New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1868-03-14

~ Maiepd 70 be exempt from state taxaIion anu , SoH
Vi from being taxed by corporations deriving thes
5er fron states The American people nave coheIe9
The power of borrowing money on Their hi5d 1s
~ Hating that Government supreme, nave shlelueu ts
ton I'm the exercise OF this power from the action oi
the local Governments The grant o. the power nG b
natibe with restraining or controlling power anu tne
8ecisraon Of supremacy IS declaration nat no suen
controlling power shall be exercised
The concluding remarks are as follows: -.
The tax on Government stock thought by the court
to tax the contract tax on the powers 70 Dor
row money the credit Of the United States ana conse
ouently TO be repugnant TO the Constitution"
Justices johnson and Thompson dissented, the lot
mer regarding the particular tax imposed rather as
a tax upon income than upon the Stock the la!ler
differed with the majority upon the nam quesI t
and held that the States have the power 10 TAX
United States stock Justice Thompson was not not
member of the court when the united oVates oanA
cases referred to were decided. , -. A.
II is proper here TO remark that the Bank OF the
United States was not exempted from taHatlVn
any act of Congress. Neither was the stock re1eIe9
TO in the South Carolina case so favored. ehould
Congress therefore repeal the clauses eXemptng from
taxation the bonds issued since April, 1901 they
would stand the same footing as the stock men
toned in the case to which allusion has been made
The Chairman of the Senate Committee on FINANCE
very truly remarks in the report accompanying us
financial bill that the exemption OF pu0hc secure
ties is not the result of act OF Congress III grows
out of the provisions of the constitution OIL Iile
United States which secure to Congress the power
| IN borrow money and the supreme nature OF that
power which cannot be affected or lnlted ny 'no 0'
| of any State or local government ~, .5
We now pass to the consideration of the second
proposition viz: That Congress cannot confer upon
In the report already alluded TO, Mr.: sherman ad-
| mits that Congress may, in negotiating loan,
reserve to the State the express power 10 eyy Hes
on public securities held within the State ibis
reservation he saws, would become part OF the
contract and would be valid stipulation.
This admission seems to be contrary to the Whole
spirit Of the reasoning in the three cases TO whlSh
reference has been made. We have seen that the
States cannot claim original power, the rght
to tax the means employed by the GENERA OoNeiu-
ment for carrying on its operations. The language
of the Court is that 1.-The right never existed, ana
the 0ueston whether has been surrendered cannot
| arise" The Constitution, as interpreted Oy tne
highest judicial tribunal known TO our laws vests III
Congress the exclusive control OF all tne sca opera
| tons of the General Government. Inc ADMISSION
made by the distinguished Senator supposes tnat
Congress may grant TO the States power OF taxation
which they never before possessed; and that 1t may
dIvest itself of powers exclusively conhded 10 IL Nv
the Constitution
The recognition of such principle would be NJ;
terly destructive of all government There womb
be little use of a written Constitution defining the
powers of the Government of the Union, II those
powers could be granted away upon any oogtaioii
has authority to confer upon the states praclch
control over the fiscal operations which the C9nsttu-
ton has vested exclusively IN II, the Executive mas
certainly right to grant his power as Commander.
in-Chef Of the Army and Navy to the Governors OF
the several States, and the JUDICIAL Department
might with as much reason, confer It's exclusive
jurisdiction in admiralty upon the State tribunals.
1t is well recognized principle OF public law sub;
ect however TO some eAceptonS VnaI nnot
| of his own authority appoint another agent whose
acts will be binding upon the principal Inns RUE
has often been applied by tho Courts IN constituting
| the powers of government, which Is recognized un-
! der our system as a delegation by the people TO
CERTAIN hnSf[ o. Tbs 81 nd%crs so Granted can
only be exercised by the persons and III the manner
agreed upon by the whole constituency IN the funda-
mental law. Mr.. Sedgwick, in his work on Constitn-
tional Law Up: 1871 says: Efforts nave been maze III
several cases by the State Legislatures 10 releVe
themselves of the responsibility of their functions
| by submitting statutes 70 the VIII OF the
people in their primary capacity But these proceed
ings have been held, and very nightly, TO Dc en-
trely unconstitutional and invahd Inc duties OF
legislation are not to be exercised blythe people NJ
large The majority governs, but only IN the pre-
sc1ibed form" Further ON he says, For the same
reason that q legislature cannot return or throw
back upon the people the duty OF making laws, Tor
the reason its pocers cannot DC delegated 6yHg
legislation cannot return its powers ~ the cOnsttu-
ency which gave them, 1T cannot confer them upon
local governments whose interests might cIash WIN
those of the General Government
Congress can no moro abrdge than Il can extend
powers Neither can 1t confer upon the states
an authority which would tend 10 such abridgment;
for that would only be TO do indirectly what II can
not do directly. Its authority is trust reposed III u
by the people, and it no more throw back upon
them or upon the States powers so granted, than II
can assume powers not granted Either would NC
violation of its trust. n,
land and of fife Ohio Legislatures and the ordinance
of the City Council of Charleston, declared void by
the Supreme Court, did not expressly conflict with
any act of Congress The two former were declared
unconstitutional because they imposed burden
upon institution created by the GoveInment as
an aid to the execution of its powers the latter be-
cause came in conflict with the power OF Congress
to borrow money the credit of the United States
That power is conferred upon Congress by the same
Constitution which declares that its own provisions
and the laws made in pursuance thereof snail be
the supreme law of the and;" and that the judges
in every State shall be bound thereby anything IN
the constitution or laws OF any State to the contrary
notwithstanding" .
Taxation is a sovereign power, and consequently
cannot be controlled TO its extent or object when
once admitted. In the case of Herricks agt. Ran
dolph Q3 Verm., 529l the supreme Court OF Vermont
very truly SAYS " If the Legislature have the rgh
Of taxation over any given property or possession
that power is admitted TO be unlimited and uncon-
trollabe." Now. can the legislative branch OF a
Government, whose Constitution and laws are de-
clared TO be supreme, grant 10 the State power |
over its own instruments and resources which is IL.
mtabe ana Ia IN Jus STy aa
supreme with the General Government q proposition
which destroys the very idea of supremacy 1t would
be- rather, the substitution Of the idea OF State
equality for Federal suprenldcg,
Upon those things which are properly the objects
of it, taxation is power which cannot be limited or
controlled. The power of borrowing money on the
credit Of the United States is supreme power. Now
it is utterly impossible to reconcile the idea of the
the application to it of the uncomfortable and imit
able power of taxation 1t is assigning an inferior
to the supervision of superior; controlling the acts
of the master by the lash of an oveIseer.
The Union is Government OF limited powers
which are strictly deiined and yet 1t is supreme
when acting within the bounds of these powers The
powers of the State Government are general and re-
sduaTy; and yet they subordinate TO those OF the
General Government in every matter that comes
within the scope of it's authority. Now, if Congress
should, in the exercise of the power vested IN 1t OF
borrowing money on the credit Of the United States
also confer upon the States the power of limiting
controlling its capacity to borrow by means OF local
taxation, it would render that power dependent and
subordinate, which the Constitution makes indie
pendent and supreme This would be submission
of the powers vested in Congress which, TO admit,
would be to deny that the Constitution is OF any
binding force.
The argument may therefore be summed up as fol-
lows The States have no original right" to tax the