Juilliard v. Greenman
4 S. Ct. 122, 1884 U.S. LEXIS 1712, 110 U.S. 421 (1884)
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Rule of Law:
Congress possesses the constitutional authority to make United States Treasury notes a legal tender for the payment of private debts in peacetime as well as in wartime.
Facts:
- Augustus D. Juilliard sold 100 bales of cotton to T.S. & S.A. Greenman for a price of $5,100.
- At the time of payment, Greenman offered to pay the $5,100 debt using United States notes.
- These notes were originally issued as legal tender during the Civil War under acts passed between 1862 and 1863.
- The specific notes tendered had been redeemed by the U.S. Treasury in coin and then reissued under the Act of May 31, 1878, which required that they be kept in circulation.
- Juilliard refused to accept the notes as payment and demanded gold or silver coin.
Procedural Posture:
- Augustus D. Juilliard sued T.S. & S.A. Greenman in the Circuit Court of the United States for the Southern District of New York to recover a debt of $5,100.
- Greenman, as the defendant, pleaded that he had made a valid tender of payment using United States legal tender notes, which Juilliard refused.
- The Circuit Court, a federal trial court, held that the tender of notes was legally sufficient and entered judgment in favor of Greenman.
- Juilliard, as the appellant, appealed the Circuit Court's judgment to the Supreme Court of the United States.
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Issue:
Does Congress have the constitutional authority to make United States Treasury notes legal tender for the payment of private debts during peacetime?
Opinions:
Majority - Justice Gray
Yes. Congress has the constitutional power to make its notes legal tender for private debts in peacetime. This power is not expressly granted but is an appropriate means, 'necessary and proper,' for the execution of Congress's enumerated powers, such as the power to borrow money, to coin money, and to regulate interstate commerce. The authority to issue legal tender notes is an attribute of national sovereignty, universally understood to belong to governments. The choice of when to exercise this power, whether in war or peace, is a political question for Congress to decide, not a judicial one for the courts to review.
Dissenting - Justice Field
No. Congress does not have the constitutional authority to make its notes legal tender for private debts. The framers of the Constitution, wary of the economic chaos caused by paper money during the Revolution, intended to prohibit the federal government from issuing legal tender notes. The power is not enumerated, and it cannot be properly implied from the powers to 'borrow money' or 'coin money'; the former refers to a contract for a loan, and the latter refers exclusively to metallic currency. Granting this power to Congress is contrary to the principle of a government with limited, delegated powers and subverts the establishment of justice by impairing the obligation of private contracts.
Analysis:
This decision solidified the federal government's broad authority over the nation's monetary system. It decisively moved beyond the wartime-necessity justification of the earlier Legal Tender Cases, establishing the power to issue legal tender currency as an inherent attribute of national sovereignty exercisable even in peacetime. The ruling affirmed that the judiciary will grant significant deference to Congress on economic matters, classifying the decision to issue legal tender as a 'political question.' This case provides a key constitutional foundation for the modern, flexible monetary policy of the United States, which is not tied to a metallic standard.
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