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The Fourteenth Amendment's Public Debt Clause

The Fourteenth Amendment's primary purpose was to help Reconstruction efforts following the Civil War. It granted citizenship to all people born in the United States, most importantly, formerly enslaved persons. Plus, it aimed to ensure states could not create laws that infringed on the rights of African Americans. Some portions of the Amendment became legal oddities, including the public debt clause.

Like the apportionment clause, the public debt clause was likely intended to prevent Congress from forgiving debts incurred by Union states. But because the clause as written is incredibly broad, it could have a bigger impact.

What the Public Debt Clause Says

​"The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void."

What It Means

The Supreme Court has only addressed the public debt clause in one case: Perry v. United States. Decided in 1935, Perry centered on a "gold bond," a type of commodity-backed bonded popular at the time. The plaintiff, John Perry, purchased a gold bond worth $10,000 payable in "gold coin of the present standard value." When he bought the bond, standard gold dollars were made of 25.8 grains of gold. But by the time he redeemed it, Congress had changed the standard for gold dollars to 15.2 grains. 

Perry argued that he was entitled to $16,931 cash or 258,000 grains of gold, nearly $7,000 more than the original cash value of the bond. The Court of Claims asked the Supreme Court to determine whether it could issue an amount that exceeded the face amount of the bond. In a 5-4 decision written by Justice Charles E. Hughes, the Court decided the case against Perry. 

The Court found that Congress's power to regulate money is plenary, or essentially without limit. This meant that, because Perry did not show the change in coin weight caused him actual damages, the government was not required to pay out more than the face value of the bond.

According to the Library of Congress's Analysis and Interpretation of the U.S. Constitution:

"Although § 4 'was undoubtedly inspired by the desire to put beyond question the obligations of the government issued during the Civil War, its language indicates a broader connotation. The validity of the public debt embraces whatever concerns the integrity of the public obligations, and applies to government bonds issued after as well as before adoption of the Amendment."1

In recent years, the Fourteenth Amendment's public debt clause has been proposed as a method for a president to raise the nation's debt ceiling without approval from Congress. However, legal scholars are split on whether such a move would survive a challenge in the courts - and no president has actually done it.

Related Resources

Footnotes

  1. Perry v. United States, 294 U.S. 330, 354 (1935), in which the Court concluded that the Joint Resolution of June 5, 1933, insofar as it attempted to override the gold-clause obligation in a Fourth Liberty Loan Gold Bond went beyond the congressional power. On a Confederate bond problem, see Branch v. Haas, 16 F. 53 (C.C.M.D. Ala. 1883) (citing Hanauer v. Woodruff, 82 U.S. (15 Wall.) 439 (1873), and Thorington v. Smith, 75 U.S. (8 Wall.) 1 (1868)). See also The Pietro Campanella, 73 F. Supp. 18 (D. Md. 1947).

 

 

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