Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1874-03-25
GREENBACKs NOT TAXABLE.
Important Decision by the Supreme
Court Of the United states.


greenbacks are not taxable by or under
State authority:
The general question requiring con-
sideratiOn Is, whether United States
notes came under another rule, in re-
spect of taxation, than that which APP
plies to certificates of Indebtedness.
The issues Of United States notes
were authorized by three successive
acts. The first was the act of Feb.
25, 1862; the second, the act Of
July IL, 1862; and the third,
that of March 2, 1868. Before either
Of these acts received the sanction
Of Congress the Secretary of the Treas
ury had been authorized by the act of
July IL, 1861, to issue Treasury notes
not bearing interest, but payable on
demand by the Assistant Treasurer at
New York, Philadelphia or Boston;
and about three weeks later thesenotes,
by the act Of Aug. 5, 1861, had been
made receivable generally for public
dues. The amount of notes to be issued
of this description was originally lin
tied to fifty millions, but was after
ward, by the act of Feb. II, 1862, in
creased to sixty millions.
These notes, made payable on de-
mand, and receivable for all public
dues, including duties on imports, al
ways payable In coin, were, practically,
equivalent to coin; and all public dis
bursements, until after the date Of the
act last mentioned, were made In coin
or these notes.
In December, 1861, the State banks
land no others then existed suspended
payment IN coin, and it became neces-
sary to provide by law for the use of
State bank notes, or TO authorize the
issue of notes for circulation under the
authority of the national 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 later period for the is
sue of the national bank currency.
Under the exigencies Of the times it
seems to have been inexpedlent to at
tempt any provision for the redemp-
ton of the United States notes IN coin.
The law, therefore, directed that they
should be made payable to bearer at the
Treasury Of the United States, but did
not provide for payment on demand.
The period of payment was left to be
determined by the public exigencies.
In the meantime the notes were receiv-
able in payment of all loans, and were,
until after the close of our civil war,
always practically converted into bonds
of the funded debt, bearing not less
than five per cent interest, payable in
coin.
The act of Feb. %, 1862, provided
for the issue Of these notes to the
amount of one hundred and fifty nil
lions of dollars. The act Of July IL,
1862, added another hundred and fifty
millions Of dollars to the circulation,
reserving, however, fifty millions for
the redemption Of temporary loan, to
be issued and used only when necessary
for that purpose. Under the act of
March 3, 1868, another issue Of one
hundred and fifty millions was author
lied, making the whole amount author
lied four hundred and fifty millions,
and contemplating permanent circu-
latiOn, until resumption Of payment
of coin of four hundred millions of
dollars.
1t Is unnecessary here to go further
into the history of these notes, or to ex-
anime their relation to the national
bank currency. That history belongs
to another place, and the quality Of
these notes, as legal tenders, belongs TO
another discussion. 1t has been thought
proper only to advert to the legislation
by which these notes were authorized,
| in order that their true character may
be clearly perceived
That these notes were issued under
the authority of the United States, and
as a means to ends entirely within the
constitutional power of the govern
ment, was not seriously questioned
upon the argument.
But it was insisted that they were is
sued as money, that their controlling
quality was that of money, and that
therefore they were subject to taxation
in the same manner and to the same
extent as coin issued under like author
ity. And there is certainly much force
in the argument. 1t is clear that these
notes were intended to circulate as
money, and, with the national bank
notes, to constitute the credit currency
of the country. Nor is it easy to see
that taxation of these notes, used as
money, and held by individual owners,
can control or embarrass the power of
the government in issuing them for
circulation more than like taxation
embarrasses its power IN coming and
issuing gold and silver money for CIR
culation.
Apart from the quality Of legal ten
der impressed upon them by acts OF
Congress of which we now say nothing,
their circulation depends on the extent
to which they are received IN payment,
On the quantity in circulation. and on
the credit given to the promises they
bear. In these respects they resemble
the bank notes formerly issued as cur-
rency.
But. on the other hand, it Is equally
clear that these notes are obligations of
the United States. Their name i'm
ports obligation. Every one Of them
expresses upon its face an engagement
of the nation to pay to the bearer GER
tain sum. The dollar note Is an en-
gagement to pay dollar, and the dol
lar intended is the coined dollar of the
| United States-a certain quantity IN
weight and fneness of gold or silver;
authenticated as such by the stamp OF
the government. No other dollars had
before been recognized by the legisla-
ton OF the national government as
lawful money.
Would, then, their usefulness and
value as means to the exercise of the
functions of government, be injurious
ly affected by State taxation?
It cannot be said, as We have already
intimated, that the sameinconveniences
as would arise from the taxation OF
bonds and other interest bearing obi
cations Of the government, would at
tend the taxation Of notes issued fOr
circulation as money. But We cannot
say that no embarrassment would arise
from such taxation. And We think IT
clearly within the discretion Of Con
gress to determine whether, In view OF
all the circumstances attending the
issue of the notes, their usefulness, as