New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1869-12-16
TAXING THE STATE BANKS.
u,ssrNrING OPINION OF JUDGES NELSON AND
DAVIS.

NV Mr. Justice Nelson; concurred in by Mr.. Justice
Davis
lam unable TO concur in the opinion OF majority OF
iv the Legislature Of the Of Maine IN lSS WIN
capital Of S2OOOO and was invested with the ~
powers Of banking institution ana anions r and
power of receiving deposits, disconntnS paper, a
Issuing notes or bills for circulation Inc nos and 3
authority Of the State to create these ,d
vest them with fun banking powers Is nauS In the
But IL may useful for rev moments " INC
The Tenth Amendment TO the Constitution is as lol
nv the Constitution nor prohibited 10y II TO the states are
reserved TO the States respectively P 70 cue t there
looking into the Constitution, IL VIII De lOuhu that
Is no clause or provision which either expressly OF 10y
reasonable implication dflfgas bi IS 70 tbe states
nor any which prohibited TO them In the DISCUSSIONS
on the subject Of the creation of the First Bank OF the
Timed States in the LIST Congress- and in the Cabinet OF
Washington 1870 and 1884, no question was made as 10
the constutonalty of the state banks The only douot
bat existed and which divided the opinion OF the most
eminent statesmen OF the day many on whom hau 9ust
of the Government which they were then engaged III or
gaining whether or not Congress posSesseu Vn
current power TO incorporate banking INSTITUTION Oh thc
United states. ,-.,.,
Bank to the House Of representatives. ulSGsseu d. SUt
length the question whether or not II would DE
TO substitute the Bank OF North America located III f
adelpha, and which had accepted charter from the
Legislature OF Pennsylvania, IN the place OF ORGANIZING
sion 10 organize new one there is not suggestion or
intimaon to the uegality or unconshtuIonaIly u
The act Incorporating this bank passed Feb d, l79
prohibited the establishment OF any 9oI9r ~ Hons n
Ike prohibon is contained in the act Incorporating
the Bark Of the United states OF 1916. The constitu
settled by judgment Of this Court IN McCu3eh agt
The state of Maryland in 1879 a. wheaton,
D. $40. In that both the counsel and tie court
recognize the legality and eonsttutonaly OF D9iRs
Snc0rnorated by the States The COnstitutOnay OF the
Bank of the United States again discussed ana de
cded in the case OF Osborn agt United states bInh S
Wheaton, 1881, and in connection WIN TINS was aIScu
and decided point in the case OF the United states
Bank agt. The Planters Bank OF Georgia, which was
common 10 OOth cases. Inc question Wa WIN" ,it, ~
Circuit Courts Of the United States had jurisdiction OF
suit brought by the United states Bank agt Inc fdn,
ters Bank OF Georgia, incorporated by that state ana
in which the State was stOckhodtr lOlu PIP SUI wal
Since the adoption of the Constitution down to the
present act Of Congress and the case now before US e
question In Congress and in the Courts. has been not
Whether the State banks constitutional institutions
but whether Congress power conferred on II TO
establish national bank As We SAID, thar question
closed by the judgment OF this Court IN M'C3uoo
sg The state Of Maryland at the time OF me adopo oi
the Constitution there four state banks IN exist
ence and in operation one in each OF the siae1 Oh
The one in Philadelphia had been ORIGINALLY ORIGINALLY
chartered by the C9niedeTatiop but subs aqenty
took charter under the state OF Lehhsy
wanna The trainers OF inc e. S[ onSti'utiO d
the S'e Of their paper as money and were
familiar with the practice OF the STATE, which was so
by tho State exclusively on its own credit and intended
TO circulate as currency redeemaOle at inure gay
rction Of the Isl article; That no state shall emit bills
of credit" and in the section guarded against any
abuse OF paper Of the state banks in the follow
ing words: :" Nor make anything but gold ana
silver coin tender in payment of debts"
AS bills of credit thus entirely abolished the paper
culatng medium TO which tins prohibition could have
had any application and was the only currency eAeeP
gold and silver left 10 the states Inc piOHiOlon toos
from this paper all cOeTcve circulation and lett 10 stand
alone upon the credit OF the 3a al o o., tho bor,s
1t longer irredeemable currency as tne Dauhs
were under Obligation and including frequently that OF
Us T gS me counter The State banks We're left
In this condition by the Constitution untouched by any
sSbed npon or eSslated against or in any other
uayi into
three-Quarters OF century-irOm l'ef 10 1874
ibe State banks the question Of their con
yututonality came directly before this Court In the
ease OF BrscOe agt. The Bank OF the Commonwealth Of
Kentucky IN Pet 257 The case was most eIaborately
discussed both by tine counsel and the Court Inc Court
after the fullest consideration held that the states pos
essed the power TO grant charters 10 state banks tha
limitation in the Federal Constitution on IT'S exer
rise by the States. The Court observed that the
,Sme others were IN SlGsato on5 t tba9 u ~
Tue ADOPTION OF !.S SonsS' III aG wa. ~
tended inhibited by that instruments or thatfhey
we're considered as bills OF credit WITHIN lts meaning An
hre story. The decision IN TINS case was affirmed IN
Woodruff agt Trapnall 90 How, 2Oj, in Darlington agt
The Bank Of Alabama O5 ill., 49, and in Curran ag State
The constitutional power Of the states being thus es
fabshed by ncOutrOvertbe authority 10 create state
Ranking institutions, the next question is whether or not
the tax question be upheld consistent with the en-
Ioyment Of this power
The act of Congress Of July 49, 1866 stat at Large 1G
declares that the State Banks shall pay ten per
centum the amount Of their notes or the notes Of any
person, other state banks used TOT circulation ana
pad out by them after the rst OF August 1906 In add
IOn this there Is also ajax OF 1--WE per cenum per
upon all dividends 10 stockholders Q3 D. 2e, 1901
besides duty of One-twcntyfOuTth OF one per Centum
monthly upon all deposits. and the same monthly duty
upon the capital Of the bank OBJ 2 llO This makes an
aggregate Of sixteen per imposed annually upon
these banks IL Will he observed that the tax OF 10 per
upon the bills in circulation, lie not tax on the
property Of the institutions The bills in circulation
property, but the debts OF the Bank; aud IN their
account Ocbts and credits placed 10 the debit side
Certainly Government has yet made the discovery Of
both sides OF this acCOuut-dcbt and crcdt-as
the property OF taxable person. OF corporation. II
both these could be made available for this pur
nose a heavy National debt need create any very
ALARM either respects IT'S pressure on the INDUS
Try the country Tor the time being, or Of us possible
hiratOn
The imposition upon the BANKS cannot be upheld
property, neither could 10 have been 50 IN.
tended. IL simply q mode by which the powers or
faculties Of incorporate banks subjected
to taxation and which, II mantainabe, may annlhllate
No person questions the authority Of Congress tax
the property Of banks and Of all other corporate bodies
NJ a state, the that OF individuals; They are
ARTIFICIAL bodies representing the associated pecuniary
OF real persons which constitute their cap
la and the property thus invested open and subject 10
taxation with an the property real ana and personal Of
the state. upon this property, and which by the
Constitution 20 De uniform, affords full scope 10 the
taxing powers the Federal Government, and Is con
sscnt power OF the States TO create the banks,
this Government to which these institutions are liable.
THIS taxation OF the power ana faculties OF the state
Governments which are essential 70 their sOvcregutes
aud the efficient and independent management and
administration OF their internal AFFAIRS is for the first
time advanced attribute OF Federal authority. II
Nuds support confidence IN the early history OF the
Government; the opinions OF the luStrOus states
who founded 10. These statesmen scrpulOuSy alb
stained from any entertainment upon the reserved rights
Of the States and within these limits sustained aud
OIted them sovereign states.