The New York herald., 1870-05-02

p0rtant limitations. ~ was declared not to cAtenu
nor No re to Lsa pSsa t * hs State IL the
institutlon In like mar.ner other means ana opera
empt from State taxa don, as bonds issued for money
borrowed Weston vs CITY Of Cnaries'on & narey r;
or supplies The, Banks Va tho Mayor, Wall, 2l
bills OF credit s4ed for circulation, Bank vs.. super
yisoIs wat 2s There ste o.hsr es,annsSSS s.1Sces
In Mccullough W. Maryland might have been held
10 arise fyom the simple creation ana ORGANIZATION
OF cOrpO! ati0ns under acts of Congress- aH In the
case Of Inc narionai banking associations. bnt in
which Congress thought Mt to prescribe the extent
Va. .Assessors. Wall, 57s Bradley vs.. Tho People,
4 Wall, 450. People ys. Commissioners, Wall, 244)
United States. exemption from liability to taxation
was maintained upon the same ground: The State
tax, held 10 be repugnant to the constitution, was
imposed directly upon an operation or On mstru-
ment OF the government. That such taxes cannot
be imposed on the operations OF the government Is
IL. And the same reasoning viii apply to instru-
nents OF me government created ny Itself Tor public
Bat we are not aware OF any case IN which the real
estate or other properly OF corporation not organ
kea under "a act Of Congress has been held to be
eject from just contribution IN common with other
property TO the general expenditure for the common
benefit because Of tho employment OF the corpora
ton in the service OF the government. 1t s true
tat some or the reasoning In the case OF McCuough
But the decision itselr is limited TO the case Of the
bank as q corporation created by law
OF the United States and rssponsbie IN tle
United States. And oven IN respect TO corporations
organized under the legislation Of Congress we
already held at this term that the Implied limitation
upon State taxation, derived from the express per-
mission 70 tax the shares In the national banking
associations Ia to be so construed not TO embar
the imposition or collection OF State taxes TO
the extent OF the permssson fairly ana loerally In
terpreted. Bank of Louisville Vs. Kentucky, Wall;
We do not think ourselves warranted, therefore,
IN extending the exemption established by The case
nT tinlrt llntts Mnrs srlnnh hhvn 10
cannot apply 1t TO the case OF corporation deriving
its existence from state law, exercising its
properly property Within within State jurisdiction and Under
state protection. We do not doubt the
proprlely OF the necessity, under the constitution OF
ment within its constitutional sphere. We Iully
recognize the soundness oi the doctrine that no
Stale has 'rght 10 tax the means employed by tie
government OF the Union for the execution 0f us
powers" But think there is clear distinction be.
sweeB the means employed BY the government and
Taxation Of the agency Is taxation OF the means
taxation OF the property o. te agent s not taxation m
tax all property business and persons within their
respective limits Is original u the States and mas
never been surrendered. N cannot DO so used,
indeed, to deeat OF hinder the operations OF t.e
national government, but it will be safe to conclude,
In general, in reference to the persons ana State
| corportons employed in government service that
| when Congress has not ntefposed to protect their
property from STATE taxation sach taxation is not
OBNOXIOUS 10 that objection. (Lane County Vs. Ore.
| gon, wall, II; National Bank vs. Kentucky, Wall
We perceive no limits TO the principle OF excmp.
tion which the compliments seek 10 este blish IL
would remove nom the reach Of State taxation all
the property OF every agent of tue governments.
Every corporation engaged in the transportation OF
the mails or government property o. any description
by land or water, or in supplying materials lOr the
use Of the government or In performing any SER
vice, Of whatever Kind, might claim the benefit
Of the exemption. The amount OF property now
held by such corporations ana having relations more
or less direct to the national government ana its
service, Is very great. And this amount Is con-
stantly increasing so that 1T may admit OF question
remain liable 10 State taxation. II the principle con-
tended Tor admitted and applied in It's fullest OK
teub may not ultimately be found inadequate 10 the
support o tie State governments. The nature OF the
Illustrated by that which is advanced IN behalf OF
the colnpainants il the case before rs. The very
ground VI claim is in the bonnties OF the general
government The allegation ID that the government
has advanced large sums TO AID In the construction Oh
the road has c0atened Itself with the security OF
second mortgage; has made large grants OF Land
upon condition of benefit TO Itself, except that
the company viii perform certain services for Iul
| compensation, Independently OF those grants and
| win admit the government to very limited
| net incomes. And because OF these advances
| and these grants and this fully COM
pensated employment 1t is Claimed tnat
thi5 State Corporation, owing It's being TO state law
active inteposition OF the state Legislature, has .
constitutional right TO hold Its property exempt
from State taxation, ana this without any clisla-
ton Oil the part OF Congress which indicates that
such exemption is deemed essential to te full Per.
| iormallCe OIL Its Obligations 10 the government.
We are unable TO find In tho constitution any
warrant for the exemption from state taxation
claimed in behalf OF the c0mpainanis, and must
therefore answer the question certified TO US la the
affirmative.