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Legal Tender Cases
The ''Legal Tender Cases'' were a series of United States Supreme Court cases in the latter part of the nineteenth century that affirmed the constitutionality of paper money. In the 1870 case of ''Hepburn v. Griswold'', the Court had held that legal tender in the form of paper money violated the United States Constitution. The ''Legal Tender Cases'' reversed ''Hepburn'', beginning with ''Knox v. Lee'' and ''Parker v. Davis'' in 1871,〔''Knox v. Lee'', (79 U.S. 457 ) (1871).〕 and then ''Juilliard v. Greenman'' in 1884.〔Juilliard v. Greenman'', (110 U.S. 421 ) (1884).〕
==Legal Tender Act of 1862 and ensuing litigation==
The ''Legal Tender Cases'' primarily involved the constitutionality of the Legal Tender Act of 1862, , enacted during the American Civil War.〔Act of Congress, ''(Statutes at Large )'', Volume 12, 37th Congress, Session II, Chapter 33, pp. 345–348 (1862-02-25). This Act authorized issuance of $150,000,000 in United States Notes, commonly referred to as greenbacks, plus $500,000,000 in interest-bearing bonds.〕 This act authorized issuance of paper money, United States Notes, to finance the war without raising taxes.〔Newcomer, Philip. (The Illegality of Legal Tender ), ''The Freeman: Ideas on Liberty'', December 1986, Vol. 36 No. 12.〕 The paper money depreciated in terms of gold and became the subject of controversy, particularly because debts contracted earlier could be paid in this cheaper currency.〔(Legal Tender cases ), ''The Columbia Encyclopedia'', Sixth Edition. 2001-05.〕
In ''Hepburn'', Chief Justice Salmon P. Chase held for a 4-3 majority of the Court that the Act was an unconstitutional violation of the Fifth Amendment. Ironically, Chief Justice Chase had played a role in formulating the Legal Tender Act of 1862, in his previous position as Secretary of the Treasury. On the same day that ''Hepburn'' was decided, President Ulysses Grant nominated two new justices to the Court, Joseph Bradley and William Strong, although Grant later denied that he had known about the decision in ''Hepburn'' when the nominations were made.〔Pusey, Merlo. (Matter of Delicacy: The Court Copes With Disability ), Supreme Court Historical Society 1979 Yearbook.〕 Bradley and Strong subsequently voted to reverse the ''Hepburn'' decision, in ''Knox v. Lee'' and ''Parker v. Davis'', by votes of 5-4. The constitutionality of the Act was more broadly upheld thirteen years later in ''Juilliard v. Greenman''.
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