Year: 1864

Important Opinion.
From the Godsboro' Journal.


Through the courtesy of Col. W. S. G, Andrews
of this place, are enabled to lazy before the pub


lie. to day. important opinion affecting the imo'i
iy to taxation by the Confederate Government o
banks in which State Governments have an interest
The opinion Of Acting Attorney General Keyes VII
give rise to much discussion:


DEPARTMENT OF JUSTICE
Richmond, Va. 29th Aug, 1864.
Hon. GEO A. TRENHOLM, Sec'y. of the Treasury


Sir:-In the absence of the Attorney General
have the honor TO give opinion upon the case
made by the Bank of Cape Fear and the Bank OF
North Carolina.


1t is said, and assumed to be true, that "these
i Banks established, not merely for the benenl
Of the private Stockholders but the great fiscal
agents of the State, which is also largely interested
in them Stockholders They are also required by
their charters to loan money the State to receive
the deposites of the State, and to perform many
other duties that are not required of any other
Banks


/ The questions asked by your directions are:
First, HAS the Confederate Government any
right to impose any tax upon these Banks in their
corporate character?"


Second, IF So is the interest oe the State therein
liable to taxation by the Confederate Government!


1t may be assumed, without argument, that Banks
liable to taxation in their corporate character,
unless there is special exemption Providence
Bank v. Billings Peters 563.


1t may also be assumed that tie TACT that STATE
is one of the Stockholders of Bank, does not ex-
empt the Bank from taxation in its corporate cha
racter.


By becoming corporation, the State "divests it,
self, far the transaction of that Com
pany of its sovereign character and takes that of
private citizen. Instead Of communicating to the
Company its privileges and prerogatve. it descrnd$
to level with those with whom it associates itself
and takes the character which belongs to its asso-
caes and to the business which is to be transacted
nix of fhn 1nitG ate ne R0n n
Georgia. 9 Wheat. 907


But the real question in this case seems to be,
Does the fact that these Banks were established
the fiscal agents of the State, exempt them from
Confederate taxation in their corporate character!


The answer to the question is found in the theory
of the two governments. That theory, so far as
our present purpose is concerned may be thus
briefly stated: The people of each State, who alone
have sovereignty, have established two governments,
and to each have delegated certain powers. The
two governments separate. distinct and indepen
dent, though they both act upon the same persons
and the same things. Being separate. distinct and
independent. neither can, in the exercise of its le-
gslative powers. act directly upon the powers. fix
lures machinery of athe other. These Banks,
having been established by the State its fiscal
agents are part of the machinery of the State gov
ernment and not therefore liable to Confederate
taxation in their corporate character.


If apply the principle involved in the Confed-
crate taxation of the fiscal agent of State to the
Confederate Constitution generally, shall fndit
o
instrument; we shall find it capable of greatly en-
barrassing if not wholly arrestng. all the measures
of the government, and of Frustrating the States at
the feet of the Confederate government.


If the Confederate government may tax one in
strument employed by State in the execution of its
powers. it may tax any and every other instrument.
It may tax commissions issued under the great seal
of the State it may tax every Judicial process issued
by State; it may the State House, the Court
House. and County jails of State; it may tax the
revenues of State: it may tax all the means employ
ed by u State, to an excess which would impair if
not defeat the ends of State Government. This
not intended by the people of any Confederate
State. They did not design to make the State Co
vernment dependent the Confederate Govern
nent for IN the very preamble of the Confederate
Constitution, the character of ''sovereign and indie
pendent" is given to each State. This is not all.
If the principle of construction, involved in the
alton of the fiscal agent of State. be established,
what is to restrain the Confederate Government from
exercising control over the Independence of a
State in any shape it may please to give it! The
Legislative power eff the Confederate Governments
not confined to taxation. That is not the only
mode in which it might be displayed. The question
Is in truth a question of independence; and if the
right of the Confederate Government to tax the
means employed by State be conceded, the decIa-
ration that State has separate and independent
government, is empty and unmeaning defamation.
See McCuloch the State of Mary land,
Wheat 432-433


And here, with tho greatest Difference l may be
allowed to say, that | do not the necessitY for
the line of argument adopted by the Chief Justice
in that and one or two other like cases. The ques
ton in those in this. seems to be simply
one, not of 'supremacy but already stated, of
the separate and independent existence of the two
governments. Admitting that plain proposition-a
proposition not susceptible of denial-and the coro-
larry inevitable that the powers and machinery of
neither is within the scope of the taxing
other Legislative power of the other.


But the charters of the Banks not before
me, and as tho question is an important, and,
far as | know, in its present shape novel one and
the ofinvestigation of very limited in the
Department. | beg leave to suggest that case be
made and submitted for judicial determination.


Very respectfully. your ob't servt


[Sgned] WADE kEYES.


Act'g Atto'y Genl.