Facts of the Case

Kentucky authorized a state owned and operated bank to issue bank notes that circulated as currency. The bank gave Briscoe the notes in exchange for a promissory note. Briscoe failed to repay, so the bank sued him. Briscoe claimed that the bank (and thus Kentucky) had violated the Constitution.

Question

By issuing notes and currency, did the bank violate the constitutional prohibition in Article I Section 10 that "[n]o State shall...emit Bills of Credit"?

Conclusion

The Court rejected Briscoe's argument. The clause prohibiting bills of credit applied to notes issued indirectly through a corporation. But the bank had issued the notes on its own credit, not on the credit of the state.