Bank Fenno.Veazie v. 588Dec. 1869.]

Syllabus.

and therecord, ofand of their productiontheof parties,will of B.and of the Johnprobatedofrecord partition,the

matters of onebe two inquiry:could onlythereJames/of de-James,of the heirs Williamthe identityrespecting

suit; theand other,to the partitionwith theceased, partiesat the time he receivedwas notice towhether there Hawley,

deed fromof unrecorded toDavenportthehis conveyance,determine,were left to the toThese mattersDeWitt. jury

so left.and rightlysuf-in below thewas raised the courtNo uponquestion

that deeds theevidence,the the produced byofficiencyindorse-at the indicated therecorded, time bywereplaintifftaken1819;in nor was tothereon, anyment exceptionMay,

deedcourt,of that the from Davenporttheinstructionthethe deedoffice,inwas recorded the beforeproperto Hawley

Witt; raised,to nor was anyDe questionfrom Davenportof James,willthe Williamasked,or upon producedruling

for our con-and, no is thereon-therefore, presentedpointsideration.

inno substantial error the andrecord,We theperceiveof below bemust, therefore,the courtjudgment

Affirmed.

BankVeazie v. Fenno.

13th, 1866,Julyof amendatorysection the act of priorThe 9th of1. in-acts, providesrevenue everyternal and which that National banking

bank,association, association,State or bankingState payshall a tax ofany bank,ten centum on the amounts of ofper the notes orState State

association,banking paid by 1866,out them 1st August,after the day oflay a direct tax within the meaningdoes ofnot that of theclause Con-

“ordains thatstitution which direct taxes shall be apportioned amongStates, according to their respectivethe several numbers.”

undertaken,Congress having in the ofexercise undisputed2. constitutionalcurrencya forprovideto thepower, country, maywhole constitution-

ally byof it to people appropriatesecure the benefit the legislation, andrestrain, by enactments,mayto suitablethat the circulation ofend any

notes, authority.itsnot issued under own

Bank v.534 Veazie Fenno. Ct.[Sup.

ofStatement the case.

13th,by July 1806,of ten theper imposed8. The tax centum act of on the1866,August,notes of State banks the 1st ofpaid out after is warranted

by the Constitution.

On certificate of division for Court for Maine.the Circuit

The Constitution ordains that:“The shall haveCongress power—

taxes, duties,“To and collect excises,and tolay imposts, payfordebts and the common defence andthe wel-provide general

of the but allStates; duties,fare United and excisesimposts,shall be uniform the United States.throughout

“ To commerce withregulate nations, and theforeign amongStates, and with the tribes.several Indian

“ To coin the valuemoney, thereof, and ofregulate foreign•coin.”

It also ordains that:“ Direct betaxes shall the several Statesapportioned among

. . theiro to numbers.”respectiveaccording“No or other direct tax shall be unless incapitation laid, pro-

to the census or enumeration hereinbefore directed toportionbe made.”

“ The thenot to United States thepowers delegated Con-bystitution, nor it to the areby States, reserved toprohibited the

or to theStates respectively, people.”

With these in force as law,fundamental Con­provisionsan13th, 1866,* theact, second clause ofpassed, Julygress

9th section of which enacts :the

association, bank,“That National State orevery bankingassociation, of tenState shall a tax centum onpaybanking per

bank,the amount of ornotes of State Stateany person, bankingassociation, used and out themfor circulation after thepaid by

1866,1st of and such tax shall be assessed andday August, paidin such manner as shall be the Commissionerofprescribed byInternal Eevenue.”

cent, assessed thethis act a of ten was uponUnder tax pernotes issued for afterBank, circulation,Veazie for its bank

the named in the act.day

* Large,14 at 146.Stat.

Bank v. Fenno. 535Dee. Veazie1869.]

Argument for the United States.

the StateVeazie Bank was a chartered byThe corporationcirculation,with bank notes forMaine, to issueof authority

col-wasthe actnotes on the taxand the which imposed bywaswere issued Therelected, nothingunder this authority.

torelationbauk sustainedin the case that the anyshowingissuetoa that itsthe State as financial or authorityagent,

referenceconferred withnotes was or exercised any specialto other than interests.private

be uncon-tax,The bank declined the it toto pay allegingFenno,aud the internal onestitutional, revenue,ofcollector

in collect it,to make a distraint order towas proceedingthethis,and in'costs, when,with order to preventpenalty

claimit under An unsuccessful havingbank paid protest.for re-made oh the of internal revenuebeen commissioner

bank the col-suit theimbursement, was by againstbroughtthe courtin below.lector,

an state-case was to that court uponThe presented agreedthea for instructions tofacts, and,of jury,ment upon prayer

in on threefound themselves opinionthe opposedjudgesthe first two fromof which—the differingothersquestions,

and recited—wasform not to be this:in only,it needing“ section of the ofthe second clause of the 9th actWhether

of the 13th of under which in his1866, the taxJuly,Congresslevied and collected,case was is a valid and law.”constitutional

here,The case Messrs. and C.coming Reverdy Johnsonthe Bank,Veazie contended:Cushing,for

the tax a1. That in was and that itquestion tax,direct■hadnot been theapportioned States to theamong agreeablyConstitution.

of the nature ofIn direct taxesexplanation they-reliedthe of Adam otherupou writings Smith, andlargely upon

American,and oftreatises, politicalEnglish economy.the act the2. That tax franchiseimposing aimpaired

andState,the that had no togranted by Congress powerwhich could dolaw that.anypass

Hoar, theAttorney-GeneralMr. United theStates, arguedofcontra; hecase the offully, case v. Theupon Hyltonrelying

Bank Fenno.Veazie v. Ct.536 [Sup.

of theOpinion court.

as conclusive the ofUnited ofStates,* question independentlyand briefto theprinciple; recentlyreferring published† of

General theHamilton, whom case was toby argued, explainand decided;view there a case con­his of what wassupportfirmed the inobserved,recently, Attorney-General PacificInsurance v.Company Soule.‡

In it was contended that The Statesreply, UnitedHylton v.alone,one which was a tax onthatadjudged point carriages

tax,not awas direct and that from the thedicta of judges,in the it was obvious whatcase, that the ofquestiongreat

waswere direct taxes but considered.crudely

bar,at the these views of thewhicharguments byThe.counsel themaintained,were are not presented,respective

of both sides of the caseviews fromfullybeing presentedcourt,in tbe of the and in the dissentbench,the opinion

it.from

The CHIEF JUSTICE delivered the of the court.opinionThe of thefor financial exi-necessity adequate provision

created the late rebellion, to the ad-bygencies suggestedministrative and thedepartments oflegislative government

in the of and taxationimportant changes systems currencyhad hitherto Thesewhich more or lessprevailed. changes,

inshown administrative tookdistinctly recommendations,form and substance in have now toacts. Velegislative

within a'limited those cir-consider, which relate torange,notes and the taxation of circulation.culating

At the the rebellion theof mediumbeginning circulatingconsisted almost of bank notes issued numerousentirely byindependent corporations under Statevariously organized

of various of andcredit,legislation, degrees very unequalresources, administered often with and not unfre-great,

with little andskill, The actsquently, prudence, integrity.inof then force, theCongress, or dis-receiptprohibiting

* Dallas,3 171.HistoryIn The of Republic, bythe C. Hamilton.John†

Wallace, 433.7‡

Bank Fenno.Dec. Yeazie v. 5371869.]

of the court.Opinion

Nationalin of thethe transactionsbursement, government,'the laws of the Statessilver,of and andexceptanything gold

demand,in coinof bank notes onthe redemptionrequiringcircula­and silver fromthe ofprevented disappearance gold

coin;then,tion. There no Nationalwas, currency exceptthere Nationalwas of otherno any bygeneral* regulation

inimposedno taxation wasand National anylegislation;form on the State bank circulation.

The the emission notes thefirst act ofauthorizing by17th,for circulation was that ofTreasury Department July

The notes issued under this act were notes,treasury1861.†on demand in coin. The amount authorized itpayable by

was and was increased the act$50,000,000, ofby Februaryto12th, $60,000,000.1862,‡

banksDecember, 1861,On the of the State suspended31stthethis time the of warexpensesspecie payment. .Until

had been in in thecoin, referredjustpaid or demand.notesto; continued beafterwards,for some time toand, they phid

in coin,in these if redeemed werenotes, which, receivednot.coin in duties.as the ofpayment

of 1862,§on the 25th a newSubsequently, February,became ofin thepolicy necessary consequence suspension

'and the wasof condition of the and The.country, adopted.hitherto as has beenissued, stated,notes werejust called

and were demand innotes, on coin. Thetreasury payableissue of billsact now authorized the for circulationpassed

notes,under the' name of United States made topayableonbenot to tobearer, payable demand,but theexpressed

this amountand was$150,000,000;amount of increased byof which $50,000,000acts to $450,000,000, were-­subsequentto issuedreserve,held in and be for ato be only special

as to theirand under directions withdrawalspecialpurpose,after theuntil close of thenotes,Thesefrom circulation.■

orinto, receivable at forconvertiblewar, parwere always

* 27th, 1854, small notes in thesuppressSee the act of to Dis-DecemberColumbia, Large,trict of 10 Stat. at 599.

Ib.Large,12 Stat. Ib. 338.at 259. 345.§‡†1863,1862, 532; 3d,of March Ib.July 11th,Act of act 710.Ib.■

Fenno.Bank v.538 Ct.Veazie [Sup.

ofOpinion the court.

at a rateinterest,in and coincoin,bonds payable bearingand the acts which werecent.,not less than five by theyperto be lawful and adeclared themauthorized, money legal

tender.the for theThis issued bycurrency, directly government

war and other could not,disbursement of the expenditures,a of taxation.be objectobviously, proper

the act1863,But on the of25th February, authorizingassociations* was in for thewhich,National passed,banking

the ex­first time years,during many Congress recognizeda taxand of uponimposing currency. Bypediency duty

cent, wasthis act a of two on thetax per annually imposedit. after,circulation of the associations authorized Soonby

similar but tax3d, 1863,†the act of March a oflighterbycent, on the circulationone was ofimposedper annually

and ofin certain to their twocapital,State banks proportionscent, associa­excess; the the Nationalon the andper .tax'on

rates.tions w'as reduced to the sameBoth acts also taxes on andimposed capital deposits,

which need not be noticed here.At a later the act of whichdate, 3d,June was1864,‡by

the act of 25th, 1863,substituted for February authorizingof tax onassociations,National the rate circulationbanking

was and to the amount it,continued whole of andappliedthe shares wereof their stockholders also to taxa­subjected

States; afterwards,the a few the act oftion andby days by1864,§ and means for30,June to theprovide ways support

the ofof the tax on the circulation the Stategovernment,banks also at the same annual rate ofwas continued one

as was incent., before, but paymentper required monthlyinstalments of of one withcent.,one-twelfth per monthly

each of the infrom State bank amount circulation.reportscan be doubted that the of thisIt hardly object provision

inform authorities amount ofwas to the of the exactproperin with a view to itscirculation, bypaper money regulation

law.* 3d, 1863,of 12 Large,Act March Stat. at 670.

13 Ib. 111. Id.§Id. 712. 277.‡†

Veazie Bank v. Fenno.Dec. 5391869.]

Opinion of the court.

intaken thatfirst direction wasbyThe step Congress bythe and17,of issue circula­the act July 1862,* prohibiting

one dollar orpersonof notes under by any corporation.tionnext,to was the and it wasact referred followedThe just

the act of March 3d, 1865,later amenda­bysome monthsacts,internal revenue the sixth section ofof the priortory

“that National association,which everyprovides, bankingshall a ofassociation,or State taxbank, banking payState

on the ofcentum amount the notes of Stateanyten peror afterassociation,State out thembank, banking paid by

1st of July,the day 1866.Ӡre-enacted,was with asame more extendedThe provision

on the 13th of in these1866, words:July,application,“ association, bank,State or StateNationalEvery banking

a ofassociation, shall tax ton centum onpay perbankingbank,of orof notes State Statethe amount kny person,

andcirculation,association used for outpaid bybankingand such1866, tax shallafter the first ofthem day August,

in manner as shall beand suchassessed prescribedbe paidofthe Commissioner Internalby Revenue.”‡

last nowof this is drawnprovisionThe constitutionalityofthis the recentand brief statementin legislationquestion,

has been made for the of in apurposeof Congress placingand as initsclear scope bearing, especiallylight developed

beIt will seen that whencited. thethe provisions justwasof bank circulation first' in 1863,adoptedpolicy taxing

discriminate for,was inclined to rather thanCongressbanks;circulation the State butthe of that whenagainst,

furnishedbeen with ahad Nationalsufficientlythe couutryissues of States notes and ofthe United Nationalcurrency by

wasthe discrimination and decid-notes, turned, verybankdirection.in theturned, oppositeedly

usbefore whether oris,The now not thequestiongeneralon State banks orcent.,ten Nationaltax of imposedper

the of individuals orout notes State banksbanks paying

* 1863, Large,3d,March 12 Stat. at 592.Act of14 Id. 146.13 Ib. 484. ‡†

Fenno. Ct.Veazie Bank v.540 [Sup.

Opinion of the court.

used for of theis to the Constitutioncirculation, repugnantStates.United

so farIn that act ofof the thesupport position Congress,is re-tax,as it and of thisfor the collectionprovides levy

to have beenthe twoConstitution, propositionspugnantwith andmuch force earnestness.argued

tax in and hastax,The first is that the is a directquestionthenot been the toStatesapportioned among agreeably

Constitution.a fran-The second is that the act the taximposing impairs

andState,chise the that has noby powergranted Congresslaw that intent or effect.to withpass any

first of these will be firstThe examined.propositionswithThe of the terms used indifficulty defining accuracy

clause of the which confers thethe Constitution ofpowerwas felt in thetaxation Convention whichupon Congress,

that and has beeninstrument,framed always experiencedwhen to determine theircourts called uponby meaning.

Constitution, however,intent of theThe seemsgeneraladministered, theThe General Con-Government, byplain.

Confederation,the had been reduced to theofgress vergethe of for revenueof necessityby relying upoiiimpotency

States, a inon the and it was theobjectrequisitions leadingof the to relieve theConstitution toadoption government,

fromit,be under this and confernecessity, uponorganizedit to revenue the taxation ofbyample power provide per-sons and And is from theclearer, dis-property. nothiugcussions in the andConvention the discussions which pre-

final theratificationceded numberby necessary States,ofthan the to this to aspurpose power to thegive Congress,taxation of in its fullesteverything except exports, extent.

also,This is from the terms inpurpose apparent, which“the is The istaxing power power togranted. andlay

duties,taxes, excises,collect and to theimposts, debtpayfor andand the common defence welfareprovide ofgeneral

the States.” MoreUnited words couldcomprehensive nothave been used. are anotherExports byonly provision

fromexcluded its application.

541Bank’ v. Fenno.VeazieDec. 1869.]

of the court.Opinion

limitations, fromcertain virtualare, indeed, arisingThereIt woulditself. undoubt­Constitutionof thethe principles

asexercised toan if so impairbe abuse of theedly powerofandthe existence independent, self-government*separate

for inconsistent with thethe or if exercised endsStates,in thelimited Constitution.of powergrants

theas toAnd there are directions the mode of exercisingto a or otherIf sees fit capitation,imposepower. Congress

census; ifit laid in to thetax, must bedirect proportionexcises,andduties,determines to impose imposts,Congress

States, Thesebe uniform themust Unitedthroughouttheyarelimitations of rulesnot power. pre-are strictly They

in It stillthe mode which it shall be exercised.scribingandto of taxation, mayextends exports,every object except

it extends,to to whichtaxation,ofbe every objectappliedsuch measure as determine.in mayCongress

thus to Con-The of thecomprehensiveness power, givenleast, ofserve to the absence anyatmay explain,gress,

into evendefine,members of the Conventionbyattemptwords useddebate, certainlythe terms of the Thegrant.

and the thedescribe the whole it was intention ofpower,be conferred. TheConvention that the whole shouldpower

words,definition of becametherefore, unimpor-particulartant.

observation,be that this howeversaid, indeed,It justmayofin its to the cannot beapplication power,general, grant

to the rules which different of taxesbyapplied descriptionsare directed to be laid and collected.

Direct must be laid andtaxes collected the rule ofbyandduties, excises must be laidimposts,apportionment;

ofcollected under the i*uleand uniformity.Much of has thediversity opinion always prevailed upon

what are direct ittaxes? to answerAttempts byquestion,to the definitions of economistsreference have beenpoliticalmade, but without results. The enu-frequently satisfactory

meration of the different kinds taxes whichof wasCongress

* County Wallace,Oregon,Lane v. 73.7

Fenno.Bank v. Ct.Veazie [Sup.542

of the court.Opinion

made withto was littleveryprobablyauthorized imposeThe ofto their work Adamspeculations.reference great

first treatisethe onSmith, politicalcomprehensive economy-had then beenthe recently published;in English language,

arework, there which referin this tothoughbut passagesbetween direct and indirectdifference taxa-the characteristic

which affordsis valuablethere ontion, nothing any light“ direct taxes” intheuse of words the Constitution.the

to resorttherefore,are to historicalobliged, evidence,Weof the words in the inseek the use and theto meaningandrelations toof those whose the andgovernment,opinion

warranted them inof with au-means knowledge, speakingthority.

theconsidered in this andAnd, light, meaning applica-taxes,direct to usrule,the as to appearstion of quite clear.

shown inas we act of Con-is, thiuk, distinctlyIt everyon the subject.gress

these a sum was laidof theacts,In each Unitedupongrossthe amount was to theand totalStates, apportioned several

their numbers oftoStates, according respective inhabitants,the last census.byas ascertained beenpreceding Having

was made for the of the taxprovision impositionapportioned,in the its totalact,the sum.specifiedsubjects fixingupon

direct taxwhen the first was the1798,In totalimposed,dollars;*at two millions ofwas fixed in 1813,amount the

direct tax was fixed atof the second threeamount millions;†thirdof the at six millions,the amount and1815,in it

in 1816,an annual thewas made tax;‡ provision makingannualthe tax was the of thebyrepealed repeal first

act and the1815,section of the of total amount was fixedofat three millionsfor that No otheryear dollars.§ direct

when a1861,until directtax was tax ofimposed twentyand madeof dollars laidmillions was but theannual;■ pro­

* 14th, 1798,Act of 1 atJuly Large,Stat. 697.2d, 1813,Act of 3 Ib. 53.August†

1815,July 9th,Act of Id. 164.‡5th, 1816,Act of March Id. 255.§

1861,5th,Act of 12 Ib.August 294.■

543Fenno.v.BankVeazieDec. 1869.]

the court.ofOpinion

tax,and no exceptwas suspended,it annualmakingvisiontheinstance,eachIneverwas apportioned.first laidthat

States, the consti­the byamongwassum apportionedtotalon therates,atassessedand was prescribedrule,tutional

1798,* 1813,† 1815,‡inThese subjects,of the tax.subjectsandlands, dwelling-houses,were1816,§ improvements,

andlands, dwelling-­slaves; 1861, improvements,inandwere assessedslaves1798,act oftheUnderhouses only.

totheeach; acts,under other accordingcents onat fiftyvaluation assessors.by

occu-contracts,review shows that property,This personalhave never beenlike,and the by Congressregardedpations,

thatof direct tax. It has beenas supposedproper subjectsas an to this observa-must be considered exceptionslaves

is rather than real. Asthe apparenttion. exceptionButa tax,were ofslaves subjects capitationproperpersons,

tax;ain the Constitution as direct asis describedwhichsome,the laws of if not most of thewere, bytheyproperty

descendibleclassed as real heirs. UnderStates, property, toto the 1798,first would be tax of as aview,the subjectthey

tax; wouldlatter,under -the be tosubjecttheycapitationastaxation of the other That the latterthe realty.years

taken the of the actsview was that framers after 1798,bywhen it is that inconsidered,becomes theprobable,highly

valueheld,where slaves were much of the whichStates wouldintohave attached to land theotherwise slaves.passed If,

valuedindeed, the land had been without theonly slaves,have to muchland would been heavierthe subject propor-

inin those States than Statestional where thereimpositiontaxslaves;no for the of onwere eachproportion imposed

was withoutdetermined reference toState by population,on which it was to be assessed.the subjects

valued,slaves were under the acts re-fact, thatthen,Theas some haveto, far from thatshowing, supposed,ferred

as a ofpersonal property proper objectregardedCongress

* 9th, 1798, Large,1 Stat. atJulyAct of 586.1813,22d,of 3 Ib. 26.JulyAct†

Id. 166. Id. 255.§‡

Bank Fenno. Ct.544 Veazie v. [Sup.

Opinion of the court.

Constitution,direct taxation under the shows that Con-onlyafter 1798, for the ofslaves, taxation,gress, regarded purposes

as realty.be therefore, that in themay affirmed, practicalrightly.It

construction direct taxesthe Constitution byof Congress,have been on andlimited to taxes land and appurtenances,taxes on or taxes.polls, capitation

this consideration,And construction' is entitled to greatin absence of to it in thethe adverseespecially anything

the con-discussions of Convention which framed"and of thewhich ratified,ventions the Constitution.

in discussions,What does those on theappear sup­contrary,Madison us,*the construction. Mr. informs that Mr.ports

asked was the of direct taxa­precisewhatKing meaningOntion,-and no one answered. another the ques­day, when

andtaxation,tion of to to'bothrepresentationproportioninginhabitants,the white three-fifths of the slave wasand under

“Mr. case aconsideration,. tax,Ellsworth said: In of pollthere would nobe- ofand, doubtlessdifficulty;” speaking

taxation,direct he went on to “The'sumobserve: allotteda beto State levied without themay todifficulty, according

used in State forthe its own All thisplan raising supplies.”doubtless shows as to the true theofuncertainty meaning

tax;term direct itbut anindicates, also, thatunderstandingdirect weretaxes such as be bymay capitation,-andlevied■■onlands and andvaluationappurtenances;-or, byperhaps,assessment of lists. Forpersonal property upon general

werethese the from .which the at timeStates thatsubjectsraised theirusually supplies.principal

This view thereceived ofsanction this two yearscourtbefore the of theenactment first law direct taxesimposingeonomine.

Term,theDuring theFebruary 1796, ofconstitutionalityof 1794,act.the a on came underimposing duty carriages-,

States.†inconsideration the case of TheHylton v. Unitedwas the UnitedbroughtSuit Statesby Daniel Hyl-against

* 3 Madison Papers, Dallas,31337. 171.†

Bank Eenno. 545v.VeazieDec. 1869.]

of the court.Opinion

for not re-the actthe byrecoverton, imposedto penaltyof for the'on a number carriages,and dutyturning paying

his ownthe defendant for use.of byconveyance keptpersons,of the tax,for thelaw notdid provide apportionmentThe

the law was unwar-tax,if it was a directand, confessedlyThe in the case,Constitution.ranted the only questionby

not the was a direct tax.whether or taxtherefore,' was,acase was one of andThe expectation,great general

in its It ininterest was felt determination. was argued,tax, Hamilton,Lee,of the andby Attorney-General,support

of the in to therecently Secretary tax,Treasury; oppositionthefor andCampbell, District,by Attorney Virginia Inger-

ofsoll, Attorney-General Pennsylvania.theOf who then filled this bench, Ellsworth,justices

and Wilson beenPaterson, members, aipdhad conspicuousmembers, of the Constitutional and each theConvention, of

hadthree taken in the discussions to direct tax-part relatingEllsworth, theation. Chief sworn into officeJustice, that

heard the wholemorning, declinedhaving argument,notin the decision.part seniortaking AssociateCushing,

Justice, been fromhaving prevented, at-by indisposition,to the also refrained fromtending argument, anexpressing

The other delivered theiropinion. injudges opinions suc-thecession, in commissionyoungest the first, anddelivering

the oldest the last.all held that tax onThey the was not a directcarriages

within the of thetax, Constitution. Chase, Jus-meaningtice, was inclined to think that the direct taxes contemplated

Constitution,the are atwo:by only capitation or tax,polla taxand on land. He doubted whether a tax aby general

assessment of can bepersonal included withinproperty thePaterson,term direct tax. who had taken a leading part

in the Constitutional Convention, went more intofully theinsense which the words, the power ofgiving taxation,

were used that In the course of thisby body. examinationhe said:

“ taxes,Whether direct in the sense of the Constitution,other thantax acomprehend any and taxcapitation tax, on

VIII.YOL. 35

Veazie v. Fenno. Ct.Bank'546 [Sup.

of the court.Opinion

If for instance,is alaud, point. Congress,questionableor thatmass,intax, generallyshould the thingsaggregate

the ruleUnion, then,in the perhaps,the Statesallpervadeif anthe mostbe proper, especiallywouldof apportionment

from theThis practicewas to intervene. appearsassessmentasahave been consideredthe to direct.tax.of some of Statesof the Unitedunder the Constitutionso,it■Whether beit notsome but as is beforeis of difficulty;a matterStates,

to decisivebecourt, it would improper give any opiniontheaentertained doubt that theit. I never principalupon —Ithat the framers of the Con­thewill not only objectssay —

as within the rule ofstitution contemplated hilling appor­tax and a tax land.”*a onweretionment, capitation

his at concurredIredell, J., opiniondelivering length, gen-and Paterson.of Chase Wilsonin the views Justiceserally

the same wheneffect,to generalbad hisexpressed opinioncircuit, and did not nowthe repeatdecision upongiving the.

nor JusticeEllsworthNeither Chief Justice Cushingthem.inif, a casedissent; it cannot beand supposedexpressed any

had differed from an-thoseso theirimportant, judgmentsnot havewould beennounced, that an givenopportunity

into the de-them an order for participateby reargumentcision.

as theassumed, therefore, unanimousIt bemay safelya on isthat tax uot a directcourt,of the carriagesjudgment

asit be taken established theupontax. And furthermaytaxes,that the words direct asof usedPaterson,testimony

Constitution,the only capitation taxes,comprehendedinand taxes onland,and taxes on perhaps personal property

the variousand assessment ofvaluation descrip-by generalwithin the several States.tions possessed

follows that the to tax withoutIt necessarily power appor-extends to all other Taxes on othertionment objects. objects

direct,are included under the heads of taxes not im-duties,beand and must laid and collected the ruleexcises, byposts,

under is a onof The tax consideration tax bankuniformity.

* Dallas,3 177.

Veazie BankDec. v. Fenno. 5471869.]

of the court.Opinion

circulation, and well classed the head ofbo undermay verynot,duties. in theit is sense of the Constitution,Certainly

a direct tax. It be to the cate­said come within samemayof astaxation the tax on incomes of insurance com­gory

which this at the last in the Of Pa­court, term, casepanies,Insurance v. not to aCompany Soule*held be direct tax.cificit,Is a athen, tax on franchise a State, whichbygranted

the reservedCongress, upon any powersprinciple exemptingtheof States from be held tomustimpairment by’taxation,

have no to and collect?authority layWo do not that there anot be such tax. Itsay may may

be admitted the reservedthat of the asStates, suchlightsthe to law’s,to execu-effect to lawsright pass give throughtive action, to administer the and tojustice courts,through

allemploy for ofnecessary legitimateagencies purposesState are not of thegovernment, proper subjects taxing

of But it cannot be admitted that fran-pow'er Congress.chises a State are taxa-granted by fromnecessarily exempt

;tion for arefranchises often valuable andproperty, veryandproductive property; wdien not conferred for the pur-

of effect to somepose reserved agiving State,of seempowerbe itsto of asproperly objects taxation otherany property.

inBut the case before us the isobject of taxation not thefranchise of the bank, but created, or contractspropertymade and issued under the or to issuefranchise, bankpowerbills. A railroad in the exorcise of itscompany, corporatefranchises, issues billsfreight ofreceipts, andlading, pas-

tickets; and it cannot besenger doubted that the organiza-tion isof railroads asquite to the Stateimportant as the

of banks. Butorganization it will behardly questionedthat these contracts of the are objects ofcompany taxationwithin the ofpowers and notCongress, exempted by anyrelation to the State which the charter of thegranted rail-road. And it seems difficult to thedistinguish taxation ofnotes issued for circulation from the taxation of these rail-road contracts.' Both of contractsdescriptions are means

* 7 Wallace, 434.

Bank v. Fenno.Veazie Ct.548 [Sup.

Opinion of the court.

them; both,issue and asto the whichcorporationsof profitbe made to thethink, publicwe contributorymay properly

revenue.in case usIt is that the tax the beforeinsisted, however,

theand so excessive as to indicate a onexcessive,is purposethe franchise of the andbank,of toCongress destroypart

oftherefore, the constitutionalis, beyond power Congress.first answer to this is that the cannotThe judicial pre-

the of the limi-scribe legislative departments governmentto.the exercise of itstations Thepowers.upon acknowledged

be exercisedto tax may oppressively upon persons,powerof the isthe not to theresponsibility courts,but legislature

to the whom its members are elected. So ifbypeoplebutheavilytax bears aa or a classupon corporation,particular

it for that becannot, reasonof corporations, only, pronouncedtheto Constitution.contrary

theanswer which vindicatesBut there is another equallyofand thewisdom power Congress.

underdoubted that theIt cannot be Constitution thea circulation of coin isto toprovide givenpower Congress.

the uniform of thepracticeit is settled byAnd governmentthatdecisions,and constitution-Congressby repeated mayof bills ofemissionauthorize the credit. It is not im-ally

to decide whether the ofhere, quality tender,legalportantbedebts, canof constitutionallyin toimpartedpayment

bills; to that there cánit is be nosay,enoughthese ques-them;,ofthe to eimt to maketion of the power government

itself;in of debts to to fitreceivable thempaymentthemwho see fit to use in allthose them theuse transac-for by

commerce; to theirforof to makeprovide redemption;tionsin value anda and con-them currency, description,uniform

useful, forand Thesevenient circulation. untilpowers,' andwere only partially exercised.occasionallyrecently,called,have full,been intohowever, theyLately, activity,

undertaken to'has aarid for thesupplyCongress currencyentire country.

themethods for of thisThe adopted supply werecurrencyin the first of thispart Itexplained opinion.briefly now.

Dec. Bank v.Yeazie Eenno. 5491869.]

Davis,Nelson, JJ.,Opinion dissenting.of and

consists of andof United States of the notes ofcoin, notes,the National banks. Both of notes bedescriptions may

described as of credit,bills for both are furnishedproperlythe both are issued on the credit of theby government;

and the is for the re-government; government responsibleboth;of as to thedemption first andprimarily description,

default of the asimmediately upon to the second.bank,When these bills be madeshall atcoin,convertible into thewill of the thisholder, will, .thecurrency perhaps, satisfywants of the in atocommunity, respect medium,circulatingas as mixed can be devised’.perfectly any currency'that

in the exercise ofthus,Having constitutionalundisputedundertaken to a the wholepowers, provide forcurrencyit cannot be thatcountry, questioned consti-may,Congress

secure ofthe benefit it to thetutionally, people by appro-denied;theend,To thispriate haslegislation.' Congress

of tender to andcoins, hasquality legal foreign provided bylaw the of counterfeitagainst and base coinimposition onthe the end,To samecommunity. Congress may restrain,

suitable theby enactments, circulation as ofmoney anynotes not issued under its own' Without thisauthority.

uniform,secure,itsindeed, to apower, sound andattemptsfor the must becurrency futile.country

Viewed in this as well as in the otherlight, of alight dutyon contracts or we cannot doubt theproperty, constitution-

of the tax underality consideration.The three certifiedquestions from the Circuit Court of

the District of Maine'must, betherefore, answeredAffirmatively.

Mr. Justice withNELSON, whom Mr. JusticeconcurredDAVIS, dissenting.

I am unable to inconcur the of aopinion ofmajority the•court in this case.

The Yeazie Bank was theincorporated by. oflegislaturethe State of inMaine, with a1848, ofcapital $200,000, andwas invested with the of acustomary powers insti-banking

;tution and, the ofamong others, power receiving deposits,

Veazie Bank v. Fenno.550 Ct.[Sup.

Davis, JJ.,Nelson,Opinion dissenting.of and

and notes or bills for circulation.paper, issuingdiscountingconstitutional the State toThe of create these in-authority

and invest them with full isstitutions, to banking powers,usefuldenied.. it bo to recur for aBut, fewhardly may

moments to the of thissource authority.The tenth amendment to the Constitution is as follows:

“ The not to the United States the Con-powers bydelegatedStates,nor it to the are reservedstitution, tobyprohibited

tothe or the Onrespectively,States intopeople.” lookingConstitution, it will be found that therethe is no clause or

eitherwhich or reasonableexpressly, byprovision implica-thetion, this to Federal Government, whichpowerdelegates

whichStates,to the nor it toprohibitsbelongedorigiuallythe discussions on the of the creationthem. In ofsubject

States, in the firstthe first Bank of the United andCongress,of in and 1791,in the noCabinet 1790 ques-Washington,

thewas made as to the of State banks.tion constitutionalityand which divided theexisted,doubt that opinionThe only

of theeminent statesmen of whomday,the most manyofin of thethe formation Consti-had just participatedlargely

thenwhich woretution, the theyunder engagedgovernmentnot awhether or con-was, possessedin Congressorganizing,a of theto institutionbankingcurrent power incorporate

States?Unitedain onHamilton,Mr. his celebrated National bankreport

discusses at somethe House ofto Representatives, lengthwhether not it would be to sub-or expedientthe question,

inlocatedAmerica,the Bank of North Philadelphia,stitutea charter from the ofwhich hadand accepted legislature

And,newin the of a bank.place organizingPennsylvania,a newcame the conclusion tohe to organizefinallyalthough

as to the ille-intimation,a orthere is notone, suggestion,of this bank.Stateor unconstitutionalitygality

25th,bank,this Februaryact passedThe incorporatingotherof bythe any Congress,establishment1791,prohibited

to the State banks.said ascharter, butits nothingduringthein the actis contained incorporatinglikeA prohibitionof aTheof constitutionality1816.of theUnitedBank States

Dec. Veazie Bank v. Eenno. 5511869.]

Nelson, Davis, JJ.,Opinion of and dissenting.

bank wasincorporated .first settled theby Congress by judg­*ment of this court in McCullochv. The State Maryland,­of

in In that case the and1819. both counsel the court recog­nize the and of bankslegality incorporatedconstitutionality

the States.byofThe the theBank of United States.wasconstitutionality

anddiscussed, decided in the ease of Osbornv. UnitedagainAnd,States in connection with this, was arguedBank.†

aand decided in the case of Bankpoint StatesThe.Unitedboth,The Bankv. Planters’ which was tocommonGeorgia,of

was,cases. The whether the Circuit Courts ofquestionthe States had aUnited of thesuit,jurisdiction bybroughtUnited States Bank the Planters’ Bank ofagainst Georgia,'

State,that and in thewhich State was aincorporated bystockholder.‡

held in cases it had.The court both that the adop­Sincedown theConstitution,tion of the to act ofpresent Congress,us,and the case the in and innow before question Congress

the has whether werebeen,courts not the State banks con­institutions,stitutional but whether had the powerCongress

conferred on it to aStates,the establish National bank.byAs we have that was closed thesaid, byquestion judgment

inof this court v. The State At theMaryland.McCulloch ofthethe thereConstitution,time of of were fouradoption

in and inexistence in each ofoperationState banks —oneNew York, Massachusetts,ofthe States andPennsylvania,

The one in had been char­PhiladelphiaMaryland. originallyConfederation, butthe took a chartertered subsequentlyby

of The framers of thePennsylvania.under the State Con­therefore, familiar with thesewere, State banks,stitution

asand circulation of their and werepaper money;the alsoof the thatStates,the was sowith practice common,familiar

of werecredit, which bills issued theto issue bills State,bycredit,on its owu and intended to ascirculate cur­exclusively

a futureredeemable at theday. They guardedrency, peopleevils of thisthe of the Statepractice governmentsagainst

* Wheaton, 804,9316. Id. 738. Ib. 904.4 † ‡

Bank v. Fenno.Veazie Ct.552 [Sup.

Davis,Nelson, JJ., dissenting.andofOpinion

“the thatarticle,section of firstin the tenththeby provisioncredit,” and, in the same sec-bills of“emitno shall”State

theabuse of of Statepaper moneytion, anyguard against“nor make butthe words: anythingin goldbanks following

Asdebts.” bills ofin ofa tenderand silver coin paymentthe of theabolished, moneypapercredit were thus entirely

or medium towas the only currency circulatingbanksStatehave had andcould anythis application,which prohibition

leftand to thesilver,was the except goldonly currency,took from this all coercivepaperTheStates. prohibition

alone the theto stand credit ofand left itcirculation, uponbanks.

asirredeemable the banksno an currency,It was longerthat itsofwere under including, frequently,obligation,

circulation,intheir into redeemstockholders, paper goldbanks wereat The State left inor the counter. thissilver,

Constitution, untouchedthe otherby anycondition pro-bywereAs a establishedtheyvision. consequence, gradually

States, had notin or all of the beenmost and encroachedinor otheror interferedany wayupon legislated against,

for more thanacts of of awith, three-quartersby -Congress,1864.to1787century —fromthein addition to above of theBut, Staterecognitiontheir camethe ofbanks, constitutionality directlyquestion

in case of Briscoe v. The Bankthis court the thebefore ofKentucky.*Commonwealthof

discussed,case was most both counselelaborately byThecourt,The after the fullest consideration,and the court. held

the chartersto tothat the States Statepossessed power grantwas incident to andbanks; that the thatpower sovereignty;

in the Federal Constitutionwas no limitation on itsthereThe cotirt observedexercise the States. that-the Bank ofby

andAmerica and of some wereMassachusetts, others,Norththe the of thein at time o'f adoption Constitution,operation

the notes theseit could'not be of banksand that supposedinhibited that instrument,intended to be thatby or,were

* Peters,11 257.

v.Veazie 553Fenno.Dec. Bank1869.]

JJ.,Nelson, Davis,ofOpinion dissenting.and

aswere bills of credit within itsconsideredthey meaning.inconcurred this Mr. JusticeAll the exceptjudgment,judges

inThe decision this was affirmed in v.caseStory. WoodruffAlabama;†Bank inin v. The andTrapnall;* Barrington of

v. StateCurran Arkansas.‡ofhisKent that inobserves, Mr. Justice Story,Chancellor

the beConstitution,§on seems to ofCommentaries opinionof the from thethat independent practice,long-continued

the of Constitution,time of the wouldthe Statesadoptiona sound thenot, construction of if theupon Constitution,

was res be authorized toquestion integra, banksincorporatetowith a circulate aspower inasmuchbank.paper currency,

areas fromexpressly prohibited Hethey coining money.cites the of Mr.opinions Webster, of the Senate of the

andStates,United of Mr. Dexter, ofSecretaryformerlyWar, the same side. But theon observes, thatChancellorthe if not theequal, of Mr. thegreater, authority Hamilton,earliest of the beSecretary cited inTreasury, may support

aof different and theopinion; sense and uni­contemporaryform of the nation are decisivepractice of the Hequestion.further theobserves, bills ofprohibition (of credit) does notextend billsto emitted by individuals, orsingly collectively,whether associated under a private foragreement banking

as was the case withpurposes, the Bank of New York, priorto its earliest charter, which was in the winter of 1791, or

under a charter ofacting soincorporation, as the Statelonglends not its credit, or or coercion toobligation, sustain thecirculation.

In the case of Briscoev. The Bank the Commonwealthof ofheKentucky, observes, that this wasquestion atput rest by

the of theopinion court, that there was no limitation in theConstitution on the of the Statespower to incorporate banks,and their notes were not intended nor were considered asbills credit.­of ■

The constitutional of States,thepower thus estab-being

‡* 19,Howard,10 205. 13 12. Id. 3,Id. 15 317. p.Vol.† §1 Kent’s Commentaries, 409, A,p. marg. note 10th ed.■

Ct.Veazie Bank v. Benno. [Sup.554

Nelson, Davis, JJ., dissenting.of andOpinion

to createincontrovertible Statelished bankingby authority,whether or not the inthe next taxinstitutions, is,question

with the ofcan bé enjoymentconsistentlyquestion- upheld,this power.

1866,* declares,of that the13th,act JulyThe Congress,often on the amount theirshall centumperbanksState pay

bank, usedof or otherthe notes Stateany person,or■notes,,ofout them after the 1st Au­circulation, byand-paidfor

ato there is also tax oftax,In addition this1866.gust,all tocentum dividends stockh­annum,five uponper.per

of of onebesides a oneolders,† twenty-fourthduty perand theall samecentum, upon deposits, monthly'monthly,

of This makes anthe the ag­upon capitalduty bank.‡cent,of some sixteen per imposed annually upongregate

taxthe tenobserved,be of centumperthese banks. It willa tax onis not the ofthe bills in circulation propertyupon

are not thein circulationbills prop­the institutions. Theinand,of the account ofbank,the debts theirbuterty,

to the debitare side.credits,debits and placed Certainly,the ofno has made bothdiscovery taxingyetgovernment

ascredit,debit thethis and of aaccount,sides of propertyIf both these itemsor couldtaxable person corporation.

this a Nationalbe made available for debtpurpose, heavyneither,alarm, as itneed not create any very great respects

theon of the for timecountry,its the industrypressure being,is in theThereor of its duration. debtspossible nothing

them in this from therespectto debtsof a bank distinguishdiscounted receivedof individuals or The paperpersons.

bank,notes in is of thethe circulation the andpropertyforofas theis as is individuals receivedsuch,taxed property

their notes thatfor bemay outstanding.-• the cannot asbanks be aThe taximposition upon upheld

neither could it have been so intended. It is,property;uponmode which the or faculties thea of States,by powerssimply,

are tobanks, taxation, and,to subjected which,incorporate,maintainable, annihilate those powers.if may

* 146,Large, 283,14 at 9. 13 Id. p.Stat. 120.§ §†277,Ib. 110.§‡

Veazie Bank v. Fenno. 555Dee. 1869.]

Nolson, JJ.,Davis, dissenting.Opinion of and

of to tax theNo thequestions authorityperson Congressall bodies ofof the and of otherbanks, corporateproperty

are artificiala the same as that of individuals.State, Theythe associated means of realbodies, pecuniaryrepresenting

thewhich constitute their andbusiness capital,persons,thus invested is and to withtaxation,open subjectproperty

all the real and the A taxof State. uponproperty, personal,and is to be uni-which,this the Constitution,property, by

affords full theform, to of the Federalscope powertaxingand is consistent with of the Statesgovernment, the-power

and,to create the in our the sub-banks, is onlyjudgment,of taxation, this whichto these institu-ject by government,are liable.tionswe have inseen,As the of this theforepart opinion, power.

banks was not surrendered to theto FederalincorporateStates;but reserved to theGovernment, and it follows that

orthem,the Constitution itself shouldprotects protect them,encroachmentfrom this As to theany upon right. powers

reserved, the States are asthus as en-beforesupreme theyUnion,into the andtered are entitled to the unrestrained

exercise of them. The as to the taxation of thequestionand faculties to is notpowers newbelonging governments

Thein this court. bonds of the Federal Government haveheld to be frombeen Stateexempt taxation. Be-Why?

wore issuedcause under the inthey the Constitutionpowerandto borrow the tax would bo amoney, tax thisupon

asand, there can be no limitation to the extentpower; oftax, thethe to borrowpower be So, in themight destroyed.

of theinstance United States ornotes, astenders,legalcalled,are issued aunder constructivethey to issuepower

ascredit,of no isbills in theexpress power Constitu-givenare fromtion, State taxation for athey likeexempt reason

in theas case of bonds; and, we learn fromgovernmentof thethe court in this that one further isopinion case, step

and thattaken, is, that the notes of the National banks areto be as bills of issued thecredit,regarded indirectly by

and it follows, course, this,of from that thegovernment;asused instruments issue and inbanks to circulationput

• Veazie556 Bank v. Fenno. Ct.[Sup.

Nelson,Opinion Davis, JJ.,of dissenting.and

arenotes,these also "Weare not ofexempt. complainingisthis. Our to show how it is thetopurpose important

of the reserved of the thatprotection States,proper rightsand shouldthese be from Fed-exemptpowers prerogativesand how fatal their iftaxation,eral to existence, permitted.

even taxthat if this could be as oneAnd, also, regardedunderstill, the decisions above réferred to,upon property,

be a tax the andit would faculties of .the Statesupon powerstherefore,banks,create these and,to unconstitutional.

is that the decisiontrue,It strikes at thepresent onlybanks,to create but no can fail to see thethatpersonpower

affectsinvolved the to create de-power any'otherprinciplesuch as railroads,of manu-scription corporations, turnpikes,

and others.companies,facturingandthe faculties of theThis "Statetaxation,of powers gov-

esseutial to theirwhich are and toernments, sovereignty,and administra-efficient andthe independent management

for the first advancedaffairs, is, time,their internaloftionIt findsFederal noattribute of orauthority.an supportas

theofin the or theinearly history government,countenancefoundedstatesmen who it.of the illustrious Theseopinions

fromabstained encroachmentanyscrupulouslystatesmenStates; and,of the withinreserved thesethe rightsupon

asthemand States.limits, sustained supported sovereignthe of thisas to tax ofpurposeWe heavysay nothing,

banks,the ten of which wesixteen centumper uponsomeofas the the Statesupon powercannot but imposedregard

the isIndeed, concealed,purpose scarcelyto create them.to thecourt,of the Na-in the namely, encourageopinion

to the burdenadd,It is sufficient that of thetional banks.banks,these hashas fatal toprovedwhile ittax, encouraged

if we are at to ofStates; and, thelibertythose of judgethehaveact,an from the thatconsequences followed,ofpurpose

far that thesetoo to conse-not, say,,isit perhaps, goingintended.werequences