The New York herald., 1869-12-16
Federal Taxation Of ISSUES OF State
Banks.
The ConstitutiOnality Of State Banks Un-
questioncd-Attempt Of Government to
Tax Them Out OF Existence-Dis-
senting Opinion Of Judges
Nelson and Davis.
WASHINGTON. Dec. Is, 1863.

corported by the Legislature OF the State Of Maine
In ls4s with capital o. 10000 aad was invested
with the customary powers Of eankins Institution,
ana among Others the power OF receiving deposits,
discounlng paper and issuing notes bids for
cuation. The constitutional authority OF the State
create these Institutions and TO invest them with
eI banking powers is hardly denied; but II nay be
useful TO recur for fes moments the source or
tais authority The tenth amendment 70 the co1lsu-
.u.ou is rs ioilows:-
The powers egaed United States by the cgn-
ltaan, prohibited TO the States reserved g iae
s,a-ss respectively or 70 the people
On looking into the constitution 1. VIII re found
thar there Is no clause or provision which, either
expressly or BY reasonable implication, delegates
this power 10 the fedeya government which origin
ally belonged 10 the states any which prohibited
70 chem. In the discussions on the subject OF the
creation or the first OF the United states IN the
hrst Congress AMI in the Cabinet Of asbinston IN
1872 anu 1871, no question was made as 70 the
sstu1onahty OF the state banks. me only doubt
that existed and which divided the opinion OF the
most eminent statesmen OF the day, many OF whom
had just largely participated In the formation OF
the constitution OF the government wnica they
were tnen engaged IN organizing was whether
hot Congress possessed concurrent power to In
corporate banking Institution or the United States
Mr. Hamilton In his celebrated report on national
p.ink 10 the House OF Representatives. discussed at
some length the question whether not 1t would
be e1pedient 70 substitute the Bank OF North
America located IN Philadelphia, aud which had
accepted charter from the Legisa azure OF Pennsyl-
wanna IN the place OF organizing new Dank. Ana
although he hnaiy came 20 the conclusion To organ
&c new OAe, there - not a suggestion intiIna-
ton as TO the lioga.ity or unconstulonalty OF this
si4te uaiA. Tie act Incorporating this bank, passed
February Is 1891, pronuited the estaDl. lncnt Of
ans other by Congress during its charter, but
SAID nothing as 10 tue state BANKS ike prohibl-
OF the lnlled states oi lSl6. Ile consutuuonaily
OF bank Incorporated BY Congress vas r,t setlled
by me Judgement oil snis Court McUullocS VS.. the
,. te oi maryland, IN lsls "a Wheaton. y. Sl5. In
TIA case Dotn the counsel and the Court recognize
lie legal W ana consAlasonain OF Odaks lucurYog.
a.Sd Uy tne states. The c0asftuuonaiity or The !
iak or tue lniled States was AGAIN discussed and
aeeded III the case oi Osborn Va. United states
bAHk-tJ wheaton, y. IJsl-and IN connection wtl
ta.a was argued ami decIied point III the or
tne bnlte3 states Baph VS.. The Painters bank of
70 rea, walcl was common to Ooth cases. Tue
eI1StIon VA wnetrer tie Circuit Courts or tae
b1ted states had jurisdiction OF suit brought Dy
tls Nsited states BANK against the Planters Bank
o Georgia, Incorporated " thai state and ia
when o. state was stockaoloer2 (Wend. pp. So4
WI Tie Court held IN D0ln Gases that IL had.
since ~ adoption VI the coasl lJusioa down 10 the
present act OF Congress, aud the Case nov before
u, TIE question In Congress ana IN tue courts has
been nOt whether the S.ate banks were eonstlsG.
tenai Institutions but whether Congress mad tIe
lowSr cunieIrea on IL to establish q national baas
As we nave said mat question was clOsed by Jne
Judgment OF THIS court II McCu ocl The state o.
Aary land At the time of the abortion OF the con
st.tuiion there were fulr panks In existence
nd II operation one IN eacn oil the states OF Penn
Aytvauia, New York Massachusetts anu Maryland
Tpe une III PhlaI1lpnla mad been orionaIIy cnar.
teled py the conicle stlon but suDseltently TOOK
Charter under tie state Vi Penn yyaa.s rae
tne constitution were therefore n nlIiar with
IA ~ stale bAuks and Tie crnlal on of fneIr nane1
~ money, anu were ais 1amiiiar Trlh the practce
o. credit which were Oils fssu.,! by the stafe ey-
clgs. ey on its own creail ana nteAued 10 circulate
al cufreLcg reIeemable at iuture day. Tney
,ar Ell the people against tue evil 81 TINS practice
. tne state governments BY the provision 10 tno
" IA sactlun Of tae trsr artlc.e-.,that no staIe
- IT emit his OF credIt- ana IL the same sect,oa
g.a.eled against any abuse of paper none, OF tne
State banns IN the following woris:-.Nor make
b. ulag but gold ana silver coin q tender IN pay
u at OF dabtsi As bulls or credit were tnus en-
tite abolished the pap per money OF the state Danks
VS. the ouly curreucy or circulating medlllln ID
wnith thls,pfoAbltloa could nave AaI any aDpliea.
lou, aud Was the only currency, except gold
uAl SILVER, left TO tile States. The prohlbliun
tooh from tnis paper ali coerclve cireulaton
aul lett il 10 stand aoac upon tue ere OF ne eans
IL was no longer rredeemabe curreucy as the
banks were under oDluatIon-and inclndtng tre
luentiy mat OF its stocIhocers-to redeem their
paper IN circulation 10 rold or silver at tne counter
tue state 6anka we're eit in tnis cond,t,nn nv rn
eonstrution iIoucaed by any other PROVISION As
1ose"nsHce iSeS vSera 1radoaIv @ ppstohI;ene ,s
,un.f or ali ~ ,n. sIaies ana ha1 nor haaa on ~
rrp1ched mnon or ersl,rea ara,nst or m anv ntSer
~ area = WIN ~ - Sr ~ ~ 'iy ~ osiea s
man threeauar;ers af 4 ranruYv frn7n I2ar to La
l5ut IN adalrlon to the anoys recnuuit,on of the
s..te banks .ne question Of their col,siisutonariy
c1ne aIre,f,Y hafTe tnIs corr, -, The c.se ~ G,,a
VI me B.nk OF inc Cummonwea,tn az Kentucky m
Pa 255l me case was most eIabora,e ' atscns.ad
10 u no EaiIrI afr
H. iniiesI cons,deraa,on ne,d Iha, tna Ssadas ..
,essed Inc nower IN grant cnarters tp state hsprs
tu.1 M LIVER was inc,dsnI -, sovere,anpv. .n1
ina tnara vas Ia l,m,t.tInn in ina tadar7
Ion On It's eyercis. nv Ine States 'rhe Cnnrt oh
eety,i thar the DanE or North America ~ Nsass
enlsatts ana sone nfbars tvaro in a,.ra ~, - 80 30
,ma y n anu 81 in NJ me
soiIl nof - snpnosed the nCteS ~ rnna % r
jafe dea 70 be nhlpted Inv thai nsIr,,mcnf ar toat
Iuat tn.y were CONSIDERED "a mis- nf cratit g,tbn
is meaoing All Tue Judges concurred IN tn,s inda
menf pxrept Mr IusiIce story Tne drc,s,on IN ana
ease was atfirmed IN Woodrnr Va Trannai I'D lnrv
2Jsl in parrlngton "a The nank M aianaua ~ ~
III ana Ia Iurrau va state oil Arkansas ia IN AZ,
Clauccuor Kent opseryes tnal Air Jnetiee stnry
In MS comnentaries on inc consiifptton vol ~
ls, seems 10 he 81 opnion that ,ndencndent of me
long conlnlleu practice from the time of the aaou
iioa or the constitution the states would not upon
q sound CONSTRUCTION ol the coustitution n mo
question was res tnteoro be authorized to incorpo-
late banks with n mower III circnlara bant naner as