United States to a government whose laws, made in pursuance of the Constitution, are declared to be supreme. Consequently, the people of a single State cannot confer a sovereignty which will extend over them.

§ 1039. "If we measure the power of taxation residing in a State by the extent of sovereignty which the people of a single State possess and can confer on its government, we have an intelligible standard, applicable to every case to which the power may be applied. We have a principle which leaves the power of taxing the people and property of a State unimpaired; which leaves to a State the command of all its resources; and which places beyond its reach all those powers which are conferred by the people of the United States on the government of the Union, and all those means which are given for the purpose of carrying those powers into execution. We have a principle which is safe for the States and safe for the Union. We are relieved, as we ought to be, from clashing sovereignty, from interfering powers, from a repugnancy between a right in one government to pull down what there is an acknowledged right in another to build up, from the incompatibility of a right in one government to destroy what there is a right in another to preserve. We are not driven to the perplexing inquiry, so unfit for the judicial department, what degree of taxation is the legitimate use, and what degree may amount to the abuse of the power. The attempt to use it on the means employed by the government of the Union, in pursuance of the Constitution, is itself an abuse, because it is the usurpation of a power which the people of a single State cannot give.

§ 1040. "We find, then, on just theory, a total failure of this original right to tax the means employed by the government of the Union for the execution of its powers. The right never existed; and the question whether it has been surrendered cannot arise.

§ 1041. "But, waiving this theory for the present, let us resume the inquiry, whether this power can be exercised by the respective States consistently with a fair construction of the Constitution. That the power to tax involves the power to destroy; that the power to destroy may defeat and render useless the power to create; that there is a plain repugnance in conferring on one gov

1 [A very striking illustration of this truth is afforded by the case of Veazie Bank v. Fenno, 8 Wall. 533, in which taxation imposed upon State banks and their circulation

ernment a power to control the constitutional measures of another, which other, with respect to those very measures, is declared to be supreme over that which exerts the control, are propositions not to be denied. But all inconsistencies are to be reconciled by the magic of the word confidence. Taxation, it is said, does not necessarily and unavoidably destroy. To carry it to the excess of destruction would be an abuse, to presume which would banish that confidence which is essential to all government. But is this a case of confidence? Would the people of any one State trust those of another with a power to control the most insignificant operations of their State government? We know they would not. Why, then, should we suppose that the people of any one State would be willing to trust those of another with a power to control the operations of a government to which they have confided their most important and most valuable interests? In the legislature of the Union alone are all represented. The legislature of the Union alone, therefore, can be trusted by the people with the power of controlling measures which concern all, in the confidence that it will not be abused. This, then, is not a case of confidence, and we must consider it as it really is.

§ 1042. "If we apply the principle for which the State of Maryland contends to the Constitution generally, we shall find it capable of changing totally the character of that instrument. We shall find it capable of arresting all the measures of the government, and of prostrating it at the foot of the States. The American people have declared their Constitution, and the laws made in pursuance thereof, to be supreme; but this principle would transfer the supremacy, in fact, to the States. If the States may tax one instrument employed by the government in the execution of its powers, they may tax any and every other instrument. They may tax the mail, they may tax the mint, they may tax patent rights, they may tax the papers of the custom-house, they may tax judicial process, they may tax all the means employed by the government, to an excess which would defeat all the ends of government. This was not intended by the American people. They did not design to make their government dependent on the States. Gentlemen say they do not claim the right to extend State taxa

for the very purpose of destruction was held not unconstitutional. The case of imposts levied not primarily for the purposes of revenue, but in order to aid home industry by checking importations, may also be referred to.]

tion to these objects. They limit their pretensions to property. But on what principle is this distinction made? Those who make it have furnished no reason for it, and the principle for which they contend denies it. They contend that the power of taxation has no other limit than is found in the tenth section of the first article of the Constitution; that, with respect to everything else, the power of the States is supreme, and admits of no control. If this be true, the distinction between property and other subjects, to which the power of taxation is applicable, is merely arbitrary, and can never be sustained. This is not all. If the controlling power of the States be established, if their supremacy, as to taxation, be acknowledged, what is to restrain their exercising this control in any shape they may please to give it? Their sovereignty is not confined to taxation. This is not the only mode in which it might be displayed. The question is, in truth, a question of supremacy; and if the right of the States to tax the means employed by the general government be conceded, the declaration that the Constitution, and the laws made in pursuance thereof, shall be the supreme law of the land is empty and unmeaning declamation."

§ 1043. "It has also been insisted that, as the power of taxation in the general and State governments is acknowledged to be concurrent, every argument which would sustain the right of the general government to tax banks chartered by the States will equally sustain the right of the States to tax banks chartered by the general government. But the two cases are not on the same reason. The people of all the States have created the general government, and have conferred upon it the general power of taxation. The people of all the States, and the States themselves, are represented in Congress, and, by their representatives, exercise this power. When they tax the chartered institutions of the States, they tax their constituents; and these taxes must be uniform. But when a State taxes the operations of the government of the United States, it acts upon institutions created, not by their own constituents, but by people over whom they claim no control. It acts upon the measures of a government created by others as well as themselves, for the benefit of others in common with themselves. The difference is that which always exists and always must exist between the action of the whole on a part and the action of a part on the whole; between the laws of a government declared to be supreme and those of a government which,

when in opposition to those laws, is not supreme. But if the full
application of this argument could be admitted, it might bring into
question the right of Congress to tax the State banks, and could
not prove the right of the States to tax the Bank of the United
States.

§ 1044. "The Court has bestowed on this subject its most de-
liberate consideration. The result is a conviction that the States
have no power, by taxation or otherwise, to retard, impede, burden,
or in any manner control, the operations of the constitutional laws
enacted by Congress to carry into execution the powers vested in
the general government. This is, we think, the unavoidable con-
sequence of that supremacy which the Constitution has declared.
We are unanimously of opinion that the law passed by the legis-
lature of Maryland, imposing a tax on the Bank of the United
States, is unconstitutional and void.”1

§ 1045. In another case the question was raised whether a State
had a constitutional authority to tax stock issued for loans to the
United States; and it was held by the Supreme Court that a State
had not.2 The reasoning of the Court was as follows: "Is the

1 The doctrine was again re-examined by the Supreme Court in a later case, and de-
liberately reaffirmed. Osborn v. Bank of the United States, 9 Wheat. R. 738, 859 to 868;
1 Kent's Comm. Lect. 12, p. 235 to 239.

2 Weston v. The City Council of Charleston, 2 Peters's R. 449, per Mr. Chief Justice
Marshall. [See also Bank of Commerce v. New York, 2 Black, 620; Bank Tax Case,
2 Wall. 200; The Bank v. The Mayor, 7 Wall. 16; Bank v. The Supervisors, 7 Wall. 26.
The general principles declared in M'Culloch v. Maryland were again applied in Dob-
bins v. Commissioners of Erie Co., 16 Pet. 448. It was there held that a State could not
levy a tax upon the compensation allowed by the United States to one of its officers,
which compensation, it is to be assumed, was no more than the services were worth, and
no more than would be sufficient to secure a diligent performance of the official duties.
And it has also been held competent for Congress to provide that banks organized
under its enactments may be taxed by the States to a certain extent and in a particular
way, and not otherwise. Van Allen v. Assessors, 3 Wall. 573; People v. Commissioners,
4 Wall. 244; Bradley v. People, 4 Wall. 459.

But State taxation of a Federal instrumentality, as, for instance, of a railroad which
is employed by the government for its purposes, is not impliedly prohibited where it
does not impair the usefulness or capability of such instruments to serve the government.
Thomson v. Pacific Railroad, 9 Wall. 579. See National Bank v. Commonwealth, 9 Wall.
353.

On the other hand, and for the same reasons, the Supreme Court has declared it incom
petent for the United States to impose a tax upon the salary of a State officer.
"If the
means and instrumentalities employed by [the Federal] government to carry into opera-
tion the powers granted to it are necessarily, and for the sake of self-preservation, ex-
empt from taxation by the States, why are not those of the States depending upon their
reserved powers for like reasons equally exempt from Federal taxation?
Their un-

stock, issued for loans made to the government of the United States, liable to be taxed by States and corporations? Congress has power to borrow money on the credit of the United States.' The stock it issues is the evidence of a debt created by the exercise of this power. The tax in question is a tax upon the contract subsisting between the government and the individual. It bears directly upon that contract while subsisting and in full force. The power operates upon the contract the instant it is framed, and must imply a right to affect that contract. If the States and corporations throughout the Union possess the power to tax a contract for the loan of money, what shall arrest this principle in its application to every other contract? What measure can government adopt which will not be exposed to its influence?

§ 1046. "But it is unnecessary to pursue this principle through its diversified application to all the contracts and to the various operations of government. No one can be selected which is of more vital interest to the community than this of borrowing money on the credit of the United States. No power has been conferred by the American people on their government, the free and unburdened exercise of which more deeply affects every member of our republic. In war, when the honor, the safety, the independence, of the nation are to be defended, when all its resources are to be strained to the utmost, credit must be brought in aid of taxation, and the abundant revenue of peace and prosperity must be anticiimpaired existence is as essential in the one case as in the other." The Collector v. Day, 11 Wall. 127.

And the State courts, upon the reasoning in M'Culloch v. Maryland, have held that stamp duties could not be imposed upon State process. Warren v. Paul, 22 Ind. 279; Jones v. Estate of Keep, 19 Wis. 369; Fifield v. Close, 15 Mich. 505; Union Bank v. Hill, 3 Cold. 325; Smith v. Short, 40 Ala. 796.

Nor upon the tax deeds of a State. Sayles v. Davis, 22 Wis. 225.

Nor upon the official bonds of a State officer. State v. Gaston, 32 Ind. 1.

Some of these cases are referred to with approbation by Mr. Justice Clifford, in deciding the case of Day v Buffington. See American Law Review for Oct. 1871, p.

176.

In Veazie Bank v. Fenno, 8 Wall. 533, it was held that Congressional taxation of State banks of issue to an extent that would put an end to their existence was constitutional, notwithstanding it was imposed for that express purpose and not for revenue. And in Crandall v. Nevada, 6 Wall. 35, a State tax upon carriers of passengers, of so much for each passenger carried out of the State, was held void, because if the power existed to impose it, it might be exercised to an extent that would preclude the government from transporting its troops through the State by the usual modes, or its citizens from visiting the Capitol or the Federal offices, where the State line must be crossed for the purpose. And See Minot v. Philadelphia, &c., R. R. Co., 2 Abb. U. S. 323.]