New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1869-12-14
u. S. SUPREME COURT.
OPINION OF CHIEF-JUsTICE CHASE AFFIRMING
THE LEGALITY OF THE TAX ON STATE

Collector OF Internal Revenue.-ChletJustlce Chase
delivered the following opinion;
The necessity of adequate provision for the financial
exgencies created by the late Rebellion suggested to the
administrative and legislative departments OF the Gov
eminent important changes in the systems OF currency
and taxation which had hitherto prevailed. These
changes more less distinctly shown In administrative
recommendations took form and substance In legislative
acts. We have TO consider. within limited range
those which relate to circulating notes. ana the taxation
OF circulation.
At the beginning OF the Rebellion the circulating medi
consisted almost entirely OF bank notes issued by n-
under State egisation OF various degrees OF credit and
very unequal resources administered often with great
and not unfrequeny with little SKILL prudence, and In
tegrty The acts Of Congress- then in force prohibiting
the receipt disbursements IN the transactions OF the
national Government OF anything except gold ana silver
aud the laws OF the State recurring the redemption OF
bank notes in coin demand prevented the disappear
aDce OF gold and silver from circulation There was then
authorized national currency, except coin, aud no
national taxation was imposed In any form on the state
Bank circulation.
The first act authorizing the conversion Of notes by the
Treasury Department for circulation was that OF July IT,
1861 ~ u st. 259. The notes issued under this act
Treasury notes, payable demand In coin. The
amount authorized by IT was s5O,OOO,OOO and in.
creased by the act OF Feb. a. 1862 u2 u S $685. TO
s6OOO00O the 3lst OF December 1851 the State banks
suspended specie payment Until this time the expenses
Of the had been paid IN con In the demand notes
Just referred and for time afterward they con-
tnued be paid these notes, which, not redeemed
in cOn were received as coin IN the payment OF duties
3d. new policy became necessary, In consequence Of
the suspension and the condition Of the country and was
adopted The notes hitherto issued has just been
stated were called Treasury notes, and were pay;
able on demand in coin Ii. The act now passed
the name United states made payable bearer
but not expressed TO be payable on demand to the
subsequent acts sJOO0O00, Of which s5OOOOOOO
be held In and only to be issued for special
purpose and under special directions as to withdrawal
from circulation Aet OF July IL, 1852 II u. s. st. $50;
OF March g. 1863 II u g. st. no. These notes, until
or ecsvahe az mar for bonds nayabe in coin and hear
ing interest at not less than per cent and
the acts by which they authorized declared them to
ha Lax mi UO n eQal
issued directly by tho Government for the disbursement
OF the war and other expenditure could not obviously
ruary 1862 the act authorizing national banking assoca
tons az u g. St. 670l In which, for the first time during
many years Congress recognized the eXpedlency and
duty Of imposing tax upon currency by TINS act tax
OF 10 per cent annually was imposed on the circulation OF
the associations authorized by It, Soon after by the act
OF March g. 1868 q2 u g. st. 712 similarly lighter tax OF
per cent annually was imposed on the circulation OF
state banks in certain proportions their capital and Of
per cent on the excess and the same act reduced
the the National associations to the same rate
Both acts also imposed taxes capital and deposits,
which need not be noticed here At later date by the
act OF June 1864 3 IT, st. I'D which was substituted
for the OF Feb 49, 1862 authorizing National banking
associations the rate Of tax on circulation was continued
and applied the whole amount Of IT, and the shares OF
States aud few days afterward by the act OF June 30
1864 Q3 IT, g. st. 2 TO provide ways and means for the
support OF the Government the tax on the circulation OF
the State banks also continued at the same annual
rate Of per cent as before but was required
iu monthly instalmens Of 0netwefth or one per cent
with monthly reports from each state BANK OF the
amount in circulation ,,,
ion was TO inform the proper authorities OF the exact
amount OF paper money In circulation with view to It's
il was the first step taken by Congress in that dlrec
ton and followed months later by the act OF
March 1866 amendatoy OF me RrOEd aerTa syepS
national banking association, state Dank, OF elaIe
banking sSs Dd Pay TAX sn St state bnk Of
State banking association paid out by them ater the ISL
The same provision was regnacted with more extend
ed application the 18th OF july 1866, IN these words
State banking association, shall pay tax OF ten per cen
the amount OF notes OF any person state pahk
out by Them after the first day OF August 1885, and such
tax shall be assessed and paid In such manner as sha Do
prescribed by the Commissioner Of Internal Revenue
az T. s ST. 1852 The constutonaity Of the last pro.
vision is drawn In question; ana the Drlef state
ment of the recent legislation OF CONGRESS mas Deen maze
for the purpose OF placing In clear ght ts scope ana
bearing especially developed In the provision just
bank circulation was first adopted IN 1868 congress
was inclined 10 discriminate for rather than against the
circulation OF the State banks but that when the coun
try had been suniclenty iurbIsneu Win natlondi
rency by issue of United States and OF national BANK
notes. the Discrimination was turned ana very ueclueuy
turned, In the opposite direction.
The general before MS Ia whether or not
the tax of ten per imposed State banks or Ma
tona banks paying out the notes Of individual or state
banks used for circulation Is repugnant 10 the COnsutu
ton OF the United states 1t Is presented Dy &
Court OF the United states for the district OF Maine 10
SUIT brought by the President Directors ana Company OF
the Veaze Bank against jeremiah Fenno collector OF
Internal Revenue for the recovery OF the tax penalty
and paid by the bank TO the COLLECTOR under protest.
The Vealte Bank ia corporation chartered by the
State Maine, with authority TO issue bank notes Tor
circulation; and the which the tax imposed by
the act was collected issued under ths authority
There nothing in the case showing that the BANK sus
tanned any relation TO the state as financial agent or
that its authority issue conferred or eXer
csed with any special reference to other than private
interests The case presented TO the Circuit Court
upon an agreed statement OF facts and upon prayer
for instructions the jury, the Judges found them:
selves opposed IN opinion on three questions the rt OF
which was this Whether the second clause OF the ninth
section OF the act Of Congress OF the 18th OF July 1866 I'M
der which the tax this was levied and collected Is
valid and Constitutional law The other two questions
differ from this in form only and need not be reeited
I'm support OF the position that the of Congress-
FAR nroydes Tor the levy and collection OF the tax
is repugnant to the Constitution, TWO propositions nave
been argued with much force ana Inc fs
heen apporOned among the States agreeaby TO the Con-
stuon The second is that the act imposing the tax
mpairs franchise granted by the State, and that Con-
gres has no power pass any law with that intent or
effect The first OF these propositions VIII DC nrst exam
ined.
The difficulty OF defining with accuracy the term used
in the clauses Of the Constitution which confer the
power Of taxation upon Congress as leit Ia Tue
ton which framed that Instrument and has always Deen
experienced by Court when called upon 10 determine
their meaning. 800 80. A. .- 49,.
clear The General Government, administered by the
Congress OF Confederation had been reduced 10 he
verge OF impotency by the necessity OF relying Tor
reyenue npon reguisitions on states. and was
leading object in the adoption OF the CONSTITUTION 70 re-
ioye the Government to DO organized under It from this
necessary and confer upon it ample power to provide
revenue by the taxation of persons and property And
nothipR IA clearer, from the discussions IN the
1onyention and the discussions which pre-
coded fnal ratification by the necessary
humber OF States the purpose TO give the power 10
"a TO the taxation OF everything except ex-
ports in lis fullest extent The purpose apparent also
from the terms In which the taxing power Is granted
be mower ia 70 lay and collect taxes duties Imports
and excuses 10 pay the debts and provide for the com.
mon defense and general welfare OF the United States
And there are directions 10 the mode OF exercising
the power II Congress fit 10 impose capitaton or
other direct must be laid IN proportion 10 the
4 Con
and excuses, they must be uniform throughout the
United States These are not properly limitations OF
which il shall DO exercised by them IL still extends TO
every object OF taxation, except exports ana may %
apped 10 every object Of taxation 70 which II extends
IN such measure Congress may determine. The COM
OF the power thas given to Congress may
rl... aha uafL ~ All