Hepburn v. Griswold was the U.S. Supreme Court decision, handed down on February 7, 1870, that held Congress could not constitutionally force a creditor to accept paper “greenbacks” as payment for a debt contracted before the Legal Tender Act of 1862 existed. Chief Justice Salmon P. Chase wrote the 4–3 opinion striking down the law he himself had pushed through Congress as Abraham Lincoln’s Treasury Secretary. The ruling lasted about fifteen months. After President Ulysses S. Grant filled two vacancies, the reconstituted Court overruled Hepburn in the Legal Tender Cases of 1871, and the federal power to declare paper currency legal tender has been settled ever since.
The Debt That Started the Case
The dispute was ordinary on its face. On June 20, 1860, Mrs. Hepburn signed a promissory note agreeing to pay Henry Griswold $11,250. The note matured on February 20, 1862 — five days before Congress passed the Legal Tender Act. On the date the note was written and on the date it came due, the only lawful money for satisfying private debts in the United States was gold and silver coin.
Mrs. Hepburn did not pay on time. When Griswold sued her in the Louisville Chancery Court in March 1864, she tendered $12,720 in the new United States notes, enough to cover principal, interest, and costs. Griswold refused, insisting the debt had been contracted in a gold-and-silver world and had to be paid in coin. The question that made its way to the Supreme Court was whether Congress could, after the fact, declare that depreciated paper money satisfied a debt the parties had understood would be paid in gold.
That question mattered because the greenbacks were not stable. Congress had authorized about $430 million of the notes to finance the Union war effort, and because they were not redeemable in specie on demand, their market value swung with Union military fortunes. At the worst points of the war, it took nearly $2,850 in paper to buy what $1,000 in gold could purchase. A creditor forced to accept greenbacks at face value could lose half or more of what he was owed.
What the Court Held in 1870
Chief Justice Chase wrote for a closely divided Court. The vote is usually reported as 4–3, though one account puts it at 5–3 with the ailing Justice Robert Grier casting a majority vote before his resignation took effect on January 31, 1870. The margin was thin either way.
Chase’s opinion built on three points. He found no express constitutional authority for Congress to make credit currency legal tender, and applying the test from McCulloch v. Maryland, he concluded that making paper notes legal tender for pre-existing debts was not “appropriate, plainly adapted to constitutional and legitimate ends.” It was not, in his view, a genuine means of carrying out the powers to borrow money, wage war, or anything else Congress was authorized to do.
He then framed the Act as an arbitrary rewriting of private contracts. Before February 25, 1862, every contract for the payment of money was in legal effect a contract for gold and silver coin. Forcing a creditor to accept depreciated notes, the Court held, “alters arbitrarily the terms of the contract and impairs its obligation.” Chase pointed to the wartime gold-paper gap to show what that meant in practice: a creditor owed a thousand gold dollars could be handed notes worth barely half that on the open market.
Finally, Chase reached for broader constitutional principles. Compelling creditors to take a “currency of different nature and value” than what the contract contemplated was, he wrote, “contrary to justice and equity” and inconsistent with the constitutional mandate to “establish justice.” Reading implied powers broadly enough to cover legal tender would, in his phrasing, “convert the government … into a government of unlimited powers.”
The Dissent
Justice Samuel Miller dissented, joined by Justices Noah Swayne and David Davis. Miller argued the majority read the Necessary and Proper Clause too narrowly. Under McCulloch, “necessary” meant “convenient or useful,” not indispensable, and the Legal Tender Act was essential to prosecuting the Civil War: without it, the Union could not have borrowed enough, paid its soldiers, or avoided a collapse that would have aided the Confederacy.
Miller also flagged a textual asymmetry. The Constitution expressly forbids states from making anything but gold and silver legal tender, yet imposes no such prohibition on Congress. Whether a given means was necessary, he wrote, was a judgment for the legislature, not the courts operating on “vague notions of the spirit of the Constitution.” That reasoning would become the law of the land within two years.
The Chief Justice Who Struck Down His Own Law
The identity of Hepburn’s author is the case’s most-remarked-upon feature. As Lincoln’s Treasury Secretary, Chase had lobbied for the Legal Tender Act. In a January 29, 1862, letter to Representative Thaddeus Stevens, chairman of the House Ways and Means Committee, Chase called the bill “expedient and necessary” and urged its passage. He then placed his own portrait on the 1862 one-dollar greenback, a decision widely read as burnishing his profile for a future presidential run.
Eight years later, sitting as Chief Justice, he wrote the opinion declaring that same law unconstitutional as applied to pre-existing debts. His shift had a defense: even in 1862 he had privately called the legal tender provision a reluctant wartime expedient. But the spectacle of a chief justice invalidating his own signature policy remains one of the great ironies in Supreme Court history.
How Hepburn Was Overruled in Fifteen Months
The reversal is inseparable from a fight over the size of the Court. In April 1869, after Grant took office, Congress restored the Court to nine seats. Justice Grier resigned effective February 1, 1870. An earlier Grant nominee to replace him, former Secretary of War Edwin Stanton, had died in December 1869; another, Attorney General E. R. Hoar, was rejected by the Senate on February 3, 1870. On February 7, 1870 — the same day Chase read Hepburn from the bench — Grant sent the Senate the names of William Strong and Joseph P. Bradley for the two open seats.
Critics said Grant had picked Strong and Bradley knowing they would vote to reverse Hepburn. Defenders replied that the nominations had been settled in a Cabinet meeting the previous Tuesday and that the Hepburn outcome, reached in conference on November 27, 1869, was supposed to be confidential. Either way, once the new justices were seated, the Attorney General moved for a rehearing of the legal tender question, and the Court granted it.
The reversal came in 1871 in Knox v. Lee and Parker v. Davis, together known as the Legal Tender Cases. Justice Strong wrote for the majority, with Chase now leading four dissenters and reaffirming his earlier reasoning. Strong’s opinion held that Congress possessed implied power under the Necessary and Proper Clause to declare paper money legal tender as a means of borrowing money, raising armies, and suppressing insurrection. The majority stressed the wartime emergency: “a civil war was then raging which seriously threatened the overthrow of the government,” the Treasury was nearly empty, and soldiers were unpaid. Strong also warned of the practical consequences of undoing the greenbacks, which had “become the universal measure of values,” predicting “great business derangement, widespread distress, and the rankest injustice.”
The Court rejected the premise that constitutional “money” meant only gold and silver. The government, it held, possesses sovereign authority to determine the medium of exchange, and private contracts are always made against the backdrop of that power, so the legal tender laws did not unconstitutionally impair contract obligations.
Peacetime Confirmation: Juilliard v. Greenman
The Legal Tender Cases rested partly on wartime necessity, which left an open question: did the power survive into peacetime? The Court answered in Juilliard v. Greenman in 1884, upholding the Act of May 31, 1878, which required redeemed legal tender notes to be reissued and kept in circulation years after the war had ended and after the United States had resumed the gold standard on January 1, 1879.
Justice Horace Gray held that the legal tender power is an attribute of national sovereignty “included in the power expressly granted to borrow money on the credit of the United States.” Whether to use it was a political question for Congress. Justice Stephen Field dissented alone, arguing the framers had meant to deny the federal government any authority to issue legal tender notes. With Juilliard, the doctrinal arc was complete: Hepburn had said Congress could not make paper legal tender for pre-existing debts; the Legal Tender Cases said it could during a war emergency; Juilliard said the power exists in peace as well as war.
Why the Case Still Matters
Hepburn v. Griswold has been overruled for more than 150 years, so its value now is historical rather than doctrinal. It is one of the clearest examples of how quickly Supreme Court precedent can shift when the Court’s membership changes: roughly fifteen months separated Hepburn from its reversal in Knox v. Lee, one of the fastest about-faces in the Court’s history and a fixture in debates about judicial independence and court-packing. It is also a case about the elasticity of the Necessary and Proper Clause, showing how the same McCulloch framework can be read to forbid a law one year and permit it the next. And it is, unavoidably, the story of Salmon P. Chase — architect of the greenback, its judicial executioner, then a dissenter defending an opinion the Court had already discarded.