Sec. 8.--Powers of Congress Scholey v. Rew, 23 Wall. 331. Head Money Cases, 112 U. S. 580. Patton v. Brady, 184 U. S. 608. South Carolina v. U. S., 199 U. S. 437. 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 Cl. 1.-Taxation 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. 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 Government. 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. 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 instrumentality of Government and can not be subjected to State recording tax. 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 Corporation, 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. 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. Sec. 8.-Powers of Congress Penalty Designated Tax Cl. 1.-Taxation 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 66 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. 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 prohibited 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 unconstitutional, 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 enforcement, 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. Clause 2.-TO BORROW MONEY. The Congress shall have power. . . on the credit of the United States. The Power in General To borrow money 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 Government. Legal Tender Case, 110 U. S. 444. 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. Hepburn v. Griswold, 8 Wall. 607. Gregory v. Morris, 96 U. S. 625. Dewing v. Sears, 11 Wall. 380. 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 Exemption from Taxation Cl. 2.-To Borrow Money 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 instruments 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. 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. 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. Clause 3.-REGULATION OF COMMERCE. 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 |