957

ARTICLE VI 

PRIOR DEBTS, NATIONAL SUPREMACY, AND OATHS OF 

OFFICE

CONTENTS

Page

Clause 1. Validity of Prior Debts and Engagements .............................................................. 959 

Clause 2. Supremacy of the Constitution, Laws and Treaties ............................................... 959 

National Supremacy ........................................................................................................... 959

Marshall’s Interpretation of the National Supremacy Clause ................................. 959 

Task of the Supreme Court Under the Clause: Preemption .................................... 960 

The Operation of the Supremacy Clause ................................................................... 961 

Federal Immunity Laws and State Courts ........................................................ 961 

Priority of National Claims Over State Claims ................................................. 962 

Obligation of State Courts Under the Supremacy Clause ....................................... 962 

Supremacy Clause Versus the Tenth Amendment ................................................... 963 

Federal Instrumentalities and Personnel and State Police Power ......................... 973 

The Doctrine of Federal Exemption From State Taxation ...................................... 975 

McCulloch v. Maryland ........................................................................................ 975 

Applicability of Doctrine to Federal Securities .................................................. 976 

Taxation of Government Contractors ................................................................. 977 

Taxation of Salaries of Employees of Federal Agencies .................................... 979 

Ad Valorem Taxes Under the Doctrine .............................................................. 980 

Federal Property and Functions ......................................................................... 983 

Federally Chartered Finance Agencies: Statutory Exemptions ....................... 983 

Royalties ............................................................................................................... 985 

Immunity of Lessees of Indian Lands ................................................................ 985 

Summation and Evaluation ........................................................................................ 986 

Clause 3. Oath of Office ............................................................................................................ 986 

Power of Congress in Respect to Oaths ............................................................................ 987 

National Duties of State Officers ...................................................................................... 987 

959

1Ware v. Hylton, 3 U.S. (3 Dall.) 199 (1796). 

2 17 U.S. (4 Wheat.) 316 (1819). 

3 22 U.S. (9 Wheat.) 1 (1824). 

PRIOR DEBTS, NATIONAL SUPREMACY, AND OATHS OF 

OFFICE

ARTICLE VI 

Clause 1. All Debts contracted and Engagements entered 

into, before the Adoption of this Constitution, shall be as valid 

against the United States under this Constitution, as under the 

Confederation.

PRIOR DEBTS 

There have been no interpretations of this clause. 

Clause 2. This Constitution, and the Laws of the United 

States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the 

United States, shall be the supreme Law of the Land; and the 

Judges in every State shall be bound thereby; any Thing in the 

Constitution or Laws of any State to the Contrary notwithstanding.

NATIONAL SUPREMACY 

Marshall’s Interpretation of the National Supremacy Clause 

Although the Supreme Court had held, prior to Marshall’s appointment to the Bench, that the Supremacy Clause rendered null 

and void a state constitutional or statutory provision which was inconsistent with a treaty executed by the Federal Government, 1 it

was left for him to develop the full significance of the clause as applied to acts of Congress. By his vigorous opinions in McCulloch v. 

Maryland 2 and Gibbons v. Ogden, 3 he gave the principle a vitality 

which survived a century of vacillation under the doctrine of dual 

federalism. In the former case, he asserted broadly 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 

960 ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 

Cl. 2—Supremacy of the Constitution, Laws, and Treaties 

4 17 U.S. (4 Wheat.) 436 (1819). 

5 22 U.S. (9 Wheat.) 210-211 (1824). See the Court’s discussion of Gibbons in

Douglas v. Seacoast Products, 431 U.S. 265, 274-279 (1977). 

enacted by Congress to carry into execution the powers vested in 

the general government. This is, we think, the unavoidable consequence of that supremacy which the Constitution has declared.’’ 4

From this he concluded that a state tax upon notes issued by a 

branch of the Bank of the United States was void. 

In Gibbons v. Ogden, the Court held that certain statutes of 

New York granting an exclusive right to use steam navigation on 

the waters of the State were null and void insofar as they applied 

to vessels licensed by the United States to engage in coastal trade. 

Said the Chief Justice: ‘‘In argument, however, it has been contended, that if a law passed by a State, in the exercise of its acknowledged sovereignty, comes into conflict with a law passed by 

Congress in pursuance of the Constitution, they affect the subject, 

and each other, like equal opposing powers. But the framers of our 

Constitution foresaw this state of things, and provided for it, by declaring the supremacy not only of itself, but of the laws made in 

pursuance of it. The nullity of an act, inconsistent with the Constitution, is produced by the declaration, that the Constitution is 

the supreme law. The appropriate application of that part of the 

clause which confers the same supremacy on laws and treaties, is 

to such acts of the State legislatures as do not transcend their powers, but though enacted in the execution of acknowledged State 

powers, interfere with, or are contrary to the laws of Congress, 

made in pursuance of the Constitution, or some treaty made under 

the authority of the United States. In every such case, the act of 

Congress, or the treaty, is supreme; and the law of the State, 

though enacted in the exercise of powers not controverted, must 

yield to it.’’ 5

Task of the Supreme Court Under the Clause: Preemption 

In applying the Supremacy Clause to subjects which have been 

regulated by Congress, the primary task of the Court is to ascertain whether a challenged state law is compatible with the policy 

expressed in the federal statute. When Congress legislates with regard to a subject, the extent and nature of the legal consequences 

of the regulation are federal questions, the answers to which are 

to be derived from a consideration of the language and policy of the 

state. If Congress expressly provides for exclusive federal dominion 

or if it expressly provides for concurrent federal-state jurisdiction, 

the task of the Court is simplified, though, of course, there may 

still be doubtful areas in which interpretation will be necessary. 

ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 961

Cl. 2—Supremacy of the Constitution, Laws, and Treaties 

6Treatment of preemption principles and standards is set out under the Commerce Clause, which is the greatest source of preemptive authority. 7Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 210-211 (1824). See, e.g., Cipollone v. 

Liggett Group, Inc., 112 S. Ct. 2608 (1992); Morales v. TWA, 112 S. Ct. 2031 (1992); 

Maryland v. Louisiana, 451 U.S. 725, 746 (1981); Jones v. Rath Packing Co., 430 

U.S. 519, 525 (1977). 8 By the Social Security Act of 1935, 49 Stat. 620, 42 U.S.C. § 301 et seq., Congress established a series of programs operative in those States which joined the 

system and enacted the requisite complying legislation. Although participation is 

voluntary, the federal tax program underlying in effect induces state participation. 

See Steward Machine Co. v. Davis, 301 U.S. 548, 585-598 (1937). 

9On the operation of federal spending programs upon state laws, see South Dakota v. Dole, 483 U.S. 203 (1987) (under highway funding programs). On the preemptive effect of federal spending laws, see Lawrence County v. Lead-Deadwood 

School Dist., 469 U.S. 256 (1985). An early example of States being required to conform their laws to the federal standards is King v. Smith, 392 U.S. 309 (1968). Private parties may compel state acquiescence in federal standards to which they have 

agreed by participation in the programs through suits under a federal civil rights 

law (42 U.S.C. § 1983). Maine v. Thiboutot, 448 U.S. 1 (1980). The Court has imposed some federalism constraints in this area by imposing a ‘‘clear statement’’ rule 

on Congress when it seeks to impose new conditions on States. Pennhurst State 

School & Hosp. v. Halderman, 451 U.S. 1, 11, 17-18 (1981). 10Which operate to compel witnesses to testify even over self-incrimination 

claims by giving them an equivalent immunity. 

Where Congress is silent, however, the Court must itself decide 

whether the effect of the federal legislation is to oust state jurisdiction. 6

The Operation of the Supremacy Clause 

When Congress legislates pursuant to its delegated powers, 

conflicting state law and policy must yield. 7 Although the preemptive effect of federal legislation is best known in areas governed by 

the Commerce Clause, the same effect is present, of course, whenever Congress legislates constitutionally. And the operation of the 

Supremacy Clause may be seen as well when the authority of Congress is not express but implied, not plenary but dependent upon 

state acceptance. The latter may be seen in a series of cases concerning the validity of state legislation enacted to bring the States 

within the various programs authorized by Congress pursuant to 

the Social Security Act. 8 State participation in the programs is voluntary, technically speaking, and no State is compelled to enact 

legislation comporting with the requirements of federal law. Once 

a State is participating, however, any of its legislation which is 

contrary to federal requirements is void under the Supremacy 

Clause. 9

Federal Immunity Laws and State Courts.—An example of 

the former circumstance is the operation of federal immunity acts 10

to preclude the use in state courts of incriminating statements and 

testimony given by a witness before a committee of Congress or a 

962 ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 

Cl. 2—Supremacy of the Constitution, Laws, and Treaties 

11 Adams v. Maryland, 347 U.S. 179 (1954). 12 Ullmann v. United States, 350 U.S. 422, 434-436 (1956). See also Reina v. 

United States, 364 U.S. 507, 510 (1960). 13 17 U.S. (4 Wheat.) 316 (1819). 14 United States v. Fisher, 6 U.S. (2 Cr.) 358 (1805). 15Spokane County v. United States, 279 U.S. 80, 87 (1929). A state requirement 

that notice of a federal tax lien be filed in conformity with state law in a state office 

in order to be accorded priority was held to be controlling only insofar as Congress 

by law had made it so. Remedies for collection of federal taxes are independent of 

legislative action of the States. United States v. Union Central Life Ins. Co., 368 

U.S. 291 (1961). See also United States v. Buffalo Savings Bank, 371 U.S. 228 

(1963) (State may not avoid priority rules of a federal tax lien by providing that the 

discharge of state tax liens are to be part of the expenses of a mortgage foreclosure 

sale); United States v. Pioneer American Ins. Co., 374 U.S. 84 (1963) (Matter of federal law whether a lien created by state law has acquired sufficient substance and 

has become so perfected as to defeat a later-arising or later-filed federal tax lien). 16 Brownell v. Singer, 347 U.S. 403 (1954). 17 United States v. Oregon, 366 U.S. 643 (1961). 

federal grand jury. 11 Because Congress in pursuance of its paramount authority to provide for the national defense, as complemented by the Necessary and Proper Clause, is competent to 

compel testimony of persons which is needful for legislation, it is 

competent to obtain such testimony over a witness’s self-incrimination claim by immunizing him from prosecution on evidence thus 

revealed not only in federal courts but in state courts as well. 12

Priority of National Claims Over State Claims.—Anticipating his argument in McCulloch v. Maryland, 13 Chief Justice 

Marshall in 1805 upheld an act of 1792 asserting for the United 

States a priority of its claims over those of the States against a 

debtor in bankruptcy. 14 Consistent therewith, federal enactments 

providing that taxes due to the United States by an insolvent shall 

have priority in payment over taxes due by him to a State also 

have been sustained. 15 Similarly, the Federal Government was 

held entitled to prevail over a citizen enjoying a preference under 

state law as creditor of an enemy alien bank in the process of liquidation by state authorities. 16 A federal law providing that when 

a veteran dies in a federal hospital without a will or heirs his personal property shall vest in the United States as trustee for the 

General Post Fund was held to operate automatically without prior 

agreement of the veteran with the United States for such disposition and to take precedence over a state claim founded on its escheat law. 17

Obligation of State Courts Under the Supremacy Clause 

The Constitution, laws, and treaties of the United States are 

as much a part of the law of every State as its own local laws and 

constitution. Their obligation ‘‘is imperative upon the state judges, 

in their official and not merely in their private capacities. From the 

ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 963

Cl. 2—Supremacy of the Constitution, Laws, and Treaties 

18Martin v. Hunter’s Lessee, 14 U.S. (1 Wheat.) 304, 335 (1816). State courts 

have both the power and the duty to enforce obligations arising under federal law, 

unless Congress gives the federal courts exclusive jurisdiction. Claflin v. Houseman, 

93 U.S. 130 (1876); Second Employers’ Liability Cases, 223 U.S. 1 (1912); Testa v. 

Katt, 330 U.S. 386 (1947). 19 Cooper v. Aaron, 358 U.S. 1 (1958). 20 Howlett v. Rose, 496 U.S. 356 (1990); Felder v. Casey, 487 U.S. 131 (1988). 

The Court’s re-emphasis upon ′′dual federalism′′ has not altered this principle. See,

e.g., Printz v. United States, 521 U.S. 898, 905-10 (1997). 

21 Clearfield Trust Co. v. United States, 318 U.S. 363 (1943); Textile Workers 

of America v. Lincoln Mills, 353 U.S. 448 (1957); Illinois v. City of Milwaukee, 406 

U.S. 91 (1972). 22 36 U.S. (11 Pet.) 102 (1837). 

very nature of their judicial duties, they would be called upon to 

pronounce the law applicable to the case in judgment. They were 

not to decide merely according to the laws or Constitution of the 

State, but according to the laws and treaties of the United States— 

‘the supreme law of the land’.’’ 18 State courts are bound then to 

give effect to federal law when it is applicable and to disregard 

state law when there is a conflict; federal law includes, of course, 

not only the Constitution and laws and treaties but also the interpretations of their meanings by the United States Supreme 

Court. 19 While States need not specially create courts competent to 

hear federal claims or necessarily to give courts authority specially, 

it violates the Supremacy Clause for a state court to refuse to hear 

a category of federal claims when the court entertains state law actions of a similar nature. 20 The existence of inferior federal courts 

sitting in the States and exercising often concurrent jurisdiction of 

subjects has created problems with regard to the degree to which 

state courts are bound by their rulings. Though the Supreme Court 

has directed and encouraged the lower federal courts to create a 

corpus of federal common law, 21 it has not spoken to the effect of 

such lower court rulings on state courts. 

Supremacy Clause Versus the Tenth Amendment 

The logic of the Supremacy Clause would seem to require that 

the powers of Congress be determined by the fair reading of the express and implied grants contained in the Constitution itself, without reference to the powers of the States. For a century after Marshall’s death, however, the Court proceeded on the theory that the 

Tenth Amendment had the effect of withdrawing various matters 

of internal police from the reach of power expressly committed to 

Congress. This point of view was originally put forward in New

York City v. Miln, 22 which was first argued but not decided before 

Marshall’s death. The Miln case involved a New York statute 

which required the captains of vessels entering New York Harbor 

with aliens aboard to make a report in writing to the Mayor of the 

964 ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 

Cl. 2—Supremacy of the Constitution, Laws, and Treaties 

23 Id. at 139. 24 Id. at 161. 25 46 U.S. (5 How.) 504 (1847). 26 Id. at 573-574. 27 Representative early cases include NLRB v. Jones & Laughlin Steel Corp., 

301 U.S. 1 (1937); Steward Machine Co. v. Davis, 301 U.S. 548 (1937); Helvering 

v. Davis, 301 U.S. 619 (1937); United States v. Darby, 312 U.S. 100 (1941). Among 

the cases incompatible with the theory was Maryland v. Wirtz, 392 U.S. 183 (1968). 

City, giving certain prescribed information. It might have been distinguished from Gibbons v. Ogden on the ground that the statute 

involved in the earlier case conflicted with an act of Congress, 

whereas the Court found that no such conflict existed in this case. 

But the Court was unwilling to rest its decision on that distinction. 

Speaking for the majority, Justice Barbour seized the opportunity to proclaim a new doctrine. ‘‘But we do not place our opinion 

on this ground. We choose rather to plant ourselves on what we 

consider impregnable positions. They are these: That a State has 

the same undeniable and unlimited jurisdiction over all persons 

and things, within its territorial limits, as any foreign nation, 

where that jurisdiction is not surrendered or restrained by the Constitution of the United States. That, by virtue of this, it is not only 

the right, but the bounden and solemn duty of a State, to advance 

the safety, happiness and prosperity of its people, and to provide 

for its general welfare, by any and every act of legislation, which 

it may deem to be conducive to these ends; where the power over 

the particular subject, or the manner of its exercise is not surrendered or restrained, in the manner just stated. That all those powers which relate to merely municipal legislation, or what may, perhaps, more properly be called internal police, are not thus surrendered or restrained; and that, consequently, in relation to these, 

the authority of a State is complete, unqualified, and exclusive.’’ 23

Justice Story, in dissent, stated that Marshall had heard the previous argument and reached the conclusion that the New York 

statute was unconstitutional. 24

The conception of a ‘‘complete, unqualified and exclusive’’ police power residing in the States and limiting the powers of the National Government was endorsed by Chief Justice Taney ten years 

later in the License Cases. 25 In upholding state laws requiring licenses for the sale of alcoholic beverages, including those imported 

from other States or from foreign countries, he set up the Supreme 

Court as the final arbiter in drawing the line between the mutually 

exclusive, reciprocally limiting fields of power occupied by the national and state governments. 26

Until recently, it appeared that in fact and in theory the Court 

had repudiated this doctrine, 27 but in National League of Cities v. 

ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 965

Cl. 2—Supremacy of the Constitution, Laws, and Treaties 

28 426 U.S. 833 (1976). 29On the doctrine of ‘‘dual federalism,’’ see the commentary by the originator of 

the phrase, Professor Corwin. E. CORWIN, THE TWILIGHT OF THE SUPREME COURT—

A HISTORY OF OUR CONSTITUTIONAL THEORY 10-51 (1934); THE COMMERCE POWER

VERSUS STATES RIGHTS 115-172 (1936); A CONSTITUTION OF POWERS IN A SECULAR

STATE 1-28 (1951). 30 297 U.S. 175 (1936). 31 Id. at 183-185. 32 California v. United States, 320 U.S. 577 (1944) (federal regulation of shipping terminal facilities owned by State); California v. Taylor, 353 U.S. 553 (1957) 

(Railway Labor Act applies on state-owned railroad); Case v. Bowles, 327 U.S. 92 

(1946); Hubler v. Twin Falls County, 327 U.S. 103 (1946) (federal wartime price regulations applied to state transactions; Congress’ power effectively to wage war); 

Board of Trustees v. United States, 289 U.S. 48 (1933) (State university required 

to pay federal customs duties on imported educational equipment); Oklahoma ex rel. 

Phillips v. Atkinson Co., 313 U.S. 508 (1941) (federal condemnation of state lands 

for flood control project); Sanitary Dist. v. United States, 206 U.S. 405 (1925) (prohibition of State from diverting water from Great Lakes). 33 392 U.S. 183 (1968). Justices Douglas and Stewart dissented. Id. at 201. 

Usery, 28 it revived part of this state police power limitation upon 

the exercise of delegated federal power. However, the decision was 

by a closely divided Court and subsequent interpretations closely 

cabined the development and then overruled the case. 

Following the demise of the doctrine of ‘‘dual federalism’’ in the 

1930s, the Court confronted the question whether Congress had the 

power to regulate state conduct and activities to the same extent, 

primarily under the Commerce Clause, as it did to regulate private 

conduct and activities to the exclusion of state law. 29 In United

States v. California, 30 upholding the validity of the application of 

a federal safety law to a state-owned railroad being operated as a 

non-profit entity, the Court, speaking through Justice Stone, denied the existence of an implied limitation upon Congress’ ‘‘plenary 

power to regulate commerce’’ when a state instrumentality was involved. ‘‘The state can no more deny the power if its exercise has 

been authorized by Congress than can an individual.’’ While the 

State in operating the railroad was acting as a sovereign and within the powers reserved to the States, the Court said, its exercise 

was ‘‘in subordination to the power to regulate interstate commerce, which has been granted specifically to the national government. The sovereign power of the states is necessarily diminished 

to the extent of the grants of power to the federal government in 

the Constitution.’’ 31

A series of cases followed in which the Court refused to construct any state immunity from regulation when Congress acted 

pursuant to a delegated power. 32 The culmination of this series 

had been thought to be Maryland v. Wirtz, 33 in which the Court 

upheld the constitutionality of applying the federal wage and hour 

law to nonprofessional employees of state-operated schools and hosVerDate Apr<14>2004 11:28 Apr 15, 2004 Jkt 077500 PO 00000 Frm 00007 Fmt 8222 Sfmt 8222 C:\CONAN\CON019.SGM PRFM99 PsN: CON019
966 ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 

Cl. 2—Supremacy of the Constitution, Laws, and Treaties 

34 Id. at 195, 196-197. 35 421 U.S. 542 (1975). 36 Id. at 549. Essentially, the Justice was required to establish an affirmative 

constitutional barrier to congressional action. Id. at 552-553. That is, if one asserts 

only the absence of congressional authority, one’s chances of success are dim because of the breadth of the commerce power. But when he asserts that, say, the 

First or Fifth Amendment bars congressional action concededly within its commerce 

power, one interposes an affirmative constitutional defense that has a chance of success. It was the Justice’s view that the State was ‘‘asserting an affirmative constitutional right, inherent in its capacity as a State, to be free from such congressionally 

asserted authority.’’ Id. at 553. But whence the affirmative barrier? ‘‘[I]t is not the 

Tenth Amendment by its terms... .’’ Id. at 557 (emphasis supplied). Rather, the 

Amendment was an example of the Framers’ understanding that the sovereignty of 

the States imposed an implied affirmative barrier to the assertion of otherwise valid 

congressional powers. Id. at 557-559. But the difficulty with this construction is that 

the equivalence sought to be established by Justice Rehnquist lies not between an 

individual asserting a constitutional limit on delegated powers and a State asserting 

the same thing but is rather between an individual asserting a lack of authority and 

a State asserting a lack of authority; this equivalence is evident on the face of the 

Tenth Amendment, which states that the powers not delegated to the United States 

‘‘are reserved to the States respectively, or to the people.’’ (emphasis supplied). The 

States are thereby accorded no greater interest in restraining the exercise of nonpitals. In an opinion by Justice Harlan, the Court saw a clear connection between working conditions in these institutions and interstate commerce. Labor conditions in schools and hospitals affect 

commerce; strikes and work stoppages involving such employees interrupt and burden the flow across state lines of goods purchased 

by state agencies, and the wages paid have a substantial effect. 

The Commerce Clause being thus applicable, the Justice wrote, 

Congress was not constitutionally required to ‘‘yield to state sovereignty in the performance of governmental functions. This argument simply is not tenable. There is no general ‘doctrine implied 

in the Federal Constitution that ‘‘the two governments, national 

and state, are each to exercise its powers so as not to interfere with 

the free and full exercise of the powers of the other.’’’ . . . [I]t is 

clear that the Federal Government when acting within a delegated 

power, may override countervailing state interests whether these 

be described as ‘governmental’ or ‘proprietary’ in character. . . . 

[V]alid general regulations of commerce do not cease to be regulations of commerce because a State is involved. If a State is engaging in economic activities that are validly regulated by the Federal 

Government when engaged in by private persons, the State too 

may be forced to conform its activities to federal regulation.’’ 34

Wirtz was specifically reaffirmed in Fry v. United States, 35 in

which the Court upheld the constitutionality of presidentially imposed wage and salary controls, pursuant to congressional statute, 

on all state governmental employees. In dissent, however, Justice 

Rehnquist propounded a doctrine which was to obtain majority approval in League of Cities. 36 In that opinion, he said for the Court: 

ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 967

Cl. 2—Supremacy of the Constitution, Laws, and Treaties 

delegated power than are the people. See Massachusetts v. Mellon, 262 U.S. 447 

(1823). 37 National League of Cities v. Usery, 426 U.S. 833, 845 (1976). 38 Id. 39 Id. at 852. 40 Id. at 854. 41 Id. at 854 n.18. 42 Id. at 852-853. 43 Id. at 853-855. 44 Hodel v. Virginia Surface Mining & Reclamation Ass’n, 452 U.S. 264 (1981). 45 United Transp. Union v. Long Island R.R., 455 U.S. 678 (1982). 

‘‘[T]here are attributes of sovereignty attaching to every state government which may not be impaired by Congress, not because Congress may lack an affirmative grant of legislative authority to 

reach the matter, but because the Constitution prohibits it from exercising the authority in that manner.’’ 37 The standard apparently, 

in judging between permissible and impermissible federal regulation, is whether there is federal interference with ‘‘functions essential to separate and independent existence.’’ 38 In the context of this 

case, state decisions with respect to the pay of their employees and 

the hours to be worked were essential aspects of their ‘‘freedom to 

structure integral operations in areas of traditional governmental 

functions.’’ 39 The line of cases, exemplified by United States v. California, was distinguished and preserved on the basis that the state 

activities there regulated were so unlike the traditional activities 

of a State that Congress could reach them; 40 Case v. Bowles was

held distinguishable on the basis that Congress had acted pursuant 

to its war powers, and to have rejected the power would have impaired national defense; 41 Fry was distinguished on the bases that 

it was emergency legislation tailored to combat a serious national 

emergency, the means were limited in time and effect, the freeze 

did not displace state discretion in structuring operations or force 

a restructuring, and the federal action ‘‘operated to reduce the 

pressure upon state budgets rather than increase them.’’ 42 Wirtz

was overruled; it permitted Congress to intrude into the conduct of 

integral and traditional state governmental functions and could not 

therefore stand. 43

League of Cities did not prove to be much of a restriction upon 

congressional power in subsequent decisions. First, its principle 

was held not to reach to state regulation of private conduct that affects interstate commerce, even as to such matters as state jurisdiction over land within its borders. 44 Second, it was held not to immunize state conduct of a business operation, that is, proprietary 

activity not like ‘‘traditional governmental activities.’’ 45 Third, it 

was held not to preclude Congress from regulating the way States 

regulate private activities within the State, even though such state 

968 ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 

Cl. 2—Supremacy of the Constitution, Laws, and Treaties 

46FERC v. Mississippi, 456 U.S. 742 (1982). 47 National League of Cities v. Usery, 426 U.S. 833, 854 n.18 (1976). 48Fitzpatrick v. Bitzer, 427 U.S. 445 (1976); City of Rome v. United States, 446 

U.S. 156, 178-180 (1980). 49 In Pennhurst State School & Hospital v. Halderman, 451 U.S. 1, 17 n.13 

(1981), the Court suggested rather ambiguously that League of Cities may restrict 

the federal spending power, citing its reservation of the cases in League of Cities, 426 U.S. 852 n.17, but citing also spending clause cases indicating a rational 

basis standard of review of conditioned spending. Earlier, the Court had summarily 

affirmed a decision holding that the spending power was not affected by the case. 

North Carolina ex rel. Morrow v. Califano, 445 F.Supp. 532 (E.D.N.C. 1977) (threejudge court), affd. 435 U.S. 962 (1978). No hint of such a limitation is contained in 

more recent decisions (to be sure, in the aftermath of League of Cities’ demise). New 

York v. United States, 505 U.S. 144, 167, 171-72, 185 (1992); South Dakota v. Dole, 

483 U.S. 203, 210-212 (1987). 50 National League of Cities v. Usery, 426 U.S. 833, 846-851 (1976). The 

quotation in the text is at 853 (one of the elements distinguishing the case from 

Fry).

51 Id. at 856. 52 469 U.S. 528 (1985). The issue was again decided by a 5 to 4 vote, Justice 

Blackmun’s qualified acceptance of the National League of Cities approach having 

activity is certainly traditional governmental action, on the theory 

that because Congress could displace or preempt state regulation 

it may require the States to regulate in a certain way if they wish 

to continue to act in this field. 46 Fourth, it was held not to limit 

Congress when it acts in an emergency or pursuant to its war powers, so that Congress may indeed reach even traditional governmental activity. 47 Fifth, it was held not to apply at all to Congress’ 

enforcement powers under the Thirteenth, Fourteenth, and Fifteenth Amendments. 48 Sixth, it apparently was to have no application to the exercise of Congress’ spending power with conditions attached. 49 Seventh, not because of the way the Court framed the 

statement of its doctrinal position, which is absolutist, but because 

of the way it accommodated precedent and because of Justice 

Blackmun’s concurrence, it was always open to interpretation that 

Congress was enabled to reach traditional governmental activities 

not involving employer-employee relations or is enabled to reach 

even these relations if the effect is ‘‘to reduce the pressures upon 

state budgets rather than increase them.’’ 50 In his concurrence, 

Justice Blackmun suggested his lack of agreement with ‘‘certain 

possible implications’’ of the opinion and recast it as a ‘‘balancing 

approach’’ which ‘‘does not outlaw federal power in areas such as 

environmental protection, where the federal interest is demonstrably greater and where state facility compliance with imposed 

federal standards would be essential.’’ 51 Indeed, Justice 

Blackmun’s deviation from League of Cities in the subsequent cases 

usually made the difference in the majority dispute. 

The Court overruled National League of Cities in Garcia v. San 

Antonio Metropolitan Transit Auth., 52 and seemingly returned to 

ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 969

Cl. 2—Supremacy of the Constitution, Laws, and Treaties 

changed to complete rejection. Justice Blackmun’s opinion of the Court was joined 

by Justices Brennan, White, Marshall, and Stevens. Writing in dissent were Justices Powell (joined by Chief Justice Burger and by Justices Rehnquist and O’Connor), O’Connor (joined by Justices Powell and Rehnquist), and Rehnquist. 53 Id. at 557. 54 Id. at 548. 55 Id. at 549. 56 Id. at 548. 57 ‘‘Apart from the limitation on federal authority inherent in the delegated nature of Congress’ Article I powers, the principal means chosen by the Framers to 

ensure the role of the States in the federal system lies in the structure of the Federal Government itself.’’ Id. at 550. The Court cited as prime examples the role of 

states in selecting the President, and the equal representation of states in the Senate. Id. at 551. 58 Id. at 554. 59 Id. at 556. 

the conception of federal supremacy embodied in Wirtz and Fry.

For the most part, the Court indicated, States must seek protection 

from the impact of federal regulation in the political processes, and 

not in any limitations imposed on the commerce power or found in 

the Tenth Amendment. Justice Blackmun’s opinion for the Court in 

Garcia concluded that the National League of Cities test for ‘‘integral operations in areas of traditional governmental functions’’ had 

proven ‘‘both impractical and doctrinally barren.’’ 53 State autonomy 

is both limited and protected by the terms of the Constitution 

itself, hence—ordinarily, at least—exercise of Congress’ enumerated powers is not to be limited by ‘‘a priori definitions of state sovereignty.’’ 54 States retain a significant amount of sovereign authority ‘‘only to the extent that the Constitution has not divested them 

of their original powers and transferred those powers to the Federal Government.’’ 55 There are direct limitations in Art. I, § 10, 

and ‘‘Section 8 . . . works an equally sharp contraction of state sovereignty by authorizing Congress to exercise a wide range of legislative powers and (in conjunction with the Supremacy Clause of Article VI) to displace contrary state legislation.’’ 56 On the other 

hand, the principal restraints on congressional exercise of the commerce power are to be found not in the Tenth Amendment, in the 

Commerce Clause itself, or in ‘‘judicially created limitations on federal power,’’ but in the structure of the Federal Government and 

in the political processes. 57 ‘‘[T]he fundamental limitation that the 

constitutional scheme imposes on the Commerce Clause to protect 

the ‘States as States’ is one of process rather than one of result.’’ 58

While continuing to recognize that ‘‘Congress’ authority under the 

Commerce Clause must reflect [the] position . . . that the States occupy a special and specific position in our constitutional system,’’ 

the Court held that application of Fair Labor Standards Act minimum wage and overtime provisions to state employment does not 

require identification of these ‘‘affirmative limits.’’ 59 Thus, arguVerDate Apr<14>2004 11:28 Apr 15, 2004 Jkt 077500 PO 00000 Frm 00011 Fmt 8222 Sfmt 8222 C:\CONAN\CON019.SGM PRFM99 PsN: CON019
970 ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 

Cl. 2—Supremacy of the Constitution, Laws, and Treaties 

60 Id. at 554. 61 485 U.S. 505 (1988). 62 Id. at 512-513. 63 Id. at 512. 64Garcia v. San Antonio Metropolitan Transit Auth., 469 U.S. 528, 579-580 

(1985). 65The shift was pronounced in Gregory v. Ashcroft, 501 U.S. 452 (1991), in 

which the Court, cognizant of the constraints of Garcia, chose to apply a ‘‘plain 

statement’’ rule to construction of a statute seen to be intruding into the heart of 

state autonomy. Id. at 463. To do otherwise, said Justice O’Connor, was to confront 

‘‘a potential constitutional problem’’ under the Tenth Amendment and the guarantee 

clause of Article IV, § 4. Id. at 463-464. 66 505 U.S 144 (1992). 67The line of cases exemplified by Garcia was said to concern the authority of 

Congress to subject state governments to generally applicable laws, those covering 

private concerns as well as the States, necessitating no revisiting of those cases. 505 

U.S. at 160. 

ably, the Court has not totally abandoned the National League of 

Cities premise that there are limits on the extent to which federal 

regulation may burden States as States. Rather, it has stipulated 

that any such limits on exercise of federal power must be premised 

on a failure of the political processes to protect state interests, and 

‘‘must be tailored to compensate for [such] failings . . . rather than 

to dictate a ‘sacred province of state autonomy.’’’ 60

Further indication of what must be alleged in order to establish affirmative limits to commerce power regulation was provided 

in South Carolina v. Baker. 61 The Court expansively interpreted 

Garcia as meaning that there must be an allegation of ‘‘some extraordinary defects in the national political process’’ before the 

Court will intervene. A claim that Congress acted on incomplete information will not suffice, the Court noting that South Carolina 

had ‘‘not even alleged that it was deprived of any right to participate in the national political process or that it was singled out in 

a way that left it politically isolated and powerless.’’ 62 Thus, the 

general rule is that ‘‘limits on Congress’ authority to regulate state 

activities . . . are structural, not substantive—i.e., that States must 

find their protection from congressional regulation through the national political process, not through judicially defined spheres of 

unregulable state activity.’’ 63

Dissenting in Garcia, Justice Rehnquist predicted that the doctrine propounded by the dissenters and by those Justices in National League of Cities ‘‘will . . . in time again command the support 

of a majority of the Court.’’ 64 As the membership of the Court 

changed, it appeared that the prediction was proving true. 65 Confronted with the opportunity in New York v. United States, 66 to reexamine Garcia, the Court instead distinguished it, 67 striking

down a federal law on the basis that Congress could not ‘‘commandeer’’ the legislative and administrative processes of state govVerDate Apr<14>2004 11:28 Apr 15, 2004 Jkt 077500 PO 00000 Frm 00012 Fmt 8222 Sfmt 8222 C:\CONAN\CON019.SGM PRFM99 PsN: CON019
ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 971

Cl. 2—Supremacy of the Constitution, Laws, and Treaties 

68Struck down was a provision of law providing for the disposal of radioactive 

wastes generated in the United States by government and industry. Placing various 

responsibilities on the States, the provision sought to compel performance by requiring that any State that failed to provide for the permanent disposal of wastes generated within its borders must take title to, take possession of, and assume liability 

for the wastes, id. at 505 U.S. at 161, obviously a considerable burden. 69 Id. at 156. 70 Id. (quoting United States v. Darby, 312 U.S. 100, 124 (1941)). 71 505 U.S. at 156. 72 Id. at 168-69. 73 Id. at 175-77, 188. 74 Id. at 177. 

ernment to compel the administration of federal programs. 68 The

line of analysis pursued by the Court makes clear, however, the result when a Garcia kind of federal law is reviewed. 

That is, because the dispute involved the division of authority 

between federal and state governments, Justice O’Connor wrote for 

the Court, one could inquire whether Congress acted under a delegated power or one could ask whether Congress had invaded a 

state province protected by the Tenth Amendment. But, said the 

Justice, ‘‘the two inquiries are mirror images of each other. If a 

power is delegated to Congress in the Constitution, the Tenth 

Amendment expressly disclaims any reservation of that power to 

the States; if a power is an attribute of state sovereignty reserved 

by the Tenth Amendment, it is necessarily a power the Constitution has not conferred on Congress.’’ 69

Powers delegated to the Nation, therefore, are subject to limitations that reserve power to the States. This limitation is not 

found in the text of the Tenth Amendment, which is, the Court 

stated, ‘‘but a truism,’’ 70 but is a direct constraint on Article I powers when an incident of state sovereignty is invaded. 71 The ‘‘take 

title’’ provision was such an invasion. Both the Federal Government and the States owe political accountability to the people. 

When Congress encourages States to adopt and administer a federally-prescribed program, both governments maintain their accountability for their decisions. When Congress compels the States to 

act, state officials will bear the brunt of accountability that properly belongs at the national level. 72 The ‘‘take title’’ provision, because it presented the States with ‘‘an unavoidable command’’, 

transformed state governments into ‘‘regional offices’’ or ‘‘administrative agencies’’ of the Federal Government, impermissibly undermined the accountability owing the people and was void. 73 Whether viewed as lying outside Congress’ enumerated powers or as infringing the core of state sovereignty reserved by the Tenth 

Amendment, ‘‘the provision is inconsistent with the federal structure of our Government established by the Constitution.’’ 74

972 ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 

Cl. 2—Supremacy of the Constitution, Laws, and Treaties 

75 521 U.S. 898 (1997). 

76 521 U.S. at 933 (internal quotation marks omitted) (quoting New York v. 

United States, 505 U.S. 144, 188 (1992)). 

77 521 U.S. at 904-18. Notably, the Court expressly exempted from this rule the 

continuing role of the state courts in the enforcement of federal law. Id. at 905-08. 

78 521 U.S. at 919 (quoting THE FEDERALIST, No. 39 (Madison). 

79 521 U.S. at 918. 

Federal laws of general applicability, therefore, are surely subject to examination under the New York test rather than under the 

Garcia structural standard. The exercise of Congress’ commerce 

powers will likely be reviewed under a level of close scrutiny in the 

foreseeable future. 

Expanding upon its anti-commandeering rule, the Court in 

Printz v. United States 75 established ‘‘categorically’’ the rule that 

‘‘[t]he Federal Government may not compel the States to enact or 

administer a federal regulatory program.’’ 76 At issue in Printz was

a provision of the Brady Handgun Violence Prevention Act, which 

required, pending the development by the Attorney General of a 

national system by which criminal background checks on prospective firearms purchasers could be conducted, the chief law enforcement officers of state and local governments to conduct background 

checks to ascertain whether applicants were ineligible to purchase 

handguns. Confronting the absence of any textual basis for a ‘‘categorical’’ rule, the Court looked to history, which in its view demonstrated a paucity of congressional efforts to impose affirmative 

duties upon the States. 77 More important, the Court relied on the 

‘‘structural Constitution’’ to demonstrate that the Constitution of 

1787 had not taken from the States ‘‘a residuary and inviolable 

sovereignty,’’ 78 that it had, in fact and theory, retained a system 

of ‘‘dual sovereignty’’ 79 reflected in many things but most notably 

in the constitutional conferral ‘‘upon Congress of not all governmental powers, but only discrete, enumerated ones,’’ which was expressed in the Tenth Amendment. Thus, while it had earlier rejected the commandeering of legislative assistance, the Court now 

made clear that administrative officers and resources were also 

fenced off from federal power. 

The scope of the rule thus expounded was unclear. Particularly, Justice O’Connor in concurrence observed that Congress retained the power to enlist the States through contractual arrangements and on a voluntary basis. More pointedly, she stated that 

‘‘the Court appropriately refrains from deciding whether other 

purely ministerial reporting requirements imposed by Congress on 

ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 973

Cl. 2—Supremacy of the Constitution, Laws, and Treaties 

80 521 U.S. at 936 (citing 42 U.S.C. § 5779(a) (requiring state and local law enforcement agencies to report cases of missing children to the Department of Justice)).81 528 U.S. 141 (2000). 82 528 U.S. at 150-51. 83 76 U.S. (9 Wall.) 353 (1870). 84 Id. at 362. 85 161 U.S. 275 (1896). 

state and local authorities pursuant to its Commerce Clause powers are similarly invalid.’’ 80

A partial answer was provided in Reno v. Condon, 81 in which 

the Court upheld the Driver’s Privacy Protection Act against a 

charge that it offended the anti-commandeering rule of New

York and Printz. The Act in general limits disclosure and resale 

without a driver’s consent of personal information contained in the 

records of state motor vehicle departments, and requires disclosure 

of that information for specified government record-keeping purposes. While conceding that the Act ‘‘will require time and effort 

on the part of state employees,’’ the Court found this imposition 

permissible because the Act regulates state activities directly rather than requiring states to regulate private activities. 82

Federal Instrumentalities and Personnel and State Police 

Power

Federal instrumentalities and agencies have never enjoyed the 

same degree of immunity from state police regulation as from state 

taxation. The Court has looked to the nature of each regulation to 

determine whether it is compatible with the functions committed 

by Congress to the federal agency. This problem has arisen most 

often with reference to the applicability of state laws to the operation of national banks. Two correlative propositions have governed 

the decisions in these cases. The first was stated by Justice Miller 

in First National Bank v. Commonwealth. 83 ‘‘[National banks are] 

subject to the laws of the State, and are governed in their daily 

course of business far more by the laws of the State than of the 

Nation. All their contracts are governed and construed by State 

laws. Their acquisition and transfer of property, their right to collect their debts, and their liability to be sued for debts are all based 

on State law. It is only when the State law incapacitates the banks 

discharging their duties to the government that it becomes unconstitutional.’’ 84 In Davis v. Elmira Savings Bank, 85 the Court stated 

the second proposition thus: ‘‘National banks are instrumentalities 

of the Federal Government, created for a public purpose, and as 

such necessarily subject to the paramount authority of the United 

States. It follows that an attempt by a State to define their duties 

974 ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 

Cl. 2—Supremacy of the Constitution, Laws, and Treaties 

86 Id. at 283. 87Franklin Nat’l Bank v. New York, 347 U.S. 273 (1954). 88 Reagan v. Mercantile Trust Co., 154 U.S. 413 (1894). 89Free v. Bland, 369 U.S. 663 (1962). 90Sperry v. Florida, 373 U.S. 379 (1963). 91Penn Dairies v. Milk Control Comm’n, 318 U.S. 261 (1943). 

or control the conduct of their affairs is absolutely void, wherever 

such attempted exercise of authority expressly conflicts with the 

laws of the United States, and either frustrates the purpose of the 

national legislation, or impairs the efficiency of these agencies of 

the Federal Government to discharge the duties for the performance of which they were created.’’ 86

Similarly, a state law, insofar as it forbids national banks to 

use the word ‘‘saving’’ or ‘‘savings’’ in their business and advertising is void by reason of conflict with the Federal Reserve Act authorizing such banks to receive savings deposits. 87 However, federal incorporation of a railroad company of itself does not operate 

to exempt it from control by a State as to business consummated 

wholly therein. 88 Also, Treasury Department regulations, designed 

to implement the federal borrowing power (Art. I, § 8, cl. 2) by 

making United States Savings Bonds attractive to investors and 

conferring exclusive title thereto upon a surviving joint owner, 

override contrary state community property laws whereunder a 

one-half interest in such property remains part of the estate of a 

decedent co-owner. 89 Similarly, the Patent Office having been 

granted by Congress an unqualified authorization to license and 

regulate the conduct throughout the United States of nonlawyers 

as patent agents, a State, under the guise of prohibiting unauthorized practice of law, is preempted from enjoining such activities of 

a licensed agent as entail the rendering of legal opinions as to patentability or infringement of patent rights and the preparation and 

prosecution of application for patents. 90

The extent to which States may go in regulating contractors 

who furnish goods or services to the Federal Government is not as 

clearly established as is their right to tax such dealers. In 1943, a 

closely divided Court sustained the refusal of the Pennsylvania 

Milk Control Commission to renew the license of a milk dealer 

who, in violation of state law, had sold milk to the United States 

for consumption by troops at an army camp located on land belonging to the State, at prices below the minimum established by the 

Commission. 91 The majority was unable to find in congressional 

legislation, or in the Constitution, unaided by congressional enactment, any immunity from such price fixing regulations. On the 

same day, a different majority held that California could not penalize a milk dealer for selling milk to the War Department at less 

ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 975

Cl. 2—Supremacy of the Constitution, Laws, and Treaties 

92Pacific Coast Dairy v. Department of Agriculture, 318 U.S. 285 (1943). See

also Paul v. United States, 371 U.S. 245 (1963). 

93Leslie Miller, Inc. v. Arkansas, 353 U.S. 187 (1956). 94 North Dakota v. United States, 495 U.S. 423 (1990). The difficulty is that the 

case was five-to-four with a single Justice concurring with a plurality of four to 

reach the result. Id. at 444. Presumably, the concurrence agreed with the rationale 

set forth here, disagreeing only in other respects. 95 Id. at 435. Four dissenting Justices agreed with this principle, but they also 

would invalidate a state law that ‘‘actually and substantially interferes with specific 

federal programs.’’ Id. at 448, 451-452. 96 Id. That is, only when the overall effect, when balanced against other regulations applicable to similarly situated persons who do not deal with the government, 

imposes a discriminatory burden will they be invalidated. The concurring Justice 

was doubtful of this standard. Id. at 444 (Justice Scalia concurring). 97 22 U.S. (9 Wheat.) 738 (1824). 98 Id. at 865. 

than the minimum price fixed by state law where the sales and deliveries were made in a territory which had been ceded to the Federal Government by the State and were subject to the exclusive jurisdiction of the former. 92 On the other hand, by virtue of its conflict with standards set forth in the Armed Services Procurement 

Act, 41 U.S.C. § 152, for determining the letting of contracts to responsible bidders, a state law licensing contractors cannot be enforced against one selected by federal authorities for work on an 

Air Force base. 93

Most recently, the Court has done little to clarify the doctrinal 

difficulties. 94 The Court looked to a ‘‘functional’’ analysis of state 

regulations, much like the rule covering state taxation. ‘‘A state 

regulation is invalid only if it regulates the United States directly 

or discriminates against the Federal Government or those with 

whom it deals.’’ 95 In determining whether a regulation discriminates against the Federal Government, ‘‘the entire regulatory system should be analyzed.’’ 96

The Doctrine of Federal Exemption From State Taxation 

McCulloch v. Maryland.—Five years after the decision in 

McCulloch v. Maryland that a State may not tax an instrumentality of the Federal Government, the Court was asked to and did 

reexamine the entire question in Osborn v. United States Bank. 97

In that case counsel for the State of Ohio, whose attempt to tax the 

Bank was challenged, put forward two arguments of great importance. In the first place it was ‘‘contended, that, admitting Congress to possess the power, this exemption ought to have been expressly asserted in the act of incorporation; and not being expressed, ought not to be implied by the Court.’’ 98 To which Marshall replied: ‘‘It is no unusual thing for an act of Congress to 

imply, without expressing, this very exemption from state control, 

976 ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 

Cl. 2—Supremacy of the Constitution, Laws, and Treaties 

99 Id. 100 Id. at 866. 101 Id. at 867. 102 27 U.S. (2 Pet.) 449 (1829), followed in New York ex rel. Bank of Commerce 

v. New York City, 67 U.S. (2 Bl.) 620 (1863). 103 12 Stat. 709, 710, 1 (1863). 104 31 U.S.C. § 3124. The exemption under the statute is no broader than that 

which the Constitution requires. First Nat’l Bank v. Bartow County Bd. of Tax Assessors, 470 U.S. 583 (1985). The relationship of this statute to another, 12 U.S.C. 

§ 548, governing taxation of shares of national banking associations, has occasioned 

no little difficulty. American Bank & Trust Co. v. Dallas County, 463 U.S. 855 

(1983); Memphis Bank & Trust Co. v. Garner, 459 U.S. 392 (1983). 105 74 U.S. (7 Wall.) 26 (1868). 106 Hibernia Savings Society v. San Francisco, 200 U.S. 310, 315 (1906). 107Smith v. Davis, 323 U.S. 111 (1944). 

which is said to be so objectionable in this instance.’’ 99 Secondly,

the appellants relied ‘‘greatly on the distinction between the bank 

and the public institutions, such as the mint or the post office. The 

agents in those offices are, it is said, officers of government. . . . Not

so the directors of the bank. The connection of the government with 

the bank, is likened to that with contractors.’’ 100 Marshall accepted 

this analogy but not to the advantage of the appellants. He simply 

indicated that all contractors who dealt with the Government were 

entitled to immunity from taxation upon such transactions. 101

Thus, not only was the decision of McCulloch v. Maryland reaffirmed but the foundation was laid for the vast expansion of the 

principle of immunity that was to follow in the succeeding decades. 

Applicability of Doctrine to Federal Securities.—The first 

significant extension of the doctrine of the immunity of federal instrumentalities from state taxation came in Weston v. Charleston, 102 where Chief Justice Marshall also found in the Supremacy 

Clause a bar to state taxation of obligations of the United States. 

During the Civil War, when Congress authorized the issuance of 

legal tender notes, it explicitly declared that such notes, as well as 

United States bonds and other securities, should be exempt from 

state taxation. 103 A modified version of this section remains on the 

statute books today. 104 The right of Congress to exempt legal tender notes to the same extent as bonds was sustained in Bank v. 

Supervisors, 105 over the objection that such notes circulate as 

money and should be taxable in the same way as coin. But a state 

tax on checks issued by the Treasurer of the United States for interest accrued upon government bonds was sustained since it did 

not in any way affect the credit of the National Government. 106

Similarly, the assessment for an ad valorem property tax of an 

open account for money due under a federal contract, 107 and the 

inclusion of the value of United States bonds owed by a decedent, 

ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 977

Cl. 2—Supremacy of the Constitution, Laws, and Treaties 

108Plummer v. Coler, 178 U.S. 115 (1900); Blodgett v. Silberman, 277 U.S. 1, 

12 (1928). 109 Accord: Rockford Life Ins. Co. v. Illinois Dep’t of Revenue, 482 U.S. 182 

(1987) (Tax including in an investor’s net assets the value of federally-backed securities (‘‘Ginnie Maes’’) upheld, since it would have no adverse effect on Federal Government’s borrowing ability). 110Society for Savings v. Bowers, 349 U.S. 143 (1955). 111 Northwestern Mut. Life Ins. Co. v. Wisconsin, 275 U.S. 136, 140 (1927). 112Miller v. Milwaukee, 272 U.S. 713 (1927). 113Provident Inst. v. Massachusetts, 73 U.S. (6 Wall.) 611 (1868); Society for 

Savings v. Coite, 73 U.S. (6 Wall.) 594 (1868); Hamilton Company v. Massachusetts, 

73 U.S. (6 Wall.) 632 (1868); Home Ins. Co. v. New York, 134 U.S. 594 (1890); Werner Machine Co. v. Director of Taxation, 350 U.S. 492 (1956). 114Macallen v. Massachusetts, 279 U.S. 620, 625 (1929). 115 Northwestern Mutual Life Ins. Co. v. Wisconsin, 275 U.S. 136 (1927). 116 22 U.S. (9 Wheat.) 738 (1824). 

in measuring an inheritance tax, 108 were held valid, since neither 

tax would substantially embarrass the power of the United States 

to secure credit. 109 A state property tax levied on mutual savings 

banks and federal savings and loan associations and measured by 

the amount of their capital, surplus, or reserve and undivided profits, but without deduction of the value of their United States securities, was voided as a tax on obligations of the Federal Government. Apart from the fact that the ownership interest of depositors 

in such institutions was different from that of corporate stockholders, the tax was imposed on the banks which were solely liable 

for payment thereof. 110

Income from federal securities is also beyond the reach of the 

state taxing power as the cases now stand. 111 Nor can such a tax 

be imposed indirectly upon the stockholders on such part of the corporate dividends as corresponds to the part of the corporation’s income which is not assessed, i.e., income from tax exempt bonds. 112

A State may constitutionally levy an excise tax on corporations for 

the privilege of doing business, and measure the tax by the property of net income of the corporation, including tax exempt United 

States securities or the income derived therefrom. 113 The designation of a tax is not controlling. 114 Where a so-called ‘‘license tax’’ 

upon insurance companies, measured by gross income, including interest on government bonds, was, in effect, a commutation tax levied in lieu of other taxation upon the personal property of the taxpayer, it was still held to amount to an unconstitutional tax on the 

bonds themselves. 115

Taxation of Government Contractors.—In the course of his 

opinion in Osborn v. United States Bank, 116 Chief Justice Marshall 

posed the question: ‘‘Can a contractor for supplying a military post 

with provisions, be restrained from making purchases within any 

state, or from transporting the provisions to the place at which the 

978 ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 

Cl. 2—Supremacy of the Constitution, Laws, and Treaties 

117 Id. at 867. 118The dissent in James v. Dravo Contracting Co., 302 U.S. 134, 161 (1937), observed that the Court was overruling ‘‘a century of precedents.’’ See, e.g., Panhandle 

Oil Co. v. Mississippi ex rel. Knox, 277 U.S. 218 (1928) (voiding a state privilege 

tax on dealers in gasoline as applied to sales by a dealer to the Federal Government 

for use by Coast Guard). It was in Panhandle that Justice Holmes uttered his riposte to Chief Justice Marshall: ‘‘The power to tax is not the power to destroy while 

this Court sits.’’ Id. at 223 (dissenting). 119 302 U.S. 134 (1937). 120 Id. at 150 (quoting Willcuts v. Bunn, 282 U.S. 216, 225 (1931)). 121 Alabama v. King & Boozer, 314 U.S. 1 (1941), overruling Panhandle Oil Co. 

v. Mississippi ex rel. Knox, 277 U.S. 218 (1928), and Graves v. Texas Co., 298 U.S. 

393 (1936). See also Curry v. United States, 314 U.S. 14 (1941). ‘‘The Constitution 

... does not forbid a tax whose legal incidence is upon a contractor doing business 

with the United States, even though the economic burden of the tax, by contract 

or otherwise, is ultimately borne by the United States.’’ United States v. Boyd, 378 

U.S. 39, 44 (1964) (sustaining sales and use taxes on contractors using tangible personal property to carry out government cost-plus contract). 122 Alward v. Johnson, 282 U.S. 509 (1931). 123Trinityfarm Const. Co. v. Grosjean, 291 U.S. 466 (1934). 124 United States v. Allegheny County, 322 U.S. 174 (1944) (voiding property tax 

that included in assessment the value of federal machinery held by private party); 

Kern-Limerick v. Scurlock, 347 U.S. 110 (1954) (voiding gross receipts sales tax applied to contractor purchasing article under agreement whereby he was to act as 

agent for Government and title to articles purchased passed directly from vendor 

to United States). 

troops were stationed? Or could he be fined or taxed for doing so? 

We have not yet heard these questions answered in the affirmative.’’ 117 Today, the question insofar as taxation is concerned is answered in the affirmative. While the early cases looked toward immunity, 118 in James v. Dravo Contracting Co., 119 by a 5-to-4 vote, 

the Court established the modern doctrine. Upholding a state tax 

on the gross receipts of a contractor providing services to the Federal Government, the Court said that ‘‘‘[I]t is not necessary to cripple [the State’s power to tax] by extending the constitutional exemption from taxation to those subjects which fall within the general application of non-discriminatory laws, and where no direct 

burden is laid upon the governmental instrumentality, and there is 

only a remote, if any, influence upon the exercise of the functions 

of government.’’’ 120 A state-imposed sales tax upon the purchase of 

goods by a private firm having a cost-plus contract with the Federal Government was sustained, it not being critical to the tax’s validity that it would be passed on to the Government. 121 Previously,

it had sustained a gross receipts tax levied in lieu of a property tax 

upon the operator of an automobile stage line, who was engaged in 

carrying the mails as an independent contractor 122 and an excise 

tax on gasoline sold to a contractor with the Government and used 

to operate machinery in the construction of levees on the Mississippi River. 123 While the decisions have not set an unwavering 

line, 124 the Court has in recent years hewed to a very restrictive 

ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 979

Cl. 2—Supremacy of the Constitution, Laws, and Treaties 

125 United States v. New Mexico, 455 U.S. 720, 735 (1982). See South Carolina 

v. Baker, 485 U.S. 505, 523 (1988). 126 ‘‘[I]mmunity may not be conferred simply because the tax has an effect on 

the United States, or even because the Federal Government shoulders the entire 

economic burden of the levy.’’ United States v. New Mexico, 455 U.S. 720, 734 

(1982). Arizona Dep’t of Revenue v. Blaze Constr. Co., 119 S. Ct. 957 (1999) (the 

same rule applies when the contractual services are rendered on an Indian reservation).127 James v. Dravo Contracting Co., 302 U.S. 134, 161 (1937); Carson v. RoaneAnderson Co., 342 U.S. 232, 234 (1952); United States v. New Mexico, 455 U.S. 720, 

737 (1982). Roane-Anderson held that a section of the Atomic Energy Act barred the 

collection of state sales and use taxes in connection with sales to private companies 

of personal property used by them in fulfilling their contracts with the AEC. Thereafter, Congress repealed the section for the express purpose of placing AEC contractors on the same footing as other federal contractors, and the Court upheld imposition of the taxes. United States v. Boyd, 378 U.S. 39 (1964). 128 306 U.S. 466 (1939), followed in State Comm’n v. Van Cott, 306 U.S. 511 

(1939). This case overruled by implication Dobbins v. Erie County, 41 U.S. (16 Pet.) 

435 (1842), and New York ex rel. Rogers v. Graves, 299 U.S. 401 (1937), which held 

the income of federal employees to be immune from State taxation. 

doctrine of immunity. ‘‘[T]ax immunity is appropriate in only one 

circumstance: when the levy falls on the United States itself, or on 

an agency or instrumentality so closely connected to the Government that the two cannot realistically be viewed as separate entities, at least insofar as the activity being taxed is concerned.’’ 125

Thus, New Mexico sustained a state gross receipts tax and a use 

tax imposed upon contractors with the Federal Government which 

operated on ‘‘advanced funding,’’ drawing on federal deposits so 

that only federal funds were expended by the contractors to meet 

their obligations. 126 Of course, Congress may statutorily provide for 

immunity from taxation of federal contractors generally or in particular programs. 127

Taxation of Salaries of Employees of Federal Agencies.—

Of a piece with James v. Dravo Contracting Co. was the decision 

in Graves v. New York ex rel. O’Keefe, 128 handed down two years 

later. Repudiating the theory ‘‘that a tax on income is legally or 

economically a tax on its source,’’ the Court held that a State could 

levy a nondiscriminatory income tax upon the salary of an employee of a government corporation. In the opinion of the Court, 

Justice Stone intimated that Congress could not validly confer such 

an immunity upon federal employees. ‘‘The burden, so far as it can 

be said to exist or to affect the government in any indirect or incidental way, is one which the Constitution presupposes; and hence 

it cannot rightly be deemed to be within an implied restriction 

upon the taxing power of the national and state governments which 

the Constitution has expressly granted to one and has confirmed 

to the other. The immunity is not one to be implied from the Constitution, because if allowed it would impose to an inadmissible exVerDate Apr<14>2004 11:28 Apr 15, 2004 Jkt 077500 PO 00000 Frm 00021 Fmt 8222 Sfmt 8222 C:\CONAN\CON019.SGM PRFM99 PsN: CON019
980 ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 

Cl. 2—Supremacy of the Constitution, Laws, and Treaties 

129 Id. at 487. 130 Id. at 492. 131 4 U.S.C. § 111. The statute, part of the Public Salary Tax Act of 1939, was 

considered and enacted contemporaneously with the alteration occurring in constitutional law, exemplified by Graves. That is, in Helvering v. Gerhardt, 304 U.S. 405 

(1938), the Court had overruled precedents and held that Congress could impose 

nondiscriminatory taxes on the incomes of most state employees, and the 1939 Act 

had as its primary purpose the imposition of federal income taxes on the salaries 

of all state and local government employees. Feeling equity required it, Congress included a provision authorizing nondiscriminatory state taxation of federal employees. Graves came down while the provision was pending in Congress. See Davis v. 

Michigan Dept. of the Treasury, 489 U.S. 803, 810-814 (1989). For application of the 

Act to salaries of federal judges, see Jefferson County v. Acker, 527 U.S. 423 (1999) 

(upholding imposition of a local occupational tax). 132 Id. at 813. This case struck down, as violative of the provision, a state tax 

imposed on federal retirement benefits but exempting state retirement benefits. See

also Barker v. Kansas, 503 U.S. 594 (1992) (similarly voiding a state tax on federal 

military retirement benefits but not reaching state and local government retirees). 133 17 U.S. (4 Wheat.) 316, 426 (1819). 134Thomson v. Pacific R.R., 76 U.S. (9 Wall.) 579, 588, (1870); Union Pacific 

R.R. v. Peniston, 85 U.S. (18 Wall.) 5, 31 (1873). 135Susquehanna Power Co. v. Tax Comm’n (No. 1), 283 U.S. 291 (1931). 

tent a restriction on the taxing power which the Constitution has 

reserved to the state governments.’’ 129 Chief Justice Hughes concurred in the result without opinion. Justices Butler and 

McReynolds dissented and Justice Frankfurter wrote a concurring 

opinion in which he reserved judgment as to ‘‘whether Congress 

may, by express legislation, relieve its functionaries from their civic 

obligations to pay for the benefits of the State governments under 

which they live.’’ 130

That question is academic, Congress having consented to state 

taxation of its employees’ compensation as long as the taxation 

‘‘does not discriminate against the . . . employee, because of the 

source of the . . . compensation.’’ 131 This statute, the Court has 

held, ‘‘is coextensive with the prohibition against discriminatory 

taxes embodied in the modern constitutional doctrine of intergovernmental tax immunity.’’ 132

Ad Valorem Taxes Under the Doctrine.—Property owned by 

a federally chartered corporation engaged in private business is 

subject to state and local ad valorem taxes. This was conceded in 

McCulloch v. Maryland, 133 and confirmed a half century later with 

respect to railroads incorporated by Congress. 134 Similarly, a property tax may be levied against the lands under water which are 

owned by a person holding a license under the Federal Water 

Power Act. 135 However, when privately owned property erected by 

lessees on tax exempt state lands is taxed by a county at less than 

full value, and houses erected by contractors on land leased from 

a federal Air Force base are taxed at full value, the latter tax, soleVerDate Apr<15>2004 08:23 Aug 19, 2004 Jkt 077500 PO 00000 Frm 00022 Fmt 8222 Sfmt 8222 C:\CONAN\CON019.SGM PRFM99 PsN: CON019
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Cl. 2—Supremacy of the Constitution, Laws, and Treaties 

136Moses Lake Homes v. Grant County, 365 U.S. 744 (1961). 137Phillips Chemical Co. v. Dumas School Dist., 361 U.S. 376, 383, 387 (1960). 

In Offutt Housing Co. v. Sarpy County, 351 U.S. 253 (1956), a housing company was 

held liable for county personal property taxes on the ground that the Government 

had consented to state taxation of the company’s interest as lessee. Upon its completion of housing accommodations at an Air Force Base, the company had leased the 

houses and the furniture therein from the Federal Government. 138 Baltimore Shipbuilding Co. v. Baltimore, 195 U.S. 375 (1904). 139 Northern Pacific R.R. v. Myers, 172 U.S. 589 (1899); New Brunswick v. 

United States, 276 U.S. 547 (1928). 140 Irwin v. Wright, 258 U.S. 219 (1922). 141 117 U.S. 151 (1886). 142Lee v. Osceola Imp. Dist., 268 U.S. 643 (1925). 143 United States v. Allegheny County, 322 U.S. 174 (1944). 

ly by reason of the discrimination against the United States and 

its lessees, is rendered void. 136 Likewise, when under state laws, 

a school district does not tax private lessees of state and municipal 

realty, whose leases are subject to termination at the lessor’s option in the event of sale, but does levy a tax, measured by the entire value of the realty, on lessees of United States property utilized for private purposes and whose leases are terminable at the 

option of the United States in an emergency or upon sale, the discrimination voided the tax collected from the latter. ‘‘A state tax 

may not discriminate against the Government or those with whom 

it deals’’ in the absence of significant differences justifying levy of 

higher taxes on lessees of federal property. 137 Land conveyed by 

the United States to a corporation for dry dock purposes was subject to a general property tax, despite a reservation in the conveyance of a right to free use of the dry dock and a provision for forfeiture in case of the continued unfitness of the dry dock for use 

or the use of land for other purposes. 138 Also, where equitable title 

has passed to the purchaser of land from the Government, a State 

may tax the equitable owner on the full value thereof, despite retention of legal title; 139 but, in the case of reclamation entries, the 

tax may not be collected until the equitable title passes. 140 In the 

pioneer case of Van Brocklin v. Tennessee, 141 the State was denied 

the right to sell for taxes lands which the United States owned at 

the time the taxes were levied, but in which it had ceased to have 

any interest at the time of sale. Similarly, a State cannot assess 

land in the hands of private owners for benefits from a road improvement completed while it was owned by the United States. 142

In 1944, with two dissents, the Court held that where the Government purchased movable machinery and leased it to a private 

contractor the lessee could not be taxed on the full value of the 

equipment. 143 Twelve years later, and with a like number of Justices dissenting, the Court upheld the following taxes imposed on 

federal contractors: (1) a municipal tax levied pursuant to a state 

982 ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 

Cl. 2—Supremacy of the Constitution, Laws, and Treaties 

144 United States v. City of Detroit, 355 U.S. 466 (1958). The Court more recently has stated that Allegheny County ‘‘in large part was overruled’’ by Detroit. 

United States v. New Mexico, 455 U.S. 720, 732 (1982). 145 United States v. City of Detroit, 355 U.S. 478, 482, 483 (1958). See also California Bd. of Equalization v. Sierra Summit, 490 U.S. 844 (1989). 

law which stipulated that when tax exempt real property is used 

by a private firm for profit, the latter is subject to taxation to the 

same extent as if it owned the property, and based upon the value 

of real property, a factory, owned by the United States and made 

available under a lease permitting the contracting corporation to 

deduct such taxes from rentals paid by it; the tax was collectible 

only by direct action against the contractor for a debt owed, and 

was not applicable to federal properties on which payments in lieu 

of taxes are made; (2) a municipal tax, levied under the authority 

of the same state law, based on the value of the realty owned by 

the United States, and collected from a cost-plus-fixed-fee contractor, who paid no rent but agreed not to include any part of the 

cost of the facilities furnished by the Government in the price of 

goods supplied under the contract; (3) another municipal tax levied 

in the same State against a federal subcontractor, and computed on 

the value of materials and work in process in his possession, notwithstanding that title thereto had passed to the United States following his receipt of installment payments. 144

In sustaining the first tax, the Court held that it was imposed, 

not on the Government or on its property, but upon a private lessee, that it was computed by the value of the use to the contractor 

of the federally leased property, and that it was nondiscriminatory; 

that is, it was designed to equalize the tax burden carried by private business using exempt property with that of similar businesses using taxed property. Distinguishing the Allegheny case, the 

Court maintained that in this older decision, the tax invalidated 

was imposed directly on federal property and that the question of 

the legality of a privilege on use and possession of such property 

had been expressly reserved therein. Also insofar as the economic 

incidents of such tax on private use curtails the net rental accruing 

to the Government, such burden was viewed as insufficient to vitiate the tax. 145

Deeming the second and third taxes similar to the first, the 

Court sustained them as taxes on the privilege of using federal 

property in the conduct of private business for profit. With reference to the second, the Court emphasized that the Government 

had reserved no right of control over the contractor and, hence, the 

latter could not be viewed as an agent of the Government entitled 

ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 983

Cl. 2—Supremacy of the Constitution, Laws, and Treaties 

146 United States v. Township of Muskegon, 355 U.S. 484 (1958). 147 City of Detroit v. Murray Corp., 355 U.S. 489 (1958). In United States v. 

County of Fresno, 429 U.S. 452 (1977), these cases were reaffirmed and applied to 

sustain a tax imposed on the possessory interests of United States Forest Service 

employees in housing located in national forests within the county and supplied to 

the employees by the Forest Service as part of their compensation. A State or local 

government may raise revenues on the basis of property owned by the United States 

as long as it is in possession or use by the private citizen that is being taxed. 148 Clallam County v. United States, 263 U.S. 341 (1923). See also Cleveland v. 

United States, 323 U.S. 329, 333 (1945); United States v. Mississippi Tax Comm’n, 

412 U.S. 363 (1973); United States v. Mississippi Tax Comm’n, 421 U.S. 599 (1975). 149Mayo v. United States, 319 U.S. 441 (1943). A municipal tax on the privilege 

of working within the city, levied at the rate of one percent of earnings, although 

not deemed to be an income tax under state law, was sustained as such when collected from employees of a naval ordinance plant by reason of federal assent to that 

type of tax expressed in the Buck Act. 4 U.S.C. §§ 105-110. Howard v. Commissioners, 344 U.S. 624 (1953). 150Telegraph Co. v. Texas, 105 U.S. 460, 464 (1882). 151Des Moines Bank v. Fairweather, 263 U.S. 103, 106 (1923); Owensboro Nat’l 

Bank v. Owensboro, 173 U.S. 664, 669 (1899); First Nat’l Bank v. Adams, 258 U.S. 

362 (1922); Michigan Nat’l Bank v. Michigan, 365 U.S. 467 (1961). 152 Baltimore Nat’l Bank v. Tax Comm’n, 297 U.S. 209 (1936). 

to the immunity derivable from that status. 146 As to the third tax, 

the Court asserted that there was no difference between taxing a 

private party for the privilege of using property he possesses, and 

taxing him for possessing property which he uses; for, in both instances, the use was private profit. Moreover, the economic burden 

thrust upon the Government was viewed as even more remote than 

in the administration of the first two taxes. 147

Federal Property and Functions.—Property owned by the 

United States is, of course, wholly immune from state taxation. 148

No State can regulate, by the imposition of an inspection fee, any 

activity carried on by the United States directly through its own 

agents and employees. 149 An early case, the authority of which is 

now uncertain, held invalid a flat rate tax on telegraphic messages, 

as applied to messages sent by public officers on official business. 150

Federally Chartered Finance Agencies: Statutory Exemptions.—Fiscal institutions chartered by Congress, their shares and 

their property, are taxable only with the consent of Congress and 

only in conformity with the restrictions it has attached to its consent. 151 Immediately after the Supreme Court construed the statute authorizing the States to tax national bank shares as allowing 

a tax on the preferred shares of such a bank held by the Reconstruction Finance Corporation, 152 Congress passed a law exempting 

such shares from taxation. The Court upheld this measure, saying: 

‘‘When Congress authorized the states to impose such taxation, it 

did no more than gratuitously grant them political power which 

they theretofore lacked. Its sovereign power to revoke the grant reVerDate Apr<14>2004 11:28 Apr 15, 2004 Jkt 077500 PO 00000 Frm 00025 Fmt 8222 Sfmt 8222 C:\CONAN\CON019.SGM PRFM99 PsN: CON019
984 ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 

Cl. 2—Supremacy of the Constitution, Laws, and Treaties 

153Maricopa County v. Valley Bank, 318 U.S. 357, 362, (1943). 154 308 U.S. 21 (1939). 155 314 U.S. 95 (1941). 156 Id. at 101. 157 Id. at 102. 158Federal Land Bank v. Kiowa County, 368 U.S. 146 (1961). 

mained unimpaired, the grant of the privilege being only a declaration of legislative policy changeable at will.’’ 153 In Pittman v. Home 

Owners’ Corp., 154 the Court sustained the power of Congress under 

the Necessary and Proper Clause to immunize the activities of the 

Corporation from state taxation; and in Federal Land Bank v. Bismarck Lumber Co., 155 the like result was reached with respect to 

an attempt by the State to impose a retail sales tax on a sale of 

lumber and other building materials to the bank for use in repairing and improving property that had been acquired by foreclosure 

or mortgages. The State’s principal argument proceeded thus: 

‘‘Congress has authority to extend immunity only to the governmental functions of the federal land banks; the only governmental 

functions of the land banks are those performed by acting as depositories and fiscal agents for the federal government and providing a market for government bonds; all other functions of the 

land banks are private; petitioner here was engaged in an activity 

incidental to its business of lending money, an essentially private 

function; therefore § 26 cannot operate to strike down a sales tax 

upon purchases made in furtherance of petitioner’s lending functions.’’ 156 The Court rejected this argument and invalidated the tax 

saying: ‘‘The argument that the lending functions of the federal 

land banks are proprietary rather than governmental misconceives 

the nature of the federal government with respect to every function 

which it performs. The federal government is one of delegated powers, and from that it necessarily follows that any constitutional exercise of its delegated powers is governmental. . . . It also follows 

that, when Congress constitutionally creates a corporation through 

which the federal government lawfully acts, the activities of such 

corporation are governmental.’’ 157

Similarly, the lease by a federal land bank of oil and gas in a 

mineral estate, which it had reserved in land originally acquired 

through foreclosure and thereafter had conveyed to a third party, 

was held immune from a state personal property tax levied on the 

lease and on the royalties accruing thereunder. The fact that at the 

time of the conveyance and lease, the bank had recouped its entire 

loss resulting from the foreclosure did not operate to convert the 

mineral estate and lease into a non-governmental activity no longer 

entitled to exemption. 158 However, in the absence of federal legislation, a state law laying a percentage tax on the users of safety deVerDate Apr<14>2004 11:28 Apr 15, 2004 Jkt 077500 PO 00000 Frm 00026 Fmt 8222 Sfmt 8222 C:\CONAN\CON019.SGM PRFM99 PsN: CON019
ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 985

Cl. 2—Supremacy of the Constitution, Laws, and Treaties 

159 Colorado Bank v. Bedford, 310 U.S. 41 (1940). 160Long v. Rockwood, 277 U.S. 142 (1928). 161 286 U.S. 123 (1932). 162 Educational Films Corp. v. Ward, 282 U.S. 379 (1931). 163 235 U.S. 292 (1914). 164 Indian Oil Co. v. Oklahoma, 240 U.S. 522 (1916). 165 Howard v. Gipsy Oil Co., 247 U.S. 503 (1918); Large Oil Co. v. Howard, 248 

U.S. 549 (1919). 166 257 U.S. 501 (1922). 167Oklahoma v. Barnsdall Corp., 296 U.S. 521 (1936). 168 336 U.S. 342 (1949). Justice Rutledge, speaking for the Court, sketched the 

history of the immunity lessees of Indian lands from state taxation, which he found 

posit services, measured by the bank’s charges therefore, was held 

valid as applied to national banks. The tax, being on the user, did 

not, the Court held, impose an intrinsically unconstitutional burden on a federal instrumentality. 159

Royalties.—In 1928, the Court went so far as to hold that a 

State could not tax as income royalties for the use of a patent 

issued by the United States. 160 This proposition was soon overruled 

in Fox Film Corp. v. Doyal, 161 where a privilege tax based on gross 

income and applicable to royalties from copyrights was upheld. 

Likewise a State may lay a franchise tax on corporations, measured by the net income from all sources and applicable to income 

from copyright royalties. 162

Immunity of Lessees of Indian Lands.—Another line of 

anomalous decisions conferring tax immunity upon lessees of restricted Indian lands was overruled in 1949. The first of these 

cases, Choctaw, O. & G. R.R. v. Harrison, 163 held that a gross production tax on oil, gas, and other minerals was an occupational tax, 

and, as applied to a lessee of restricted Indian lands, was an unconstitutional burden on such lessee, who was deemed to be an instrumentality of the United States. Next, the Court held the lease 

itself a federal instrumentality immune from taxation. 164 A modified gross production tax imposed in lieu of all ad valorem taxes 

was invalidated in two per curiam decisions. 165 In Gillespie v. 

Oklahoma, 166 a tax upon net income of the lessee derived from 

sales of his share of oil produced from restricted lands also was 

condemned. Finally a petroleum excise tax upon every barrel of oil 

produced in the State was held inapplicable to oil produced on restricted Indian lands. 167 In harmony with the trend to restricting 

immunity implied from the Constitution to activities of the Government itself, the Court overruled all these decisions in Oklahoma

Tax Comm’n v. Texas Co. and held that a lessee of mineral rights 

in restricted Indian lands was subject to nondiscriminatory gross 

production and excise taxes, so long as Congress did not affirmatively grant him immunity. 168

986 ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 

Cl. 3—Oath of Office 

to stem from early rulings that tribal lands are themselves immune. The Kansas 

Indians, 72 U.S. (5 Wall.) 737 (1867); The New York Indians, 72 U.S. (5 Wall.) 761 

(1867). One of the first steps taken to curtail the scope of the immunity was Shaw 

v. Oil Corp., 276 U.S. 575 (1928), which held that lands outside a reservation, 

though purchased with restricted Indian funds, were subject to state taxation. Congress soon upset the decision, however, and its act was sustained in Board of County Comm’rs v. Seber, 318 U.S. 705 (1943). 

Summation and Evaluation 

Although McCulloch v. Maryland and Gibbons v. Ogden were

expressions of a single thesis, the supremacy of the National Government, their development after Marshall’s death has been sharply divergent. During the period when Gibbons v. Ogden was

eclipsed by the theory of dual federalism, the doctrine of McCulloch

v. Maryland was not merely followed but greatly extended as a restraint on state interference with federal instrumentalities. Conversely, the Court’s recent return to Marshall’s conception of the 

powers of Congress has coincided with a retreat from the more extreme positions taken in reliance upon McCulloch v. Maryland.

Today, the application of the Supremacy Clause is becoming, to an 

ever increasing degree, a matter of statutory interpretation; a determination whether state regulations can be reconciled with the 

language and policy of federal enactments. In the field of taxation, 

the Court has all but wiped out the private immunities previously 

implied from the Constitution without explicit legislative command. 

Broadly speaking, the immunity which remains is limited to activities of the Government itself, and to that which is explicitly created 

by statute, e.g., that granted to federal securities and to fiscal institutions chartered by Congress. But the term, activities, will be 

broadly construed. 

Clause 3. The Senators and Representatives before mentioned, and the Members of the several State Legislatures, and 

all executive and judicial Officers, both of the United States 

and of the several States, shall be bound by Oath or Affirmation, to support this Constitution; but no religious Test shall 

ever be required as a Qualification to any Office or public Trust 

under the United States. 

ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 987

Cl. 3—Oath of Office 

169McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316, 416 (1819). 170 Ex parte Garland, 71 U.S. (4 Wall.) 333, 337 (1867). 171 Cummings v. Missouri, 71 U.S. (4 Wall.) 277, 323 (1867). See also Bond v. 

Floyd, 385 U.S. 116 (1966), where the Supreme Court held that antiwar statements 

made by a newly elected member of the Georgia House of Representatives were not 

inconsistent with the oath of office, pledging support to the federal Constitution. 172 No. 27, (J. Cooke ed. 1961), 175 (emphasis in original). See also, id. at No. 

45, 312-313 (Madison). 173 1 M. FARRAND, THE RECORDS OF THE FEDERAL CONVENTION OF 1787 404 

(rev. ed. 1937). 174See Article I, § 3, cl. 1; § 4, cl. 1; 10; Article II, § 1, cl. 2; Article III, 2, cl. 

2; Article IV, §§ 1, 2; Article V; Amendments 13, 14, 15, 17, 19, 25, and 26. 175 1 Stat. 73 (1789). 

OATH OF OFFICE 

Power of Congress in Respect to Oaths 

Congress may require no other oath of fidelity to the Constitution, but it may add to this oath such other oath of office as its wisdom may require. 169 It may not, however, prescribe a test oath as 

a qualification for holding office, such an act being in effect an ex

post facto law, 170 and the same rule holds in the case of the 

States. 171

National Duties of State Officers 

Commenting in The Federalist on the requirement that state 

officers, as well as members of the state legislatures, shall be 

bound by oath or affirmation to support the Constitution, Hamilton 

wrote: ‘‘Thus the legislatures, courts, and magistrates, of the respective members, will be incorporated into the operations of the 

national government as far as its just and constitutional authority 

extends; and it will be rendered auxiliary to the enforcement of its 

laws.’’ 172 The younger Pinckney had expressed the same idea on 

the floor of the Philadelphia Convention: ‘‘They [the States] are the 

instruments upon which the Union must frequently depend for the 

support and execution of their powers . . .’’ 173 Indeed, the Constitution itself lays many duties, both positive and negative, upon the 

different organs of state government, 174 and Congress may frequently add others, provided it does not require the state authorities to act outside their normal jurisdiction. Early congressional 

legislation contains many illustrations of such action by Congress. 

The Judiciary Act of 1789 175 not only left the state courts in 

sole possession of a large part of the jurisdiction over controversies 

between citizens of different States and in concurrent possession of 

the rest, and by other sections state courts were authorized to entertain proceedings by the United States itself to enforce penalties 

and forfeitures under the revenue laws, examples of the principle 

that federal law is law to be applied by the state courts, but also 

988 ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 

Cl. 3—Oath of Office 

176See Warren, Federal Criminal Laws and the State Courts, 38 HARV. L. 

REV. 545 (1925); Holcomb, The States as Agents of the Nation, 3 SELECTED ESSAYS

ON CONSTITUTIONAL LAW 1187 (1938); Barnett, Cooperation Between the Federal and 

State Governments, 7 ORE. L. REV. 267 (1928). See also J. CLARK, THE RISE OF A

NEW FEDERALISM (1938); E. CORWIN, COURT OVER CONSTITUTION 148-168 (1938). 177 1 Stat. 302 (1793). 178For the development of opinion, especially on the part of state courts, adverse 

to the validity of such legislation, see 1 J. KENT, COMMENTARIES ON AMERICAN

LAW 396-404 (1826). 

179 41 U.S. (16 Pet.) 539 (1842). 180 65 U.S. (24 How.) 66 (1861). 181 41 U.S. (16 Pet.) 539, 622 (1842). See also Kentucky v. Dennison, 65 U.S. (24 

How.) 66, 108 (1861). The word ‘‘magistrates’’ in this passage does not refer solely 

to judicial officers but reflects the usage in that era in which officers generally were 

denominated magistrates; the power thus upheld is not the related but separate 

issue of the utilization of state courts to enforce federal law. 

any justice of the peace or other magistrates of any of the States 

were authorized to cause any offender against the United States to 

be arrested and imprisoned or bailed under the usual mode of process. From the beginning, Congress enacted hundreds of statutes 

that contained provisions authorizing state officers to enforce and 

execute federal laws. 176 Pursuant to the same idea of treating state 

governmental organs as available to the National Government for 

administrative purposes, the act of 1793 entrusted the rendition of 

fugitive slaves in part to national officials and in part to state officials and the rendition of fugitives from justice from one State to 

another exclusively to the state executives. 177

With the rise of the doctrine of States Rights and of the equal 

sovereignty of the States with the National Government, the availability of the former as instruments of the latter in the execution 

of its power came to be questioned. 178 In Prigg v. Pennsylvania, 179

decided in 1842, the constitutionality of the provision of the act of 

1793 making it the duty of state magistrates to act in the return 

of fugitive slaves was challenged; and in Kentucky v. Dennison, 180

decided on the eve of the Civil War, similar objection was leveled 

against the provision of the same act which made it ‘‘the duty’’ of 

the Chief Executive of a State to render up a fugitive from justice 

upon the demand of the Chief Executive of the State from which 

the fugitive had fled. The Court sustained both provisions, but 

upon the theory that the cooperation of the state authorities was 

purely voluntary. In the Prigg case the Court, speaking by Justice 

Story, said that ‘‘while a difference of opinion has existed, and may 

exist still on the point, in different states, whether state magistrates are bound to act under it, none is entertained by this 

Court, that state magistrates may, if they choose, exercise that authority, unless prohibited by state legislation.’’ 181 Subsequent cases 

confirmed the point that Congress could authorize willing state offiVerDate Apr<14>2004 11:28 Apr 15, 2004 Jkt 077500 PO 00000 Frm 00030 Fmt 8222 Sfmt 8222 C:\CONAN\CON019.SGM PRFM99 PsN: CON019
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Cl. 3—Oath of Office 

182 United States v. Jones, 109 U.S. 513, 519 (1883); Robertson v. Baldwin, 165 

U.S. 275, 280 (1897); Dallemagne v. Moisan, 197 U.S. 169, 174 (1905); Holmgren 

v. United States, 217 U.S. 509, 517 (1910); Parker v. Richard, 250 U.S. 235, 239 

(1919). 183Selective Draft Law Cases, 245 U.S. 366, 389 (1918). The Act was 40 Stat. 

76 (1917). 184 41 Stat. 314, § 22. In at least two States, the practice was approved by state 

appellate courts. Carse v. Marsh, 189 Cal. 743, 210 Pac. 257 (1922); United States 

v. Richards, 201 Wis. 130, 229 N.W. 675 (1930). On this and other issues under the 

Act, see Hart, Some Legal Questions Growing Out of the President’s Executive Order 

for Prohibition Enforcement, 13 VA. L. REV. 86 (1922). 185 65 U.S. (24 How.) 66, 107-108 (1861). 186 100 U.S. 371 (1880). 

cers to perform such federal duties. 182 Indeed, when Congress in 

the Selective Service Act of 1917 authorized enforcement to a great 

extent through state employees, the Court rejected ‘‘as too wanting 

in merit to require further notice’’ the contention that the Act was 

invalid because of this delegation. 183 State officials were frequently 

employed in the enforcement of the National Prohibition Act, and 

suits to abate nuisances as defined by the statute were authorized 

to be brought, in the name of the United States, not only by federal 

officials, but also by ‘‘any prosecuting attorney of any State or any 

subdivision thereof.’’ 184

In the Dennison case, however, it was held that while Congress 

could delegate it could not require performance of an obligation. 

The ‘‘duty’’ of state executives in the rendition of fugitives from justice was construed to be declaratory of a ‘‘moral duty.’’ Said Chief 

Justice Taney for the Court: ‘‘The act does not provide any means 

to compel the execution of this duty, nor inflict any punishment for 

neglect or refusal on the part of the Executive of the State; nor is 

there any clause or provision in the Constitution which arms the 

Government of the United States with this power. Indeed, such a 

power would place every State under the control and dominion of 

the General Government, even in the administration of its internal 

concerns and reserved rights. And we think it clear that the Federal Government, under the Constitution, has no power to impose 

on a State officer, as such, any duty whatever, and compel him to 

perform it[.] . . . It is true,’’ the Chief Justice conceded, ‘‘that in the 

early days of the Government, Congress relied with confidence 

upon the co-operation and support of the States, when exercising 

the legitimate powers of the General Government, and were accustomed to receive it, [but this, he explained, was] upon principles of 

comity, and from a sense of mutual and common interest, where no 

such duty was imposed by the Constitution.’’ 185

Eighteen years later, in Ex parte Siebold, 186 the Court sustained the right of Congress, under Article I, § 4, cl. 1 of the ConVerDate Apr<14>2004 11:28 Apr 15, 2004 Jkt 077500 PO 00000 Frm 00031 Fmt 8222 Sfmt 8222 C:\CONAN\CON019.SGM PRFM99 PsN: CON019
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Cl. 3—Oath of Office 

187 Id. at 392. 

188 209 U.S. 123 (1908). See also Board of Liquidation v. McComb, 92 U.S. 531, 

541 (1876). 

189Maine v. Thiboutot, 448 U.S. 1 (1980). 

stitution, to impose duties upon state election officials in connection 

with a congressional election and to prescribe additional penalties 

for the violation by such officials of their duties under state law. 

While the doctrine of the holding was expressly confined to cases 

in which the National Government and the States enjoy ‘‘a concurrent power over the same subject matter,’’ no attempt was made to 

catalogue such cases. Moreover, the outlook of Justice Bradley’s 

opinion for the Court was decidedly nationalistic rather than dualistic, as is shown by the answer made to the contention of counsel 

‘‘that the nature of sovereignty is such as to preclude the joint cooperation of two sovereigns, even in a matter in which they are 

mutually concerned.’’ To this Justice Bradley replied: ‘‘As a general 

rule, it is no doubt expedient and wise that the operations of the 

State and national governments should, as far as practicable, be 

conducted separately, in order to avoid undue jealousies and fears 

and conflicts of jurisdiction and power. But there is no reason for 

laying this down as a rule of universal application. It should never 

be made to override the plain and manifest dictates of the Constitution itself. We cannot yield to such a transcendental view of 

state sovereignty. The Constitution and laws of the United States 

are the supreme law of the land, and to these every citizen of every 

State owes obedience, whether in his individual or official capacity.’’ 187

Conflict thus developed early between these two doctrinal 

lines. But it was the Siebold line that was to prevail. Enforcement 

of obligations upon state officials through mandamus or through injunctions was readily available, even when the State itself was immune, through the fiction of Ex parte Young, 188 under which a 

state official could be sued in his official capacity but without the 

immunities attaching to his official capacity. Although the obligations were, for a long period, in their origin based on the Federal 

Constitution, the capacity of Congress to enforce statutory obligations through judicial action was little doubted. 189 Nonetheless, it 

was only recently that the Court squarely overruled Dennison. ‘‘If 

it seemed clear to the Court in 1861, facing the looming shadow of 

a Civil War, that ‘the Federal Government, under the Constitution, 

has no power to impose on a State officer, as such, any duty whatever, and compel him to perform it,’ . . . basic constitutional prinVerDate Apr<14>2004 11:28 Apr 15, 2004 Jkt 077500 PO 00000 Frm 00032 Fmt 8222 Sfmt 8222 C:\CONAN\CON019.SGM PRFM99 PsN: CON019
ART. VI—PRIOR DEBTS, SUPREMACY CLAUSE, ETC. 991

Cl. 3—Oath of Office 

190Puerto Rico v. Branstad, 483 U.S. 219, 227 (1987) (Dennison ‘‘rests upon a 

foundation with which time and the currents of constitutional change have dealt 

much less favorably’’). 191 In including territories in the statute, Congress acted under the territorial 

clause rather than under the extradition clause. New York ex rel. Kopel v. Bingham, 

211 U.S. 468 (1909). 192 New York v. United States, 112 S. Ct. 2408, 2430 (1992). See also FERC v. 

Mississippi, 456 U.S. 742, 761-765 (1982); Washington v. Washington State Commercial Passenger Fishing Vessel Ass’n, 443 U.S. 658, 695 (1979); Illinois v. City 

of Milwaukee, 406 U.S. 91, 106-108 (1972). 193The practice continues. See P.L. 94-435, title III, 90 Stat. 1394, 15 U.S.C. § 

15c (authorizing state attorneys general to bring parens patriae antitrust actions in 

the name of the State to secure monetary relief for damages to the citizens of the 

State); Medical Waste Tracking Act of 1988, P. L. 100-582, 102 Stat. 2955, 42 U.S.C. 

§ 6992f (authorizing States to impose civil and possibly criminal penalties for violations of the Act); Brady Handgun Violence Prevention Act, P.L. 103-159, tit. I, 107 

Stat. 1536, 18 U.S.C. § 922s (imposing on chief law enforcement officer of each jurisdiction to ascertain whether prospective firearms purchaser his disqualifying 

record). 194 New York v. United States, 112 S. Ct. 2408 (1992). 

ciples now point as clearly the other way.’’ 190 That case is doubly 

important, inasmuch as the Court spoke not only to the extradition 

clause and the federal statute directly enforcing it, but it also enforced a purely statutory right on behalf of a Territory that could 

not claim for itself rights under the clause. 191

Even as the Court imposes new federalism limits upon Congress’ powers to regulate the States as States, it has reaffirmed the 

principle that Congress may authorize the federal courts to compel 

state officials to comply with federal law, statutory as well as constitutional. ‘‘[T]he Supremacy Clause makes federal law paramount 

over the contrary positions of state officials; the power of federal 

courts to enforce federal law thus presupposes some authority to 

order state officials to comply.’’ 192

No doubt, there is tension between the exercise of Congress’ 

power to impose duties on state officials 193 and the developing doctrine under which the Court holds that Congress may not ‘‘commandeer’’ state legislative or administrative processes in the enforcement of federal programs. 194 However, the existence of the Supremacy Clause and the federal oath of office, as well as a body of 

precedent indicates that coexistence of the two lines of principles 

will be maintained.