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Sec. 8.--Pwers of Congress

Cl. 1.–Taxation

Scholey v. Rew, 23 Wall. 331.
Head Money Cases, 112 U. S. 580.
Knowlton v. Moore, 178 U. S. 41.
Patton v. Brady, 184 U. S. 608.
Snyder v. Bettman, 190 U. S. 249.
South Carolina v. U. S., 199 U, S. 437.
Veazie Bank v. Fenno, 8 Wall. 533.
Collector v. Day, 11 Wall. 113.
U. S. v. Railroad Co., 17 Wall. 322.
Pollock v. Farmers Loan, etc., Co., 157 U. S. 429.
Flint v. Stone Tracy Co., 220 U. S. 107.

Territorial Extent of Power

Duties exacted by the military authorities in conquered territories held lawful.

Cross v. Harrison, 16 How. 164.
Railroad Co. v. Collector, 100 U. S. 595.

U. S. v. Erie R. Co., 106 U. S. 327.
The imposition of duties upon imports from Porto Rico is a
constitutional exercise of the power of Congress.

Downes v. Bidwell, 182 U. S. 244.
Dooley v. U. S., 183 U. S. 151.

Goetze v. U. S., 182 U. S. 221.
Taxation of Governmental Agencies

Implied constitutional restrictions upon the taxing power are as effectual as those expressed. Such an implied restriction prevents the taxation of an instrumentality of the Federal Government by the States and of a State agency by the Federal Gov. ernment.

Ward v. Maryland, 12 Wall. 427.
Van Brocklin v. Tennessee, 117 U. S. 177.
Pollock v. Farmers Loan, etc., Co., 157 U. S. 584.
U. S. v. Railroad Co., 17 Wall. 322.
McCulloch v. Maryland, 4 Wheat. 316.
Van Allen v. Assessors, 3 Wall. 591.
Austin v. Aldermen, 7 Wall. 694.
Banks v. Mayor, 7 Wall. 16.
Smith v. Kansas City Title Co., 255 U. S. 180.
Hamilton v. Massachusetts, 6 Wall. 639.
People v. Commissioners, 4 Wall. 244.
Osborn v. Bank, 9 Wheat. 738.
Farmers', etc., Natl. Bank v. Dearing, 91 U. S. 34.
Dobbins v. Erie County, 16 Pet. 435.
Low v, Austin, 13 Wall. 29.
Wisconsin R. R. v. Price County, 133 U. S. 496.
Railroad Co. v. Peniston, 18 Wall, 5.
Central Pac. R. Co. v. California, 162 U, S. 125.
License cases, 5 How. 504.
Owensboro Bank v. Owensboro, 173 U. S. 667.
Talbot v. Silver Bow County, 139 U. S. 440.
Weston v. Charleston, 2 Pet. 449.
Bank of Commerce v. New York, 2 Black 620.
Home Ins. Co. v. New York, 134 U. S. 594.
Thomson v. Pacific R. R., 9 Wall. 579.
National Bank v. Commonwealth, 9 Wall. 353.

Sec. 8.--Powers of Congress

Cl. 1.-Taxation

Western Union Tel. Co. v. Massachusetts, 125 U. S. 530.
California v. Central Pac. R. Co., 127 U. S. 1.
U. S. v. Stanford, 161 U. S. 412.
Sea right v. Stokes, 3 How. 150.

Webber v. Virginia, 103 U. S. 344.
Mortgage executed to a Federal land bank is an instrumen-
tality of Government and can not be subjected to State recording

Federal Land Bank v. Crosland, 261 U. S. 374. In Clallam County v. U. S., 263 U. S. 341, it was held that State taxation of corporation organized by the United States for war purposes, whose stock is held by the United States, is invalid.

See also U. S. v. Walter, 263 U. S. 15, holding that section 35 of the Criminal Code, forbidding fraudulent claims against corporations in which the United States is stockholder, refers only to its corporate instrumentalities, like the Emergency Fleet Cor

poration, and is constitutional. Taxation of National Banks

National banks, their property, or the shares of their capital stock can not be taxed by the States otherwise than in conformity with the terms and restrictions imposed by Congress in assenting to such taxation. Under section 5219, R. S. (prior to the amendment of March 4, 1923), national banks and their property were free from State taxation, except on their real property and on shares held by them in other national banks; and all shares in such banks were taxable to their owners, the stockholders, subject to the restrictions that they be not taxed higher than other moneyed capital employed in competition with such banks, and that the taxing of shares of nonresidents of the State be at the place of the bank's location.

Des Moines Bank v. Fairweather, 263 U. S. 103, which see also as to

tax-exempt securities. Taxation of Salary of State Judge

In Collector v. Day (11 Wall. 113) acts of Congress levying taxes on incomes were held unconstitutional as applied to the official salary of a judge of a State court.

a Taxation of Person Employing Child Labor

The Child Labor Tax Law (Act of Feb. 24, 1919), imposing a tax on the net income of a person employing child labor held not an act imposing a tax under this clause and unconstitutional as attempting to regulate State matters.

Bailey v. Drexel Furn. Co., 259 U. S. 20. Tax on Future Sales

An act of Congress which was manifestly intended to regulate business can not be sustained as an exercise of the taxing power merely because it sought to compel obedience by imposing a prohibitory tax on those who violated the regulations.

Hill v. Wallace, 259 U. S. 44.
Browne v. Thorn, 260 U. S. 137.


Sec. 8.—Powers of Congress

Cl. 1.--Taxation

Penalty Designated Tax

The mere use of the word "tax" in an act primarily designed to define and suppress crime is not enough to show that a tax was laid; but, if by its very nature the imposition is a penalty, it must be so regarded.

Lipke v. Lederer, 259 U. S. 557.

Regal Drug Co. v. Wardell, 260 U. S. 386. To Pay the Debts

The power to pay the debts is broad enough to include claims of citizens arising on obligations of right and justice.

U. S. v. Realty Co., 163 U. S. 427. Congress has power to enact that debts due the United States should have priority of payment out of the estate of the insolvent debtor.

U. S. v. Fisher, 2 Cranch 358.

Legal Tender Case, 110 U. S. 421.
To Provide for the Common Defense and General Welfare

The general welfare clause contains no provision of power, of itself, to enact any legislation, but, on the contrary, the words “and provide for the common defense and general welfare” is a limitation of the taxing power of the United States, and that only.

U. S. v. Boyer, 85 Fed. 432.
Binns v. U. S., 194 U. S. 486.

Ward v. Maryland, 12 Wall. 418.
As to taxation with a moral end in view, the court said: “That
Congress may under the broad authority of the taxing power tax
intoxicating liquors, notwithstanding their production is pro-
hibited and punished, we have no question. The fact that the
statute in this respect had a moral end in view, as well as the
raising of revenue, presents no valid constitutional objection to
its enactment.”

U. S. v. Yuginovich, 256 U. S. 462.
To invoke the judicial power to disregard a statute as uncon-
stitutional, the party who assails it must show not only that the
statute is invalid, but that he has sustained, or is immediately in
danger of sustaining, some direct injury as a result of its en-
forcement, and not merely that he suffers in some indefinite way
in common with people generally.

Massachusetts v. Mellon, 262 U. S. 447.
The courts may determine whether tax act is for public object.

St. Paul Trust Bank v. American Clearing Co., 291 Fed. 212.

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The Power in General

This is a power vested in the National Government for the safety and welfare of the whole people, and is not to be construed in a restricted sense. It is a power to raise money for the public

Sec. 8.—Powers of Congress

Cl. 2.-To Borrow Money

use on the pledge of the public credit, and may be exercised to
meet either present or anticipated expenses and liabilities of the

Legal Tender Case, 110 U. S. 444.
Weston v. Charleston, 2 Pet. 465.
Banks v. Mayor, 7 Wall. 23.
Hepburn v. Griswold, 8 Wall. 616.
Craig v. Missouri, 4 Pet. 435.
The Floyd Acceptances, 7 Wall. 675.
Bank v. Supervisors, 7 Wall. 26.
Veazie Bank v. Fenno, 8 Wall. 549.
National Bank v. U. S., 101 U. S. 6.
U. S. v. Sacks, 257 U. S. 37.
U. S. v. Janowitz, 257 U. S. 42.

Legal Tender

The clauses granting to Congress the power to coin money (Art. I, sec. 8, cl. 5), and prohibiting the States from emitting bills of credit (Art. I, sec. 10, cl. 1), do not impliedly prohibit Congress from making Treasury notes legal tender, and while no such power is expressly granted by the Constitution, the authority is necessarily implied as a means to the exercise of the functions of government. It is a necessary incident of sovereignty. If, in the judgment of the Congress, it is necessary, in order to enhance the credit of the Government's promises, it may make them legal tender. Congress may make Treasury notes legal tender, and, while such notes are only the representatives of money, they may be made a substitute therefor.

Hepburn v. Griswold, 8 Wall. 603, in which the legal tender acts of

Congress were held unconstitutional so far as they applied to debts
contracted prior to the passage of the acts. But the decision on

this point was overruled in the Legal Tender Cases, 12 Wall. 457.
Dooley v. Smith, 13 Wall. 604.
Railroad Co. v. Johnson, 15 Wall. 195.
U. S. v. Reese, 92 U. S. 253.

Bissell v. Heyward, 96 U, S. 587.
Where the contract is to pay in a particular kind of money, as
"gold" or "specie" it can not be discharged in legal tender notes.

Bronson v. Rodes, 7 Wall. 250.
Butler v. Horwitz, 7 Wall. 259.
Hepburn v. Griswold, 8 Wall. 607.
Gregory v. Morris, 96 U. S. 625.
Dewing v. Sears, 11 Wall. 330.

Trebilcock v. Wilson, 12 Wall. 695.
The "debts" contemplated by the legal tender act are debts
arising on contract and demand and do not include taxes.

Lane County v. Oregon, 7 Wall. 71.

Hagar v. Reclamation Dist., 111 U. S. 706. Under its power over money and the revenue, Congress can establish a national bank and subscribe to its stock, although it be a corporation organized for profit.

Legal Tender Cases, 12 Wall. 457.

Sec. 8 Powers of Congress

Cl. 2.-To Borrow Money Exemption from Taxation

A State tax on the loans of the Federal Government is a restriction on its power to borrow money, and if it existed might wholly defeat the Federal power.

Bank of Commerce v. New York, 2 Black 620.
Weston v. Charleston, 2 Pet. 449.
Hamilton v. Massachusetts, 6 Wall. 632.
Home Ins. Co. v. New York, 119 U. S. 129; 134 U. S. 594.
Plummer v. Coler, 178 U. S. 115.

Smith v. Kansas City Title Co., 255 U. S. 180.
The power to issue securities being an incident of the power
to borrow money, the securities thus issued are clearly instru-
ments of the Federal Government exempt from State taxation.

McCulloch v. Maryland, 4 Wheat. 439.
Bank Tax Cases, 2 Wall, 200.
Van Allen v. Assessors, 3 Wall. 573.
Society for Savings v. Coite, 6 Wall. 604.
Austin v. Aldermen, 7 Wall. 699.
Banks v. Mayor, 7 Wall. 23.
Bank v. Supervisors, 7 Wall. 30.
Mitchell v. Board, 91 U. S. 206.
Palmer v. McMahon, 133 U. S. 666.

Of General Application

The following cases may be found to be of general interest and application in connection with the above:

People v. Commissioners, 4 Wall. 244.
U. S. v. Perkins, 163 U. S. 630.
Magoun v. Illinois, etc., Bank, 170 U. S. 290.
Osborn v. U. S. Bank, 9 Wheat. 859.
Owensboro Bank v. Owensboro, 173 U. S. 667.
Lionberger v. Rouse, 9 Wall. 468.
National Bank v. Commonwealth, 9 Wall. 353.
Cummings v. National Bank, 101 U. S. 156.
Van Slyke v. Wisconsin, 154 U. S. 581.
Merchants Bank v. Pennsylvania, 167 U. S. 466.
Boyer v. Boyer, 113 U, S. 695.
Whitbeck v. Mercantile Bank, 127 U. S. 199.
Supervisors v. Stanley, 105 U. S. 308.
Mercantile Bank v. New York, 121 U. S. 152.
People v. Weaver, 100 U. S. 543.
Pelton v. Natl. Bank, 101 U. S. 145.
Davenport Bank v. Board of Equalization, 123 U. S. 85.


The Congress shall have power ... to regulate commerce with foreign nations, and among the several States, and with the Indian tribes. Leading Cases

Gibbons v. Ogden (9 Wheat. 1), in which Chief Justice Marshall said that commerce was traffic and intercourse; that it described commercial intercourse between nations and parts of

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