« AnteriorContinuar »
ment of the court should have been placed exclu Afterwards, on the 30th of April, 1866, the sively upon that ground.
legislature of New York provided by law for Strong doubts are entertained by me whether refunding to the banking associations and other Congress possesses the power to levy any such corporations in like condition the taxes of 1863 tax; but whether so or not, I am clear that the and 1864 collected upon that part of their capiState legislature cannot impose any such burden tals invested in securities of the United States apon commerce among the several States. Such exempt by law from taxation. The board of commerce is secured against such legislation in supervisors of the county of New York was the States by the Constitution, irrespective of charged with the duty of auditing and allowing: any congressional action.
with the approval of the mayor of the city and The Chief Justice also dissents, and concurs in the corporation counsel, the amount collected the views I have expressed.
from each corporation for taxes on the exempt
portion of its capital, together with costs, damOn State Taxation of United States Certificates ages, and interest. Upon such auditing and alof Indebtedness.
lowance the sums awarded were to be paid to DECEMBER TERM, 1868.
the corporations severally entitled by the issue The People of the State of New York, er rel.
to each of New York county seven per cent. The Bank of New York National Banking
bonds of equal amounts. These bonds were to Association, plaintiffs in error, No. 246.
be signed by the comptroller of the city of New Richard B. Connolly, comptroller, and John
York, countersigned by the mayor, and sealed T. Hoffman, mayor, &c., et al.
with the seal of the board of supervisors, and The People of the State of New York, ex rel. The National Broadway Bank, plaintiffs
error attested by the clerk of the board.
Under this act the board of supervisors audited No. 248. John T. Hoffman, mayor, and Richard T.
and allowed to the several institutions repre
appeals Connolly, comptroller, etc.,
the sented in the three cases under consideration State of their several claims for taxes collected upon the
N. York. The People of the State of New York, ex rel.
national securities held by them, including in The National Bank of the Republic of the city of New York, plaintiffs in error,
this allowance the taxes paid on certificates of No. 252.
indebtedness, which the corporations claimed to John T. Hoffman, mayor, Richard B. Con
be securities of the United States exempt from polly, comptroller of the city of New
taxation. York, et al. Mr. Chief Justice Chase delivered the opinion to sign, countersign, seal, and attest the requisite
But the comptroller, mayor, and clerk refused of the court in these causes. These three cases present, under somewhat dif- ' tificates of indebtedness were not exempt from
amount of bonds for payment, insisting that cerferent forms, the same question, namely: Are the
taxation. obligations of the United States, known as certificates of indebtedness, liable to be taxed by Siate of the supreme
court of New York for the pur
A writ of mandamus was thereupon sued out legislation ?
These three cases were argued and will be con- pose of compelling these officials to perform their sidered together.
alleged duties in this respect. An answer was In 1863 and in 1864 the proper officers of the the refusal. An appeal was taken to the court
filed, and the court, by its judgment, sustained State, acting under the laws of New York, assess of appeals of New York, by which the judgment several banking associations in that State. Some of the supreme court was affirmed. Writs of of these banking associations resisted the collec-error, under the 25th section of the judiciary act, tion of the tax on the ground that, though nomi- | bring these judgments here for revision. nally imposed upon their respective capitals, it
The first question to be considered is one of was in fact imposed upon the bonds and obliga fendants in error that the judgment of the New
jurisdiction. " It is insisted in behalf of the detions of the United States, in which a large pro. York court of appeals is not subject to review in portion of these capitals was invested, and which,
this court. under the Constitution and laws of the United States, were exempt from State taxation.
But is it not plain that, under the act of the This question was brought before the court of legislature of New York, the banking associaappeals, which sustained the assessments, and of the taxes illegally collected from them'in 1863
tions were entitled to reimbursement by bonds disallowed the claim of the banking associations.
and 1864? From this decision an appeal was taken to this court, upon the hearing of which, at the the process by which the associations sought to
No objection was made in the State court to taxes imposed upon the capitals of the associa- enforce the issue of the bonds to which they astions were a tax upon the national bonds and serted their right. Mandamus to the officers obligations in which they were invested, and, charged with the execution of the State law therefore, so far, contrary to the Constitution of seems to have been regarded on all hands as the the United States. *
appropriate remedy. A mandate in conformity with this decision that the particular description of obligations, of
But it was objected on the part of those officers was sent to the court of appeals of New York, the tax on which the associations claimed reimwhich court thereupon reversed its judgment, bursement, were not exempt from taxation. The and entered a judgment agreeably to the man associations, on the other hand, insisted that date.
these obligations were exempt under the Consti2 Wall., 210.
tution and laws of the United States. If they
were so exempt, the associations were entitled to restraining or controlling power shall be exerthe relief which they sought. The judgment of cised.". the court of appeals denied the relief, upon the And, applying these principles, the court proground that certificates of indebtedness were not ceeded to say: entitled to exemption. Is it not clear that in "The right to tax the contract to any extent, the case before the State court a right, privilege, when made, must operate on the power to borrow or immunity was claimed under the Constitution before it is exercised and have a sensible influor a statute of the United States, and that the ence on the contract. The extent of this infludecision was against the right, privilege, or im- ence depends on the will of a distinct government. munity claimed, and, therefore, that the juris. To any extent, however inconsiderable, it is a diction of this court to review that decision is burden upon the operations of the Government. within the express words of the amendatory act It may be carried to an extent which shall arrest of February 5, 1867? There can be but one them entirely.” answer to this question. We can find no ground And finally: for doubt on the point of jurisdiction.
A tax on Government stock is thought by The general question upon the merits is this: this court to be a tax on the contract, a tax on Were the obligations of the United States known the power to borrow money on the credit of the as certificates of indebtedness liable to State tax. United States, and consequently repugnant to ation ?
the Constitution." If this question can be affirmatively answered, Nothing need be added to this, except that in the judgınents of the court of appeals must be no case decided since have these propositions affirmed; if not, they must be reversed. been retracted or qualified. The last cases in
Evidences of the indebtedness of the United which the power of the States to tax the obligaStates, held by individuals or corporations, and tions of the Government came directly in quessometimes called stock or stocks, but recently tion were those of the Bank of Commerce vs. The better known as bonds or obligations, have uni City of New York, in 1862,* and the Bank Tax formly been held by this court not to be liable Case,t in 1865, in both of which the power was to taxation under Siate legislation.
denied. The authority to borrow money on the credit An attempt was made at the bar to establish of the United States is, in the enumeration of the a distinction between the bonds of the Governpowers expressly granted by the Constitution, ment expressed for loans of money and the cersecond in place, and only second in importance, tificates of indebtedness for which the exemption to the authority to lay and collect taxes. Both was claimed. The argument was ingenious, but are given as means to the exercise of the func failed to convince us that such a distinction can tions of Government under the Constitution, and be maintained. It may be admitted that these both, if neither had been expressly conferred, certificates were issued 'in payment of supplies would be necessarily implied from other powers; and in satisfaction of demands of public creditfor no one will assert that without them the ors. But we fail to perceive either that there is great powers—mentioning no others to raise a solid distinction between certificates of indebtand support armies, to provide and maintain a edness issued for money borrowed and given to navy, and to carry on war, could be exercised at creditors and certificates of indebtedness issued all, or, if at all, with adequate efficiency. directly to creditors in payment of their demands;
And no one affirms that the power of the Goy or that such certificates, issued as a means of exeernment to borrow, or the action of the Govern- cuting constitutional powers of the Government, ment in borrowing, is subject to taxation by the other than of borrowing money, are not as much States.
beyond control and limitation by the States There are those, however, who assert that, through taxation as bonds or other obligations although the States cannot tax the exercise of issued for loans of money. the powers of the Government, as for example in The principle of exemption is, that the States the conveyance of the mails, the transportation cannot control the national Government within of troops, or the borrowing of money, they may the sphere of its constitutional power , for there tax the indebtedness of the Government when it it is supreme; and cannot tax its obligations for assames the form of obligations held by individ- payment of money issued for pärposes within uals, and so becomes in a certain sense private that range of powers, because such taxation neproperty.
cessarily implies the assertion of the right to This court, however, has constantly held other- exercise such control. wise.
The certificates of indebtedness in the case be. Forty years ago, in the case of Weston vs. The fore us are completely within the protection of City of Charleston, this court, speaking through this principle. For the public history of the Chief Justice Marshall, said :*
country and the acts of Congress show that they "The American people have conferred the were issued to creditors for supplies necessary to power of borrowing money upon their Govern- the Government in carrying on the recent war ment, and by making that Government supreme for the integrity of the Union and the preservahave shielded its action in the exercise of that tion of our republican institutions. They were power from the action of the local governments. received instead of money at a time when full The grant of the power is incompatible with a money payment for supplies was impossible, and, restraining or controlling power, and the declar- according to the principles of the cases to which ation of supremacy is a declaration that no such we have referred, are as much beyond the taxing
*2 Peters, 467.
2 Black., 628.
† 2 Wall., 200.
power of the States as the operations themselves | at first for the emission of United States notes, in furtherance of which they were issued. and at a later period for the issue of the national
It results that the several judgments of the bank currency. court of appeals must be reversed.
Under the exigencies of the times it seems to
have been thought inexpedient to attempt any On State Taxation of United States Notes. provision for the redemption of the United States No. 247.-DECEMBER TERM, 1868
notes in coin. The law, therefore, directed that The People of the State of New York: ) In error to the treasury of the United States, but did not pro
they should be made payable to bearer at the
, plaintiffs in error,
peals of the vide for payment on demand. The period of The Board of Supervisors of the Coun State of New payment was left to be determined by the public
York. ty of New York.
exigencies. In the meantime the notes were Mr. Chief Justice Chase delivered the opinion receivable in payment of all loans, and were, of the court.
until after the close of our civil war, always This case differs from those just disposed of in practically convertible inte bonds of the funded two particulars: (1) That the board of super- debt, bearing not less than five per cent. interest, visors, which in the other cases allowed and payable in coin. audited the claims of the banking associations, The act of February 25, 1862, provided for refused to allow the claim made in this case; the issue of these notes to the amount of and (2) that the exemption from State taxation | $150,000,000. The act of July 11, 1862, added claimed in this case was of United States notes, another $150,000,000 to the circulation, reservwhile in the other cases it was of certificates of ing, however, $50,000,000 for the redemption indebtedness.
of temporary loan, to be issued and used only The mandamus in the State court was there when necessary for that purpose. Under the fore directed, in the case now before us, to the act of March 3, 1863, another issue of $150,board of supervisors, instead of the officers au- 000,000 was authorized, making the whole thorized to issue bonds, as in the cases already amount authorized $450,000,000, and contemdecided
plating a permanent circulation, until resumpThe judgment of the court of appeals sustained tion of payment in coin, of $400,000,000. the action of the board, and the case is brought It is unnecessary here to go further into the here by writ of error to that court.
history of these notes, or to examine their relaThe general question requiring consideration tion to the national bank currency. That hisis, whether United States notes come under tory belongs to another place, and the quality another rule in respect of taxation than that of these notes, as legal tenders, belongs to which applies to certificates of indebtedness.
another discussion. It has been thought proper The issues of United States notes were author-only to advert to the legislation by which these ized by three successive acts. The first was the notes were authorized in order that their true act of February 25, 1862;* the second the act character may be clearly perceived. of July 11, 1862 it and the third that of March That these notes were issued under the au3, 1863.
thority of the United States, and as a means to Before either of these acts received the sanc-ends entirely within the constitutional power of tion of Congress the Secretary of the Treasury the Government, was not seriously questioned had been authorized by the act of July 17, 1861,upon the argument. to issue treasury notes not bearing interest, but But it was insisted that they were issued as payable on demand by the assistant treasurers money; that their controlling quality was that at New York, Philadelphia, or Boston; and of money; and that therefore they were subject about three weeks later these potes, by the act to taxation in the same manner and to the same of August 5, 1861. || had been made receivable extent as coin issued under like authority. generally for public dues. The amount of notes And there is certainly much force in the arguto be issued of this description was originally ment. It is clear that these notes were intended limited to fifty millions, but was afterwards, by to circulate as money, and, with the national the act of February 12, 1862,increased to sixty bank notes, to constitute the credit currency of millions.
the country. These notes, made payable on demand and Nor is it easy to see that taxation of these receivable for all public dues, including duties notes, used as money and held by individual on imports always payable in coin, were prac-owners, can control or embarrass the power of tically equivalent to coin; and all public dis- the Government in issuing them for circulation bursements, until after the date of the act last more than like taxation embarrasses its power mentioned, were made in coin or these notes. in coining and issuing gold and silver money for
In December, 1861, the State banks (and no circulation. others then existed) suspended payment in coin; Apart from the quality of legal tender imand it became necessary to provide by law for pressed upon them by acts of Congress, of which the use of State bank notes, or to authorize the we now say nothing, their circulation as curissue of notes for circulation under the authority rency depends on the extent to which they are of the national Government. The latter alter received in payment, on the quantity in circalanative was preferred, and in the necessity thus tion, and on the credit given to the promises they recognized originated the legislation providing bear. In these respects they resemble the bank *12 U.S. Stat., 345. +12 U.S. Stat., 532. 112 U. S. Stat.,
notes formerly issued as currency. 703. 0120.8. stat., 259, 26. 112 U.S. Stat., 318, 86. 112 | these notes are obligations of the United States.
But, on the other hand, it is equally clear that U.S. Stat., 338.
Their name imports obligation. Every one of Our conclusion is, that United States notes are them expresses upon its face an engagement of exempt, and, at the time the New York statutes the nation to pay to the bearer a certain sum. were enacted, were exempt from taxation by or The dollar note is an engagement to pay a dol. under State authority: The judgment of the lar, and the dollar intended is the coined dollar court of appeals must therefore be reversed. of the United States--a certain quantity in weight and fineness of gold or silver, authenti- Clause making United States Notes a Legal Tencated as such by the stamp of the Government. der for Debts has no reference to State Taxes. No other dollars had before been recognized by
No. 5. DECEMBER TERM, 1868. the legislation of the national Government as lawsul money
The County of Lane, pl'ff in error,) In error to the su
preme court of the Would, then, their usefulness and value as The State of Oregon. State of Oregon. means to the exercise of the functions of govern Mr. Chief Justice Chase delivered the opinion ment be injuriously affected by State taxation? of the court.
It cannot be said, as we have already inti The State of Oregon, in April, 1865, filed a inated, that the same inconveniences as would complaint against the county of Lane, in the arise from the taxation of bonds and other circuit court of the State for that county, to interest-bearing obligations of the Government recover $5,460 96 in gold and silver coin, which would attend the taxation of notes issued for cir
sum was alleged to have become due as State culation as money. But we cannot say that no revenue from the county to the State on the 1st embarrassment would arise from such taxation. Monday of February, 1864. And we think it clearly within the discretion of
To this complaint an answer was put in by the Congress to determine whether, in view of all county, alleging a tender of the amount claimed the circumstances attending the issue of the by the State, made on the 23d day of January, notes, their usefulness as a means of carrying on 1864, to the State treasurer, at his office, in the Government would be enhanced by exemp- United States notes, and averring that the law. tion from taxation; and within the constitu- ful money so tendered and offered was, in truth tional power of Congress, having resolved the and fact, part of the first moneys collected and question of usefulness affirmatively, to provide paid into the county treasury after the assessby law for such exemption.
ment of taxes for the year 1862. There remains, then, only this question : Has To this answer there was a demurrer, which Congress exercised the power of exemption ? was sustained by the circuit court, and judgment
A careful examination of the acts under which was given that the plaintiff recover of the dethey were issued has left no doubt in our minds fendent the sum claimed in gold and silver coin, upon that point.
with costs of suit, and this judgment was affirmed The act of February, 1862,* declares that all upon writ of error by the supreme court of the United States bonds and other securities of the State. United States held by individuals, associations, The case is brought here by writ of error to or corporations, within the United States, shall that court; and two propositions have been be exempt from taxation by or under State pressed upon our attention, ably and earnestly, authority.”
in behalf of the plaintiff in error. We have already said that these notes are obli The first is, that the laws of Oregon did not gations. They bind the national faith. They require the collection in coin of the taxes in are, therefore, strictly securities. They secure question, and that the treasurer of the county the payment stipulated to the holders by the could not be required to pay to the treasurer of pledge of the national faith, the only ultimate the State any other money than that in which security of all national obligations, whatever the taxes were actually collected. form they may assume.
The second is, that the tender of the amount And this provision is re-enacted in application of taxes made to the treasurer of the State by to the second issue of United States notes by the the treasurer of the county in United States act of July 11, 1863.†
notes, was warranted by tho acts of Congress And, as if to remove every possible doubt from authorizing the issue of these notes, and that the intention of Congress, the act of March 3, the law of the State, if it required collection 1863,f which provides for the last issue of these and payment in coin, was repugnant to these notes, omits in its exemption clause the word acts, and therefore void. "stocks," and substitutes for "other securities"
The first of these propositions will be first the words, "Treasury notes or United States considered. notes issued under the provisions of this act." The answer avers substantially that the money
It was insisted at the bar that a measure of tendered was part of the first moneys collected exemption in respect to the notes issued under in Lane county after the assessment of 1863, and this, different from that provided in the former the demurrer admits the truth of the answer. acts in respect to the notes authorized by them, The fact therefore may be taken as established, was intended. But we cannot yield our assent that the taxes for that year in Lane county were to this view. The rule established in the last collected in United States notes. act is in no respect inconsistent with that pre But was this in conformity with the laws of viously established. It must be regarded, there- Oregon? fore, as explanatory. It makes specific what was In this court the construction given by the before expressed in general terms.
State courts to the laws of a State relating to local *12 U. 8. Stat., 346, 82. + 12 U. S. Stat., 546. 712 Stat., affairs is uniformily received as the true con709.
struction, and the question first stated must have
been passed upon, in reaching a conclusion upon be made. Coin was then and is now the only the demurrer, both by the circuit court for the legal tender for debts less than one dollar. county and by the supreme court of the State. In the view which we take of this case this Both courts must have held that the statutes of is not important. It is mentioned only to show Oregon, either directly or by clear implication, that the general words "all debts' were not required the collection of taxes in gold and silver intended to be taken in a sense absolutely coin.
literal. Nor do we perceive anything strained or un. We proceed then to inquire whether, upon, a reasonable in this construction. The laws of sound eonstruction of the acts, taxes imposed by Oregon, as quoted in the brief for the State, pro- a State government upon the people of a State vided that "the sheriff shall pay over to the are debts within their true meaning: county treasurer the full amount of the State and In examining this question it will be proper school taxes in gold and silver coin ;'* and that to give some attention to the constitution of the " the several county treasurers shall pay over to States and to their relations as United States. the State treasurer the State tax in gold and The people of the United States constitute one silver coin."
nation, under one government; and this governIt is certainly a legitimate if not a necessary ment, within the scope of the powers with which inference that these taxes were required to be it is invested, is supreme. On the other hand, collected in coin. Nothing short of express words the people of each State compose a State, having would warrant us in saying that the laws au- its own government, and endowed with all the thorized collection in one description of money functions essential to separate and independent from the people and required payment over of existence. The States disunited might continue the same taxes into the county and State treas. to exist. Without the States in union there uries in another.
could be no such political body as the United If, in our judgment, however, this point were States. otherwise, we should still be bound by the sound Both the States and the United States existed est principles of judicial administration and by a before the Constitution. The people, through long train of decisions in this court to regard that instrument, established a more perfect union, the judgment of the supreme court of Oregon, so by substituting a national Government, acting, far as it depends on the right construction of the with ample power, directly upon the citizens, statutes of that State, as free from error. instead of the confederate government which · The second proposition remains to be examined, acted with powers, greatly restricted, only upon and this inquiry brings us to the consideration the States. But in many articles of the Constiof the acts of Congress authorizing the issue of tation the necessary existence of the States, and, the notes in which the tender was made. within their proper spheres, the independent
The first of these was the act of February 25, authority of the States, is distinctly recognized. 1862, which authorized the Secretary of the To them nearly the whole charge of interior regTreasury to issue, on the credit of thị United ulation is committed or left; to them and to the States, $150,000,000 in United States potes, and people all powers not expressly delegated to the provided that these notes "shall be receivable national Government are reserved. The general in payment of all taxes, internal duties, excises, condition was well stated by Mr. Madison, in the debts, and demands due to the United States, ex- Federalist, thus: “The federal and State gove cept duties on imports, and of all claims and ernments are in fact but different agents and demands against the United States of every kind trustees of the people, constituted with different whatsoever, except interest on bonds and notes, powers and designated for different purposes." which shall be paid in coin; and shall also be Now, to the existence of the States, themselves lawful money and legal tender in payment of necessary to the existence of the United States, all debts, public and private, within the United the power of taxation is indispensable. It is an States, except duties on imports and interest as essential function of government. aforesaid."
It was exercised by the colonies; and when The second act contains a provision nearly in the colonies became States, both before and after the same words with that just recited, and under the formation of the confederation, it was exerthese two acts two-thirds of the entire issue was cised by the new governments. authorized It is unnecessary, therefore, to refer Under the articles of confederation the Gov. to the third act, by which the notes to be issued ernment of the United States was limited in the under it are not in terms made receivable and exercise of this power to requisitions upon the payable, but are simply declared to be lawful States, while the whole power of direct and indimoney and a legal tender.
rect taxation of persons and property, whether In the first act no emission was authorized of by taxes on polls, or duties on imports, or duties any notes under five dollars, nor in the other on internal production, manufacture, or use, was two of any under one dollar. The notes, at- acknowledged to belong exclusively to the States, thorized by different statutes, for parts of a dol- without any other limitation than that of nonlar, were never declared to be lawful money or interference with certain treaties made by Cona legal tender. I
gress. It is obvious, therefore, that a legal tender in The Constitution, it is true, greatly changed United States notes of the precise amount of this condition of things. It gave
the taxes admitted to be due to the State could not tax, both directly and indirectly, to the national
Government, and, subject to the one prohibition *Statutes of Oregon, 438, 232. fIbid., 441, 246. 112 U. of any tax upon exports and to the conditions of 8. Stat., 592; Ibid., 711.
uniformity in respect to indirect and of propor