LA "SINGULARIDAD" DE LA PLATA (28+29/12/2025; SHANAKA ANSLEM PERERA)

 I. THE ARITHMETIC OF DEPLETION

Begin with the numbers, because the numbers are merciless. The Silver Institute, in partnership with Metals Focus, confirmed what the price action had already signaled: 2025 marked the fifth consecutive annual supply deficit for the global silver market. The estimated shortfall of ninety-five million ounces joined deficits of two hundred fifty-three million ounces in 2022, one hundred ninety-nine million in 2023, and one hundred forty-nine million in 2024. The cumulative shortfall since 2021 now approaches eight hundred twenty million ounces, a figure that demands context to comprehend.

 Eight hundred twenty million ounces represents approximately one full year of global mine production. It represents the total silver holdings of every exchange-traded fund on the planet. It represents inventory that once existed in the vaults of London and Shanghai and New York and has now been permanently consumed, transformed into solar cells generating electricity across Chinese deserts, embedded in the battery management systems of electric vehicles traversing European highways, dispersed through the electronic components of devices manufactured in facilities from Shenzhen to Seoul. This silver does not return. It is not sitting in a warehouse awaiting higher prices. It has been absorbed into the physical infrastructure of the energy transition and the computational revolution, and the industrial processes that consumed it cannot reverse.

 Global mine production remained essentially static at eight hundred thirteen to eight hundred twenty million ounces, a level that has prevailed for nearly a decade and sits materially below the 2016 peak of nine hundred million ounces. Mexico retained its position as the world’s largest producer at one hundred eighty-five million ounces, followed by China at one hundred six million and Peru at one hundred seven million. But these figures obscure the structural constraint that makes silver uniquely unable to respond to demand signals: approximately seventy-five percent of global silver production emerges as a byproduct of copper, lead, and zinc mining operations. 

 II. THE PHOTOVOLTAIC SINGULARITY

The demand side of the equation has undergone a transformation that makes historical comparisons misleading. Industrial fabrication consumed six hundred sixty-five million ounces of silver in 2025, representing fifty-nine percent of total demand. This percentage matters enormously. During the 1980 Hunt Brothers spike, industrial demand constituted approximately thirty-five percent of consumption. During the 2011 peak that saw silver briefly touch fifty dollars, industrial applications represented roughly forty percent. The 2025 rally occurred with industrial demand approaching sixty percent of total offtake, and within that industrial category, photovoltaic applications have become the dominant driver.

 Solar cells consumed two hundred thirty-two million ounces in 2024, twenty-nine percent of total industrial demand and roughly twenty percent of all silver consumed globally. The photovoltaic sector has grown from a rounding error in silver demand a decade ago to a structural force that now competes with jewelry and investment for marginal ounces. But the raw tonnage obscures a technological transition that has fundamentally altered the silver intensity of solar manufacturing.

 Silver paste represents the conductive pathways that collect electrons from the photovoltaic material and route them to external circuits. Manufacturing advances reduced silver loading from five hundred twenty-one milligrams per cell in 2009 to one hundred eleven milligrams by 2019, with industry roadmaps targeting sixty-five milligrams by 2028. For years, the bearish thesis on silver held that rising efficiency would more than offset rising installation volumes. Every new cell would require less silver, capping demand growth regardless of how many panels the world installed.

 

The mathematics become stark when you multiply changing intensity by exploding volume. Global solar installations reached three hundred eighty gigawatts in the first half of 2025 alone, a sixty-four percent increase over the prior year period. China accounted for two hundred fifty-six gigawatts of that total, sixty-seven percent of global additions. Full-year projections from industry bodies ranged from five hundred seventy to six hundred fifty-five gigawatts, representing continued double-digit growth atop an already massive base. Even with aggressive thrifting assumptions, cutting silver intensity in half, the absolute volume of panels being manufactured overwhelms efficiency gains when installation volumes double and triple.

The industry confronts what might be termed the Jevons Paradox applied to materials consumption. As thrifting reduces the silver cost per panel, solar installations become more economically viable, accelerating deployment, which increases total silver demand despite lower per-unit consumption. The Silver Institute projected a five percent decline in photovoltaic silver demand for 2025 despite record installation volumes, evidence of intensified thrifting at prices exceeding sixty dollars per ounce. But a five percent decline from two hundred thirty-two million ounces still represents two hundred twenty million ounces, and the installations themselves will require ongoing silver for maintenance, expansion, and replacement over their multi-decade lifespans.

 III. THE SHANGHAI DECOUPLING

 If the supply-demand fundamentals established the conditions for silver’s repricing, the emergence of the Shanghai premium provided the mechanism. By late December 2025, the SGE Ag(T+D) spot contract was trading at approximately seventy-eight dollars per ounce equivalent when converted from renminbi at prevailing exchange rates. The COMEX price in New York hovered around seventy-two to seventy-three dollars. A premium exceeding five dollars per ounce, and by some measures approaching eight dollars, had opened between the world’s largest physical consumer and the traditional pricing centers of London and New York.

 Standard arbitrage theory dictates that such a spread should be impossible to sustain. When Shanghai trades at a premium to London, bullion banks ship metal from West to East, capturing the spread and compressing the differential back toward transportation and insurance costs. For decades, this mechanism has kept regional silver prices aligned within narrow bands. In December 2025, the mechanism ceased to function.

 The premium thus reflects not merely physical tightness, though physical tightness is severe, but regulatory risk. It is the market pricing the possibility that Chinese silver will become progressively ring-fenced, available for domestic industrial consumption but unavailable to satisfy shortages in Western markets. It is the early-stage manifestation of what Beijing’s policy architects intend: ensuring that Chinese solar manufacturers have priority access to silver regardless of what prices global markets might offer.

 IV. THE OCTOBER ANOMALY AND THE STRATEGIC ERROR

China entered the January 2026 export control regime with warehouse inventories at decade lows rather than strategically elevated buffers.

The consequence is the panic buying visible in Shanghai during late December. Chinese industrial users, primarily solar manufacturers operating gigafactories that run twenty-four hours daily regardless of calendar holidays, cannot afford to wait for policy clarification. They must secure physical inventory now because the alternative, production line shutdowns, carries costs that make any silver premium look trivial by comparison. These are not speculators who can reverse positions if prices fall. These are industrial consumers with contractual obligations to deliver solar panels to utility projects across Asia and Europe and the Americas. They bid for silver because they must, and the price they pay reflects not market sentiment but operational necessity.

 V. THE FUND CRISIS AND THE SEPARATION OF PAPER FROM PHYSICAL

The collision between speculative finance and physical reality found its purest expression in the December crisis of the UBS SDIC Silver Futures Fund LOF. This Chinese investment vehicle, the only pure-play silver fund available to domestic retail investors, became a barometer of the desperation for silver exposure within capital controls that restrict access to international markets and foreign exchange.

By mid-December, the fund was trading at a sixty-two percent premium to its net asset value. Investors were paying the equivalent of over one hundred ten dollars per ounce for silver exposure when spot prices hovered at seventy dollars. This premium reflected the scarcity of silver investment vehicles within China combined with the momentum psychology that drives retail capital flows in Chinese markets. The year-to-date return approached two hundred twenty percent. The buying pressure was so intense that the fund hit its ten percent upper circuit limit for three consecutive trading days.

 Then authorities intervened. Fund managers restricted new subscriptions to one hundred yuan per day, approximately fourteen dollars, effectively cutting off new capital inflows. The speculative premium collapsed. On December 25-26, the fund crashed ten percent, triggering trading halts and warnings from management that gains were unsustainable and total capital loss remained possible.

While the fund crashed, the physical benchmark continued rising. The SGE Ag(T+D) contract, which represents actual silver rather than paper claims, ignored the fund crisis entirely. Physical prices held firm while the retail investment vehicle collapsed.

This divergence provides the smoking gun for the thesis that Shanghai’s premium reflects industrial demand rather than speculative excess.

 VI. THE WESTERN INVENTORY PARADOX

 The ETF absorption dynamic compounds the physical shortage. iShares Silver Trust holdings grew from approximately four hundred forty million ounces to five hundred twenty-nine million ounces through December 2025, absorbing nearly ninety million ounces with assets under management reaching thirty-five to thirty-eight billion dollars. Sprott Physical Silver Trust crossed the ten billion dollar NAV milestone in October, adding twenty-three million ounces to reach two hundred four million by year-end. The one hundred eighty-seven million ounces absorbed by ETFs in 2025 exceeds the annual deficit itself. Investment demand is not merely participating in the shortage. It is amplifying it, competing with industrial users for the same constrained pool of available metal.

 VII. THE CRITICAL MINERAL DESIGNATION AND THE END OF FREE MARKETS

Two regulatory developments in the final months of 2025 elevated silver from commodity to strategic asset, from a metal governed by supply and demand to a material subject to state intervention on national security grounds. The United States moved first. On November 6, 2025, the Department of Interior’s United States Geological Survey published its 2025 Critical Minerals List, adding silver alongside copper, uranium, and seven other materials. The designation, the first time silver has appeared on this list, acknowledged the metal’s role in electrical circuits, batteries, solar cells, and anti-bacterial medical instruments.

 China’s response, or perhaps China’s lead that America followed, came through the MOFCOM export licensing regime. The October 30 announcement placed silver alongside tungsten and antimony, metals already subject to tight export controls, in a category of strategic resources whose outflows require state approval. The classification matters enormously. It moves silver out of the category of monetary metals traded freely across borders and into the category of strategic inputs whose availability to foreign purchasers depends on diplomatic relationships and policy priorities.

 China controls sixty to seventy percent of global refined silver processing capacity. The raw ore mined in Mexico and Peru and Australia flows to Chinese refineries for processing into the high-purity metal that electronics and solar manufacturers require. By placing this capacity under a licensing regime, Beijing gains a lever over Western industries that depend on Chinese-refined silver. Licenses can be granted or delayed based on considerations that have nothing to do with commercial terms. They can be tightened during periods of geopolitical tension or loosened as part of trade negotiations. The market mechanism that previously governed silver flows has acquired a political dimension that introduces discontinuities no pricing model anticipated.

 The era when commodities flowed freely across borders according to price signals is giving way to an era of resource nationalism, where governments intervene to secure access to materials deemed strategically essential. Silver, having spent decades in the shadows of geopolitical attention, has joined the ranks of contested resources. The implications for pricing, for supply chains, for industrial planning, remain incompletely understood. What is certain is that the rules have changed, and those who model silver as a conventional commodity trading within established arbitrage bands are using maps that no longer describe the territory.

 VIII. THE REFERENCE CLASS PROBLEM

 The 2025 episode belongs to a unique reference class that might be termed structural resource nationalism. There is no historical precedent for the world’s largest consumer locking its gates while simultaneously undergoing a technology transition that maintains elevated consumption intensity despite aggressive efficiency efforts. The fat tail distribution that should govern expectations for such unprecedented configurations suggests both that extreme outcomes in either direction remain possible and that the base rates derived from 1980 and 2011 may dramatically understate the probability of persistence.

 IX. THE GOLD-SILVER RATIO AND THE INCOMPLETE REPRICING

 The ratio, expressing how many ounces of silver purchase one ounce of gold, began 2025 at eighty-six to one. It spiked to an extreme one hundred five to one in late April when gold surged on safe-haven flows while silver lagged on industrial demand concerns amid tariff uncertainty. By late December, the ratio had collapsed to sixty-four to sixty-five to one, a ten-year low reflecting silver’s dramatic outperformance.

 The ratio’s behavior during the year illustrates the sequencing of precious metals repricing. Gold typically leads, driven by monetary policy concerns and central bank diversification and geopolitical hedging. Silver follows with leverage, the junior precious metal catching up to gold’s move and typically overshooting before the cycle concludes. The compression from one hundred five to sixty-five represents the catch-up phase. Whether an overshoot phase follows depends on whether the structural factors driving silver demand intensify or moderate.

 X. THE DIVERGENT FORECASTS AND THEIR IMPLICATIONS

 The dispersion itself carries analytical content. A range from forty-two dollars to five hundred dollars from serious market participants suggests a market in genuine uncertainty, where multiple plausible scenarios lead to dramatically different outcomes. This is not the modest forecast dispersion that characterizes stable commodity markets with established pricing dynamics. This is the dispersion of a market undergoing structural change, where the old models may not apply and the new equilibrium has not yet been established.

 XIII. THE CIVILIZATIONAL IMPLICATIONS

The question for 2026 is not whether silver belongs in portfolios but how much and at what prices. The analyst targets spanning forty-two dollars to five hundred dollars reflect genuine uncertainty about how the structural versus speculative balance will resolve. What is certain is that the old equilibrium has broken, the new equilibrium has not yet been established, and the path between them will create both opportunity and risk for those positioned to navigate a market that no longer operates by the rules that governed it for four decades.

The window for arbitrage is closed. The era of resource sovereignty has begun. And the silver market, having spent forty-five years consolidating below its 1980 peak, has finally broken through into territory that neither the Hunt Brothers nor the 2011 speculators could reach, driven not by manipulation or momentum but by the inexorable mathematics of industrial consumption exceeding geological supply. What happens next will be determined not in trading pits but in photovoltaic factories and licensing bureaus, in strategic stockpile decisions and mining boardrooms, in the collision between civilizational ambition and physical constraint that silver, more than any other metal, now embodies.

 (...)

III. The Shanghai Divergence: Smoking Gun of Physical Scarcity

The Shanghai Gold Exchange publishes continuous trading data for its Ag(T+D) spot contract, a physically-settled instrument that requires delivery of 99.99% pure silver within a defined settlement period. Unlike COMEX, where the vast majority of contracts are cash-settled or rolled perpetually, SGE facilitates actual metal changing hands for industrial consumption.

On December 24, 2025, SGE silver closed at 19,400 yuan per kilogram. Converting through the prevailing exchange rate of 7.30 yuan per dollar and the standard 32.15 troy ounces per kilogram, this equates to approximately $82.66 per ounce. COMEX nearby futures at the same moment traded at $72.36.

A premium exceeding eight dollars per ounce, representing an 11% deviation between the world’s two primary silver trading venues, should be arbitrage-annihilating. Traders should be purchasing cheap COMEX silver, shipping it to Shanghai, and pocketing the differential until prices converge.

They cannot. Three structural barriers prevent arbitrage closure.

First, purity specifications diverge. Shanghai Futures Exchange silver contracts require 99.99% purity (four-nines), while COMEX accepts 99.9% (three-nines). This seemingly minor distinction creates market segmentation; COMEX-deliverable silver cannot directly substitute for SHFE delivery obligations without additional refining.

Second, China’s export licensing regime, which takes effect January 1, 2026, restricts physical silver flows. MOFCOM Announcement No. 68, issued October 26, 2025, establishes that silver exporters must meet stringent qualification criteria: minimum annual production of 80 metric tons, ISO 9000 and 14000 certifications, and demonstrated export performance during 2022-2024. Smaller producers and traders are effectively excluded. Available export silver becomes a controlled commodity administered by state-aligned entities.

Third, and most critically, China dominates the silver refining infrastructure that converts mined doré into deliverable bars. While China produces only approximately 13% of global mined silver, it controls between 60% and 70% of worldwide silver refining capacity. Latin American and African silver concentrate flows to Chinese refineries for processing before entering global markets. When China prioritizes domestic consumption over export, the rest of the world does not simply find alternative suppliers. The alternative suppliers do not exist at scale.

The Shanghai premium, therefore, is not a temporary logistics bottleneck. It is the market’s confession that Chinese industrial buyers are paying substantially more for the metal their factories actually require than the “global benchmark” price that Western financial institutions quote on their screens.

When COMEX crashed on December 29, Shanghai kept trading at $82 because solar panel manufacturers and electronics assemblers and electric vehicle battery producers need physical silver to operate. They cannot meet production schedules with paper contracts that settle in cash.

 IV. The Inventory Apocalypse No One Discusses

Exchange-reported silver inventories provide the most concrete evidence that the paper-physical divergence reflects structural scarcity rather than transient positioning. COMEX registered silver, the metal actually available for delivery against futures contracts, stood at approximately 113 million ounces as of late November 2025. This represents a 67% decline from the March 2020 peak of 346 million ounces. More alarmingly, during the first four trading days of December 2025, delivery notices claimed over 47.6 million ounces, approximately 60% of the registered inventory in less than one week. Traders describing this as a “vault drain emergency” are not engaging in hyperbole. Total COMEX silver (registered plus eligible) declined from approximately 530 million ounces in October 2025 to 451 million ounces by late December, a 15% reduction in two months. The London Bullion Market Association reports similar stress. LBMA vault holdings have declined approximately 24% from their April 2020 peak of 35,667 tonnes to 27,187 tonnes. During periods of acute tightness, such as October 2025, silver had to be airlifted across the Atlantic, an expensive logistical measure typically reserved for gold, to meet delivery obligations. Shanghai Futures Exchange silver inventories paint the starkest picture: 819 tonnes in late 2025, representing a 73.5% collapse from the January 2021 level of 3,091 tonnes. Chinese industrial demand has systematically absorbed available warehouse stocks. The cumulative picture across all three major global silver venues is unambiguous: inventories are depleting at rates that cannot be sustained without price rationing demand or incentivizing significant supply response. Neither is occurring.  XII. The View from 2030 When future financial historians examine the silver market of late 2025, they will likely identify this period as the terminal phase of paper market dominance over physical price discovery. The mechanisms that allowed derivatives markets to suppress and manage precious metals prices, operating through concentrated short positions, margin manipulation, and leverage-enabled speculation, functioned effectively while physical supply exceeded industrial demand. Warehouse stocks provided the buffer that made paper promises credible because metal could always be delivered if necessary. That buffer has been systematically consumed. Five consecutive years of structural deficits, totaling approximately 820 million ounces, have drawn down inventories across all major exchanges. Chinese industrial demand has accelerated as Beijing pursues domestic solar manufacturing dominance and electric vehicle deployment. Export controls now restrict the flow of refined metal to Western markets. The Shanghai premium represents the first persistent rupture in global price discovery, a market admitting through price differentials that two separate physical realities now exist: one inside China where metal is available at high but manageable prices for domestic industry, and one outside China where physical scarcity is becoming structural. December 29’s volatility was not the crisis. It was a symptom of crisis, forcing functions revealing through price action what the inventory data had been signaling for years. CME raised margins because they saw risk. They saw risk because the gap between paper claims and physical reality had widened to systemic concern levels. What comes next depends on whether Western policymakers, industrial corporations, and financial institutions accept the regime change that has already occurred. Those who adapt, securing physical metal, diversifying supply chains, and positioning portfolios for structural repricing, will navigate the transition. Those who assume pattern repetition will restore normalcy may find that the patterns no longer apply. The arithmetic is merciless. Global demand exceeds global supply by over 100 million ounces annually. Inventories continue declining. China controls the refining chokepoint and has decided to prioritize domestic allocation. These facts do not change because margin requirements increase. Silver traded at $84 per ounce on December 29, 2025, because physical buyers needed metal. It crashed to $72 because leveraged speculators faced margin calls. But Shanghai kept buying at $82 because Chinese factories do not care what COMEX says the price should be. They only care whether metal arrives.  https://open.substack.com/pub/shanakaanslemperera/p/the-argentum-inflection?utm_campaign=post&utm_medium=web   https://open.substack.com/pub/shanakaanslemperera/p/the-argentum-singularity?utm_campaign=post&utm_medium=web

ALEXANDER HAMILTON SOBRE EL PODER JUDICIAL (1787-1788)

The Federalist, commonly referred to as the Federalist Papers, is a series of 85 essays written by Alexander Hamilton, John Jay, and James Madison between October 1787 and May 1788. The essays were published anonymously, under the pen name "Publius," in various New York state newspapers of the time.

The Federalist Papers were written and published to urge New Yorkers to ratify the proposed United States Constitution, which was drafted in Philadelphia in the summer of 1787. In lobbying for adoption of the Constitution over the existing Articles of Confederation, the essays explain particular provisions of the Constitution in detail. For this reason, and because Hamilton and Madison were each members of the Constitutional Convention, the Federalist Papers are often used today to help interpret the intentions of those drafting the Constitution.

Federalist No. 78

The Judiciary Department
From McLEAN'S Edition, New York.

Author: Alexander Hamilton

To the People of the State of New York:

(...) 

Whoever attentively considers the different departments of power must perceive, that, in a government in which they are separated from each other, the judiciary, from the nature of its functions, will always be the least dangerous to the political rights of the Constitution; because it will be least in a capacity to annoy or injure them. The Executive not only dispenses the honors, but holds the sword of the community. The legislature not only commands the purse, but prescribes the rules by which the duties and rights of every citizen are to be regulated. The judiciary, on the contrary, has no influence over either the sword or the purse; no direction either of the strength or of the wealth of the society; and can take no active resolution whatever. It may truly be said to have neither FORCE nor WILL, but merely judgment; and must ultimately depend upon the aid of the executive arm even for the efficacy of its judgments.

This simple view of the matter suggests several important consequences. It proves incontestably, that the judiciary is beyond comparison the weakest of the three departments of power¹; that it can never attack with success either of the other two; and that all possible care is requisite to enable it to defend itself against their attacks. It equally proves, that though individual oppression may now and then proceed from the courts of justice, the general liberty of the people can never be endangered from that quarter; I mean so long as the judiciary remains truly distinct from both the legislature and the Executive. For I agree, that "there is no liberty, if the power of judging be not separated from the legislative and executive powers."² And it proves, in the last place, that as liberty can have nothing to fear from the judiciary alone, but would have every thing to fear from its union with either of the other departments; that as all the effects of such a union must ensue from a dependence of the former on the latter, notwithstanding a nominal and apparent separation; that as, from the natural feebleness of the judiciary, it is in continual jeopardy of being overpowered, awed, or influenced by its co-ordinate branches; and that as nothing can contribute so much to its firmness and independence as permanency in office, this quality may therefore be justly regarded as an indispensable ingredient in its constitution, and, in a great measure, as the citadel of the public justice and the public security.

The complete independence of the courts of justice is peculiarly essential in a limited Constitution. By a limited Constitution, I understand one which contains certain specified exceptions to the legislative authority; such, for instance, as that it shall pass no bills of attainder, no ex-post-facto laws, and the like. Limitations of this kind can be preserved in practice no other way than through the medium of courts of justice, whose duty it must be to declare all acts contrary to the manifest tenor of the Constitution void. Without this, all the reservations of particular rights or privileges would amount to nothing.

Some perplexity respecting the rights of the courts to pronounce legislative acts void, because contrary to the Constitution, has arisen from an imagination that the doctrine would imply a superiority of the judiciary to the legislative power. It is urged that the authority which can declare the acts of another void, must necessarily be superior to the one whose acts may be declared void. As this doctrine is of great importance in all the American constitutions, a brief discussion of the ground on which it rests cannot be unacceptable.

There is no position which depends on clearer principles, than that every act of a delegated authority, contrary to the tenor of the commission under which it is exercised, is void. No legislative act, therefore, contrary to the Constitution, can be valid. To deny this, would be to affirm, that the deputy is greater than his principal; that the servant is above his master; that the representatives of the people are superior to the people themselves; that men acting by virtue of powers, may do not only what their powers do not authorize, but what they forbid.

If it be said that the legislative body are themselves the constitutional judges of their own powers, and that the construction they put upon them is conclusive upon the other departments, it may be answered, that this cannot be the natural presumption, where it is not to be collected from any particular provisions in the Constitution. It is not otherwise to be supposed, that the Constitution could intend to enable the representatives of the people to substitute their WILL to that of their constituents. It is far more rational to suppose, that the courts were designed to be an intermediate body between the people and the legislature, in order, among other things, to keep the latter within the limits assigned to their authority. The interpretation of the laws is the proper and peculiar province of the courts. A constitution is, in fact, and must be regarded by the judges, as a fundamental law. It therefore belongs to them to ascertain its meaning, as well as the meaning of any particular act proceeding from the legislative body. If there should happen to be an irreconcilable variance between the two, that which has the superior obligation and validity ought, of course, to be preferred; or, in other words, the Constitution ought to be preferred to the statute, the intention of the people to the intention of their agents.

Nor does this conclusion by any means suppose a superiority of the judicial to the legislative power. It only supposes that the power of the people is superior to both; and that where the will of the legislature, declared in its statutes, stands in opposition to that of the people, declared in the Constitution, the judges ought to be governed by the latter rather than the former. They ought to regulate their decisions by the fundamental laws, rather than by those which are not fundamental.

This exercise of judicial discretion, in determining between two contradictory laws, is exemplified in a familiar instance. It not uncommonly happens, that there are two statutes existing at one time, clashing in whole or in part with each other, and neither of them containing any repealing clause or expression. In such a case, it is the province of the courts to liquidate and fix their meaning and operation. So far as they can, by any fair construction, be reconciled to each other, reason and law conspire to dictate that this should be done; where this is impracticable, it becomes a matter of necessity to give effect to one, in exclusion of the other. The rule which has obtained in the courts for determining their relative validity is, that the last in order of time shall be preferred to the first. But this is a mere rule of construction, not derived from any positive law, but from the nature and reason of the thing. It is a rule not enjoined upon the courts by legislative provision, but adopted by themselves, as consonant to truth and propriety, for the direction of their conduct as interpreters of the law. They thought it reasonable, that between the interfering acts of an EQUAL authority, that which was the last indication of its will should have the preference.

But in regard to the interfering acts of a superior and subordinate authority, of an original and derivative power, the nature and reason of the thing indicate the converse of that rule as proper to be followed. They teach us that the prior act of a superior ought to be preferred to the subsequent act of an inferior and subordinate authority; and that accordingly, whenever a particular statute contravenes the Constitution, it will be the duty of the judicial tribunals to adhere to the latter and disregard the former.

It can be of no weight to say that the courts, on the pretense of a repugnancy, may substitute their own pleasure to the constitutional intentions of the legislature. This might as well happen in the case of two contradictory statutes; or it might as well happen in every adjudication upon any single statute. The courts must declare the sense of the law; and if they should be disposed to exercise WILL instead of JUDGMENT, the consequence would equally be the substitution of their pleasure to that of the legislative body. The observation, if it prove any thing, would prove that there ought to be no judges distinct from that body.

If, then, the courts of justice are to be considered as the bulwarks of a limited Constitution against legislative encroachments, this consideration will afford a strong argument for the permanent tenure of judicial offices, since nothing will contribute so much as this to that independent spirit in the judges which must be essential to the faithful performance of so arduous a duty.

This independence of the judges is equally requisite to guard the Constitution and the rights of individuals from the effects of those ill humors, which the arts of designing men, or the influence of particular conjunctures, sometimes disseminate among the people themselves, and which, though they speedily give place to better information, and more deliberate reflection, have a tendency, in the meantime, to occasion dangerous innovations in the government, and serious oppressions of the minor party in the community. Though I trust the friends of the proposed Constitution will never concur with its enemies,³ in questioning that fundamental principle of republican government, which admits the right of the people to alter or abolish the established Constitution, whenever they find it inconsistent with their happiness, yet it is not to be inferred from this principle, that the representatives of the people, whenever a momentary inclination happens to lay hold of a majority of their constituents, incompatible with the provisions in the existing Constitution, would, on that account, be justifiable in a violation of those provisions; or that the courts would be under a greater obligation to connive at infractions in this shape, than when they had proceeded wholly from the cabals of the representative body. Until the people have, by some solemn and authoritative act, annulled or changed the established form, it is binding upon themselves collectively, as well as individually; and no presumption, or even knowledge, of their sentiments, can warrant their representatives in a departure from it, prior to such an act. But it is easy to see, that it would require an uncommon portion of fortitude in the judges to do their duty as faithful guardians of the Constitution, where legislative invasions of it had been instigated by the major voice of the community.

But it is not with a view to infractions of the Constitution only, that the independence of the judges may be an essential safeguard against the effects of occasional ill humors in the society. These sometimes extend no farther than to the injury of the private rights of particular classes of citizens, by unjust and partial laws. Here also the firmness of the judicial magistracy is of vast importance in mitigating the severity and confining the operation of such laws. It not only serves to moderate the immediate mischiefs of those which may have been passed, but it operates as a check upon the legislative body in passing them; who, perceiving that obstacles to the success of iniquitous intention are to be expected from the scruples of the courts, are in a manner compelled, by the very motives of the injustice they meditate, to qualify their attempts. This is a circumstance calculated to have more influence upon the character of our governments, than but few may be aware of. The benefits of the integrity and moderation of the judiciary have already been felt in more States than one; and though they may have displeased those whose sinister expectations they may have disappointed, they must have commanded the esteem and applause of all the virtuous and disinterested. Considerate men, of every description, ought to prize whatever will tend to beget or fortify that temper in the courts: as no man can be sure that he may not be to-morrow the victim of a spirit of injustice, by which he may be a gainer to-day. And every man must now feel, that the inevitable tendency of such a spirit is to sap the foundations of public and private confidence, and to introduce in its stead universal distrust and distress.

That inflexible and uniform adherence to the rights of the Constitution, and of individuals, which we perceive to be indispensable in the courts of justice, can certainly not be expected from judges who hold their offices by a temporary commission. Periodical appointments, however regulated, or by whomsoever made, would, in some way or other, be fatal to their necessary independence. If the power of making them was committed either to the Executive or legislature, there would be danger of an improper complaisance to the branch which possessed it; if to both, there would be an unwillingness to hazard the displeasure of either; if to the people, or to persons chosen by them for the special purpose, there would be too great a disposition to consult popularity, to justify a reliance that nothing would be consulted but the Constitution and the laws.

(...)