Opinion of the Court.

wise, (if such a showing would be admissible,) that any necessity existed for devoting the proceeds of the lands in question to the purposes of drainage. No case is shown as the basis of any complaint, even on the part of the general government, much less on the part of the county of Adams, which voluntarily entered into the arrangement complained of. Our conclusion, therefore, is that this objection to the validity of the contract cannot prevail." The opinion then overruled the other grounds urged in favor of the plaintiff, reversed the decree below, and directed a decree to be entered dismissing the bill, without prejudice to the right of the county to bring an action at law for any breach of the terms of the contract.

The provisions of the swamp land act of 1850, and of the Iowa statutes in regard to the swamp lands, were again considered by this court in Mills County v. Railroad Companies, 107 U. S. 557, at October Term, 1882, the opinion of the court being delivered by Mr. Justice Bradley. In that case, reference was made to Emigrant Co. v. County of Wright, supra, and it was said that the contract there "was declared to be void for actual fraud of the grossest character," and that the question as to whether the disposition of the lands operated as a diversion of the fund, in violation of the original grant, was not fully considered. The opinion also referred to the case of Emigrant Co. v. County of Adams, supra, and quoted a large part of the extract above given from the opinion in that case, and then added: "Upon further consideration of the whole subject, we are convinced that the suggestion then made, that the application of the proceeds of these lands to the purposes of the grant rests upon the good faith of the State, and that the State may exercise its discretion as to the disposal of them, is the only correct view. It is a matter between two sovereign powers, and one which private parties cannot bring into discussion. Swamp and overflowed lands are of little value to the government of the United States, whose principal interest in them is to dispose of them for purposes of revenue; whereas, the state governments, being concerned in their settlement and improvement, in the opening up of roads and other public works through them, in the pro

Opinion of the Court.

motion of the public health by systems of drainage and embankment, are far more deeply interested in having the disposal and management of them. For these reasons, it was a wise measure on the part of Congress to cede these lands to the States in which they lay, subject to the disposal of their respective legislatures; and, although it is specially provided that the proceeds of such lands shall be applied, as far as necessary,' to their reclamation by means of levees and drains, this is a duty which was imposed upon and assumed by the States alone, when they accepted the grant; and whether faithfully performed or not is a question between the United States and the States; and is neither a trust following the lands nor a duty which private parties can enforce as against the State."

These views were confirmed in the case of Hagar v. Reclamation District, 111 U. S., 701, 713, at October Term, 1883, where it was said of the swamp-land act of 1850, that the appropriation of the proceeds of the sale of the lands rested solely in the good faith of the State; and that its discretion in disposing of them was not controlled by the condition mentioned in the act, as neither a contract nor a trust following the lands was thereby created.

In the case of Louisiana v. United States, 22 C. Cl. 284, the State of Louisiana sued the United States for claims arising under the 5 per cent act of 1811, and under the swampland acts of 1850 and 1855, and had a judgment for both claims, amounting to $71,385.83, which was affirmed by this court in United States v. Louisiana, 123 U. S. 32. In that case, the United States interposed the defence of the limitation of six years, as to the swamp-land claim. The Court of Claims held that the action of the Commissioner of the General Land Office, under 2 of the act of 1855, in determining, on proof by the agent of the State, that any of the swamp land had, within the meaning of the act, been sold by the United States, so as to bring into force the requirement that the purchase money should be paid over to the State, was necessary to a right of action for the money on the part of the State, and that, as such action in that case did not occur more than

Opinion of the Court.

six years before the bringing of the suit, the limitation prescribed by 1069 of the Revised Statutes did not apply. A set-off or counter-claim was interposed in that case by the United States, they alleging that the amount due by citizens of the State of Louisiana to the United States for the direct tax levied by the act of August 5, 1861, 12 Stat. 292, was a proper subject of set-off against the claim of the State in the suit. This contention of the United States was overruled by the Court of Claims, on the ground that the State had never assumed the payment of the tax assessed under the act of 1861. On the appeal to this court by the United States, 123 U. S. 32, it was said in the opinion of the court delivered by Mr. Justice Field, that the statute of limitations did not seem to have any application to the demand arising upon the swamp-land acts; and that, as the Commissioner of the General Land Office had not found and certified the amount due to the State from the sales of swamp lands until the 30th of June, 1885, and the suit was commenced in September, 1886, the limitation of the statute did not apply to the case. It was further held, that the State was not liable for the taxes assessed under the act of August 5, 1861, against the real property of private individuals in the State, and that the Court of Claims had jurisdiction of the action. Therefore, the judgment was affirmed.

In accordance with the views of this court in the cases above cited, it must be held that the proceeds of the swamp lands are not subject to a property trust, either in the hands of the United States or in those of the State, in such sense that the claim of the United States upon the State for the overdue coupons on the Indian Trust bonds, involved in the present case, cannot be set-off against the claim of the State to the swamp-land fund.

Under the act of 1850, the swamp lands are to be conveyed to the State as an absolute gift, with a direction that their proceeds shall be applied exclusively, as far as necessary, to the purpose of reclaiming the lands. The judgment of the State as to the necessity is paramount, and any application of the proceeds by the State to any other object is to be taken as

Opinion of the Court.

the declaration of its judgment that the application of the proceeds to the reclamation of the lands is not necessary. By the 2d section of the act of 1855, it is provided that the purchase money received by the United States for the swamp lands sold by them shall be paid over to the State. There is nothing in these provisions of the character of a property trust, and nothing to prevent the application by the State of the swampland fund to general purposes. If the power exists anywhere to enforce any provisions attached to the grant, it resides in Congress and not in the court.

The same views apply to the provision as to the 5 per cent fund, in the act of 1811, that it shall be applied to laying out and constructing public roads and levees in the State, "as the legislature thereof may direct ;" and as to both the 5 per cent fund and the swamp-land fund, we are of opinion that neither of them is of such a character that the debt due to the United States by the State of Louisiana, for the overdue coupons on the Indian Trust bonds, cannot be set off against the fund which is in the hands of the United States. This being so, it follows that the limitation of § 1069 of the Revised Statutes is a bar against the recovery of the item of $13, 602.71 of the 5 per cent fund, credited May 8, 1879, and that the amount of the set-off of $31,080, for coupons falling due up to November 1, 1887, on the Indian Trust bonds, is a valid set-off against the remaining $29,970, and is more than sufficient to extinguish that item.

It results from these views that

The judgment of the Court of Claims must be reversed, and the case be remanded to that court, with a direction to enter a judgment in favor of the United States.

Statement of the Case.

WHITBECK v. MERCANTILE NATIONAL BANK OF

CLEVELAND.

APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF OHIO.

No. 970. Argued March 20, 1888.- Decided April 23, 1888.

The auditor of Cuyahoga County, Ohio, fixed the taxable value of shares in a national bank at 60 per cent of their true value in money, in accordance with the practice adopted for the valuation of other moneyed capital of individuals in the courts and State, and transmitted the same to the State Board of Equalization for incorporated banks. That board increased the valuation to 65 per cent, and this value, being certified back to the auditor, was placed by him on the tax list without a corresponding change being made in the valuation of other moneyed capital of individuals. Held, that this was such a discrimination as is forbidden by § 5219 of the Revised Statutes of the United States. The statutes of Ohio regulating assessments for taxation allow an owner of moneyed capital other than shares in a national bank to have a deduction equal to his bona fide indebtedness made from the amount of the assessment of the value of such moneyed capital; but they make no provision for a similar deduction from the assessed value of shares in a national bank, and provide no means by which such a deduction may be obtained.

Held:

(1) That the owners of such shares are entitled to have a deduction of their indebtedness made from its assessed value as in the case of other moneyed capital; and

(2) That the right to it is not lost by not making a demand for it until the entire process of the appraisement and equalization of the value of the shares for taxation is completed, and the tax duplicate is delivered to the treasurer for collection.

The laws of Ohio regulating the taxation of shares in national banks considered.

BILL IN EQUITY to restrain the treasurer of Cuyahoga County, Ohio, from collecting a tax upon shares of the stock of a national bank in Cleveland alleged to have been illegally assessed. Decree granting the relief prayed for except as to three stockholders. The treasurer appealed. The bank took no appeal as to the three shareholders. A certificate of division of opinion was filed. The case is stated in the opinion of the court.

VOL. CXXVII-13