conflicting arguments, it may well be said that, on principle and apart from authority, the legal tender question is one of difficulty, on which there may well be an honest difference of opinion, without liability, on the one side or the other, to a just imputation of either ignorance of constitutional law or moral perversity. The power of Congress to create a national bank was quite as bitterly controverted in the early days of the Republic, yet few, if any, now doubt that the power exists.

13. If Congress have an implied power to issue a legal tender currency as a means to the end of borrowing money for and paying the debts of the United States, and if the express power to "coin money" is to be construed as an authorization of the issue of a metallic legal tender currency and an implied prohibition of the issue of a paper legal tender currency, it inevitably follows that the Legal Tender cases are an authority for the proposition, of possibly wide application, that no express grant of power to the United States to accomplish any end in any definite way can avail to prevent the attainment of that end in any other way, if permission to use that other way be implied in and deducible from any other express grant of powers.

CHAPTER III.

TAXATION.

14. Taxation defined and limited. 15. Taxation by the United States. 16. Direct taxation.

17. The requirement of uniformity.

18. Exemption of state agencies from taxation by the United States. 19. Charges which are not taxes exempt from constitutional restraints. 20. Taxation by the states.

21. The expressed restraints upon state taxation.

22. The implied restraint upon state taxation resulting from the federal

supremacy.

23. Taxation of national banks.

24. State taxation as affected by the prohibition of the impairment of the obligation of contracts.

25. State taxation as affected by the grant to Congress of the power of regulating commerce.

14. Taxation is the compulsory exaction by a government, in the exercise of its sovereignty, of a payment of money or surrender of property by any person, natural or corporate, who, or whose property so taxed, is subject to the sovereign power of that government.1 Taxation operates upon real property and upon tangible personal property by reason of its situs or presence within the territory of the taxing power. It operates upon choses in action by reason of the subjection of the owner thereof to the jurisdiction of the government imposing the tax. Every possible exaction of money or property by a government from

1 The State Freight Tax, 15 Wall. 277; McCulloch v. Maryland, 4 Wheat. 420.

2 Mager v. Grima, 8 How. 490; Coe v. Errol, 116 U. S. 557.

3 Bonaparte v. Tax Court, 104 U. S. 592; Kirtland v. Hotchkiss, 100 U. S. 491; Nevada Bank v. Sedgwick, 104 U. S. 111.

those who are subject to its jurisdiction is not a tax; thus, a duty of so much per passenger, imposed by the United States in the exercise of the power to regulate commerce on owners of vessels bringing passengers from foreign ports into ports of the United States, in order to raise a fund to mitigate the evils incident to immigration, is "not a tax or duty within the meaning of the Constitution ;"1 for, as Miller, J., said in the judgmeat in that cause,2 "the money thus raised, though paid into the treasury, is appropriated in advance to the uses of the statute, and does not go to the general support of the government. It constitutes a fund raised from those who are engaged in the transportation of those passengers, and who make profit out of it, for the temporary care of the passengers whom they bring among us and for the protection of the citizens among whom they are landed." On the same principle a charge made by a state for facilities furnished by it, directly or indirectly, for the movement of commerce, in the form of improved water ways, or wharves,* or railways, or a charge for quarantine examination, cannot be said to be a tax. The power of taxation is vested in the legislative department of the government,7 but it may be delegated by states to political subdivisions, such as counties and municipalities, and a state

1 The Head Money Cases, 112 U. S. 580.

3 Huse v. Glover, 119 U. S. 543; Sands v. M. R. Improvement Co., 123 id. 238.

Packet Co. v. Keokuk, 95 U. S. 80; Packet Co. v. St. Louis, 100 id. 423; Vicksburg v. Tobin, id. 430; Packet Co. v. Cattlesburg, 105 id. 559; Transportation Co. v. Parkersburg, 107 id. 69; O. Packet Co. v. Aitken, 121 id. 444.

5 B. & O. R. R. v. Maryland, 21 Wall. 456.

6 Morgan v. Louisiana, 118 U. S. 455.

7 Merriwether v. Garret, 102 U. S. 472.

8 Gilman v. Sheboygan, 2 Bl. 510; United States v. New Orleans, 98 U.S. 381.

may determine the bounds of a municipality and prescribe its rate of taxation. By whomsoever exercised, or to whomsoever delegated, the power can only be exercised for public purposes. Taxes, therefore, cannot be imposed in aid of enterprises strictly private, such as the establishment of manufactories or of private grist mills; but when the purpose is public, though not directly connected with the administration. of government, taxes may rightfully be laid to aid in its accomplishment, as in the cases of state reform schools; grist mills, required by statute to grind for all customers on payment of certain tolls;5 the improvements of water powers of rivers for general purposes; the payment of bounties to volunteer soldiers in time of war; the establishment of railways. When bonds, though issued in aid of private purposes, on their face appear to have been issued for public purposes, they are valid and enforcible in the hands of bona fide holders for value and without notice.9

15. The power of taxation vested in the United States is coextensive with the territory of the United States, and it is operative in the District of Columbia,10 in the territories, and, to the extent of the constitutional grant, in all of the states.

1 Kelly v. Pittsburgh, 104 U. S. 78.

2 Loan Association v. Topeka, 20 Wall. 655; Parkersburg v. Brown, 106 U. S. 487; Cole v. La Grange, 113 id. 1.

3 Osborne v. County of Adams, 106 U. S. 181, 109 id. 1.

✦ County of Livingston v. Darlington, 101 U. S. 407.

5 Burlington v. Beasley, 94 U. S 310.

Blair v. Cuming County, 111 U. S. 363.

Middleton v. Mullica Township, 112 U. S. 433.

Rogers v. Burlington, 3 Wall. 654; Queensbury v. Culver, 19 id. 83; Taylor v. Ypsilanti, 105 U. S. 60; Olcott v. The Supervisors, 16 Wall. 678; R. R. v. Otoe, ibid. 667.

9 Hackett v. Ottawa, 99 U. S. 86; Ottawa v. National Bank, 105 id. 343; Ottawa v. Carey, 108 id. 110, 118.

10 Loughborough v. Blake, 5 Wheat. 317.

Section 8 of article I of the Constitution declares that "the Congress shall have power to lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts, and excises shall be uniform throughout the United States." At one period in the history of the country political parties were at issue as to the construction to be given to this section of the Constitution, the Federalists contending that the section granted in express terms three substantive and independent powers, namely, (1) to lay and collect taxes, duties, imposts, and excises, (2) to pay the debts, and (3) to provide for the common defense and general welfare of the United States; and the Democrats asserting that the section granted but one substantive power, that to lay and collect taxes, duties, imposts, and excises, and limited the exercise of that power to the purpose of paying the debts and providing for the common defense and general welfare of the United States. The Federalist view was open to the objection that a power to legislate for the common defense and general welfare of the United States would authorize Congress to do anything and everything, and would render superfluous the delegation of other express powers of legislation in the same section; but the Democratic view, however sound in theory, could never be judicially affirmed, for as Congress has admittedly some power of taxation, a court, looking, as it is bound to look, not at the question of expediency but solely at the question of power, could never determine an act of Congress imposing a tax to be unconstitutional because it was intended for some purpose other than that of paying the debts and providing for the common defense and general welfare of the United States. That restraint, therefore, upon the congressional power of