Part 74

The first section requires the Secretary of the Treasury to take measures for collecting the public revenue, first, in the legal currency of the United States (i.e., gold and silver), or, second, in the notes of such specie-paying banks as shall from time to time conform to certain conditions in regard to small bills, described in the section. This section does not expressly give the Secretary power to direct that any particular notes shall be received for lands or for duties, but it forbids the receipt of any paper currency other than such bank notes as are described in the section; and it requires the Secretary to adopt measures, in his discretion, to effectuate that prohibition.

The second section extends the prohibition still further, by forbidding the receipt of any notes which the banks in which they are to be deposited shall not, under the supervision and control of the Secretary of the Treasury, agree to pass to the credit of the United States as cash; to which is added a proviso authorizing the Secretary to withdraw the public deposits from any bank which shall refuse to receive as cash from the United States any notes receivable under the law which such bank receives in the ordinary course of business on general deposit.

The third and last section allows the receipt, as heretofore, of land scrip and Treasury certificates for public lands, and forbids the Secretary of the Treasury to make any discrimination in the funds receivable (other than such as results from the receipt of land scrip or Treasury certificates) between the different branches of the public revenue.

From this analysis of the bill it appears that, so far as regards bank notes, the bill designates and limits then: receivableness for the revenues of the United States, first, by forbidding the receipts of any except such as have all the characteristics described in the first and second sections of the bill, and, secondly, by restraining the Secretary of the Treasury from making any discrimination in this respect between the different branches of the public revenue. In this way the bill performs, to a certain extent, the office of "designating and limiting the funds receivable for the revenues of the United States," as mentioned in its title; but it would seem from what has been stated that it is only in this way that any such office is performed. This impression will be fully confirmed as we proceed.

The bill, should it be approved, will be supplementary to the laws now in force relating to the same subject, but as it contains no repealing clause no provision of those former laws, except such as may be plainly repugnant to the present bill, will be repealed by it.

The existing laws embraced in the above question, and applicable to the subject, are:

First. As to duties on goods imported.--The seventy-fourth section of the collection law of the 2d of March, 1799, the first of which, reenacting in this respect the act of the 31st of July, 1789, provides "that all duties and fees to be collected shall be payable in money of the United States or in foreign gold and silver coins at the following rates," etc. The residue of the section, as to rates, has been altered by subsequent laws, and the clause quoted was varied during the existence of the Bank of the United States, the notes of which were expressly made receivable in all payments to the United States, and during the existence of the act making Treasury notes receivable by such act; but in no other respects has it ever been repealed.

Second. As to public lands.--The general land law of the 10th of May, 1800, section 5, provided that no lands should be sold, "at either public or private sale, for less than $2 per acre, and payment may be made for the same by all purchasers either in specie or in evidences of the public debt of the United States, at the rates prescribed" by a prior law. This provision was varied by the acts relative to Treasury notes and the Bank of the United States in like manner as above mentioned. The second section of the general land law of the 24th of April, 1820, abrogated the allowance of credits on the sale of public lands after the its day of July then next; required every purchaser at public sale to make complete payment on the day of purchase, and the purchaser at private sale to produce to the register a receipt from the Treasurer of the United States or from the receiver of the district for the amount of the purchase money. The proviso to the fourth section of the same law enacted, in respect to reverted lands and lands remaining unsold, that they should not be sold for less price than $1.25 per acre, "nor on any other terms than that of cash payment." This latter act has been further modified by the allowing Virginia land scrip to be received in payment for public lands.

Third. As to both duties and lands.--The joint resolution of the 30th of April, 1816, provides that the Secretary of the Treasury "be required and directed to adopt such measures as he may deem necessary to cause, as soon as may be, all duties, taxes, debts, or sums of money accruing or becoming payable to the United States to be collected and paid in the legal currency of the United States, or Treasury notes, or notes of the Bank of the United States, as by law provided and declared, or in notes of banks which are payable and paid on demand in the said legal currency of the United States, and that from and after the 20th day of February next no such duties, taxes, debts, or sums of money accruing or becoming payable to the United States as aforesaid ought to be collected or received otherwise than in the legal currency of the United States, or Treasury notes, or notes of the Bank of the United States, or in notes of banks which are payable and paid on demand in the legal currency of the United States." According to the opinion given by me as a member of your Cabinet in the month of July last, and to which I still adhere, this resolution was mandatory only as it respected the legal currency of the United States, Treasury notes, and notes of the Bank of the United States, and in respect to the notes of the State banks, though payable and paid in specie, was permissive merely in the discretion of the Secretary; and in accordance with this opinion has been the practical construction given to the resolution by the Treasury Department. It is known to you, however, that distinguished names have been vouched for the opinion that the resolution was mandatory as to the notes of all specie-paying banks; that the debtor had the right, at his option, to make payment in such notes, and that if tendered by him the Treasury officers had no discretion to refuse them.

It is thus seen that the laws now in force, so far as they positively enjoin the receipt of any particular currency in payment of public dues, are confined to gold and silver, except that in certain cases Virginia land scrip and Treasury certificates are directed to be received on the sale of public lands. In my opinion, there is nothing in the bill before me repugnant to those laws. The bill does not expressly declare and enact that any particular species of currency shall be receivable in payment of the public revenue. On the contrary, as the provisions of the first and second sections are chiefly of a negative character, I think they do not take away the power of the Secretary, previously possessed under the acts of Congress, and as the agent of the President, to forbid the receipt of any bank notes which are not by some act of Congress expressly made absolutely receivable in payment of the public dues.

The above view will, I think, be confirmed by a closer examination of the bill. It sets out with the assumption that there is a currency established by law (i. e., gold and silver); and it further assumes that the public revenue of all descriptions ought to be collected exclusively in such legal currency, or in bank notes of a certain character; and therefore it provides that the Secretary of the Treasury shall take measures to effect a collection of the revenue "in the legal currency of the United States, or in notes of banks which are payable and paid on demand in the said legal currency," under certain restrictions, afterwards mentioned in the act.

The question then arises: Are bank notes having the requisite characteristics placed by the clause just quoted on the same footing with the legal currency, so as to make it the duty of the Secretary of the Treasury to allow the receipt of them when tendered by the debtor? In my judgment, such is not the effect of the provision.

If Congress had intended to make so important an alteration of the existing law as to compel the receiving officers to take payment in the bank notes described in the bill, the natural phraseology would have been, "in the legal currency of the United States and in notes of banks which are payable and paid in the legal currency," etc. And it is reasonable to presume that Congress would have used such, phraseology, or would have gone on to make a distinct provision expressly declaring that such bank notes should be receivable, as was done in the bank charters of 1790 and 1816, and as was also done by the acts relative to evidences of debt, Treasury notes, and Virginia land scrip. The form of one of these provisions (the fourteenth section of the act incorporating the late Bank of the United States) will illustrate the idea I desire to present:

"SEC. 14. And be it further enacted, That the bills or notes of the said corporation, originally made payable, or which shall have become payable, on demand, shall be receivable in all payments to the United States, unless otherwise directed by act of Congress."

The difference between the language there used and that employed in the present bill is too obvious to require comment. It is true that the word "or," when it occurs in wills and agreements, is sometimes construed to mean "and," in order to give effect to the plain intent of the parties; and such a construction of the word may sometimes be given when it occurs in statutes, where the general intent of the lawmakers evidently requires it. But this construction of the word in the present case is not only unnecessary, but, in my opinion, repugnant to the whole scope of the bill, which, so far from commanding the public officers to receive bank notes in cases not required by the existing laws, introduces several new prohibitions on the receipt of such notes.

Nor do I think this one of those cases in which a choice is given to the debtor to pay in one or other of two descriptions of currency, both of which are receivable by law. Such a choice was given by the land law of the 10th of May, 1800, section 5, between specie and the evidences of the public debt of the United States then receivable by law, and also by the joint resolution of the 30th of April, 1816, between "the legal currency of the United States, or Treasury notes, or notes of the Bank of the United States, as by law provided and declared." The option given by that resolution continued in force so long as the laws providing and declaring that Treasury notes and notes of the Bank of the United States should be receivable in payments to the United States, and ceased when those laws expired. The distinction between that description of paper currency which is by law expressly made receivable in payment of public dues, and the notes of the State banks, which were only permitted to be received, is plainly marked in the resolution of 1816. While the former are placed on the same footing with the legal currency, because by previous laws it had been so "provided and declared" the latter were left to be received or not received, at the discretion of the Secretary of the Treasury, except that he was restricted from allowing any to be received which were not payable and paid on demand in the legal currency. The bank notes spoken of in the bill before me, having never been made receivable by law, must be regarded as belonging to the latter class, and not to the former; and there can therefore be no greater obligation under the present bill, should it become a law, to receive them in payment than there was to receive the paper of the State banks under the resolution of 1816.

As to the difference between this bill and the joint resolution of 1816, the bill differs from that resolution in the following particulars:

First. It says nothing of Treasury notes and the notes of the Bank of the United States, which by the resolution of 1816 are recognized as having been made receivable by laws then in force in payment of public dues of all descriptions.

Second. It abridges the discretion left with the Secretary of the Treasury by that resolution, by positively forbidding the receipt of bank notes not having the characteristics described in the first and second sections of the bill; whereas the receipt of some of the notes so forbidden might, under the resolution of 1816, have been allowed by the Secretary.

Third. It forbids the making of any discrimination in respect to the receipt of bank notes between the different branches of the public revenue; whereas the Secretary of the Treasury, under the resolution of 1816, was subject to no such restraint, and had the power to make the discrimination forbidden by the bill, except as to the notes of the Bank of the United States and Treasury notes.

This bill, if approved, will change the resolution of 1816, so far as it now remains in force, in the second and third particulars just mentioned, but in my opinion, as already suggested, will change it in no other respect.

II. What is the extent of the supervision and control allowed by this bill to the Secretary of the Treasury over the notes to be received by the deposit banks?

And does it allow him to direct what particular notes shall or shall not be received for lands or for duties?

Answer. After maturely considering, so far as time has been allowed me, the several provisions of the bill, I think the following conclusions may fairly be drawn from them when taken in connection with the laws now in force, and above referred to, and that should it become a law they will probably express its legal effect.

First. That the Secretary of the Treasury can not direct the receipt of any notes except such as are issued by banks which conform to the first section of the law and such as will be passed by the proper deposit bank to the credit of the United States as cash.

Second. That he may direct the receipt of notes issued by banks which conform to the first section, provided the deposit bank in which the notes are to be deposited shall agree to credit them as cash.

Third. That if the deposit bank in which the money is to be deposited shall refuse to receive as cash the notes designated by the Secretary, and which such bank receives in the ordinary course of business on general deposit, he may withdraw the public deposits and select another depository which will agree to receive them.

Fourth. That if he can not find a depository which will so agree, then that the Secretary can not direct or authorize the receipt of any notes except such as the deposit bank primarily entitled to the deposits will agree to receive and deposit as cash.