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the form, without varying the substance. It is impossible to conceal from ourselves the fact that the injury to be avoided by the prohibition is the same, whether it be the one or the other. This attempted distinction is treating the prohibition, which is general, as if it were confined to a particular form or mode of doing the forbidden thing. (12 Wheat., 444.)

The prohibition claimed is not special or limited. There is no express prohibition against taxing national securities or national banks, but the prohibition is general against allowing the States to do anything that will impede the exercise of the powers granted to the general government. No matter what may be the power claimed by the States, whether it be a tax on national securities, a tax on imports, or a tax upon these shares of stock, if the result upon the powers of congress is the same, the same prohibition in the one case must apply to the other. (12 Wheat., 444.)

Justice NELSON, in the last case before the Supreme Court (State of N. Y. v. Commissioners, &c., 4 Am. L. R., 279), says: "Where the capital of the banks is required or authorized by law to be in invested in stocks, and among others in United States stocks, under their charters, or articles of association, and this capital thus invested is made the basis of taxation of the institution, there is great difficulty in saying that it is not the stock thus constituting the corpus or body of the capital that is taxed. It is not easy to separate the property in which the capital is invested from the capital itself. It requires some refinement to separate the two thus, intimately blended together. The capital is not an ideal, fictitious, arbitrary sum of money set down in the articles of association, but in the theory and practical operation of the system is composed of substantial property which gives value and solidity to the stock of the institution. It is the foundation of its credit in the business community." The legislature had, by ch. 240, Laws 1863, provided, in substance, that State banks should be liable to taxation on a valuation equal to the amount of their capital stock paid in or secured to be paid in, and it was urged that the capital of the bank was not taxed at all, that the tax was in the nature of a

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royalty for their franchise, and not a burden on the property itself, that the State had the constitutional right to say that the banks of the State should pay all the taxes of the State in their discretion; but it was held that so far as the banks held securities of the United States, the act was unconstitutional, which we submit is going much further than we ask the court to go in this case.

Justice MULLIN cites the case of Bulow v. The City of Charleston (1 Nott & McCord, 527), where it was held that the stock of the Bank of the United States, in the hands of individuals, may constitutionally be taxed by the States. Also the case of State v. Collector (2 Bailey, 754), where it was held that an act of the State of South Carolina, imposing a tax of one per cent on all dividends of banks not chartered by the State, was valid.

The former occurred in 1819, the latter in 1830, and both of which cases are distinctly overruled by the principles of subsequent cases, in the Supreme Court of the United States. Upon the argument, below, some stress was laid on the dictum of Ch. J. MARSHALL, in the case of McCullough, at the close of his opinion. Upon examination it will be found that he did not intend to pass upon the question as to whether a State tax upon "the stock of the United States Bank," in the hands of a stockholder, was valid or not.

III. The courts have always held that congress might pass a law exempting government securities from State taxation, and such a law was passed by congress on the 25th of February, 1862.

The 2d section, in terms, declares that "all stocks, bonds, and other securities of the United States, held by individuals, corporations or associations, within the United States, shall be exempt from taxation by or under State authority."

It was under that act that $166,000 of the stocks composing the capital of this bank were issued, but the exemption also extends to all stocks of the United States, and applies to the 10-40 bonds equally with the 5-20 bonds. Indeed, the act of March 3, 1864, under which the 10-40 bonds were issued, also expressly declares that "all bonds issued under

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this act, shall be exempt from taxation, by or under State or municipal authority," and no act of congress will be found in any manner changing the exemption thus given.

Now, it is clear that if these bonds were held by individuals, they would not be the proper subject of State taxation. (Weston v. The City of Charleston.) It is equally clear, that a tax on the bank would be void. (McCullough v. Maryland.) So, too, a tax upon the capital stock of the bank has been held to be a violation of the Constitution. (The Bank of Commerce v. Commissioners of Taxes, &c.) In what respect is the principle changed, when a number of individuals, instead of retaining their bonds in their own custody, deposit them, under the authority of congress, with an officer of the government, appointed for that purpose, and receive from the common agents, who make the deposit, a certificate or a paper simply containing the evidence as to the amount of the individual interests in the common deposit? A party holds five thousand dollars of government bonds; it is admitted that they are not within the sovereign jurisdiction of the State; he subscribes for stock in one of these banks, and pays in his bonds as a part of the capital. It is claimed he is now liable to be taxed. Will some one tell us, when and how the State obtained its sovereign right of taxation, which it now proposes to exercise? What act has been done by the holders of the bonds to confer this sovereignty? and how is it that the prohibition of the Constitution, so proper for the public safety, has ceased to operate?

What is the interest which these stockholders possess in the capital of this bank, and which is now attempted to be reached for taxation? We answer, it is an interest in the capital stock of the bank, and nothing else. And of what is the capital stock of the bank composed? We answer, government securities, which are declared by the Constitution of the United States, the supreme law of the land, to be exempt from State taxation; which are declared by the laws of congress, made in pursuance of the Constitution, and therefore supreme over any State law, to be exempt from

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State taxation; and which are declared by the highest co in the land, to be so exempt.

No State in the Union has a greater interest to maintain the integrity of the Constitution, to preserve throughout all our national institutions, and to hand down to posterity our Union, as we received it from our fathers, defended against the dogmas of State rights, as well as the attempts at destruction by open rebellion, than has the State of New York. The necessities of our government for money are urgent. To meet those necessities and maintain the public, credit, requires that all the powers of the nation should be brought into active operation; that they should be in no manner obstructed by State action; that no surrender of those powers, so essential to national existence, should be made to the States by congress, without the plainest sanction of the Constitution. We believe the people of this State, however onerous may be their taxes, would be the last to enforce this tax, if in so doing it will in any manner conflict with the Constitution, by obstructing any of the means which the government may constitutionally employ to maintain the public credit.

There may be, and doubtless are, a class of men whose minds, never comprehend anything extending beyond selfinterest, who will cry out against the injustice of allowing one to enjoy all the advantages of society, and protection of his property and rights, and live in affluence upon an income derived exclusively from interest on government stocks, exempted from taxation. But it should be remembered that these national banks and national stocks are the proper subjects of national taxation, and as soon as it becomes the policy of the nation to tax them for national purposes, beyond what they are already taxed, that policy will be enforced. But it is clear that the present policy of the nation is not to tax them beyond the present rate imposed by the laws of congress, and especially not to allow them to be taxed for State purposes.

These banks are now taxed by congress upon their circulation and deposits, besides a license tax. This is all the

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taxation which congress, at present, in view of the governmental policy of making these institutions useful to the government and the people, have deemed it prudent and safe to impose, and any other or further burden should only be imposed by the same authority, and in furtherance of the same policy.

The foundation of the obligation to pay taxes is not, as some people suppose, the privileges enjoyed or the protec-. tion given to a citizen by the government. Like protection is due to all. Those members of a State who do not, because they are not able to, pay taxes, are entitled to the same privileges as the greatest tax payer in the country. (16 Peters, 446.) Married women and children have privileges and protection, but they are not assessed unless they have property separate from the heads of the families. So, too, with clergymen and charitable institutions. It is the necessities of the government for money in times of peace or war, that fixes the obligation to pay such taxes as may be imposed by lawful authority.

IV. We come now to the consideration of the 41st section of the last banking act of congress, approved June 4th, 1864, under which, as we understand, the assessors acted in making this assessment. The language of the act is:

"Provided, that nothing in this act shall be construed to prevent all the shares in any of said associations, held by any person or body corporate, from being included in the valuation of the personal property of such person or corpo-. ration, in the assessment of taxes, imposed by or under State authority, at the place where such bank is located, and not elsewhere."

Now we deny that this section grants any authority whatever to make this assessment.

It will be observed that the language is not that these shares "shall be," or may be," included in the valuation of the tax payers' property. But the language is, "that nothing in this act shall be construed to prevent" their being included, &c., and therefore the act leaves the right to tax or not to tax, the same as though the act had not been passed.