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4 Lynch ve. United States. granted were voluntarily enlarged and new ones were given by the Government. But no power to curtail the amount of the benefits which Congress contracted to pay was reserved to Congress; and none could be given by any regulation promulgated by the Administrator. Prior to the Economy Act, no attempt was made to lessen the obligation of the Government.* Then, Congress, by a clause of thirteen words included in a very long section deal- ing with gratuities, repealed ‘‘all laws granting or pertaining to yearly renewable term insurance’’, The repeal, if valid, abro- gated outstanding contracts; and relieved the United States from \ liability on the contracts without making compensation to the oeneficiaries. Second. The Fifth Amendment commands that property be not taken without making just compensation, Valid contracts are property, whether the obligor be a private individual, a munici- pality, a State or the United States, Rights against the United +Heinstatement of lapsed policies: Aug. 9, 1921, ¢. 57, § 27, 42 Stat. 147, 156; Mar. 4, 1923, «. 291, §7, 42 Stat. 1521, 1525; July 2, 1926, « 723, §§ 15, 17, 44 Stat, 790, 799, 800. Liability undertaken on certain policies which have lapsed through failure of payment of premiums, been cancelled by surrender or estoppel of later contract: e. g., Dec. 24, 1919, ¢. 16, §12, 41 Stat. 371, 374; Aug. 9, 1921, ec, 57, § 27, 42 Stat. 147, 156; July 3, 1930, «. 849, $ 24, 46 Stat. 991, 1001. Incontestability in favor of insured: Aug. 9, 1921, ¢. 57, §30, 42 Stat. 147, 157; July 3, 1980, ¢. 849, § 24, 46 Btat. 499, 1001. Administration may waive time for premium payment, grant various toler- ances: Aug. 9, 1921, c. 57, §§ 24, 28, 42 Stat. 147, 155, 157; Mar. 4, 1923, 291, $8, 42 Stat. 1521, 1526. 2roceeds exempted from taxation: June 25, 1918, c. 104, $2, 40 Stat. 609. The War Risk Insurance Act provided for the conversion of yearly renew- able term insurance into level premium inaurance at any time within five years from the date of the termination of the war; and The World’s War Veterana’ Act of June 7, 1924, ¢. 320, § 304, 43 Stat. 607, 625, provided that ail yearly renewable term insurance should cease on July 2, 1926. But provision for ex- tending the perjod for conversion and for reinstatement were made by later statutes and by regulations issued thereunder; June 2, 1926, ¢. 449, 44 Stat. 686; May 29, 1928, «. 875, § 14, 45 Stat. 964, 968; July 3, 1930, ¢, 849, § 22, 46 Stat. 991, 1001; June 24, 1932, ¢. 276, 47 Stat. 334, See Reports of United States Veterana’ Bureau for 1926, pp. 54-56; for 1927, pp. 23-25; Reports of Administrator of Veterans’ Affairs for 1931, p, 32; for 1932, p. 42; for 1933, p. 28. SBut compare Acts of June 25, 1918, c. 104, $2, 40 Stat. 609; Ang. 9, 1921, ec, 57, $15, 42 Stat. 147, 152; Mareh 4, 1923, c. 291, $1, 42 Stat. 1521; March 4, 1925, ¢. 553, §3, 43 Stat. 1302, 1303. Lynch vs. United States. 5 States arising out of a contract with it are proteeted by the Fifth Amendment. United States v. Central Pacific R. Co., 118 U. 8. 235, 238; United States v. Northern Pactfic Ry. Co., 256 U. 8. 51, 64, 67. When the United States enters into contract relations, its rights and duties therein are governed generally by the law appli- cable to contracta between private individuals. That the contracts of war risk insurance were valid when made is not questioned. As Congress had the power to authorize the Bureau of War Risk In- surance to issue them, the due process clause prohibits the United States from annulling them, unless, indeed, the action taken falls within the federal police power or some other paramount power.’ The Solicitor General does not suggest either in brief or argu- ment, that there were supervening conditions which authorized Congress to abrogate these contracts in the exercise of the police or any other power. The title of the Act of March 20, 1933, repels any such suggestion. Although popularly known as the Economy Act, it is entitled an ‘‘ Act to maintain the eredit of the United States’’. Punctilious fulfilment of contractual obligations is essen- tion to the maintenance of the credit of public as well as private debtors. No doubt there was in March, 1933, great need of economy. In the administration of all government business economy had become urgent because of lessened revenues and the heavy obliga- tions to be issued in the hope of relieving widespread distress. Congress was free to reduce gratuities deemed excessive. But Con- gress was without power to reduce expenditures by abrogating con- tractual obligations of the United States. To abrogate contracts, in the attempt to lessen government expenditure, would be not the practice of economy, but an act of repudiation. ‘‘The United States are as much bound by their contracts as are individuals. If they repudiate their obligations, it is as much repudiation, SCowpare United States v. Bank of the Metropolia, 15 Pet. 377, 392; The Floyd Acceptances, 7 Wall. 666, 675; Garrigon v. United States, 7 Wall. 688, 690; Smoot’s Case, 15 Wall, 36,47; Vermilye vt. Adams Express Co., 21 Wall. 138, 144; Cooke v. United States, 91 U. 8. 389, 396; United States v. Smith, 94 U.S. 214, 217; Hollerbach r. United States, 233 U. 8. 165, 171; Reading Steel Casting Co, v. United Statea, 268 U. 8. 186, 188; United States v. Na- tional Exehange Bank, 270 U. 8. 527, 534. 7Compare Lottery Case, 188 U. 8. 321; Hipolite Egg Co. v. United States, 220 U. 8. 45, 58; Hoke v. United States, 227 U. 5, 308, 323; Hamilton v. Kentucky Distilling & Warehouse Co., 251 U. 8. 146; Calhoun v. Massie, 253 U. §. 170, 175. Compare Home Building & Loan Association v. Blaisdell, 290 U.S. 398, 430.