its branch in the State, it was held further that the State, within which the branch was located, could not, without violating the Constitution, tax that branch. The State government had no right to tax any of the constitutional means employed by the government to execute its constitutional powers, and no power by taxation or otherwise to retard, impede, burden or in any manner control the operation of the constitutional laws enacted by Congress to carry into effect the powers vested in the national government. Thus he said:

"That the power of taxation is one of vital importance; that it is retained by the States; that it is not abridged by the grant of a similar power to the government of the Union; that it is to be concurrently exercised by the two governments: are truths which have never been denied. But, such is the paramount character of the Constitution that its capacity to withdraw any subject from the action of even this power, is admitted." After conceding that there was no express prohibition of such a tax in the Constitution, the court says:

"There is no express provision for the case, but the claim has been sustained on a principle which so entirely pervades the Constitution, is so intermixed with the materials which compose it, so interwoven with its web, so blended with its texture, as to be incapable of being separated from it without rending it into shreds.”

And further, page 431:

"That the power to tax involves the power to destroy; that the power to destroy may defeat and render useless the power to create; that there is a plain repugnance, in conferring on one government a power to control the constitutional measures of another, which other, with respect to those very measures, is declared to be supreme over that which exerts the control, are propositions not to be denied. If the States may tax one instrument,

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employed by the government in the execution of its powers, they may tax any and every other instrument. They may tax the mail; they may tax the mint; they may tax patent rights; they may tax the papers of the custom house; they may tax judicial process; they may tax all the means employed by the government, to an excess which would defeat all the ends of government. This was not intended by the American people. They did not design to make their government dependent on the States. The question is, in truth, a question of supremacy; and if the right of the States to tax the means employed by the general government be conceded, the declaration that the Constitution, and the laws made in pursuance thereof, shall be the supreme law of the land, is empty and unmeaning declamation."

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Reference was made in the opinion to the arguments of the Federalist, and it was held that they were intended to. prove the fallacy of apprehensions of an unlimited power of taxation. He said:

Had the authors of these excellent essays been asked, whether they contended for that construction of the Constitution, which would place within the reach of the States those measures which the government might adopt for the execution of its powers; no man, who has read their instructive pages, will hesitate to admit that their answer must have been in the negative."

He said further that the right of the State to tax the banks chartered by the general government was not the same as the right of the national government to tax the banks chartered by the State:

The difference is that which always exists, and always must exist, between the action of the whole on a part, and the action of a part on the whole-between the laws of a government declared to be supreme, and those of a govern

ment which, when in opposition to those laws, is not supreme.'

The opinion concluded as follows, pp. 436, 437:

"The court has bestowed on this subject its most deliberate consideration. The result is a conviction that the States have no power, by taxation or otherwise, to retard, impede, burden, or in any manner control the operations of the constitutional laws enacted by Congress to carry into execution the powers vested in the general government. This is, we think, the unavoidable consequence of that supremacy which the Constitution has declared.

“We are unanimously of the opinion that the law passed by the legislature of Maryland, imposing a tax on the Bank of the United States, is unconstitutional and void.

This opinion does not deprive the States of any resources which they originally possessed. It does not extend to a tax paid by the real property of the bank, in common with the other real property within the State, nor to a tax imposed on the interest which the citizens of Maryland may hold in this institution, in common with other property of the same description throughout the State. But this is a tax on the operations of the bank, and is consequently a tax on the operation of an instrument employed by the government of the Union to carry its powers into execution. Such a tax must be unconstitutional."

§ 8. Osborn v. United States.

A few years later, in 1824, the court was asked1 to reconsider so much of this opinion as held that the States had no rightful power to tax the banks of the United States. It was contended that banking is a private business, the essential character of which was not changed by the fact that the parties engaging therein were incorporated under

1 Osborn v. Bank of the United States, 9 Wheaton, 738.

the Act of Congress, and it was therefore not properly an instrumentality of the government in the sense that the mint or post office was. But the court replied that while banking was a private business, the Bank of the United States was not created for its own sake or for private purposes, and to tax its facilities, its trade and occupation, was to tax the bank itself. The tax in this case was one levied by the State of Ohio taxing the banks of the United States fifty dollars on each office of discount and deposit in the State. The court said, 1. c., page 867:

"Considering the capacity of carrying on the trade of banking, as an important feature in the character of this corporation which was necessary to make it a fit instrument for the objects for which it was created, the court adheres to its decision in the case of McCulloch v. Maryland, and is of opinion that the act of the State of Ohio, which is certainly much more objectionable than that of the State of Maryland, is repugnant to a law of the United States made in pursuance of the Constitution, and therefore void."

§ 9. Brown v. Maryland.

This principle of Federal supremacy in relation to the taxing power of the States was again emphatically stated in 1827, in the great case of Brown v. Maryland.1 In answer to the argument that the construction given by the court to the power to regulate commerce would abridge the power of the State to tax its own citizens or their property within its territory, the court, Chief Justice Marshall, said, page 448:

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We admit this power to be sacred; but cannot admit that it may be used so as to obstruct the free course of a power given to Congress. We cannot admit that it may be

1 12 Wheaton, 419.

used so as to obstruct or defeat the power to regulate commerce. It has been observed that the powers remaining with the States may be so exercised as to come in conflict with those vested in Congress. When this happens, that which is not supreme must yield to that which is supreme. This great and universal truth is inseparable from the nature of things, and the Constitution has applied it to the often interfering powers of the general and State governments, as a vital principle of perpetual operation. It results necessarily from this principle that the taxing power of the States must have some limits. It cannot reach and restrain the action of the national government within its proper sphere. It cannot reach the administra tion of justice in the courts of the Union, or the collection of the taxes of the United States, or restrain the operation of any law which Congress may constitutionally pass. cannot interfere with any regulation of commerce.

§ 10. United States securities not taxable by States.

It

This principle was first applied to the attempted State taxation of Federal securities in 1829, in Weston v. Charleston.1

The city of Charleston passed an ordinance, taxing, with other personal effects, the six and seven per cent stock of the United States, 25 cents on every $100. This tax having been sustained by the State courts of the State, was taken to the Supreme Court of the United States and there adjudged unconstitutional. It was claimed that a tax on stock came within the exception stated in the case of McCulloch v. Maryland, but the court held the contrary, saying, 1. c., page 468:

"The American people have conferred the power of borrowing money on their government, and by making that

1 2 Peters, 450; 7 L. C. P. 481.