The New York herald., 1867-03-31
THE oURTs.
COURT or APPEALS.


Important Cases Respecting the Power OF ths
staie 10 Tax United States Ccrtincates Of
Indebtedness.
Before Chief Judge Davies and full bench.
The People rel As Broad,oay NATIONAL Bank, Lp-
pelanis Ua John r. Hoffman, Mayor, do, Respondents
On the 30h Of April 1885, the Legislature passed act
authorizing and directing the Board Of Supervisors Of
the county Of New York to refund To any bank which
may have paid that county for the year 1858
1884 such an amount OF said tar as was imposed or
leved upon said bank in respect 70 any portion Of It's
capital stock invested in the securities or the United
States exempt from taxation and for this pur-
pose TO be issued county bonds signed
sealed and attested as thereby required for the
amount OF the claim OF such bank, after II should
have been audited and allowed by said Board and
approved by the Mayor and Corporation Counsel
The Broadway Bank having paid such tax presented its
claim to the Board, and the same was audited and
allowed at the sum Of $53 l32 o. OF May l. 1885, and
such auditing and allowance was approved by the Mayor
and Corporation Counsel and bonds for that amount
were ordered by the Board TO be issued said bank
- pursuance OF an ordinance Of the said Board
prescribed by the said act Of April 80, 1883.
and said ordinance were prepared and ready TO
70 signed, sealed and issued to the said bank
but the defendants refused to execute or deliver the
same. The alleged ground OF this refusal that por
sion Of the capital stock Of the Broadway Bank, on
was invested In certificates of Indebtedness issued under
the act OF March 1862, and the defendants claim that
such certificates arc not securities Of the United States
BY law exempt from taxation and that had been 90
adjudged by branch OF tho Supreme Court since the
decision Of the Board Of Supervisors.
Phe relators claim, 6rst that decision Of the board
was judicial determination, and when approved by the
Mayor and Corporation Counsel became Gna. And
second, If the question is open for discussion, they
claim that such certificates of indebtedness
u The United states exempt from taxation
In support of the second proposition REALTORS
forth a letter from Richard 0Gorman the Corporation
Counsel and cite the Of the Mercantile Bank,
American Exchange Bank, Ocean Bank and Others
which were taken TO the United States supreme Court
where was decided that the tax of 1868 and 1854 i'm
posed on these banks Illegal portion OF the
rifles in which the capital OF these banks was invested
consisted OF these certificates OF Indebtedness and
exempt
AT the special term Of the supreme Court, where the
case was tired Judgment was rendered in favor Of the
defendant which judgment having been affirmed by the
supreme Court at general term, the plaintiffs ap
= ." 's's .sisgaa.
The appellants 1.-."', n's'' -!ags me exemption
Of government securities from ..sAtion dogs
not depend upon the act Of Congress OF Feb-
ruary 2S, 1852, but rests on constitutional grounds;
on the contract made by tho government with the cti
third that the act OF Congress OF February rs,
1862, was merely declaraiory Of Indebtedness, and
said act in these words"A stocks, bonds and other
securities OF the United States held by individuals
poations associations within the United States shall
be exempt from taxation by under State auhority;'
fourth certificates Of Indebtedness issued under the
Of March, 1862 stand the footing, and
titled to the same immunites as any other species
Of government security, and that the act Of Congress
Juno 30 1854 provides that call bonds Treasury notes
and other obligations Of the United States shall be ex.
empt from taxation by or under State municipal
thorityn
The respondents claim that the exemption OF govern
ment securities from taxation by State authority
upon that clause OF the constitution which authorizes
Congress to borrow money the credit Of the United
States that Congress had express authority to grant
exemption from the taxing power OF the States but
that IL was only where exemption arises from the
nature Of the subject and might be Implied from the
constitution ITSELF that Congress may declare It, None
sxempting the public debt from State taxes depended
IN any degree upon the legislation Of Congress \
the thing The exemption necessarily implied
therefrom The point is whether issuing q certificate
acknowledging pre-existsng Indebtedness arising from
She purchase Of supplies, is borrowing money" which
pcaon from the principles Of the constitution and
compelled TO resort TO the acts Of Congress- they must
fail that Congress only declare exemption arising
from the nature OF the subject which courts would have
caraton; that OF the OF Congress exemptng
federal securities from State taxation apply certificates
Of indebtedness that In the act Of February rs 1862 the
phrase other securtes'' did not include legal tender
The cases Of the People rel the Bank Of New
Yerk r. B. Connolly, and Of the Bank Of the Repub.
lie vs. John T. Hoffman, Mayor, so, involving substan.
TALLY the same points, were argued and submitted
the Board OF Supervisors, was also argued and sub.
mted which involved the question OF the right Of the
Date tax United States legal tender notes. appellants
contepdng that the credit OF the United States govern
ment exempt from State taxation, matter in what
form that credit may be embodied and respondents
tending that these notes being money are therefore tax
able
In the case OF the People ex rel the Phenix Insur
ance Company appellants Thomas A. Gardiner,
County Treasurer. respondent case involving similar
questions, was submitted BRIEF