, 1865-10-27

l EQQ Fu1Cf1of 10 Ill Gl4le CQ0dGtut0nS 4QQ lays.
Hence no man would for moment claim that the
thxing power Of the State could be excred against
! the public money In the Treasury, the pretdous
nse se q lo' or o'ber s 4o psops DEVOTED to
! public purposet BY the General Government
The Court then comments On the decision
In lhe Federal Cpurts that the late United
States Bank was Government agency Of the
saine Kind and therefore exempt from State
taxation, though the Government owned only
scveu millions Of its thlrty-ive millions Of
capital, and appointed only five Of It's twenty
five directors. But the Court point ont the Eact
that Chicf Justice Marshall In deciding TINT
the Bank is not taxable By the State expressly
reserves the right Of the State to tax share
holders On their shares. The 1Aneuago Of the
Chief Justice In Mccullough u. s.ute OF
Maryland Is as follows:
''1hIs opinion does not deurife the States OF any
reeources which ,hey originally postessed. ii dos
not extend to ta1 p1id BY the real property OF The
bank, In common with the ottcf rea1 properly
rest he s &c s es. m "a II IA ,' aaa as NC Sod e T. & &c
f1ettfsdson II cos,u7on as:A etaer PTnpe7tyef Ia
sasse DESCRIPTION throughout tss Gt0s<.
But this IL tA1 on the operations of the bank,
BY the coyesnmcnt OF the Union to car1y l,a powers
Eto execution. Such = tax must be unconstitp-
uonal ~, NAedzoM, 4sG.
The n. T. Court Of Appeals argued that 1t
was with special reference to Chief Justice
Marshall's language quoted above, that the
following analogous provision was inserted In
the present National Banking act, viz: -.
Protided, That nothing IN this act ahall be cou-
sued to prevent al the sharea Of any Of the said
lnc included in ihc valuaHon Of personas property
Of ouch person or coToration IN the assessment or
taxes imposed BY md under State authority at the
-xx
nor ut greater Enic than IL 1aseAeed upon other
noncyed capital tn the bonds Of individual citizens
Of this State: tcrsdtd further. that the tax 10 in.
oi the association, authorized by this act shall not
cxceed the rate imposed upon the shares or auY of
the banks Organized under authority Of the Slate
that nothing in this shall exempt the real estats
uf associations from either State county O. nuni
apaI ta1es 10 the same extent according to is
value - othsr real estate Il liked" (Sec 4l.}
The distinction between taxing the bonds
In the hands Of the bank and taxing thr
shares of stockholdet, is thus clearly
drawn:
1.-The shares OF these banks are 1,crsons1 proper.
y. Tnc stock - species Of chose in action, or
equitable Interest which the sharehoaef posscs.
ees, md which be can enforce against the CORPORA.
tiou. The shareholder Is no, the owner ot he
he Is thopwncr Of the discounted notes q o,her
sccuntis held by The bank he il not The owner
Of either, 10 is only entitled to participate ia
a. et n9 e e3nsa S.,s Il, :, tns and
what may remain after payment or ttk dtbts
4 little rs1ccuon will chow ibis to be so. Sun.
goss thc eani!al to be n,ested partly ~ stock.
uprsear; interest IN the public stocka be has, a.
have said, an equal property in the other secarl-
IT,. A to the la1er thcze Is no possible ohec-
constantly anctsatin2, A national hank must own
the amount ofthe stocks required 10 be deposited
viii the Treasurer. A. to ans further amount, the
1.-THE ehreholaez is ts3ed on The footing * pa1t
on each OCCASION on vhie6 The a.sessnent ia made
ssset, deduc,ug tbe debts, consists il IBIS is exempt ]
stock, and the u.t be Oh the fractional ra1t of
each share; which nould generally be, perfectly
eetain intereet IL al tie properly OF ts cospor
alton. What contend for Is, that Il il not tho in
tetest Of the owner OF the property which the bank
s. 5s Ss1e
N nterrst. Neither they nor the stockholders can
toaeh IN item q the property: They Gannoi t1aas-
Of disposition which aEe incidental 10 the owner.
eh1p Of property. II there IL anything which 4s-
slnlilaes the tnereet Of the crrdftors and shase-
holdese 10 that Of oTners, the asd!,os certainly
cntted to be paid: and IN case of Insolvency, the
proceeds ai-inE ftom the conversion Of The insects
Ne Is ap'sd to .c ct 1hstr demands
stIned br the con,tt OF the e1prets provision cou
talned IN The laws provided for loans epeaks Of the
bonds as not liable 70 State taxaior. The meaning
IL that the oWners Of these bonds are thus exempt
not that III persou. hxsing costersl intcrest IN
lhcn srr exempt
The principle that the United States bonds
are exempt from State taxation, whether In
the hands Of banks or individuals, Is still Of:
Atmcd as follows:
ave tax our public banks on thels cspttal puf.u.
ant 10 the SCI Of 1868. and is presumed thai the
.s1tns otnce1s conform 70 that Judgment in tht
the part invested In Tinted States bonds. This *
e.nptlpu IL made bcc4use tho banks which art taxed
arc The owner Of these bonds+ But we have shoN7
that the shareholders art not the owners OF ths
bonds held by the banks"
The decision, Of course, leaves open th.
legislative question whether, consistent.
with good faith and the nationnl interests
.hs bonds can be taxed By Congress. Moth
Ing In the act expressly forbids such taxation
and the most forcible objection TO the polio.
is that for Congress to tax them Is N attemp
By debtor to reduce the rate Of interest Of
| his own debt As the expectation OF til
Government Is 10 take up the present obiiga
tIons Us fast as they hnve the right to do 50
! with means obtained at a lower rate Of Inter
cst, 1t follows that should Congress tax th
debt, or, what Is equivalent, rcpudiate POI
tion Of the interest, they would not on).
be compelled in reborrowing the principal Il
| pay En- additional interest equal to the amour
repudiated, but enough 10 cover the risks o
| future rcpudiations. It is easy to see, there
fore, that but little Is to be made By the Cos
crnment by attempting to +tlive on the intc'
est OF what it owcs," however vocllerousl
that policy may be recommended by som
who have found 1t practicable in their ow
1 cases.