In a letter in today’s Wall Street Journal, law professor Charles Rounds, who has written for the Pope Center on the erosion of the law school curriculum, points to an 1830 court decision that has lessons for today on the role of government:
Mr. Crovitz writes that “the losses at MF Global were facilitated by Basel rules based on the assumption that sovereign debt has no risk.” Justice Samuel Putnam of the Supreme Judicial Court of Massachusetts must be rolling over in his grave. It was he who authored the Court’s opinion in the 1830 landmark fiduciary investing case Harvard College v. Amory that contains this timeless admonition: “Do what you will, the capital is at hazard.” Putnam then buttressed this admonition with some examples: “If the public funds are resorted to, what becomes of the capital when the credit of the government shall be so much impaired as it was at the close of the last war? Investments on mortgage of real estate are not always safe. Its value fluctuates more, perhaps, than the capital of insurance stock.”
Prof. Charles E. Rounds Jr.
Suffolk University Law School
