The New York herald., 1869-05-03
UNITED STATES SUPREME COURT.

NOteS-TneT CIRCULATION 0S MOney-Th0
Obligation Of tho Government-The Notes
Are Exempt from State TaxntiOn-The Power
TO Exempt UnQuestiOnnble.
The People or the State or NeD York, er REL The
Bank or Neac York. US. The Board or Supervisors Of
the County Of Nec York, In Error to the Court of
appeals Of Neao YOrk;-Mr. Chief Justice Chase de-
lvered the opinion Of the court:-Ths case differs
from those just dlspOsed OF (three cases recently
publishedl in two partlculars that the Board OF
Supervisors, which, in the other cases. allowed and
audited the claims Of the banking associations re-
fused to allow the claim made this case and that
the exemption from State taxation claimed In this
case was OF United States notes. while in the other
cases 1t was Of certificates Of Indebtedness. The
mandamus IN the State court was therefore, directed
in the case before US to the Board OF Supervisors,
instead Of the officers authorized issue bonds as in
the cases already decided The judgment of the Court
OF Appeals sustained the action OF the Board and
the case is brought here by writ OF error to that
court. The general question requiring consideration
Is whether United States notes come under another
rule in respect to taxation than that which applies
to certificates Of Indebtedness The issues of United
States notes were authorized by three successive
acts The first the act OF February 25 1862: the
second the act of July H. 1862, and the third that Of
March g. 1863. Before either OF these acts received
the sanction OF Congress the Secretary OF the Trea
sury had been authorized by the act OF July IT, 1851,
to issue treasury notes not bearing interest but paw
able on demand by the assistant treasurers at New
York and Philadelphia or Boston; and about three
weeks later these notes, by the act OF August 1861
had been made receivable generally for public dues.
was originally limited to fifty millions. but was
afterwards by the act OF February L. 1862 increased
to sixty millions These notes. made payable on
demand and receivable Tor all public dues including
duties on imports, always payable In com, were prac.
ncally equivalent to coin, and In all pubic dis
bursements, until after the date OF the act last
mentioned, were made In coin, or these notes.
In December, 1851, the State banks tand no others
came necessary TO provide by law for the use Of
state bank notes, or to authorize the issue OF notes
government The latter alternative was preferred.
and In the necessity thus recognized originated the
legislation providing at first for the emission OF
United States notes, and at q later period for the
issue OF the national bank currency. Under the
exigencies OF the times 1t seems to have been
thought inexpedient to attempt any provision for
the redemption OF the United STATES notes In coin.
The law. therefore, directed that they should De
made payable to bearer Treasury OF the United
States, but dio not provide for payment demand.
The period OF payment was left to be determined Dy
the public exigencies. In the meantime the notes
were receivable In payment OF ali loans. ana were.
until after the close OF civil war; always practi.
cay convertible into bonds OF the funded debt,
bearing not less than five per cent interest," payable
in coin. The act OF February 25, 1852 provided for
the issue OF these notes to the amount OF OOO
The act OF July H. 1862 added another $3.50 600
to the circulation, reserving, however $50 600
for She redemption OF temporary loan 10 be issued
Under the act OF March g. 1858, another issue Of
$l50O00,000 was authorized, making the whole
amount authorized $450, 600, and contemplating
permanent circulation until u resumption of pay.
ment in coin OF $400, 900, 600.
IL is unnecessary here to go further into the his
tory OF THESE notes. or to examine their relation to
the national bank currency That history belongs 10
another place, and the quality Of these notes a.
legal tenders, belongs to another discussion II mas
been thought proper only to advert to the iegis,a-
ton by which these notes were authorized In order
these notes were issued under the autnor,ty of tne
United States and q means to ends entirely
within the constitutional power OF she governments
mad unnpt
But 1t was insisted that they were issued as money:
that their controlling quay was that OF money and
same manner and to the same extent a. com issued
under like authority; and there is certainly much
force In the argument IL Is clear that these notes
were intended To circulate as money and with
the national bank notes. to constitute the credit cur.
rency OF the country Nor IL 1t easy to that taxa
ton oil these notes used as money and ned by indi-
vidual owners, can control or embarrass the power
OF the government In issuing them for circulation
more than like taxation emDarrasses Its power in
coming and issuing gold and silver money for crcu-
lation. Apart fron tue quality OF legal tender im-
pressed upon them by acts OF Congress- OF when we
now say nothing. their circulation currency de-
pends on the extent 10 which they are received in
payment on the quantity In circulation and on tho
credit given TO the promises they BEAR In these re-
spects tney resemble the bank notes formerly issued
as currency. But on the other hand, 1t Is equally
clear tat these notes are obligations OF the United
States. Their name imports obgation Every one
OF them expresses upon Its face an engagement OF
the nation to pay the bearer certain The dol
lar note Is an engagement to pay dollar, and the
dollar intended Is the coined dollar of the United
Of gold or silver authenticated such by the stamp
OF the government. No other dollars had before
been recognized by the Legislation or the
uonal government as lawful money. Would,
then, their usefulness and value as means to tho
exercise OF the functions Of government be in
jurlousy affected by state taxatlonf II cannot be
said, as we have already intmated, that the same
inconveniences would arise from the taxation OF
bonds and other interest-bearng obligations of the
government would attend the taxation OF notes is-
sued for circulation a. money. But we cannot say
that no embarrassments would arise from such taxa
I'M hp finrn
OF Congress to determine whether, In view OF all tho
circumstances attending the issue OF the notes. their
usefulness as means OF carrying on the government
would be enhanced by exemption from taxation ana
within the constitutional power OF Congress having
resolved the question OF usefulness airmativey to
provide by law for such exemption. There remains,
then, only this Quesuon--"Has Congress exercised
the ae nnaer Mnsn area ney Wsre
issued has left doubt IN our minds on
that point The act OF February 1882 declares that
United States he'd by individuals associations or
corporations within the United states shall be ex.
We nave already said i that these notes are obOsa-
tions they bind the national faith They are there
stipulated 70 the holders by the pledge Of the national
faith the only ultimate security OF all national ob
whatever ao IN 'Hsy appcson to- ,ae ssa %
issue of United states notes by the act OF July III,
and as Il 70 eyery e sp ppssos s dono from
which provides for the last Issue OF these notes.
omits, in its exemption clause. the word
ttes, the words treasury notes, or Unted
states notes, issued under the proytsiona
Of this actu IL insisted at the bar that measur,
OF exemption IN respect to the notes issued under
this different from that provided the ormer acre
IN respect TO the notes authorized by them was In,
tended. But we cannot yield our assent 10 this
view. The rule established IN the last oct IL In no
respect inconsistent with that previously estab-
lisned. IL must be regarded therefore rs explana-
tory. II makes specific what was before expressetf
In general terms Our conclusion IL that United
states notes are exempt and at the time the New
York statutes were enacted were exempt from taxa