‘The blood-suckers were speculators who bought up loan certificates from people who couldn’t afford to wait for the government to pay them back.’
‘You dealt with that in your brief,’ Judge Morrow observed. ‘They would pay as little as twenty or twenty-five cents on the dollar. But the people they were dealing with had no choice. They needed the money to eat.’
‘Exactly, Your Honour. And for the first time, the government was presented with the temptation to refuse payment for reasons of policy. The speculators were an easy target. They weren’t about to win any popularity contests. It would have been a good political move. Mr Butler of South Carolina summed up the feelings in the House – page thirty, Your Honour – “A positive statement that the engagement shall be fulfilled might compel payment, as well to those blood-suckers who have speculated on the distresses of others, as to those who have fought and bled for their country. A distinction should be made between those classes of people.’’’
‘You have to have some sympathy with that,’ the judge remarked.
‘Yes, Your Honour. But Hamilton insisted that they couldn’t make that distinction – page thirty-one – this is from his First Report: “It would be repugnant to an express provision of the Constitution of the United States. This provision is that, ‘all debts contracted and engagements entered into before the adoption of this Constitution shall be as valid against the United States under this Constitution as under the Confederation’; which amounts to a constitutional ratification of the contracts representing the debt in the state in which they existed under the Confederation. And, resorting to that standard, there can be no doubt that the rights of the assignees and the original holders must be regarded as equal.”
‘Your Honour, if ever there were to be a good policy reason for interfering with the duty to repay a valid war loan, the case of the speculators would have been it. But Hamilton tells us exactly why it couldn’t be done.’
Judge Morrow thought for some time.
‘So now, tell me, Miss Harmon: does Hamilton also explain why the government can’t rely on the statute of limitations when it’s sued over a debt that’s more than 200 years old?’
There was some muted laughter, but Kiah wasn’t fazed for a moment.
‘He does, Your Honour.’
‘Really?’
‘Yes. Not in so many words, obviously. When Hamilton was writing his reports in the late 1780s, early 1790s, there was no Claims Court, there was no statute of limitations. There was no way to sue the government. The law then was the law we took from England: the King can do no wrong. It was our government now, not the King, but that didn’t affect the principle.’
‘Exactly,’ the judge said. ‘Eventually, our government accepted that citizens should be allowed to sue it, and they even set up this court in which to do it. But they also laid down some conditions that had to be observed, including the statute of limitations. I take it you’re not opposed to statutes of limitation in principle?’
‘No, of course not,’ Kiah replied.
‘They serve a useful function, don’t they? They ensure that cases can be tried before all the witnesses have died and all the evidence has been destroyed or lost in the mists of time. Nothing wrong with that, is there?’
‘Nothing at all, Your Honour, although I have to say that I don’t see how the statute would help in our case.’
‘Why not?’
‘Because by 1893 all the witnesses to the van Eyck loans were already dead, and there had already been every chance for documents to be lost or destroyed, not least because of what the British did to Washington in 1814. In fact, because we now have the National Archives, and we’ve done a good job preserving such documents as we do have, it’s probably easier today to reconstruct what happened back then than at any earlier time. The government isn’t prejudiced by the delay at all.’
Tomorrow smiled.
‘Not a bad point. But…’
‘But it doesn’t get me past the law. No, Your Honour, I know that. So, here’s the real point. First, the Constitution is the supreme law of the land. Do I need to address Your Honour on that? We have the authorities in our brief…’
‘I tell you what, Miss Harmon, if I start to waver on that, I’ll let you know.’
Laughter we could all join in freely.
‘Thank you, Your Honour. Starting from there, any statutory provision enacted by Congress that contradicts a provision of the Constitution is void. May I take it that we agree on that also?’
‘Any wavering there to be notified also,’ Tomorrow grinned.
‘Thank you, Your Honour. The effect of the statute of limitations in this case is that no one has been able to sue to recover a war loan since 1893. Yet Article Six makes the war debt valid without limitation of time. The statute clearly contradicts Article Six, and it is void to that extent.’
‘To that extent?’
‘Yes. We don’t suggest that the statute can’t be applied generally in the Claims Court. Quite the contrary. In fact, this may be the only kind of case where it can’t apply. I can’t think of any other contractual obligations still hanging on from the days of the Confederation. So, we’re not talking about opening Pandora’s box here. The case Your Honour is dealing with today is probably the only case where the statute can’t be applied.’
The judge exhaled audibly.
‘But Mr Petrosian suggested the answer to that, didn’t he? He says that the debt itself may well be valid, but at this late time, the family can’t sue for it in this court. He says that the government allowed itself to be sued, many years after the Constitution was adopted, and when they did, they were entitled to lay down the conditions under which they would allow themselves to be sued. One of those conditions is the six-year time limit. What’s wrong with that?’
‘Your Honour himself pointed out what’s wrong with that. If we can’t sue in this court, we are left with petitioning the government for the redress of grievances, and I think Your Honour and I agree on how far we’d get with that. It’s been tried before, and it failed.’
She paused for a few moments.
‘Your Honour, if you would, imagine this with me back then? Imagine that Congress created the Claims Court, but then said, “You can’t sue for a war loan if your ancestor was a speculator, if he wasn’t the original lender.’’’
The judge nodded. ‘That wouldn’t fly.’
‘No, it wouldn’t. It wouldn’t fly in 1790 when Hamilton rejected the idea, and it wouldn’t fly today. The only question would be whether or not you have a loan certificate which the government is obliged to redeem. The government has allowed you to sue since Hamilton’s day. They’ve given you a remedy. Perhaps they didn’t have to, but they did it, and now they have to live with it and honour it. If the government creates a remedy, it has to be a remedy compatible with the Constitution. You can’t put a time limit on claims under Article Six.’