Briscoe v. Bank of the Commonwealth of Kentucky
11 Pet. (36 U.S.) 257 (1837), argued 28 Jan., 1 Feb. 1837, decided 11 Feb. 1837 by vote of 6 to 1; McLean for the Court, Story in dissent. With the death of John Marshall in 1835, the Supreme Court's orientation shifted away from his nationalist outlook. Briscoe v. Bank of Kentucky manifested this change in the field of banking and currency in the first full term of the court's new chief justice, Roger B. Taney. Article I, section 10 of the Constitution prohibited states from using “bills of credit,” but the precise meaning of a “bill of credit” remained unclear. In Craig v. Missouri (1830) the Marshall Court had held, by a vote of 4 to 3, that state interest‐bearing loan certificates were invalid under the constitutional prohibition. However, in the Briscoe case, the Court upheld the issuance of circulating notes by a state‐chartered bank even when the Bank's stock, funds, and profits belonged to the state, and where the officers and directors were appointed by the state legislature. The Court narrowly defined a “bill of credit” as a note issued by the state, on the faith of the state, and designed to circulate as money. Since the notes in question were redeemable by the bank and not by the state itself, they were not “bills of credit” for constitutional purposes. By validating the constitutionality of state bank notes, the Supreme Court completed the financial revolution triggered by President Andrew Jackson's refusal to recharter the Second Bank of the United States and opened the door to greater state control of banking and currency in the antebellum period.
See also Capitalism.
— George Dargo
