The Strange Case of Texas v. White

In my experience, whenever the subject of the Confederate secession or of a modern attempt at the same thing occurs someone is bound to respond with a reference to the infamous case of Texas v. White. This Reconstruction Era case was written essentially to put a headstone on the Confederacy’s grave and to stifle any other State’s interests in leaving the Union in the future. It was in all significant respects a politically motivated decision. It ignored certain specific constitutional provisions as well as prior decisions of the court. In short, the decision was just plain wrong.

 

While this rebuttal will probably attract little attention from the legal establishment, it should provide more ammunition to those who rightly believe that the South was sorely mistreated following the conclusion of the war.

 

The Relevant Facts

When the state of Texas was admitted to the Union it received a number of federal treasury bonds in exchange for dropping some disputed territorial claims. When Texas withdrew from the Union, the State Treasurer of the Secession Government endorsed them for sale to several English companies, one of which was named White & Chiles. In exchange, this company was to provide certain supplies. These supplies were destroyed by Union Army troops during the war, and when White & Chiles attempted to cash in the bonds, the U.S. Treasury refused to accept them. When the war ended, the reconstruction government of Texas, instigated suit against White and others, to recover the bonds, which they received from Texas during the war.

The Legal Issues

This case is really about the rights of a good faith holder of government paper versus the government that had transferred that paper to them, albeit under unusual circumstances. One would think that White was the logical plaintiff complaining that the United States had refused to pay on its obligations. However, the suit was filed by Texas, and in so doing, the state was essentially repudiating its own prior actions. This created a political issue because Texas had undergone three changes in government, from pre-secession to secession to reconstruction since the bonds were originally issued. The bonds were received by the pre-secession government, were executed by the secession government, and the suit was filed by the reconstruction government. The suit was almost certainly contrived and calculated to provide a legal basis to prevent any other States from attempting to leave the Union in the future. That is exactly what the language of the Court’s decision did.

 

The Court first examined the act of secession and made a determination of whether this act by Texas, and by the rest of the Confederacy, was constitutionally legal. In making this determination, the Court also decided whether the secession governments of the Confederate states were legal. On these questions hung the issue of whether Texas had the power to endorse the bonds while in secession, and what was to be done about them.

 

Interestingly, the Court’s opinion failed to consider the possibility that in leaving the Union, Texas might have given up its rights in the bonds, or ceased to be a state, and therefore had no right to sue. The majority also neglected the possibility that Texas was not a state when the suit was filed. However, because the issue of the bonds had become essentially a pretext for the suit, and the majority of the Court accepted this pretext, they refused to deal properly with this question. The dissenting opinions did so, and are well worth studying.

 

Analysis of the Court’s Position

– Political Questions

The Court began its discussion of this case by outlining the history of the bonds, Texas’ admission to the Union, the election of the Secession Government and endorsement of the bonds by that government. This historical background is essentially accurate. It could be taken seriously were it not for the histrionic language employed by Chief Justice Salmon Chase in which he thoroughly condemned the State’s actions as having no legal basis. First, he attacks the delegates who convened and called for election of a new government as “irregular.” Then he glosses over the fact that the regularly chosen legislature ratified this convention and that the Ordinance of Secession was ratified by popular vote of the people. This was certainly sufficient to remove any claim of irregularity. Chase then declares “Thus was established the rebel government of Texas.” One wonders if Chase would take the same position with respect to the delegates who convened in 1776 to sign the American Declaration of Independence, and call their actions “irregular.” Recall that English law at the time did not recognize a colony’s right to govern its own affairs, or “secede” from the English crown, either.

 

Aside from Chase’s view of the “irregular” actions of the people of Texas, this judgment was improper because the Court had previously addressed a similar question in the case of Luther v. Borden. In Luther, the Court had been asked to decide what constituted the legitimate government of the State of Rhode Island. Because of an electoral dispute, for a short time there were two governments in the state, both claiming legitimacy. Eventually, one was put down by force, and later, the Court stated that the matter was a political, and not a legal dispute. The Court declined any authority to rule in political disputes, and so matters in Maryland were let stand. The same course should have been taken in Texas, as the Courts no longer had any authority to decide what was the legal government of any state. It had voluntarily given up any right to do so. On that basis, the case could not go forward in the manner that it did. The Court’s bias and its total neglect of Luther are obvious, and should have been denounced by legal scholars. Such criticism is conspicuous by its absence.

 

– A More Perfect Union?

After the above error, Justice Chase attacks secession by using the Preamble to the Constitution; very unusual step, as preambles to legal documents are almost never considered a part of the effective body of the document. In business contracts the specific intent of the parties is contained in the body of the document, which is enforced if it comes before a court of law. This opinion by Justice Chase is the only occasion, of which this author is aware after much research, when the Preamble to the Constitution has been cited as having any legal effect. The United States Codes Annotated and United States Code Service reference digests, which cover the Constitution in great detail, do not mention any such use; not even this one. It appears likely that this was the only such use.

 

Chase’s reasoning begins with language in Preamble to the Articles of Confederation, which stated the intent that the union under their auspices was to be “perpetual.” Because the Articles were replaced by the Constitution in 1789, with a stated purpose “to form a more perfect Union”, Chase argued that this “more perfect union” was one that could never be broken under any circumstances. Nowhere in the body text of the Articles or the Constitution was it stated that the Union was to be permanent or perpetual. The report of the Annapolis Convention of 1786 revealed that a real danger of dissolution of the Pre 1789 Confederation existed, and that if the Constitution had not been created, it is likely that the original states would have gone their separate ways.

 

Chase’s reliance on these particular items was wrong. Perhaps he did so only because he had nothing else to use and he needed something to fit his purpose. He cites no other authority to back his contention that the framers of the Constitution intended a perpetual and permanent union. The Constitution does not directly address the questions of secession or perpetuity at all. Chase does not cite any writings by the authors of the Constitution or delegates to the convention on the subject. Thus, Chase had insufficient legal authority to form a valid conclusion of law on this point.

 

It is also important to note that the forces driving the original states apart before 1789 and those which led to the Southern Secession were essentially the same. They were issues of the state‘s rights to control their own destinies and for their citizens to freely engage in commercial activity. By 1860 the use of federal power to restrain some states, while granting others favorable positions had become a major concern to the South. Before 1789 there were several instances of states on the verge of border wars over commercial competition and land ownership disputes. A more perfect union was needed, but not one, which enslaved the states to the federal system. Rather, a union which limited disputes between states and which provide an orderly system of resolving them was the proper prescription.

 

– The Tenth Amendment.

Despite all the above, and assuming that the Supreme Court could rule on the subject, there really was only one conclusion which the Court to reach, within the text of the Constitution. The simple fact is that the four corners of the document do not contain any reference whatsoever to the subject of a state leaving the Union. There is no permission, nor is there any prohibition. This lack leads us to look at the Tenth Amendment, which states that any powers not delegated to the Federal Government are reserved to the States or to the people. It should thus be incontrovertible that the power to leave the Union is a reserved power specifically held by the States or people under the Tenth Amendment. Recall that the people of the State of Texas voted to secede in a statewide election and that the election was held at the behest of the state legislature. In seceding Texas could very easily be seen as simply exercising a constitutional power reserved for it by the Tenth Amendment.

 

– The Strange Matter of West Virginia

As mentioned above, the Supreme Court stated in its opinion that the Union was perpetual and indivisible. It also stated that the Union was composed of indivisible states. On this basis it concluded that Texas could not leave the Union, and therefore, had never left the Union. Somehow the Court never got around to discussing how this rule applied to the state of West Virginia.

 

Virginia was one of the states that left the Union and joined the Confederacy. When Virginia did this a small portion of the state petitioned Washington DC to be admitted to the Union as a state in its own right. Congress granted the petition, and West Virginia became a separate state independent of Virginia proper.

 

When the Supreme Court decided Texas v. White it clearly forgot to order Virginia and West Virginia to get back together. Because Texas could not leave the Union, clearly Virginia could not either. Because Texas had never left the Union, Virginia also had not. Therefore, the West Virginians had no cause and no power to petition for statehood. Finally, because the Court ruled that the states and the Union are indivisible, West Virginia could not separate itself from the rest of the state of Virginia. Clearly, we should only have 49 states today, given what has happened since 1865.

 

– Was There Proper Jurisdiction?

There is also another issue, which needs to be discussed; whether or not the Court had proper jurisdiction because of the question of whether Texas was actually a state at the time that the case was filed.

 

This question was addressed in the dissenting opinions, which suggested that there was no jurisdiction based on statehood, and claimed that Texas had ceased to be a state at some poorly defined point, and certainly was not being governed as a sovereign state at the time that the case was filed. If Texas was no longer a state, then it had no right to file the case at all. The reconstruction government certainly placed severe limitations on Texas’ sovereignty, and in many respects the system looked more like the federal administration of either a conquered enemy, or an unincorporated territory. There clearly was a serious issue here, which the majority of justices failed to recognize. Perhaps they accepted Justice Chase’s position; that because Texas could not leave the Union, it never ceased being a state, which then asks us why it was not independent and self-governing after the war ended, and why the federally dominated Reconstruction government was necessary.

 

The Correct Opinion

 

Having dissected the Supreme Court opinion, what remains is to explain what the Court should have done. Despite the heavy patina of constitutional law placed there by the Court to disguise its actions, the answer to this case is really quite simple if you carefully examine one salient background fact.

 

When White and the other parties to the transactions accepted the federal bonds as payment for their wares, they also accepted the risk that the US Treasury would not honor them. Consider that if the Confederacy did not prevail, the Treasury would have been unlikely to honor bonds endorsed by a “rebel” government. This is exactly what happened. If, on the other hand, the Confederacy had prevailed against the Union the chances of the bonds being honored would be even less because of the success of the “rebellion.” Either way, White had lost his money.

 

The fortunes of war often dictate events and circumstances, which are beyond the ordinary expectations of commerce. That is why many commercial contracts contain provisions allowing non-performance by the parties when it is due to an act of war, government intervention, or extreme circumstances sometimes referred to as an “act of God”. White assumed that risk and lost.

 

As the Confederate secession had become a political matter, settled by political means, the disposition of the bonds also became a political issue. White, as a holder in due course, was now the proud possessor of worthless paper due to the fortunes of war. The Treasury had no duty, other than that of ordinary commerce, to honor the endorsement of a foreign government whether legitimate or otherwise. The Court could still have ruled that White and his compatriots had a duty to return the bonds to Texas; however, enforcement might have been difficult if not impossible, if White and the other holders refused to comply. To sum up the situation, if Washington, DC wanted to and had a duty to restore Texas to its original position, it would have been a very simple matter to cancel the old bonds and issue new ones to replace them. It would have been even simpler to do it by accounting entries. All of the fuss and bother of a court fight could have been prevented. There is a reason why the Treasury did not do so. It was necessary for the Court to get involved solely to condemn the right of secession.

 

Because of all of the above, the Supreme Court had no business hearing or ruling on this case at all, unless it was to support the right to secede.

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