Briscoe v. Bank of the Commonwealth of Kentucky
Briscoe v. Bank of the Commonwealth of Kentucky is a significant U.S. Supreme Court case that addressed the constitutional boundaries surrounding state-issued currency. In contrast to the earlier decision in Craig v. Missouri, which deemed certain state-issued financial instruments unconstitutional, Briscoe v. Bank of the Commonwealth allowed a state-owned bank to issue circulating notes. The ruling was based on the understanding that these notes were not directly issued by the state or reliant on its credit, thus sidestepping the constitutional prohibition against bills of credit. This case reflected the Court's sensitivity to state rights and the economic context of the time, particularly the need for a stable medium of exchange following the closure of the Bank of the United States. The decision marked a pivotal moment that facilitated increased state control over banking and currency, influencing the fiscal landscape leading up to the Civil War. Overall, Briscoe v. Bank of the Commonwealth of Kentucky exemplifies the ongoing tension between federal regulation and state autonomy in financial matters.
Briscoe v. Bank of the Commonwealth of Kentucky
Date: February 11, 1837
Citation: 11 Pet (36 U.S.) 257
Issue: Fiscal and monetary powers
Significance: Reflecting Chief Justice Roger Brooke Taney’s bias toward states’ rights, the Supreme Court allowed a state-owned bank to issue notes for public circulation as legal tender.
The U.S. Constitution prohibited states from issuing bills of credit, but the exact meaning of the term was unclear. In Craig v. Missouri (1830), the Supreme Court ruled that interest-bearing certificates issued by a state were unconstitutional bills of credit. In Briscoe v. Bank of the Commonwealth of Kentucky, however, the justices voted six to one to allow a state-owned bank to issue circulating notes. Justice John McLean wrote for the Court that the notes at issue were not unconstitutional because they were not issued directly by the state or backed by the faith and credit of the state. The justices at the time were very sensitive to the rights of the states and recognized the need for a circulating medium following the demise of the Bank of the United States. The decision allowed for greater state controls over banking and currency in the years before the Civil War.
