The legal evolution: How the imperative of reparations challenges state sovereignty

“ But our system renders armies, patronage, privileges, corruption and sedition laws unnecessary, by placing sovereignty in a majority, which needs no auxiliary, can find none, is able to defend itself, and attracts no enmity from a better title. A transition from the sovereignty of the people to the sovereignty of a government, is a revolution only to be effected by artificial a cumulations of power or wealth, by armies, patronage, privileges, paper or sedition laws ”

“ It has been shown that, in becoming parts of a nation, not members of a league, they surrendered many of their essential parts of sovereignty. The right to make treaties, declare war, levy taxes, exercise exclusive judicial and legislative powers, were all functions of sovereign power. ”

“ Forces beyond our borders determine our health and economic condition. Even jurists are turning to a theory of international law built upon the legal supremacy of the law of nations. "What cries out for understanding is that modern technology and business organization have woven humanity into a community. ”

“ It is true that the moral consciousness of the world must recognize the importance of removing injustices and well-founded grievances; but at the same time it must be aroused to the cardinal necessity of honoring sanctity of treaties, of respecting the rights and liberties of others and of putting an end to acts of international aggression. ”

“ The object of this Essay is to assert one very simple principle, as entitled to govern absolutely the dealings of society with the individual in the way of compulsion and control, whether the means used be physical force in the form of legal penalties, or the moral coercion of public opinion. That principle is, that the sole end for which mankind are warranted, individually or collectively, in interfering with the liberty of action of any of their number, is self-protection. ”

“ But that surrender of rights and those grants of power must not transcend the limits set my that general principle. All surrenders of rights and all grants of power beyond those limits are concessions to despotism. — All assumptions of power beyond those limits are usurpation. Hence the true source of sovereignty is not in society, as the aggregate of individuals, but in the individuals who in the aggregate constitute the people. ”

“ To the victor, war is the means of extending national or imperial frontiers and legalizing expansion at the expense of the vanquished. Defeat in war leads to the imposition of indemnities, the payment of tribute, the transfer of territory to the victor and in extreme cases the extermination of the defeated nations or empires. ”

“ This, then, is one element of what Aristotle calls Corrective Justice, which is embodied in criminal law. It must not be confounded with the principle of Reparation, on which legal awards of damages are based. We have already noticed this as a simple deduction from the maxim of general Benevolence, which forbids us to do harm to our fellow-creatures: for if we have harmed them, we can yet approximately obey the maxim by giving compensation for the harm. ”

“ The legal right being in the captor, it could only be taken from him by an act of force, that is to say, of reprisal for the offence committed against the United States in the port of Charleston. Reprisal is a very serious thing, ought always to be preceded by a demand and refusal of satisfaction, is generally considered as an act of war, and never yet failed to produce it in the case of a nation able to make war. ”

“ Deeply impressed with the idea that it was the moral duty of the great and enlightened nations to aid the less fortunate and especially to guard the nationalities freed from autocratic rule until they were capable of self-government and self-protection, the President apparently looked upon the appeals made to him as genuine expressions of humanitarianism and as manifestations of the opinion of mankind concerning the part that the United States ought to take in the reconstruction of the world. ”

“ In the dissertation, the sovereignty of the people is unequivocally asserted, as the basis of society and civil power. Representation is made its substitute, from the impossibility of holding national assemblies. ”

“ If a monarch, an aristocracy, or a parliament, possess the sovereignty of a country, a doctrine that these sovereignties should not think, speak or discuss, except according to such rules as should be prescribed to them by the people, would be equivalent to the doctrine, that a nation possessing the soveveignty, should not think, speak or discuss, except according to such rules as should be prescribed to them by a monarchy an aristocracy or a parliament. ”

“ The perfect sovereignty of the people means the disruption of empires, and the pushing to extremity of what is variously described as local government, home rule, autonomy, and decentralisation, till every commune becomes an independent State. But for defence in war and for commerce in peace, these little States must federate; and federation means centralisation, external control over the majority at home, restricted foreign relations, in fact the corruption of pure democracy. ”

“ But a judicial sovereignty over constitution and law, without responsibility to the national sovereignty, is an unprincipled and novel anomaly, unknown to any political theory, and fitted to become an instrument of usurpation. If judicial power was intended to be advanced from municipal to political quality, responsibility ought to have followed the advancement according to the elements of our policy ”

“ Germany had become a “second-rate nation.” It had been deprived of important attributes of its sovereignty: No military sovereignty; the Rhineland unprotected; the Corridor, the Saar, and others. I have already described the economic conditions. These economic and political difficulties helped advance political radicalism, and the extremists increased in every election.
If therefore help was to be forthcoming, then not merely the reparations question had to be solved—that was a negative help—but positive, moral aid was required. My program was the restoration of the sovereignty of the Reich. ”

“ The political and commercial combinations against the north are gaining in strength and confidence every day. Political, sectional, and local questions, that I had hoped were buried with the dead of the past four years, are revived. Independent sovereignty, State rights, and nullification, where the power to nullify is revoked, are openly discussed. ”

“ Is commerce of importance to national wealth? Ours is at the lowest point of declension. Is respectability in [126] the eyes of foreign powers a safeguard against foreign encroachments? The imbecility of our government even forbids them to treat with us: our ambassadors abroad are the mere pageants of mimic sovereignty. ”

“ The legislation following the war when Congress seemed to have run mad with the theory that it could legislate outside of the Constitution has to a large extent fallen under the decisions of that high tribunal. One would have supposed that it could have been certain that, considering the fact that the war was waged to extend the extremest proposition of State sovereignty, that the triumph of the Federal theory would have added enormously and permanently to the powers of the general Government and diminished very greatly and permanently the powers of the States. ”

“ Speculative judgments pass like the philosophers that write them down, unheeded in the quiet of their studies. But moral judgments are rulers of the commonwealth: they are risen to as they go by, with majesty preceding and cares coming after. Their presence awakens in us certain emotions, conflicts of passion, as we think of the good that we should do, but have not done, or of the evil that goes unremedied and unatoned for. ”

“ The nation which accepts war for such a cause, and wages it with all her means and energies, exhibits a moral grandeur which, in spite of misfortune, has a saving power, capable of overcoming and compensating all calamities, of whatever nature and extent. That nation cannot be overthrown—not unless the laws of the Most High himself can be subverted, and the right be made permanently to succumb to the wrong. ”

“ But war, in a good cause, is not the greatest evil which a nation can suffer. War is an ugly thing, but not the ugliest of things: the decayed and degraded state of moral and patriotic feeling which thinks nothing worth a war, is worse. When a people are used as mere human instruments for firing cannon or thrusting bayonets, in the service and for the selfish purposes of a master, such war degrades a people. A war to protect other human beings against tyrannical injustice; ”

“ What friend of human liberty, civilization, and refinement, can cast his view over the past history of the monarchies and aristocracies of antiquity, and not deplore that they ever existed? What philanthropist can contemplate the oppressions, the cruelties, and injustice inflicted by them on the masses of mankind, and not turn with moral horror from the retrospect? ”

“ Relaxation of right in order to avoid war—particularly penalties—Self-preservation motive for forbearing hostilities—Prudential rules in the choice of advantages—Peace preferable to the extermination of hostile powers—Forbearance prudent in inferior powers—War not to be undertaken, but from necessity. ”

“ Perhaps we shall reach a point where the unleashing of a war deserving moral and also legal condemnation will, for the general legal conscience, constitute high treason against the world community. Perhaps we shall reach a point where it will be permissible, or even compulsory, to betray a government starting such a war to foreign countries without this being termed high treason toward one’s own. ”

“ Confusion of thought is inevitable unless the position of the wrongdoers as trustees is steadily kept in mind. What is here is something more than a tort of fraudulent representations to be redressed by the recovery of damages at the suit of the defrauded creditors. What is here is a tort growing out of the fraudulent depletion of the assets by men chargeable as trustees if they have failed to act with honor. There are important differences, moreover, between an overissue of stock, which may leave the assets unimpaired, and a withdrawal of cash, which puts the enterprise in peril. ”

“ When a charter liquidator whose standing is recognized in Montana is decreed to have an interest superior to the lien of later executions, as if his position were that of a receiver appointed by the local courts, there is no resulting inequality between foreign and domestic corporations, no favoring of the one class in hostility to the other. So, at least, the Montana court may not unreasonably decide. By hypothesis the domestic corporation after dissolution may be placed, upon a proper showing, in the hands of a receiver, and its assets ratably distributed. ”

“ It would seem that conservation of assets and equality of distribution are goods no less important in the winding up of insurance companies and of other moneyed corporations than in the winding up to banks.
From this survey of the decisions in Montana there results this truth, if nothing more, that there has been no definitive pronouncement as to the circumstances justifying a receivership for an insolvent corporation, and that the question is left open whether receivers of such a corporation will be appointed after dissolution to prevent waste or inequality. ”

“ We learn from this that a petition may be approved if a receiver or trustee of all or any part of the property of a corporation has been appointed by any court in the United States and that thereupon the possession of the receiver shall be displaced and superseded. But plainly this direction, though fairly applicable to an equity receiver in the sense already indicated, was never meant to apply to a receiver in foreclosure. It is common learning that an equity receiver in suits to conserve the assets or divide them among creditors must yield to a trustee in bankruptcy. ”

“ Form is closely knit to substance when a bank, at the end of its resources, is about to close its doors.
The argument is made that the agent for collection was guilty of a wrong in accepting payment through the medium of a check upon itself with knowledge at the time that insolvency was imminent. If this be so, the wrong does not avail to charge a trust upon the assets whereby the plaintiff will have a preference over the creditors at large. A cause of action for damages may exist, upon which the plaintiff, making proper proof, will be entitled to a dividend. ”

“ For illustration, a live bank is much more efficient than a closed one in selling parcels of real estate or in carrying them while unsold at profitable rentals. Adequate precautions are embodied in the plan to assure the enjoyment of these benefits by the creditors, and not by others. It is one of the terms of the decree that none of the profits of the business may be used for the new shareholders until every dollar's worth of assets turned over by the superintendent has been paid to the creditors or delivered to the pool. ”

“ Here the moral factors enter in. The people must have the willingness to make sacrifices, and must consent to the measures adopted by the Government. In the matter of reparations, for instance, nothing could be accomplished unless the German people had impressed upon them that their moral rehabilitation and the return of Germany to the family of nations on terms of equality depended upon making the tremendous sacrifices408 necessitated by adopting the policy of paying the piper for what they had done in the World War. ”

“ We are not attempting to pass judicially upon a question which is solely within the jurisdiction of the political departments of the Four Powers. The fixing of the date of the formal end of the war and similar matters will, of course, be dependent upon the action of the political departments. We do not usurp their function. We merely inquire, in the course of litigation when the lives of men are dependent upon decisions which must be both legal and just, whether the great objectives announced by the Four Powers are themselves in harmony with the principles of international law and morality. ”

“ Sometime humanity must have the insight and the will to pass from war to real peace, that is, to peace which is good in its essence, founded on existing legal principles, without regard to victory or defeat ”