legislation by a State in the exercise of its police power.[1357]
LEGISLATIVE POWER OVER DISTRICT OF COLUMBIA
Congress possesses over the District of Columbia the blended powers of a local and national legislature.[1358] Even when legislating for the District, Congress remains the legislature of the Union, with the result that it may give its enactments nation-wide operations so far as is "necessary and proper" in order to make them locally effective. As was pointed out in Cohens v. Virginia,[1359] if a felon escapes from the State in which the crime was committed, the government of such State cannot pursue him into another State and there apprehend him, "but must demand him from the executive power of that other State." On the other hand, a felon escaping from the District of Columbia or any other place subject to the exclusive power of Congress, may be apprehended by the National Government anywhere in the United States. "And the reason," declared Chief Justice Marshall, "is, that Congress is not a local legislature, but exercises this particular power, [of exclusive legislation], like all its other powers, in its high character, as the legislature of the Union."[1360]
TAXATION IN THE DISTRICT
Persons and property within the District of Columbia are subject to taxation by Congress under both the first and seventeenth clauses of this section. A general tax levied throughout the United States may be applied to the District of Columbia upon the same conditions as elsewhere;—e.g., if a direct tax, it must be levied in proportion to the census.[1361] But in laying taxes for District purposes only, "Congress, like any State legislature unrestricted by constitutional provisions, may its discretion wholly exempt certain classes of property from taxation, or may tax them at a lower rate than other property."[1362] It is no impediment to the exercise of either power that residents of the District lack the suffrage and have politically no voice in the expenditure of the money raised by taxation.[1363]
DELEGATION OF LEGISLATIVE POWER TO MUNICIPAL OFFICERS
Congress may delegate to municipal authorities legislative functions which are strictly local in character.[1364] It may confer upon them the power to improve or repair streets, to assess adjacent property therefor,[1365] and to regulate public markets.[1366] It may confirm assessments previously made by the District government without authority of law.[1367] But in Stoutenburgh v. Hennick,[1368] the Court held that Congress would not, and did not intend to, delegate to the District the power to impose a license tax on commercial agents who offered merchandise for sale by sample, since such a license amounted to a regulation of interstate commerce.
COURTS OF THE DISTRICT
In its capacity as a local legislature Congress may create courts for the District of Columbia and may confer upon them powers and duties which lie outside the judicial power vested in "constitutional" courts. On appeal from an order of the District Public Utilities Commission, a court for the District of Columbia may be empowered to modify valuations, rates and regulations established by the Commission and to make such orders as in its judgment the Commission should have made. But inasmuch as the issuance of such orders is a legislative as distinguished from a judicial function, the provision for an appeal from them to the Supreme Court was held unconstitutional.[1369]
Despite the fact that Congress, acting under this clause, imposed nonjudicial duties upon the Supreme Court and the Court of Appeals for the District of Columbia, those tribunals were held to be constitutional courts, established under article III, with the result that the compensation of the judges thereof may not be diminished during their continuance in office.[1370] Since the courts established for the District are courts of the United States, their judgments stand upon the same footing, so far as concerns the obligations created by them, as domestic judgments of the States, wherever rendered and wherever sought to be enforced.[1371]
Authority Over Places Purchased
"PLACES"
This clause has been broadly construed to cover all structures necessary for carrying on the business of the National Government.[1372] It includes post offices,[1373] a hospital and a hotel located in a national park,[1374] and locks and dams for the improvement of navigation.[1375] But it does not cover lands acquired for forests, parks, ranges, wild life sanctuaries or flood control.[1376] Nevertheless the Supreme Court has held that a State may convey, and that Congress may accept, either exclusive or qualified jurisdiction over property acquired within the geographical limits of a State, for purposes other than those enumerated in Clause 17.[1377]
After exclusive jurisdiction over lands within a State has been ceded to the United States, Congress alone has the power to punish crimes committed within the ceded territory.[1378] Private property located thereon is not subject to taxation by the State,[1379] nor can State statutes enacted subsequent to the transfer have any operation therein.[1380] But the local laws in force at the date of cession which are protective of private rights continue in force until abrogated by Congress.[1381]
DURATION OF FEDERAL JURISDICTION
A State may qualify its cession of territory by a condition that jurisdiction shall be retained by the United States only so long as the place is used for specified purposes.[1382] Such a provision operates prospectively and does not except from the grant that portion of a described tract which is then used as a railroad right of way.[1383] In 1892, the Court upheld the jurisdiction of the United States to try a person charged with murder on a military reservation, over the objection that the State had ceded jurisdiction only over such portions of the area as were used for military purposes, and that the particular place on which the murder was committed was used solely for farming. The Court held that the character and purpose of the occupation having been officially established by the political department of the government, it was not open to the Court to inquire into the actual uses to which any portion of the area was temporarily put.[1384] A few years later, however, it ruled that the lease to a city, for use as a market, of a portion of an area which had been ceded to the United States for a particular purpose, suspended the exclusive jurisdiction of the United States.[1385]
Recently the question arose whether the United States retains jurisdiction over a place which was ceded to it unconditionally after it has abandoned the use of the property for governmental purposes and entered into a contract for the sale thereof to private persons. Minnesota asserted the right to tax the equitable interest of the purchaser in such land, and the Supreme Court upheld its right to do so. The majority assumed that "the Government's unrestricted transfer of property to nonfederal hands is a relinquishment of the exclusive legislative power."[1386] In separate concurring opinions Chief Justice Stone and Justice Frankfurter reserved judgment on the question of territorial jurisdiction.[1387]
RESERVATION OF JURISDICTION BY STATES
For more than a century the Supreme Court kept alive, by repeated dicta,[1388] the doubt expressed by Justice Story "whether Congress are by the terms of the Constitution, at liberty to purchase lands for forts, dockyards, etc., with the consent of a State legislature, where such consent is so qualified that it will not justify the 'exclusive legislation' of Congress there. It may well be doubted if such consent be not utterly void."[1389] But when the issue was squarely presented in 1937, the Court ruled that where the United States purchases property within a State with the consent of the latter, it is valid for the State to convey, and for the United States to accept, "concurrent jurisdiction" over such land, the State reserving to itself the right to execute process "and such other jurisdiction and authority over the same as is not inconsistent with the jurisdiction ceded to the United States."[1390] The holding logically renders the second half of Clause 17 superfluous. In a companion case, the Court ruled further that even if a general State statute purports to cede exclusive jurisdiction, such jurisdiction does not pass unless the United States accepts it.[1391]
Clause 18. The Congress shall have Power * * * To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.
The Coefficient or Elastic Clause
SCOPE OF INCIDENTAL POWERS
That this clause is an enlargement, not a constriction, of the powers expressly granted to Congress, that it enables the lawmakers to select any means reasonably adapted to effectuate those powers, was established by Marshall's classic opinion in McCulloch v. Maryland.[1392] "Let the end be legitimate," he wrote, "let it be within the scope of the Constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the Constitution, are constitutional."[1393] Moreover, this provision gives Congress a share in the responsibilities lodged in other departments, by virtue of its right to enact legislation necessary to carry into execution all powers vested in the National Government. Conversely, where necessary for the efficient execution of its own powers, Congress may delegate some measure of legislative power to other departments.[1394]
OPERATION OF COEFFICIENT CLAUSE
Practically every power of the National Government has been expanded in some degree by the coefficient clause. Under its authority Congress has adopted measures requisite to discharge the treaty obligations of the nation;[1395] it has organized the federal judicial system and has enacted a large body of law defining and punishing crimes. Effective control of the national economy has been made possible by the authority to regulate the internal commerce of a State to the extent necessary to protect and promote interstate commerce.[1396] Likewise the right of Congress to utilize all known and appropriate means for collecting the revenue, including the distraint of property for Federal taxes,[1397] and its power to acquire property needed for the operation of the government by the exercise of the power of eminent domain,[1398] have greatly extended the range of national power. But the widest application of the necessary and proper clause has occurred in the field of monetary and fiscal controls. Inasmuch as the various specific powers granted by article I, section 8, do not add up to a general legislative power over such matters, the Court has relied heavily upon this clause in sustaining the comprehensive control which Congress has asserted over this subject.[1399]
DEFINITION AND PUNISHMENT OF CRIMES
Although the only crimes which Congress is expressly authorized to punish are piracies, felonies on the high seas, offenses against the law of nations, treason and counterfeiting of the securities and current coin of the United States, its power to create, define and punish crimes and offenses whenever necessary to effectuate the objects of the Federal Government is universally conceded.[1400] Illustrative of the offenses which have been punished under this power are the alteration of registered bonds;[1401] the bringing of counterfeit bonds into the country;[1402] conspiracy to injure prisoners in custody of a United States marshal;[1403] impersonation of a federal officer with intent to defraud;[1404] conspiracy to injure a citizen in the free exercise or enjoyment of any right or privilege secured by the Constitution or laws of the United States;[1405] the receipt by government officials of contributions from government employees for political purposes;[1406] advocating, etc., the overthrow of the Government by force.[1407] Part I of Title 18 of the United States Code comprises more than 500 sections defining penal offenses against the United States.
CHARTERING OF BANKS
As an appropriate means for executing "the great powers, to lay and collect taxes; to borrow money; to regulate commerce; to declare and conduct a war; and to raise and support armies * * *" Congress may incorporate banks and kindred institutions.[1408] Moreover, it may confer upon them private powers which, standing alone, have no relation to the functions of the Federal Government, if those privileges are essential to the effective operation of such corporations.[1409] Where necessary to meet the competition of State banks, Congress may authorize national banks to perform fiduciary functions, even though, apart from the competitive situation, federal instrumentalities might not be permitted to engage in such business.[1410] The Court will not undertake to assess the relative importance of the public and private functions of a financial institution which Congress has seen fit to create. It sustained the act setting up the Federal Farm Loan Banks to provide funds for mortgage loans on agricultural land against the contention that the right of the Secretary of the Treasury, which he had not exercised, to use these banks as depositaries of public funds, was merely a pretext for chartering these banks for private purposes.[1411]
CURRENCY REGULATIONS
Reinforced by the necessary and proper clause, the powers "'to lay and collect taxes, to pay the debts and provide for the common defence and general welfare of the United States,' and 'to borrow money on the credit of the United States and to coin money and regulate the value thereof * * *'";[1412] have been held to give Congress virtually complete control over money and currency. A prohibitive tax on the notes of State banks;[1413] the issuance of treasury notes impressed with the quality of legal tender in payment of private debts[1414] and the abrogation of clauses in private contracts which called for payment in gold coin,[1415] were sustained as appropriate measures for carrying into effect some or all of the foregoing powers.
POWER TO CHARTER CORPORATIONS
In addition to the creation of banks, Congress has been held to have authority to charter a railroad corporation,[1416] or a corporation to construct an interstate bridge,[1417] as instrumentalities for promoting commerce among the States, and to create corporations to manufacture aircraft[1418] or merchant vessels[1419] as incidental to the war power.
COURTS AND JUDICIAL PROCEEDINGS
Inasmuch as the Constitution "delineated only the great outlines of the judicial power * * *, leaving the details to Congress, * * * The distribution and appropriate exercise of the judicial power must * * * be made by laws passed by Congress, * * *"[1420] As a necessary and proper provision for the exercise of the jurisdiction conferred by article III, section 2 Congress may direct the removal from a State to a federal court of a criminal prosecution against a federal officer for acts done under color of federal law,[1421] and may authorize the removal before trial of civil cases arising under the laws of the United States.[1422] It may prescribe the effect to be given to judicial proceedings of the federal courts,[1423] and may make all laws necessary for carrying into execution the judgments of federal courts.[1424] When a territory is admitted as a State, Congress may designate the Court to which the records of the territorial courts shall be transferred, and may prescribe the mode for enforcement and review of judgments rendered by those courts.[1425] In the exercise of other powers conferred by the Constitution, apart from article III, Congress may create legislative courts and "clothe them with functions deemed essential or helpful in carrying those powers into execution."[1426]
SPECIAL ACTS CONCERNING CLAIMS
This clause enables Congress to pass special laws to require other departments of the Government to prosecute or adjudicate particular claims, whether asserted by the Government itself or by private persons. In 1924,[1427] Congress adopted a Joint Resolution directing the President to cause suit to be instituted for the cancellation of certain oil leases alleged to have been obtained from the Government by fraud, and to prosecute such other actions and proceedings, civil and criminal, as were warranted by the facts. This resolution also authorized the appointment of special counsel to have charge of such litigation. Private acts providing for a review of an order for compensation under the Longshoreman's and Harbor Workers' Compensation Act,[1428] or conferring jurisdiction upon the Court of Claims to hear and determine certain claims of a contractor against the Government, in conformity with directions given by Congress, after that court had denied recovery on such claims, have been held constitutional.[1429]
MARITIME LAW
Congress may implement the admiralty and maritime jurisdiction conferred upon the federal courts by revising and amending the maritime law which existed at the time the Constitution was adopted, but in so doing, it cannot go beyond the reach of that jurisdiction.[1430] This power cannot be delegated to the States; hence acts of Congress which purported to make State Workmen's Compensation laws applicable to maritime cases were held unconstitutional.[1431]
Section 9. Clause 1. The Migration or Importation of such Persons as any of the States now existing shall think proper to admit, shall not be prohibited by the Congress prior to the Year one thousand eight hundred and eight, but a Tax or duty may be imposed on such Importation, not exceeding ten dollars for each Person.
Powers Denied to Congress
GENERAL PURPOSE OF THE SECTION
This section of the Constitution (containing eight clauses restricting or prohibiting legislation affecting the importation of slaves, the suspension of the writ of habeas corpus, the enactment of bills of attainder or ex post facto laws, the levying of taxes on exports, the granting of preference to ports of one State over another, the granting of titles of nobility, etc.,) is devoted to restraints upon the power of Congress and of the National Government,[1432] and in no respect affects the States in the regulation of their domestic affairs.[1433]
The above clause, which sanctioned the importation of slaves by the States for twenty years after the adoption of the Constitution, when considered with the section requiring escaped slaves to be returned to their masters (art. IV, § 1, cl. 3), was held by Chief Justice Taney in Scott v. Sanford,[1434] to show conclusively that such persons and their descendants were not embraced within the term "citizen" as used in the Constitution. Today is interesting only as an historical curiosity.
Clause 2. The Privilege of the Writ of Habeas Corpus shall not be suspended, unless when in Cases of Rebellion or Invasion the public Safety may require it.
HABEAS CORPUS
Purpose of the Writ
This section, which restricts only the Federal Government and not the States,[1435] is the only place in the Constitution where the writ of habeas corpus is mentioned. The framers took for granted that the courts of the United States would be given jurisdiction to issue this, the greatest of the safeguards of personal liberty embodied in the common law, and the Judiciary Act of 1789[1436] provided for the issuance of the writ according to "the usages and principles of law." At common law the purpose of such a proceeding was to obtain the liberation of persons who were imprisoned without just cause.[1437] While the Supreme Court conceded at an early date that the authority of the federal courts to entertain petitions for habeas corpus derived solely from acts of Congress,[1438] a narrow majority recently asserted the right to expand the scope of the writ by judicial interpretation and to sanction its use for a purpose unknown to the common law, i.e., to bring a prisoner into court to argue his own appeal. Speaking for the majority Justice Murphy declared that: "However, we do not conceive that a circuit court of appeals, in issuing a writ of habeas corpus under § 262 of the Judicial Code, is necessarily confined to the precise forms of that writ in vogue at the common law or in the English judicial system. Section 262 says that the writ must be agreeable to the usages and principles of 'law,' a term which is unlimited by the common law or the English law. And since 'law' is not a static concept, but expands and develops as new problems arise, we do not believe that the forms of the habeas corpus writ authorized by § 262 are only those recognized in this country in 1789, when the original Judiciary Act containing the substance of this section came into existence."[1439]
Errors Which May Be Corrected on Habeas Corpus
The writ of habeas corpus provides a remedy for jurisdictional and constitutional errors at the trial without limit as to time.[1440] It may be used to correct errors of that order made by military as well as by civil courts.[1441] Under the common law and the Act 31 Car. II c. 2 (1679), where a person was detained pursuant to a conviction by a court having jurisdiction of the subject matter, habeas corpus was available only if a want of jurisdiction appeared on the face of the record of the Court which convicted him. A showing in a return to a writ that the prisoner was held under final process based upon a judgment of a court of competent jurisdiction closed the inquiry.[1442] Under the Judiciary Act of 1789[1443] the same rule obtained.[1444] But by the act of February 5, 1867,[1445] Congress extended the writ to all persons restrained of their liberty in violation of the Constitution or a law or treaty of the United States, and required the Court to ascertain the facts and to "dispose of the party as law and justice require." This gave the prisoner a right to have a judicial inquiry in a court of the United States into the very truth and substance of the causes of his detention. The Supreme Court has said that there is "no doubt of the authority of the Congress to thus liberalize the common law procedure on habeas corpus * * *" .[1446]
Habeas Corpus Not a Substitute for Appeal
Since the writ of habeas corpus is appellate in nature, Congress may confer jurisdiction to issue it upon the Supreme Court as well as upon the inferior federal courts.[1447] The proceeding may not, however, be used as a substitute for an appeal or writ of error.[1448] But if special circumstances make it advantageous to use this writ in aid of a just disposition of a cause pending on appeal it may be used for that purpose.[1449] Where facts dehors the record, which are not open to consideration upon appeal, are alleged to show a denial of constitutional rights, a judicial hearing must be granted to ascertain the truth or falsity of the allegations.[1450]
Issuance of the Writ
On application for a writ of habeas corpus, the Court may either issue the writ, and, on the return, dispose of the case, or it may waive the issuing of the writ and consider whether, upon the facts presented in the petition, the prisoner, if brought before it, could be discharged.[1451] The proceeding may not be used to secure an adjudication of a question which, if determined in the prisoner's favor, could not result in his immediate release.[1452] A discharge of a prisoner on habeas corpus is granted only in the exercise of a sound judicial discretion.[1453] While the strict doctrine of res judicata does not apply to this proceeding,[1454] the Court may, in its discretion, dismiss a petition for habeas corpus where the ground on which it is sought had been alleged in a prior application, but the evidence to support it had been unjustifiably withheld for use on a second attempt if the first failed.[1455] Where the Government did not deny the allegation in a prisoner's fourth petition for habeas corpus, but sought dismissal of the proceedings on the ground that the prisoner had abused the writ, the prisoner was held to be entitled to a hearing to determine whether the charge of abusive use of the writ was well founded.[1456]
Suspension of the Privilege
A critical question under this section is who determines with finality whether the circumstances warrant suspension of the privilege of the writ. In England the writ may be suspended only by Act of Parliament,[1457] and in an early case Chief Justice Marshall asserted that the decision as to when public safety calls for this drastic action depends "on political considerations, on which the legislature is to decide."[1458] At the beginning of the Civil War Lincoln authorized the Commanding General of the Army of the United States to suspend the writ along any military line between Philadelphia and Washington.[1459] In Ex parte Merryman,[1460] Chief Justice Taney strongly denounced the President's action and reasserted the proposition that only Congress could suspend the writ. Attorney General Bates promptly challenged Taney's opinion. Noting that in Ex parte Bollman, Marshall did "not speak of suspending the privilege of the writ, but of suspending the powers vested in the Court by the act," he took the position that the constitutional provision was itself the equivalent of an Act of Parliament.[1461] Thereafter, by an express provision of the act of March 3, 1863, Congress declared, "That, during the present rebellion, the President of the United States, whenever, in his judgment, the public safety may require it, is authorized to suspend the privilege of the writ of habeas corpus in any case throughout the United States, or any part thereof."[1462] The validity of this statute was assumed in Ex parte Milligan,[1463] but a narrow majority of the Court declared that the suspension of the writ did not authorize the arrest of any one, but simply denied to one arrested the privilege of the writ in order to obtain his liberty.[1464]
Clause 3. No Bill of Attainder or ex post facto Law shall be passed.
BILLS OF ATTAINDER
Historically, the term "bills of attainder" was applied to "such special acts of the legislature as inflict capital punishment upon persons supposed to be guilty of high offences, such as treason and felony, without any conviction in the ordinary course of judicial proceedings." An act which inflicted a milder degree of punishment was called a bill of pains and penalties.[1465] Within the meaning of the Constitution, however, bills of attainder include bills of pains and penalties.[1466] As interpreted by the Supreme Court, this clause prohibits all legislative acts, "no matter what their form, that apply either to named individuals or to easily ascertainable members of a group in such a way as to inflict punishment on them without a judicial trial * * *"[1467] Two acts of Congress—one which required attorneys practicing in the federal courts to take an oath that they had never given aid to persons engaged in hostility to the United States,[1468] and another which prohibited the payment of compensation to certain named government employees who have been charged with subversive activity,[1469]—have been held unconstitutional on the ground that they amounted to bills of attainder.
EX POST FACTO LAWS
Definition
At the time the Constitution was adopted, many persons understood the terms ex post facto laws, to "embrace all retrospective laws, or laws governing or controlling past transactions, whether * * * of a civil or a criminal nature."[1470] But in the early case of Calder v. Bull,[1471] the Supreme Court decided that the phrase, as used in the Constitution, applies only to penal and criminal statutes. But although it is inapplicable to retroactive legislation of any other kind,[1472] the constitutional prohibition may not be evaded by giving a civil form to a measure which is essentially criminal.[1473] Every law which makes criminal an act which was innocent when done, or which inflicts a greater punishment than the law annexed to the crime when committed, is an ex post facto law within the prohibition of the Constitution.[1474] A prosecution under a temporary statute which was extended before the date originally set for its expiration does not offend this provision even though it is instituted subsequent to the extension of the statute's duration for a violation committed prior thereto.[1475] Since this provision has no application to crimes committed outside the jurisdiction of the United States against the laws of a foreign country, it is immaterial in extradition proceedings whether the foreign law is ex post facto or not.[1476]
What Constitutes Punishment
An act of Congress which prescribed as a qualification for practice before the federal courts an oath that the attorney had not participated in the Rebellion was found unconstitutional since it operated as a punishment for past acts.[1477] But a statute which denied to polygamists the right to vote in a territorial election, was upheld even as applied to a person who had not practiced polygamy since the act was passed, because the law did not operate as an additional penalty for the offense of polygamy but merely defined it as a disqualification of a voter.[1478] A deportation law authorizing the Secretary of Labor to expel aliens for criminal acts committed before its passage is not ex post facto since deportation is not a punishment.[1479] Likewise an act permitting the cancellation of naturalization certificates obtained by fraud prior to the passage of the law was held not to impose a punishment but simply to deprive the alien of his ill-gotten privileges.[1480]
Change in Place or Mode of Trial
A change of the place of trial of an alleged offense after its commission, is not an ex post facto law. If no place of trial was provided when the offense was committed, Congress may designate the place of trial thereafter.[1481] A law which alters the rule of evidence to permit a person to be convicted upon less or different evidence than was required when the offense was committed is invalid,[1482] but a statute which simply enlarges the class of persons who may be competent to testify in criminal cases is not ex post facto as applied to a prosecution for a crime committed prior to its passage.[1483]
Clause 4. No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.
DIRECT TAXES
The Hylton Case
The crucial problem under this section is to distinguish "direct" from other taxes. In its opinion in Pollock v. Farmers' Loan and Trust Co., we find the Court declaring: "It is apparent * * * that the distinction between direct and indirect taxation was well understood by the framers of the Constitution and those who adopted it."[1484] Against this confident dictum may be set the following brief excerpt from Madison's Notes on the Convention: "Mr. King asked what was the precise meaning of direct taxation? No one answered."[1485] The first case to come before the Court on this issue was Hylton v. United States,[1486] which was decided early in 1796. Congress had levied, according to the rule of uniformity, a specific tax upon all carriages, for the conveyance of persons, which shall be kept by, or for any person, for his own use, or to be let out for hire, or for the conveying of passengers. In a fictitious statement of facts, it was stipulated that the carriages involved in the case were kept exclusively for the personal use of the owner and not for hire. The principal argument for the constitutionality of the measure was made by Hamilton, who treated it as an "excise tax,"[1487] while Madison both on the floors of Congress and in correspondence attacked it as "direct" and so void, inasmuch as it was levied without apportionment.[1488] The Court, taking the position that the direct tax clause constituted in practical operation an exception to the general taxing powers of Congress, held that no tax ought to be classified as "direct" which could not be conveniently apportioned, and on this basis sustained the tax on carriages as one on their "use" and therefore an "excise." Moreover, each of the judges advanced the opinion that the direct tax clause should be restricted to capitation taxes and taxes on land, or that at most, it might cover a general tax on the aggregate or mass of things which generally pervade all the States, especially if an assessment should intervene; while Justice Paterson, who had been a member of the Federal Convention, testified to his recollection that the principal purpose of the provision had been to allay the fear of the Southern States lest their Negroes and lands should be subjected to a specific tax.[1489]
From the Hylton to the Pollock Case
The result of the Hylton case was not challenged until after the Civil War. A number of the taxes imposed to meet the demands of that war were assailed during the postwar period as direct taxes, but without result. The Court sustained successively as "excises" or "duties," a tax on an insurance company's receipts for premiums and assessments;[1490] a tax on the circulating notes of State banks,[1491] an inheritance tax on real estate,[1492] and finally a general tax on incomes.[1493] In the last case, the Court took pains to state that it regarded the term "direct taxes" as having acquired a definite and fixed meaning-to-wit, capitation taxes, and taxes on hand.[1494] Then, almost one hundred years after the Hylton case, the famous case of Pollock v. Farmers' Loan and Trust Company[1495] arose under the Income Tax Act of 1894.[1496] Undertaking to correct "a century of error" the Court held, by a vote of five-to-four, that a tax on income from property was a direct tax within the meaning of the Constitution and hence void because not apportioned according to the census.
Restriction of the Pollock Decision
The Pollock decision encouraged taxpayers to challenge the right of Congress to levy by the rule of uniformity numerous taxes which had always been reckoned to be excises. But the Court evinced a strong reluctance to extend the doctrine to such exactions. Purporting to distinguish taxes levied "because of ownership" or "upon property as such" from those laid upon "privileges,"[1497] it sustained as "excises" a tax on sales on business exchanges;[1498] a succession tax which was construed to fall on the recipients of the property transmitted, rather than on the estate of the decedent,[1499] and a tax on manufactured tobacco in the hands of a dealer, after an excise tax had been paid by the manufacturer.[1500] Again, in Thomas v. United States,[1501] the validity of a stamp tax on sales of stock certificates was sustained on the basis of a definition of "duties, imposts and excises." These terms, according to the Chief Justice, "were used comprehensively to cover customs and excise duties imposed on importation, consumption, manufacture and sale of certain commodities, privileges, particular business transactions, vocations, occupations and the like."[1502] On the same day it ruled, in Spreckels Sugar Refining Co. v. McClain,[1503] that an exaction denominated a special excise tax imposed on the business of refining sugar and measured by the gross receipts thereof, was in truth an excise and hence properly levied by the rule of uniformity. The lesson of Flint v. Stone Tracy Co.[1504] is the same. Here what was in form an income tax was sustained as a tax on the privilege of doing business as a corporation, the value of the privilege being measured by the income, including income from investments. Similarly, in Stanton v. Baltic Mining Co.[1505] a tax on the annual production of mines was held to be "independently of the effect of the operation of the Sixteenth Amendment * * * not a tax upon property as such because of its ownership, but a true excise levied on the results of the business of carrying on mining operations."[1506]
A convincing demonstration of the extent to which the Pollock decision had been whittled down by the time the Sixteenth Amendment was adopted is found in Billings v. United States.[1507] In challenging an annual tax assessed for the year 1909 on the use of foreign built yachts—a levy not distinguishable in substance from the carriage tax involved in the Hylton case as construed by the Supreme Court-counsel did not even suggest that the tax should be classed as a direct tax. Instead, he based his argument that the exaction constituted a taking of property without due process of law upon the premise that it was an excise, and the Supreme Court disposed of the case upon the same assumption.
In 1921 the Court cast aside the distinction drawn in Knowlton v. Moore between the right to transmit property on the one hand and the privilege of receiving it on the other, and sustained an estate tax as an excise. "Upon this point" wrote Justice Holmes for a unanimous court, "a page of history is worth a volume of logic."[1508] This proposition being established, the Court has had no difficulty in deciding that the inclusion in the computation of the estate tax of property held as joint tenants,[1509] or as tenants by the entirety,[1510] or the entire value of community property owned by husband and wife,[1511] or the proceeds of insurance upon the life of the decedent,[1512] did not amount to direct taxation of such property. Similarly it upheld a graduated tax on gifts as an excise, saying that it was "a tax laid only upon the exercise of a single one of those powers incident to ownership, the power to give the property owned to another."[1513] In vain did Justice Sutherland, speaking for himself and two associates, urge that "the right to give away one's property is as fundamental as the right to sell it or, indeed, to possess it."[1514]
Miscellaneous
The power of Congress to levy direct taxes is not confined to the States which are represented in that body. Such a tax may be levied in proportion to population in the District of Columbia.[1515] A penalty imposed for nonpayment of a direct tax is not a part of the tax itself and hence is not subject to the rule of apportionment. Accordingly, the Supreme Court sustained the penalty of fifty percent which Congress exacted for default in the payment of the direct tax on land in the aggregate amount of twenty million dollars which was levied and apportioned among the States during the Civil War.[1516]
Clause 5. No Tax or Duty shall be laid on Articles exported from any State.
TAXES ON EXPORTS
This prohibition applies only to the imposition of duties on goods by reason of exportation.[1517] The word "export" signifies goods exported to a foreign country, not to an unincorporated territory of the United States.[1518] A general tax laid on all property alike, including that intended for export, is not within the prohibition, if it is not levied on goods in course of exportation nor because of their intended exportation.[1519] Where the sale to a commission merchant for a foreign consignee was consummated by delivery of the goods to an exporting carrier, the sale was held to be a step in the exportation and hence exempt from a general tax on sales of such commodity.[1520] The giving of a bond for exportation of distilled liquor is not the commencement of exportation so as to exempt from an excise tax spirits which were not exported pursuant to such bond.[1521] A tax on the income of a corporation derived from its export trade is not a tax on "articles exported" within the meaning of the Constitution.[1522]
Stamp Taxes
A stamp tax imposed on foreign bills of lading,[1523] charter parties,[1524] or marine insurance policies,[1525] is in effect a tax or duty upon exports, and so void; but an act requiring the stamping of all packages of tobacco intended for export in order to prevent fraud was held not to be forbidden as a tax on exports.[1526]
Clause 6. No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another: nor shall Vessels bound to, or from, one State, be obliged to enter, clear, or pay duties in another.
THE "NO PREFERENCE" CLAUSE
The limitations imposed by this section were designed to prevent preferences as between ports on account of their location in different States. They do not forbid such discriminations as between individual ports. Acting under the commerce clause, Congress may do many things which benefit particular ports and which incidentally result to the disadvantage of other ports in the same or neighboring States. It may establish ports of entry, erect and operate lighthouses, improve rivers and harbors, and provide structures for the convenient and economical handling of traffic.[1527] A rate order of the Interstate Commerce Commission which allowed an additional charge to be made for ferrying traffic across the Mississippi to cities on the east bank of the river was sustained over the objection that it gave an unconstitutional preference to ports in Texas.[1528] Although there were a few early intimations that this clause was applicable to the States as well as to Congress,[1529] the Supreme Court declared emphatically in 1886 that State legislation was unaffected by it.[1530] After more than a century the Court confirmed, over the objection that this clause was offended, the power which the First Congress had exercised[1531] in sanctioning the continued supervision and regulation of pilots by the States.[1532] Alaska is not deemed to be a State within the meaning of this clause.[1533]
Clause 7. No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.
APPROPRIATIONS
This clause is a limitation upon the power of the executive department and does not restrict Congress in appropriating moneys in the Treasury.[1534] That body may recognize and pay a claim of an equitable, moral or honorary nature. Where it directs a specific sum to be paid to a certain person, neither the Secretary of the Treasury nor any court has discretion to determine whether the person is entitled to receive it.[1535] In making appropriations to pay claims arising out of the Civil War, the Court held that it was lawful to provide that certain persons, i.e., those who had aided the rebellion, should not be paid out of the funds made available by the general appropriation, but that such persons should seek relief from Congress.[1536] The Court has also recognized that Congress has a wide discretion as to the extent to which it shall prescribe details of expenditures for which it appropriates funds and has approved the frequent practice of making general appropriations of large amounts to be allotted and expended as directed by designated government agencies. Citing as an example the act of June 17, 1902[1537] where all moneys received from the sale and disposal of public lands in a large number of States and territories were set aside as a special fund to be expended under the direction of the Secretary of the Interior upon such projects as he determined to be practicable and advisable for the reclamation of arid and semi-arid lands within those States and territories, the Court declared: "The constitutionality of this delegation of authority has never been seriously questioned."[1538]
PAYMENT OF CLAIMS
No officer of the Federal Government is authorized to pay a debt due from the United States, whether reduced to judgment or not, without an appropriation for that purpose.[1539] After the Civil War, a number of controversies arose out of attempts by Congress to restrict the payment of the claims of persons who had aided the Rebellion, but had thereafter received a pardon from the President. The Supreme Court held that Congress could not prescribe the evidentiary effect of a pardon in a proceeding in the Court of Claims for property confiscated during the Civil War,[1540] but that where the confiscated property had been sold and the proceeds paid into the Treasury, a pardon did not of its own force authorize the restoration of such proceeds.[1541] It was within the competence of Congress to declare that the amounts due to persons thus pardoned should not be paid out of the Treasury and that no general appropriation should extend to their claims.[1542]
Clause 8. No Title of Nobility shall be granted by the United States: And no Person holding any Office of Profit or Trust under them, shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State.
In 1871 the Attorney General of the United States ruled that: "A minister of the United States abroad is not prohibited by the Constitution from rendering a friendly service to a foreign power, even that of negotiating a treaty for it, provided he does not become an officer of that power, but the acceptance of a formal commission, as minister plenipotentiary, creates an official relation between the individual thus commissioned and the government which in this way accredits him as its representative, which is prohibited by this clause of the Constitution."[1543]
Section 10. No State Shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.
Powers Denied to the States
TREATIES, ALLIANCES OR CONFEDERATIONS
At the time of the Civil War this clause was one of the provisions upon which the Court relied in holding that the Confederation formed by the seceding States could not be recognized as having any legal existence.[1544] Today, its practical significance lies in the limitations which it implies upon the power of the States to deal with matters having a bearing upon international relations. In the early case of Holmes v. Jennison,[1545] Chief Justice Taney invoked it as a reason for holding that a State had no power to deliver up a fugitive from justice to a foreign State. Recently the kindred idea that the responsibility for the conduct of foreign relations rests exclusively with the Federal Government prompted the Court to hold that, since the oil under the three mile marginal belt along the California coast might well become the subject of international dispute and since the ocean, including this three mile belt, is of vital consequence to the nation in its desire to engage in commerce and to live in peace with the world, the Federal Government has paramount rights in and power over that belt, including full dominion over the resources of the soil under the water area.[1546] In Skiriotes v. Florida,[1547] the Court, on the other hand, ruled that this clause did not disable Florida from regulating the manner in which its own citizens may engage in sponge fishing outside its territorial waters. Speaking for a unanimous Court, Chief Justice Hughes declared: "When its action does not conflict with federal legislation, the sovereign authority of the State over the conduct of its citizens upon the high seas is analogous to the sovereign authority of the United States over its citizens in like circumstances."[1548]
BILLS OF CREDIT
Within the sense of the Constitution, bills of credit signify a paper medium of exchange, intended to circulate between individuals; and between the Government and individuals, for the ordinary purposes of society. It is immaterial whether the quality of legal tender is imparted to such paper. Interest bearing certificates, in denominations not exceeding ten dollars, which were issued by loan offices established by the State of Missouri, and made receivable in payment of taxes or other moneys due to the State, and in payment of the fees and salaries of State officers, were held to be bills of credit whose issuance was banned by this section.[1549] The States are not forbidden, however, to issue coupons receivable for taxes,[1550] nor to execute instruments binding themselves to pay money at a future day for services rendered or money borrowed.[1551] Bills issued by State banks are not bills of credit;[1552] it is immaterial that the State is the sole stockholder of the bank,[1553] that the officers of the bank were elected by the State legislature,[1554] or that the capital of the bank was raised by the sale of State bonds.[1555]
LEGAL TENDER
Relying on this clause, which applies only to the States and not to the Federal Government,[1556] the Supreme Court has held that where the marshal of a State court received State bank notes in payment and discharge of an execution, the creditor was entitled to demand payment in gold or silver.[1557] Since, however, there is nothing in the Constitution which prohibits a bank depositor from consenting when he draws a check, that payment may be made by draft, a State law which provided that checks drawn on local banks should, at the option of the bank, be payable in exchange drafts was held valid.[1558]
BILLS OF ATTAINDER
Statutes passed after the Civil War with the intent and result of excluding persons who had aided the Confederacy from following certain callings, by the device of requiring them to take an oath that they had never given such aid, were held invalid as being bills of attainder, as well as ex post facto laws.[1559]
EX POST FACTO LAWS
Scope of Provision
This clause, like the cognate restriction imposed on the Federal Government by section 9, relates only to penal and criminal legislation and not to civil laws which affect private rights adversely.[1560] It is directed only against legislative action and does not touch erroneous or inconsistent decisions by the courts.[1561] Even though a law is ex post facto and invalid as to crimes committed prior to its enactment, it is nonetheless valid as to subsequent offenses.[1562] If it mitigates the rigor of the law in force at the time the crime was committed,[1563] or if it merely penalizes the continuance of conduct which was lawfully begun before its passage, the statute is not ex post facto. Thus measures penalizing the failure of a railroad to cut drains through existing embankments,[1564] or making illegal the continued possession of intoxicating liquors which were lawfully acquired,[1565] have been held valid.
Denial of Future Privileges to Past Offenders
The right to practice a profession may be denied to one who was convicted of an offense before the statute was enacted if the offense may reasonably be regarded as a continuing disqualification for the profession. Without offending the Constitution, a statute making it a misdemeanor to practice medicine after conviction of a felony may be enforced against a person so convicted before the act was passed.[1566] But the test oath prescribed after the Civil War, whereby office holders, teachers, or preachers were required to swear that they had not participated in the Rebellion, were held invalid on the ground that it had no reasonable relation to fitness to perform official or professional duties, but rather was a punishment for past offenses.[1567] A similar oath required of suitors in the courts also was held void.[1568]
Changes in Punishment
Statutes which changed an indeterminate sentence law to require a judge to impose the maximum sentence, whereas formerly he could impose a sentence between the minimum and maximum;[1569] abolished a rule which prevented a subsequent conviction of first-degree murder after a jury had found the accused guilty in the second-degree by a verdict which had been set aside;[1570] required criminals sentenced to death to be kept thereafter in solitary confinement,[1571] or allowed a warden to fix, within limits of one week, and keep secret the time of execution,[1572] were held to be ex post facto as applied to offenses committed prior to their enactment. But laws providing heavier penalties for new crimes thereafter committed by habitual criminals;[1573] changing the punishment from hanging to electrocution, fixing the place therefor in the penitentiary, and permitting the presence of a greater number of invited witnesses;[1574] or providing for close confinement of six to nine months in the penitentiary, in lieu of three to six months in jail prior to execution, and substituting the warden for the sheriff as hangman, have been sustained.[1575]
Changes in Procedure
An accused person does not have a right to be tried in all respects in accordance with the law in force when the crime charged was committed.[1576] The mode of procedure may be changed so long as the substantial rights of the accused are not curtailed.[1577] Laws shifting the place of trial from one county to another,[1578] increasing the number of appellate judges and dividing the appellate court into divisions,[1579] granting a right of appeal to the State,[1580] changing the method of selecting and summoning jurors,[1581] making separate trials for persons jointly indicted a matter of discretion for the trial court rather than a matter of right,[1582] and allowing a comparison of handwriting experts[1583] have been sustained over the objection that they were ex post facto. The contrary conclusion was reached with respect to the application to felonies committed before a Territory was admitted to the Union, of the provision in the State constitution which permitted the trial of criminal cases by a jury of eight persons, instead of the common law jury of twelve which was guaranteed by the Sixth Amendment during the period of territorial government.[1584]
OBLIGATION OF CONTRACTS
Definition of Terms
"Law."—The term comprises statutes, constitutional provisions,[1585] municipal ordinances,[1586] and administrative regulations having the force and operation of statutes.[1587] How is it as to judicial decisions? Not only does the abstract principle of the separation of powers forbid the idea that the courts "make" law, but the word "pass" in the above clause seems to confine it to the formal and acknowledged methods of exercise of the law-making function. Accordingly, the Court has frequently said that the clause does not cover judicial decisions, however erroneous, or whatever their effect on existing contract rights.[1588] Nevertheless, there are important exceptions to this rule which are hereinafter set forth.
Status of Judicial Decisions.—Also, while the highest State court usually has final authority in determining the construction as well as the validity of contracts entered into under the laws of the State, and the national courts will be bound by their decision of such matters, nevertheless, for reasons which are fairly obvious, this rule does not hold when the contract is one whose obligation is alleged to have been impaired by State law.[1589] Otherwise, the challenged State authority could be vindicated through the simple device of a modification or outright nullification by the State court of the contract rights in issue. Likewise, the highest State court usually has final authority in construing State statutes and determining their validity in relation to the State constitution. But this rule too has had to bend to some extent to the Supreme Court's interpretation of the obligation of contracts clause.[1590]
Suppose the following situation: (1) a municipality, acting under authority conferred by a State statute, has issued bonds in aid of a railway company; (2) the validity of this statute has been sustained by the highest State court; (3) later the State legislature passes an act to repeal certain taxes to meet the bonds; (4) it is sustained in doing so by a decision of the highest State court holding that the statute authorizing the bonds was unconstitutional ab initio. In such a case the Supreme Court would take an appeal from the State court and would reverse the latter's decision of unconstitutionally because of its effect in rendering operative the act to repeal the tax.[1591]
Suppose further, however, that the State court has reversed itself on the question of the constitutionality of the bonds in a suit by a creditor for payment without there having been an act of repeal. In this situation, as the cases stand today, the Supreme Court will still afford relief if the case is one between citizens of different States, which reaches it via a lower federal court.[1592] This is because in cases of this nature the Court formerly felt free to determine questions of fundamental justice for itself. Indeed, in such a case, the Court has apparently in the past regarded itself as free to pass upon the constitutionality of the State law authorizing the bonds even though there has been no prior decision by the highest State court sustaining them, the idea being that contracts entered into simply on the faith of the presumed constitutionality of a State statute are entitled to this protection.[1593]
In other words, in cases of which it has jurisdiction because of diversity of citizenship, the Court has held that the obligation of contracts is capable of impairment by subsequent judicial decisions no less than by subsequent statutes and that it is able to prevent such impairment. In cases, on the other hand, of which it obtains jurisdiction only on the constitutional ground, and by appeal from a State court, it has always adhered in terms to the doctrine that the word "laws" as used in article I, section 10, does not comprehend judicial decisions. Yet even in these cases, it will intervene to protect contracts entered into on the faith of existing decisions from an impairment which is the direct result of a reversal of such decisions, but there must be in the offing, as it were, a statute of some kind—one possibly many years older than the contract rights involved—on which to pin its decision.[1594]
In 1922 Congress, through an amendment to the Judicial Code, endeavored to extend the reviewing power of the Supreme Court to suits involving "'* * * the validity of a contract wherein it is claimed that a change in the rule of law or construction of statutes by the highest court of a State applicable to such contract would be repugnant to the Constitution of the United States * * *'" This appeared to be an invitation to the Court to say frankly that the obligation of a contract can be impaired as well by a subsequent decision as by a subsequent statute. The Court, however, declined the invitation in an opinion by Chief Justice Taft which reviewed many of the cases covered in the preceding paragraphs. Dealing with the Gelpcke and adherent decisions, Chief Justice Taft said: "These cases were not writs of error to the Supreme Court of a State. They were appeals or writs of error to federal courts where recovery was sought upon municipal or county bonds or some other form of contracts, the validity of which had been sustained by decisions of the Supreme Court of a State prior to their execution, and had been denied by the same court after their issue or making. In such cases the federal courts exercising jurisdiction between citizens of different States held themselves free to decide what the State law was, and to enforce it as laid down by the State Supreme Court before the contracts were made rather than in later decisions. They did not base this conclusion on Article I, § 10, of the Federal Constitution, but on the State law as they determined it, which, in diverse citizenship cases, under the third Article of the Federal Constitution they were empowered to do. Burgess v. Seligman, 107 U.S. 20 (1883)."[1595] While doubtless this was an available explanation in 1924, the decision in 1938 in Erie Railroad Co. v. Tompkins, 304 U.S. 64, so cuts down the power of the federal courts to decide diversity of citizenship cases according to their own notions of "general principles of common law" as to raise the question whether the Court will not be required eventually to put Gelpcke and its companions and descendants squarely on the obligation of contracts clause, or else abandon them.
"Obligation."—A contract is analyzable into two elements: the agreement, which comes from the parties, and the obligation which comes from the law and makes the agreement binding on the parties. The concept of obligation is an importation from the Civil Law and its appearance in the contracts clause is supposed to have been due to James Wilson, a graduate of Scottish universities and a Civilian. Actually the term as used in the contracts clause has been rendered more or less superfluous by the doctrine that the law in force when a contract is made enters into and comprises a part of the contract itself.[1596] Hence the Court sometimes recognizes the term in its decisions applying the clause, sometimes ignores it. In Sturges v. Crowninshield,[1597] decided in 1819, Marshall defines "obligation of contract" as "the law which binds the parties to perform their agreement"; but a little later the same year he sets forth the points presented for consideration in Trustees of Dartmouth College v. Woodward[1598] to be: "1. Is this contract protected by the Constitution of the United States? 2. Is it impaired by the acts under which the defendant holds?"[1599] The word "obligation" undoubtedly does carry the implication that the Constitution was intended to protect only executory contracts—i.e., contracts still awaiting performance; but as is indicated in a moment, this implication was early rejected for a certain class of contracts, with immensely important result for the clause.
"Impair."—"The obligations of a contract," says Chief Justice Hughes for the Court in Home Building and Loan Association v. Blaisdell,[1600] "are impaired by a law which renders them invalid, or releases or extinguishes them * * * and impairment, * * *, has been predicated of laws which without destroying contracts derogate from substantial contractual rights."[1601] But he straight-away adds: "Not only are existing laws read into contracts in order to fix obligations as between the parties, but the reservation of essential attributes of sovereign power is also read into contracts as a postulate of the legal order. The policy of protecting contracts against impairment presupposes the maintenance of a government by virtue of which contractual relations are worth while,—a government which retains adequate authority to secure the peace and good order of society. This principle of harmonizing the constitutional prohibition with the necessary residuum of State power has had progressive recognition in the decisions of this Court."[1602] In short, the law from which the obligation stems must be understood to include Constitutional Law and, moreover, a "progressive" Constitutional Law.[1603]
"Contracts," Extended to Cover Public Contracts.—Throughout the first century of government under the Constitution, according to Benjamin F. Wright, the contract clause had been considered in almost forty per cent of all cases involving the validity of State legislation, and of these the vast proportion involved legislative grants of one type or other, the most important category being charters of incorporation.[1604] Nor does this numerical prominence of such grants in the cases overrate their relative importance from the point of view of public interest. The question consequently arises whether the clause was intended to be applied solely in protection of private contracts, or in the protection also of public grants or, more broadly, in protection of public contracts, in short, those to which a State is party?
Writing late in life, Madison explained the clause by allusion to what had occurred "in the internal administration of the States," in the years immediately preceding the Constitutional Convention, in regard to private debts. "A violation of contracts," said he, "had become familiar in the form of depreciated paper made a legal tender, of property substituted for money, and installment laws, and the occlusions of the courts of justice."[1605] He had, in fact, written to the same effect in The Federalist, while the adoption of the Constitution was pending.[1606]
The broader view of the intended purpose of the clause is, nevertheless, not without considerable support. For one thing, the clause departs from the comparable provision in the Northwest Ordinance (1787) in two respects: First, in the presence of the word "obligation"; secondly, in the absence of the word "private"; and there is good reason for believing that Wilson may have been responsible for both alterations, inasmuch as two years earlier he had denounced a current proposal to repeal the Bank of North America's Pennsylvania charter, in the following words: "If the act for incorporating the subscribers to the Bank of North America shall be repealed in this manner, a precedent will be established for repealing, in the same manner, every other legislative charter in Pennsylvania. A pretence, as specious as any that can be alleged on this occasion, will never be wanting on any future occasion. Those acts of the State, which have hitherto been considered as the sure anchors of privilege and of property, will become the sport of every varying gust of politics, and will float wildly backwards and forwards on the irregular and impetuous tides of party and faction."[1607]
Furthermore, in its first important constitutional case, that of Chisholm v. Georgia,[1608] the Court ruled that its original jurisdiction extended to an action in assumpsit brought by a citizen of South Carolina against the State of Georgia. This construction of the federal judicial power was, to be sure, promptly repealed by the Eleventh Amendment, but without affecting the implication that the contracts protected by the Constitution included public contracts.
One important source of this diversity of opinion is to be found in that ever welling spring of constitutional doctrine in early days, the prevalence of Natural Law notions and the resulting vague significance of the term "law." In Sturges v. Crowninshield, as we saw, Marshall defined the obligation of contracts as "the law which binds the parties to perform their undertaking." Whence, however, comes this law? If it comes from the State alone, which Marshall was later to deny even as to private contracts,[1609] then it is hardly possible to hold that the States' own contracts are covered by the clause, which manifestly does not create an obligation for contracts but only protects such obligation as already exists. But if, on the other hand, the law furnishing the obligation of contracts comprises Natural Law and kindred principles, as well as law which springs from State authority, then, inasmuch as the State itself is presumably bound by such principles, the State's own obligations, so far as harmonious with them, are covered by the clause.
Fletcher v. Peck
Fletcher v. Peck,[1610] which was decided in 1810, has the double claim to fame that it was the first case in which the Supreme Court held a State enactment to be in conflict with the Constitution,[1611] and also the first case to hold that the contracts clause protected public grants. By an act passed on January 7, 1795, the Georgia Legislature directed the sale to four land companies of public lands comprising most of what are now the States of Alabama and Mississippi. As soon became known, the passage of the measure had been secured by open and wholesale bribery. So when a new legislature took over in the winter of 1795-1796, almost its first act was to revoke the sale made the previous year.
Meantime, however, the land companies had disposed of several millions of acres of their holdings to speculators and prospective settlers, and following the rescinding act some of these took counsel with Alexander Hamilton as to their rights. In an opinion which was undoubtedly known to the Court when it decided Fletcher v. Peck, Hamilton characterized the repeal as contravening "the first principles of natural justice and social policy," especially so far as it was made, "to the prejudice * * * of third persons * * * innocent of the alleged fraud or corruption; * * * [Moreover, he added,] the Constitution of the United States, article first, section tenth, declares that no State shall pass a law impairing the obligations of contract. This must be equivalent to saying no State shall pass a law revoking, invalidating, or altering a contract. Every grant from one to another, whether the grantor be a State or an individual, is virtually a contract that the grantee shall hold and enjoy the thing granted against the grantor, and his representatives. It, therefore, appears to me that taking the terms of the Constitution in their large sense, and giving them effect according to the general spirit and policy of the provisions, the revocation of the grant by the act of the legislature of Georgia may justly be considered as contrary to the Constitution of the United States, and, therefore null. And that the courts of the United States, in cases within their jurisdiction, will be likely to pronounce it so."[1612] In the debate to which the "Yazoo Land Frauds," as they were contemporaneously known, gave rise in Congress, Hamilton's views were quoted frequently.
So far as it invokes the obligation of contracts clause, Marshall's opinion in Fletcher v. Peck performs two creative acts. He recognizes that an obligatory contract is one still to be performed—in other words, is an executory contract; also that a grant of land is an executed contract—a conveyance. But, he asserts, every grant is attended by "an implied contract" on the part of the grantor not to claim again the thing granted. Thus, grants are brought within the category of contracts having continuing obligation and so within article I, § 10. But the question still remained of the nature of this obligation. Marshall's answer to this can only be inferred from his statement at the end of his opinion. The State of Georgia, he says, "was restrained" from the passing of the rescinding act "either by general principles which are common to our free institutions, or by particular provisions of the Constitution of the United States."[1613]
New Jersey v. Wilson
The protection thus thrown about land grants was presently extended, in the case of New Jersey v. Wilson,[1614] to a grant of immunity from taxation which the State of New Jersey had accorded certain Indian lands; and several years after that, in the Dartmouth College Case,[1615] to the charter privileges of an eleemosynary corporation.
Corporate Charters, Different Ways of Regarding
There are three ways in which the charter of a corporation may be regarded. In the first place, it may be thought of simply as a license terminable at will by the State, like a liquor-seller's license or an auctioneer's license, but affording the incorporators, so long as it remains in force, the privileges and advantages of doing business in the form of a corporation. Nowadays, indeed, when corporate charters are usually issued to all legally qualified applicants by an administrative officer who acts under a general statute, this would probably seem to be the natural way of regarding them were it not for the Dartmouth College decision. But in 1819 charters were granted directly by the State legislatures in the form of special acts, and there were very few profit-taking corporations in the country.[1616] The later extension of the benefits of the Dartmouth College decision to corporations organized under general law took place without discussion.
Secondly, a corporate charter may be regarded as a franchise constituting a vested or property interest in the hands of the holders, and therefore as forfeitable only for abuse or in accordance with its own terms. This is the way in which some of the early State courts did regard them at the outset.[1617] It is also the way in which Blackstone regards them in relation to the royal prerogative, although not in relation to the sovereignty of Parliament; and the same point of view finds expression in Story's concurring opinion in Dartmouth College v. Woodward, as it did also in Webster's argument in that case.[1618]
The Dartmouth College Case
The third view is the one formulated by Chief Justice Marshall in his controlling opinion in Trustees of Dartmouth College v. Woodward.[1619] This is that the charter of Dartmouth College, a purely private institution, was the outcome and partial record of a contract between the donors of the college, on the one hand, and the British Crown, on the other, which contract still continued in force between the State of New Hampshire, as the successor to the Crown and Government of Great Britain, and the trustees, as successors to the donors. The charter, in other words, was not simply a grant—rather it was the documentary record of a still existent agreement between still existent parties.[1620] Taking this view, which he developed with great ingenuity and persuasiveness, Marshall was able to appeal to the obligation of contracts clause directly, and without further use of his fiction in Fletcher v. Peck of an executory contract accompanying the grant.
A difficulty still remained, however, in the requirement that a contract must, before it can have obligation, import consideration, that is to say, must be shown not to have been entirely gratuitous on either side. Nor was the consideration which induced the Crown to grant a charter to Dartmouth College a merely speculative one. It consisted of the donations of the donors to the important public interest of education. Fortunately or unfortunately, in dealing with this phase of the case, Marshall used more sweeping terms than were needful. "The objects for which a corporation is created," he wrote, "are universally such as the government wishes to promote. They are deemed beneficial to the country; and this benefit constitutes the consideration, and in most cases, the sole consideration of the grant." In other words, the simple fact of the charter having been granted imports consideration from the point of view of the State.[1621] With this doctrine before it, the Court in Providence Bank v. Billings,[1622] and again in Charles River Bridge Company v. Warren Bridge Company,[1623] admitted, without discussion of the point, the applicability of the Dartmouth College decision to purely business concerns.
Classes of Cases Under the Clause
The cases just reviewed produce two principal lines of decisions stemming from the obligation of contracts clause: first, public grants; second, private executory contracts. The chief category of the first line of cases consists, in turn, of those involving corporate privileges, both those granted directly by the States and those granted by municipalities by virtue of authority conferred upon them by the State;[1624] while private debts, inclusive of municipal debts, exhaust for the most part the second line.
Public Grants
Municipal Corporations.—Not all grants by a State constitute "contracts" within the sense of article I, section 10. In his Dartmouth College decision Chief Justice Marshall conceded that "if the act of incorporation be a grant of political power, if it creates a civil institution, to be employed in the administration of the government, * * *, the subject is one in which the legislature of the State may act according to its own justment," unrestrained by the Constitution[1625]—thereby drawing a line between "public" and "private" corporations which remained undisturbed for more than half a century.[1626] It has been subsequently held many times that municipal corporations are mere instrumentalities of the State for the more convenient administration of local governments, whose powers may be enlarged, abridged, or entirely withdrawn at the pleasure of the legislature.[1627] The same principle applies, moreover, to the property rights which the municipality derives either directly or indirectly from the State. This was first held as to the grant of a franchise to a municipality to operate a ferry, and has since then been recognized as the universal rule.[1628] As was stated in a case decided in 1923: "The distinction between the municipality as an agent of the State for governmental purposes and as an organization to care for local needs in a private or proprietary capacity," while it limits the legal liability of municipalities for the negligent acts or omissions of its officers or agents, does not, on the other hand, furnish ground for the application of constitutional restraints against the State in favor of its own municipalities.[1629] Thus no contract rights are impaired by a statute removing a county seat, even though the former location was by law to be "permanent" when the citizens of the community had donated land and furnished bonds for the erection of public buildings.[1630] Likewise a statute changing the boundaries of a school district, giving to the new district the property within its limits which had belonged to the former district, and requiring the new district to assume the debts of the old district, does not impair the obligation of contracts.[1631] Nor was the contracts clause violated by State legislation authorizing State control over insolvent communities through a Municipal Finance Commission.[1632]
Public Offices.—On the same ground of public agency, neither appointment nor election to public office creates a contract in the sense of article I, section 10, whether as to tenure, or salary, or duties, all of which remain, so far as the Constitution of the United States is concerned, subject to legislative modification or outright repeal.[1633] Indeed there can be no such thing in this country as property in office, although the common law sustained a different view which sometimes found reflection in early cases.[1634] When, however, services have once been rendered, there arises an implied contract that they shall be compensated at the rate which was in force at the time they were rendered.[1635] Also, an express contract between the State and an individual for the performance of specific services falls within the protection of the Constitution. Thus a contract made by the governor pursuant to a statute authorizing the appointment of a commissioner to conduct, over a period of years, a geological, mineralogical, and agricultural survey of the State, for which a definite sum had been authorized, was held to have been impaired by repeal of the statute.[1636] But a resolution of a New Jersey local board of education reducing teachers' salaries for the school year 1933-1934, pursuant to an act of the legislature authorizing such action, was held not to impair the contract of a teacher who, having served three years, was by earlier legislation exempt from having his salary reduced except for inefficiency or misconduct.[1637] Similarly, it was held that an Illinois statute which reduced the annuity payable to retire teachers under an earlier act did not violate the contracts clause, since it had not been the intention of the earlier act to propose a contract but only to put into effect a general policy.[1638] On the other hand, the right of one, who had become a "permanent teacher" under the Indiana Teachers Tenure Act of 1927, to continued employment was held to be contractual and to have been impaired by the repeal in 1933 of the earlier act.[1639]
Revocable Privileges Versus "Contracts": Tax Exemptions.—From a different point of view, the Court has sought to distinguish between grants of privileges, whether to individuals or to corporations, which are contracts and those which are mere revocable licenses, although on account of the doctrine of presumed consideration mentioned earlier, this has not always been easy to do. In pursuance of the precedent set in New Jersey v. Wilson,[1640] the legislature of a State "may exempt particular parcels of property or the property of particular persons or corporations from taxation, either for a specified period or perpetually, or may limit the amount or rate of taxation, to which such property shall be subjected," and such an exemption is frequently a contract within the sense of the Constitution. Indeed this is always so when the immunity is conferred upon a corporation by the clear terms of its charter.[1641] When, on the other hand, an immunity of this sort springs from general law, its precise nature is more open to doubt, as a comparison of decisions will serve to illustrate.
In Piqua Branch of the State Bank v. Knoop,[1642] a closely divided Court held that a general banking law of the State of Ohio which provided that companies complying therewith and their stockholders should be exempt from all but certain taxes, was, as to a bank organized under it and its stockholders, a contract within the meaning of article I, section 10. "The provision was not," the Court said, "a legislative command nor a rule of taxation until changed, but a contract stipulating against any change, from the nature of the language used and the circumstances under which it was adopted."[1643] When, however, the State of Michigan pledged itself, by a general legislative act, not to tax any corporation, company, or individual undertaking to manufacture salt in the State from water there obtained by boring on property used for this purpose and, furthermore, to pay a bounty on the salt so manufactured, it was held not to have engaged itself within the constitutional sense. "General encouragements," said the Court, "held out to all persons indiscriminately, to engage in a particular trade or manufacture, whether such encouragement be in the shape of bounties or drawbacks, or other advantage, are always under the legislative control, and may be discontinued at any time."[1644] So far as exemption from taxation is concerned the difference between these two cases is obviously slight; but the later one is unquestionable authority for the proposition that legislative bounties are repealable at will.
Furthermore, exemptions from taxation have in certain cases been treated as gratuities repealable at will, even when conferred by specific legislative enactments. This would seem always to be the case when the beneficiaries were already in existence when the exemption was created and did nothing of a more positive nature to qualify for it than to continue in existence.[1645] Yet the cases are not always easy to explain in relation to each other, except in light of the fact that the Court's wider point of view has altered from time to time.[1646]
Vested Rights.—Lastly, the term "contracts" is used in the contracts clause in its popular sense of an agreement of minds. The clause therefore does not protect vested rights that are not referable to such an agreement between the State and an individual, such as the right to recovery under a judgment. The individual in question may have a case under the Fourteenth Amendment, but not one under article I, section 10.[1647]
Reservation of the Right to Alter and Repeal
So much for the meaning of the word "contract" when public grants are meant. It is next in order to consider four principles or doctrines whereby the Court has itself broken down the force of the Dartmouth College decision in great measure in favor of State legislative power. By the logic of the Dartmouth College decision itself the State may reserve in a corporate charter the right to "amend, alter, and repeal" the same, and such reservation becomes a part of the contract between the State and the incorporators, the obligation of which is accordingly not impaired by the exercise of the right.[1648] Later decisions recognize that the State may reserve the right to amend, alter, and repeal by general law, with the result of incorporating the reservation in all charters of subsequent date.[1649] There is, however, a difference between a reservation by a statute and one by constitutional provision. While the former may be repealed as to a subsequent charter by the specific terms thereof, the latter may not.[1650]
The Right to Reserve: When Limited.—Is the right which is reserved by a State to "amend" or "alter" a charter without restriction? When it is accompanied, as it generally is, by the right to "repeal," one would suppose that the answer to this question was self-evident. None the less, there are a number of judicial dicta to the effect that this power is not without limit, that it must be exercised reasonably and in good faith, and that the alterations made must be consistent with the scope and object of the grant, etc.[1651] Such utterances amount, apparently, to little more than an anchor to windward, for while some of the State courts have applied tests of this nature to the disallowance of legislation, it does not appear that the Supreme Court of the United States has ever done so.[1652]
Quite different is it with the distinction pointed out in the cases between the franchises and privileges which a corporation derives from its charter and the rights of property and contract which accrue to it in the course of its existence. Even the outright repeal of the former does not wipe out the latter or cause them to escheat to the State. The primary heirs of the defunct organization are its creditors; but whatever of value remains after their valid claims are met goes to the former shareholders.[1653] By the earlier weight of authority, on the other hand, persons who contract with companies whose charters are subject to legislative amendment or repeal do so at their own risk: any "such contracts made between individuals and the corporation do not vary or in any manner change or modify the relation between the State and the corporation in respect to the right of the State to alter, modify, or amend such a charter, * * *"[1654] But later holdings becloud this rule.[1655]
Corporations As Persons Subject To The Law.—But suppose the State neglects to reserve the right to amend, alter, or repeal—is it, then, without power to control its corporate creatures? By no means. Private corporations, like other private persons, are always presumed to be subject to the legislative power of the State; from which it follows that immunities conferred by charter are to be treated as exceptions to an otherwise controlling rule. This principle was recognized by Chief Justice Marshall in the case of Providence Bank v. Billings,[1656] in which he held that in the absence of express stipulation or reasonable implication to the contrary in its charter, the bank was subject to the taxing power of the State, notwithstanding that the power to tax is the power to destroy.