Mark.Scarberry at pepperdine.edu
Sat Mar 31 10:58:12 PDT 2012
I believe that for some time before the Revolution bank notes and bills of exchange had been used as the equivalent of money. For notes and bills to be used as a medium of exchange, there must be at least some degree of confidence that the bank or other issuer - whether public or private - will not default, with the discount at which such notes and bills would be taken being based on the creditworthiness of the issuer. Bills and notes are easier to transport than precious metals, and if endorsed in a proper fashion can provide some protection against theft. A thief is not a holder and is not entitled to payment unless the instrument has been endorsed in blank, nor is anyone who takes from a thief (not even a bona fide purchaser). Given appropriate proof that the bill or note has been stolen or lost, the former holder may enforce the obligation on the giving of a sufficient bond; at least that has been the law for quite some time in the US. I believe the promise of the bank or other issuer was to pay an amount in specie (precious metals) on presentation of the bill or note to the issuer.
If I understand the matter correctly, the chartering of a private bank or other private entity by a government did not make the government liable on the notes or bills issued by the chartered institution. I know that both the Congress under the Articles and the state of Pennsylvania chartered Robert Morris's Bank of North America, which was capitalized partly by individuals.
I have not studied the history of the use of bills and notes as money in any depth. Perhaps someone else on the list can speak authoritatively on these matters.
Mark S. Scarberry
Professor of Law
Pepperdine Univ. School of Law
From: conlawprof-bounces at lists.ucla.edu [mailto:conlawprof-bounces at lists.ucla.edu] On Behalf Of Calvin Johnson
Sent: Saturday, March 31, 2012 9:45 AM
To: jon.roland at constitution.org; Robert Sheridan
Cc: conlawprof at lists.ucla.edu
Subject: The bank
Madison had acquiesced to teh Confederate bank, teh Bank of North America, by reason of necessity. Having done that, he needed to fold on the Constitution's bank, since no was trying or thought that the ConstituionCongress should have a domain smaller than the Articles Congress.
Jefferson hates paper money -- the bank wil inundate us with anohter South Sea bubble. He is a nut case on paper money. There was nto enough specie on teh continent to effect the trades that needed to be done. The rule before the bank was you could sell only to those people you would extend credit to. Boy does that ruin a free market and suppress economic activity. He is importing his private pecadillos to crucify all America on cross of gold and I wish he had nto done that. But Jefferson plays rough. He told Virginia legislature to make passing of National Bank notes a capital offense. Nice guy.
Calvin H. Johnson
Andrews & Kurth Centennial Professor of Law
The University of Texas School of Law
727 E. Dean Keeton (26th) St.
Austin, TX 78705
(512) 232-1306 (voice)
FAX: (512) 232-2399
Website with links to publications: http://www.utexas.edu/law/faculty/cvs/chj7107_cv.pdf
For reviews, and chapters of Johnson, Righteous Anger at the Wicked States: The Meaning of the Founders Constitution (Cambridge University Press 2005) see http://www.utexas.edu/law/faculty/calvinjohnson/RighteousAnger<http://www.utexas.edu/law/faculty/calvinjohnson/RighteousAnger/>
From: conlawprof-bounces at lists.ucla.edu<mailto:conlawprof-bounces at lists.ucla.edu> [conlawprof-bounces at lists.ucla.edu] On Behalf Of Jon Roland [jon.roland at constitution.org]
Sent: Saturday, March 31, 2012 10:52 AM
To: Robert Sheridan
Cc: conlawprof at lists.ucla.edu<mailto:conlawprof at lists.ucla.edu>
Subject: Re: Limited government or national government
On 03/31/2012 10:18 AM, Robert Sheridan wrote:
Perhaps, and I appreciate the kind response, but there go the Bank,
The problem with the National Bank was not the incorporation of it, but conferring special privileges on it, and treating it as an instrumentality of the Union government. If it had been just another commercial bank bidding for the business of holding government funds, and had Maryland taxed the bank's commercial business in Maryland like they would any Maryland bank, that would have been okay. But the case was not argued well on both sides.
The problem with internal improvements was the way most of them tended to redistribute wealth from one region or interest group to another. The restrictive phrase "general welfare" was an exclusion of spending with a redistributive intent or major effect. "General" meant "not special". It would not forbid some kinds of improvements like military bases for the defense of the entire country, even if they might be located in particular places.
the end of the Lochner Era's activist conservative Old Court, the NLRA, protections against massive abusive child labor, protection of men and women in the workplace, Social Security, and whatever I've left out.
All those need to be left to the states, on state territory. Many could, however, be exercised on non-state territories where Congress has the powers of a state government.
I intentionally omit equal rights protections because, of course, we do have an amendment.
The 14th Amendment clarified the ambiguity of whether the Bill of Rights (except the first) extended the jurisdiction of federal courts to decide cases between a citizen and his state over such rights as a federal question. CJ Marshall in Barron v. Baltimore held it did not. Many thought that decision was wrong, as do I. The 14th was a clarifying amendment on that point, overturning the Barron precedent, as it also overturned Dred Scott on attachment of rights to citizenship instead of personhood.
Seems to me that it's a bit too late to turn the clock back to pre-M'Culloch days simply because the losing argument in M'Culloch remains preferred by some...
Never too late to get it right. Yes there are "reliance interests", but that is just another special interest. We're not proposing to stand them up against a wall. They make a pill for that. They'll get over it.
Reminds me of the notion that no bad idea ever completely goes away...
In law and politics no issue is ever finally settled.
Constitution Society http://constitution.org
2900 W Anderson Ln C-200-322 twitter.com/lex_rex
Austin, TX 78757 512/299-5001 jon.roland at constitution.org<mailto:jon.roland at constitution.org>
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