New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1868-03-14
TAXATION OF UNITED STATES BONDS

Az, ,... ouestion arises, preliminary to the
$500 "a onv,measure by Legislature deriving its
49, from a Constitution: Does the fundamental
- autborize the adoption of the measure under
consideration That question answered affirma-
lively il is time to consider the policy expediency
sf the measure proposed. Answered negatively, the
proposition falls to the ground, until the fundamental
law is so altered as to authorize the measure. upon
this preliminary question, the cOnstitutonanty oi
he State OF municipal taxation Of Government secu
rites, we maintain;
7 That the States have no power TO tax national
securities and this although acts of Congress sDOuIu
make no provision for their exemption.
III. That Congress cannot confer such power upon
the States. ~
The first propositon is so well established, and the
decisions upOn which it rests are so familiar 10 mem
hers of the legal profession that extracts from the
omnions of the Courts synopsis OF their reason
10 mon the point would be entirely unnecessary
were it not for the purpose OF throwing nRht upon
che second proposition which seems loeGai uS'o
former proposition as principle OF constitutional
law We therefore state pretty fully, IN their own
former point An elucdatiOn of the first IS necessary
TO correct understanding of the second pTOp0sllon
The attention of the Supreme Court OF the united
States was first expressly directed TO the subject OF
State taxation of national institutions IN the case OF
MeCulOch agt. The State OF Maryland - wheaton,
Bl6l at its February term 1919. This was qui tam
action originally brought in the County Court OF
Baltimore County, Maryland by John James, for
himself as we'll for the State of Maryland against
the appellant McCullOch, Cashier of the United
States Branch Bank at Baltimore, to recover certain
penalties imposed upon persons carrying ON the Dus
ness Of banking contrary 10 me @ oi an ce
tax all banks, or branches thereof IN the state
of Maryland, not chartered by the Legislature,
passed February II, ISIS. Judgment was gwen
against the appellant, McCullOch, in the County
Court, which was affirmed in the Maryland Court Of
Appeals, whereupOn the cause was taken by appeal
"a the Supremp Court OF tie United States
The unanimous opinion of the Court was delivered
by Chief-Justice Marshall. After stating that the
United States Bank was established by the Govern
nent to aid il in its fiscal operations he refers TO me
reasons adduced in support of the aim of the Bank
There is no express provision for the ease but the
claim has been sustained principle which SO entirely
teriaIs which compose it, interviewer with its web so
blended with its texture, as to be Incapable OF 9eing SEP
principle is that the Constitution and the laws made III
pursuance Thereon are supreme .n t and cam
moi be controlled by them. From this, which may be
A. eoToares on the truth or error Of which and their
application TO this the cause has been supposed 10
power TO preserve Q That power to destroy II Welded
by different hand, is hostile TO- and Incompatible with
these powers TO create and preserve lhat Nhere tn
repugnaney exists that authority which supreme must
control, not yield to. that over which It is supreme
lie further says upon TINS point: . - -,
at of the very essence Of supremacy to remove all
obstacles to its own actions within ITS own sphere ana so
20 modify every power yesedm subordinate
as TO exempt its own operations from ther lhnneIee
This effect Ueed De stated IN teIlh III Is
IN the declaration OF supremacy so necessarily III
st. that the expression of it could not make 1t more GER
tam" ,
In the argument of the case, the counsel for the
State of Maryland claimed that the power OF taxa
ton was sovereign power, not SURRENDERED Dy lhe
States to the General Government and that as con-
sequence they could tax any description of property
which came within Their territorial limits Upon this
PoiRt the learned Chief Justice tic Of
which it does extend npOn the sOundest princ
Piles, exempt from taxation ms pOposluon may ai5los
extends to everything winch exists by s own anthor
introduced by its permsslOn but does IL extend 10
into execution powers conferred on that body by the
people of the United sates We think it demonstrate
pSope &c Of fGes Single nG sae fy nY people
The United states to Government whose a%s, made III
T ls Pe % 81 sn over 9 e@ cannot
The attempt to use it the taxing power of State
means employed by the Government of the Union, in
pursuance of the Constitution itself abuse because
IL is the assumption Of power which the people of
total failure Of this original right to tax the means en-
POyed by the government Of the Union for the execution
Tie right existed, and the question
whether 1t has been surrendered cannot arise"
The consequences of the power of State taxation,
eOnended for by counsel for the State of Maryland
are thus portrayed
the Government In the execution of its powers they may
tax any and every other instrument They may tax the
mail they may tax the mint; they may tax patent
they may tax judicial process; they may all the
employed by the Government 10 an excess which
would defeat all the ends of Government This was not
INTENDED by the American people T6y Sd s not gesgn
In conclusion the learned Chief Justice says:
"The Court bias bestowed upon the subject It's most de-
nberate consideration The result Is conviction that
retard impede burden or In any manner control me OPP
% carry into execution the powers vested In the General
Government This is think, the unavoidable cOnse-
eared We are unanimously OF the opinion that the law
passed by the Legislature OF Maryland imposing tax
S as Eanh OF the United states Is ana
The same question was presented again to the
Court in the case OF Osborne agt. The Bank OF the
United States 20 Wheaton, 1851 1t was brought by
appeal from the Circuit Court OF the United States
for Ohio. and was decided by the Supreme Court at
ITS February term, 1924 The Legislature OF Ohio had
passed law imposing tax of $4,000 annually on all
banks or branches thereof, not chartered by the
State The principal question involved was as to the
consttutiOnality of the State law. The whole sub
iect was argued with all the ability which the power
full litgants could bring to bear. The result was
confirmation Of the opinion expressed IN the case OF
McCulloch agt. Maryland. The Ohio law was de-
clared unconstitutional and void. Justice Johnson
dissented upon point Of jurisdiction raised In the
case but did not express his views the main ques-
ton. As he cOncuTTed in the decision of the first
named case he would have, no doubt, given his views
on the main question III this one had there been any
change in his opinion.
In the case of Weston ct al. agt The City of
Charleston decided by the Supreme Court of the
United States at its January term 1872 Y Peters,
40. the exact question now under consideration
came up. BY an ordinance of the City of Charleston
Stock OF the United states" was, among OJhcI
things, subjected TO taxation. The plaintiffs, as
of such stock, applied TO the Court or Com
mon Pleas for prohibition to restrain the City
Council from levying the tax, on the ground that
snch tax would be inconsistent with the COnstitu-
ton of the United States The case taken to the
Constitutional Court Of South Carolina and thence,
by writ of error TO the Supreme Court of the United
States. Ii was conceded that if the State Of South
Carolina possessed the power cOntended for the City
of Charleston also had the power the char
ter derived from the State. SO the real question de-
cided was as to the power of State to tax United
States stock ChefJustice Marshall, delivering the
of Tho Court