Wilmington journal., 1864-09-22
Y VI NM IT IE1-7I VI " Ue AINEl Z
Richmond, Va, 29th Aug, 1864. {
Hon, Il


Hon. GEO. A. TRENHOLM Sac'y OF the Treasury
Sir@-In the absence of the Attorney General have
the honor to give an opinion upon the made by
the Bank of Cape Fear and the Banks of North Car
oIina.
1t is said and assumed to be true that tbee Banks
were established, not merely for the benefit of the pri-
vate Stockholders but the great fiscal agents the
State, which is also largely interested in them Stock
holders. They are also required by their charters to
loan money to the State to receive the deposites o. the
State and to perform many other duties that are not
required of any other Banks"
The questions asked by your directions are:
First, Has the Confederate Government any right
to impose any tax upon these Banks in their corporate
character ?'
Second "If co. is the interest of the State therein IL
able to taxation by tie Confederate Government 2"
It may be ASSUMED withsut argument that Banks are
liable to taxation in their corporate character. unless
there is some special exemption. Providence Bank v.
Billings, Peters 563.
1t may also be assumed that the fact that State is
one of the Stockholders of Bank, does not exempt the
Bank from taxation il its corporate character
BY becoming c0rForatoT, the State dIvests itself
so far as concerns the transaction Of that Company Of
its sovereign character and taxes that Of private cit
IL u. Instead OF communicating 80 the Company its
privileges and prerogative, it descands to G7 with
those with whom it associates ITSELF and takes the char
acSer which belongs to itsassoCates, and to the bust
which is to be transacted" Bank OF the United
States v. the Pantera Bank Of Georgia, 9, Wheat
907.
the real QuGStlOn IN lnlS case seems 20 Does
the TACT that these Banks were established as the fiscal
agents OF the State exempt them from Confederate tax
alton in their corporate characters?
The answer to the question is found in the theory of
the two governments. That theory, far our pres.
ent purpose IS concerned, may thus brtHy stated
The people OF each State, who alone have sovereignty
have established two governmen s, and each have del
egated certain powers. The govern mens are sep
arae, distinct and Independent, though they both act
upon the same persons and the same things Being
separate distinct and Independent, neither can in tine
exercise of its legislative powers. act directly upo the
powers, fixtures or machinery Of the otter. 1hesa
Banks having been este bshed by the State ts fiscal
agent part OF the machinery Of the State COyerd-
ment, and not theITslre lsbe to Confederate t8Xa
tion in their corporate character.
If apply The principle involved il the Confederate
taxation of the fiscal agenS OF State 10 the C)uftde
ate Constitution generally, we shall Fl ii it rItle Of
changing totally the character of that in2trCment we
shall find it capable OF greatly emsarragouS, ii not
wholly arrestipg, all tie OF the government
and of prosrang the States at the iset OF the COned
crate government
If the Confederate government may tax one i1sru-
ment employed by State in the execution of its pow
er5 it may tax any and every other i&etrument. 1t
may tax commissions issued uuSer the RTea seal of the
State. it may tax every Judicial process Issued by
State it may tax the State House. the Court II use,
the county aiIs Oft State it may tax the Ok
State it may tax all the employed by State,
to an excess which would impair, if not deea the ends
of State Government. This wa9 not intended by the ,
to make the State Government dependent the Cor
federate Government for in the very preamble ct the
Confederate governmental character oil sovereign ana
independent is given to each Siae. This is not all
If the principle of construction involved in taxaton
of the fiscal agent of State be established what 30
restrain the Confederate Government from EXERCISING
control over the Independence Of State in any shape
it may please to give it. The legislative po7er of the
Confederate Government is not confnCd to toxa'ion.
That is not the Ony mode IN which 1t might be dis
played. The question is in truth question OF indie
pendence and if the right Of the Confederate Govern
ment to tax the employed By state be conceded,
the declaration that State has separate and ndepend
ent government, is empty ard uuneaping defamation
See McCu0ch Vs, the State OF Maryland, Wheat
432-433
And here, with the greatest Difference, may be al
owed to say that do not the lecessity tor the
ne Of argument adopted by the Chief Justice in that
and two other like The question in those
cases in this, seems to be simply oue u1t Of SW
Erensucy" but, already stated OF the separate and
independent existence CT the two governments Ad.
I1ittng that plain propostion-a proposition not gus
ceptible OF denaland the cor0lary is inettf be tss @
the powers and machinery of neither government is
within the scope OF the taxing other legislative pow
er Of the other.
But the charters Of the Banks are not before me-
and the question is important and, 90 far as |
know in its present shane, novel one, and op the
means Of investigation very limited in the Depart.
meat, beg leave to suggest that case be made and
submitted for judicial determination.
Very respectfully your obj serV't
ISigned WADE KEYE5,
Actg Atto'y GGlI.