Baltimore daily commercial. [volume] (Baltimore, Md.) 1865-1867, 1866-05-05
C9URF PROCEEDINGS.


C0URF PROCEEDINGS.
FRIDAY, May 1, 1876.
,Sp2e1Ior LoW!.-He'ore Judge Martin.-Sauluel
NJ. Shoemaker. Johns Hopkins and other holders Of
shares Of capital stock of the First National Bank of
Baltimore vs., tne Mayor and City Council of Balti-
more and Aug NJ. Price, City Collector. Petition for
an Injunction to restrain the defendants from pro-
ceedng to sell the goods of petitioners and to re-
strain them from collecting the city taxes levied upon
the shares of the bank, &c. In this case which. rs
previously noticed, had been argued last week Judge
1lartin yesterday delivered elaborate opinion,
Il appears from the bill in this case that the taxes
lcVled by the Mayor and City Council of Baltimore
on The shares OF the complanants as stockholders iD
the First National Bank Of Baitmorefor the year 1861
we're imposed by ordinances passed on the 10Th April
4oo4 ana that the National Currency OilS6 vas not
approved until the Sd Of June of that year poster0r
by some months 10 the passage of the taxing Ordinan
ces for 1861 and il very clear that lhorh fhe stnc
holders in this bank who reside within the limits of
the city o. Baltimore would be Liable to the taxes
imposed by the ordinances of the I'd ofMav 1865 for
that year, on the construction which the Supreme
court have placed on the DrO1jSo to be found in the
lst section Of the act of Congress Ofthe Sd of june
i5o!, III the case OF Van Allen and others against
Nolan and Others decided at the September term
800; yet Is IS equally apparent that if the right in
the State to subject these shares to taxation did
not exist as an original nherept State power which
had never been renquished, but was derived exclu-
sIveiy from the legislative authority and permission
accorded to the States by the act Of Congress of the
"a OF June, 1864 then the ordinances of the 10th of
Hrrll lhol, IN reference to the taxation Of these
shares, must be considered imperative ard void
validity could 0nly be impaired 10 them by giving to
the of Congress of June 1864 a retroactive 0pe
ration; proposition which not asserted in tho
argument, and could not bo maintained The tar
Vas Illegal in its nCeaOn. II is certainly true that
Congress under the Constitution possesses no mower
to confer upon the States by affirmative grant the
right ot taxation, and the States hayeno right to re
c1lvo rom Congress 4h0 grant Of any such power.
me right OF taxation resides IN the State in
cldant Of It's Sovereignty, and is teuSive with
aaC 10 which i Is incident and extends TO all tho
people Of the Government and embraces every thing
"nGh can be f4ll!y considered as constituting part
OF the mass Of property within the State, But in
reference to SUBJECT matter over which Congress
the power Of taxation but from the Of which
Congress may in consequence Of its paramount au-
th0uty exclude tho States, the principle is firmly
established that Congress may when in its judgment
II may be deemed wise waive or withhold the eNer-
untrammeled-5 Wheat 2l: 2 Pet, go: u How, Z99
When, therefore, the shares held by stockholders
in these National banks are subjected to taxation bv
force ot the list section Of the Currency act il is not
upOr the ground that the right to imUOSe the tax is
hold by the Stayes under grant from Congress but
on the principle that in relation to a subject where
tha power of Congress and that of the States is con-
current Congress has waived the right to interfere
tho ordinances Of The u of May 1866 imposing tax
ON these shares for that year, are legitimate with
sIcc to all the stockholders who reside the city
The bill however, alleges, and the fact is not
trOvered, that the entire capital Of this bank was
| composed Of the liye-Iweuty bonds Of the United
States, and 1t has been established by the Supreme
Court by series OF adjudicatCns, that the capital
u Il oan mus co'tituteu IS exempt IRON State tax
alton A tax on the capital OF bank, which is made
up of these bonds, Is treated q tax the bonds
and the bonds cannot be taxed as they are instru-
mentalIies, created ard employed by the Govern
ment of the United States so necessary and proper
for the purpose Of carrying into execution their ac
| Wheat $50; 2 Pet, 447; , Black, 620 , Wallace 200
| If the capital Of bank cannot be taxed when il
consists of the bonds stock mOneyed securities Of
the United States, it follows as a necessary conse-
quence that these securities, when in the hands Of
individuals cannot be regarded as part Of the as
sessable property Of the holders and such subject
| to the taxing power Of the States.-2 Pet, 44g 70
These propositions have not been disputed by the
counsel of the defendants, but they have insisted in
the tern8 of their brief shat the property upon which
this tax is claimed and imposed, the individual in
t9res OF che harehoders 70 the profits accrqng from
the use Of the capital stock Of the bank, and is
tax on the bonds which to be considered, after
the investment Of the bonds, as the exclusive
porate property Of the bank and that the complain
ants as shareholders in the First National Bank of
baltimore were liable TO taxation by the State and
city irrespective Of the act of Congress of the Sd Of
| June, lS64-t Wheat, 49,; Queen VS.. Arnould, g;
AdOph and Ellis, n S., sos.
The argument on this branch of the case by the
counsel on both sides was very full and able but IS
useless to pursue this inquiry, because am satisfied
that the supreme Court have decided in the case of
Van Allen Nolan, that the right of the States to
impose tax upon the shareholders in these national
associations is derived entirely from the provisions
Of the Act Of Congress of 1861 In the opinion of the
Supreme Court, in the of Van Allen and Nolan,
the following passages to be found But in ad-
dIuon to this yIew the tax on the shares is tax
on tho capital OF the bank. The corporation is the
legal owner OF all the property Of the bank, real and
personal, and within the powers conferred upon it by
the charter, and for the purposes for which it was
W u
utely as private individual can deal with his own,
ard after quoting tho opinion of Lord Denman in the
case of Queen ATnOuld, Adolp Ellis N. S. SO6
the court say: The interest Of the shareholder
titles him 20 participate il the net profits earned by
| the bank IN the employment OF its capital, during
the existence OF It's charter, IN proportion TO the
Der Of the shares, and upon Its dissolution termi
nation, to his proportion Of the property that may
remain Of the corporation, after the payment of its
debts. This is distinct, independent interest or
property, held by the shareholders like any other
property that may belong to him Now it is this in
q a
tlOn by the States under the limitation prescribed
Separating this language from the context Of the
opinion, the inference might be drawn that as this
tax not to be regarded even indirect tax
the moneJed securities Of the United States but
upon these shares distinct Independent interest
or property held by the shareholder like any other
property that may have belonged to him, the Court
intended to decide that 1t was within the qualifca-
tion announced by Mr.. Chief Justice Marshall in
Mccullough against tho Stale Of Maryland Wheat
BIG But II will be perceived from examination Of
tho opinion that the Court maintain the doctrine
that these shares only be taxed by the States in
the mode, and subject to the limitations pre-
serlhGd by the 4St section OF the act of Congress
Of lsOir upon the conditions annexed to this act OIL
waiver and concession proposition altogether ire
concapIe with the supPoSton tnat the right to I'M
pose this tax eX led in the States irrespective Of the
authority contained in the provisO to which l have
referred. For If the power to tax these shares
maiHed in the States original inherent power
Incidental to their sovereignty, it is very plain hat
it was power which could not be enlarged dinlin-
ished qualified by any action on the part of the
Congress Of the United States.
In the dissenting opinion delivered by Mr. Chief
Justice Chase in an Aliens case, the learned Judge
remarks: That we do not understand the majority
CT the court as asserting that shares OF capital in
vested in national securities could be taxed without
authority from Congress- This is the construction
placed upon the opinion by the dissenting Judges and
as dissenting opinion is presumed to be filed
until 1t has been submitted to the inspection of all
the members of the court when it contains an afr-
nation that particular proposition was or was noe
intended TO be adjudcated and the assertion is not
cOntradicted explained it is to be received as q
correct Interpretation OF the decision.
In conformity with the views thus expressed, will
sign an order granting an injunction restraining the
Mayor and City Council of Baltimore from collect
inE the tax claimed to be due from the shareholders
for the year 1864 and also restraining them from
collecting the claimed to be due from the share
holders who reside outside of the limits OF the city
for both the year 1864 and 1865. The shareholders
who reside in Baltimore and Frederick counties are
protec ed from taxation by the city for the year S
by the act of Assembly of 1865, chapter ll9. But
refuse TO grant injunction to restrain the Mayor
and City Council from collecting the tax claimed to
be due from the shareholders who reside in the city
for the year 1865.
City Circuit CoHrt.-BefOre Hon. Judge Alexander
Thomas COdd ct al. VS.. Thomas J. Warrington ct al
decree for the sale OF certain property on Bond St.
and appointing C.. L. Leary, Esq, trustee to make
the sale.
United States District Court-Hon. Judge Giles
The United States Government vs.. lot of goods bs-
longing TO ): Shagaden and George Schneider
seized on their Premises-betore reported; case not
concluded.