portant rule was laid down which must not, however, be passed by in this connection. An article authorized by Congress to be imported, continues to be a part of the foreign commerce of the country, while it remains in the hands of the importer for sale, in the original bale, package, or vessel, in which it was imported. The authority given to import necessarily implies the right to sell the imported article in the form and shape in which it was imported; and no state, either by direct assessment or by requiring a license from the importer before he is permitted to sell, can impose any burden upon him or the property beyond what the law of Congress itself had imposed. But when the original package is broken up for use or for retail by the importer, and also when the commodity has passed from his hands into the hands of a purchaser, it ceases to be an import, or a part of foreign commerce, and may be taxed for state purposes.

§ 310. In the year 1847 the Supreme Court considered and determined a series of cases known as the License Cases.1 The facts were somewhat complicated, and varied in the different cases. I shall not attempt to state these facts at large. It is sufficient to say that the controversies arose under the license laws respectively of Massachusetts, New Hampshire, and Rhode Island. These statutes required a license fee for the sale of spirituous liquors, although they might have been imported, but did not apply to the importer himself. The cases turned upon the validity of these statutes. Two objections were urged against them, namely, that they laid duties upon. imports; and that they assumed to regulate commerce. state laws were sustained. The question most elaborately argued by counsel and considered by the court, was, whether these statutes were void because they interfered with the power of Congress to regulate commerce. The license fees imposed by them were plainly not duties upon imports, within the meaning of the rule laid down in Brown v. Maryland.

The

§ 311. The Passenger Cases2 decided in 1849, were in many respects extraordinary. An attempt was made to commit the court to the state sovereignty doctrine, and to overturn 15 Howard's R. 504.

2 7 Howard's R. 283.

many of the decisions which had upheld the supremacy of the general government. The attempt, however, failed. The case holds that statutes of New York and of Massachusetts imposing a tax upon alien passengers arriving within those states were void, although the proceeds of the tax were appropriated to maintain marine hospitals.

In Cooley v. The Port Wardens,1 a law of Pennsylvania, imposing certain fees upon vessels, payable to the Master Warden, for the use of decayed pilots, was upheld; the impost was not a duty upon imports. Both of these cases, however, are principally important as they affect the subject of com

merce.

The most recent judgment of the Supreme Court is found in Almy v. The State of California. It held that a statute of California imposing a stamp on bills of lading of gold exported from that state created a duty on exports, and was therefore void.

§ 312. The cases which have been referred to show that the Supreme Court of the United States, at an early day, took high national ground upon the subject of taxation by the states, and has never receded from that position. On the other hand, it has given a fair and equitable construction to the exceptions contained in the organic law, and has allowed to the separate commonwealths as free and full exercise of the great function of taxing as is necessary for their existence as subordinate political societies.

SECTION II.

THE POWER TO BORROW MONEY.

§ 313. The second general grant of legislative power contained in Section VIII. of Article I. is in these words: "Congress shall have power to borrow money

on the credit of the United States." In this immediate connection should be read a clause of Section X., as follows: "No state shall emit bills of credit, or make any thing but gold and silver coin a tender in payment of debts."

112 Howard's R. 299.

2 24 Howard's R. 169.

But few questions strictly legal in their character have arisen, or can arise, under this provision authorizing Congress to borrow money. The language is as broad as possible; it contains in itself no limitations. The extent of the borrowing power must be, and is, commensurate with the wants of the government. For whatever purposes money may be expended, money may be borrowed to meet the expenditure. Nay, even though the money should be appropriated by Congress to some object, or in some manner, not warranted by the organic law, this act of transgression could not, according to any principles of law or justice, invalidate the arrangement by which such money might have been borrowed. It cannot be that the public creditor is bound to see that the national legislature makes a proper use of the moneys loaned to it. Practically, therefore, the capacity of Congress to borrow money is absolutely unlimited; questions respecting its use are questions of policy and not of constitutional power.

§ 314. By what particular methods and measures may Col.gress exercise the power of borrowing? The answer is easy. Applying the rule which, as has been shown, is applicable to all the general grants of the Constitution, Congress may adopt such means as it thinks best, which are conducive to the efficient execution of the power; may pass all laws which have a tendency to make the provision operative. The government may go into the market and ask loans from capitalists in exchange for its evidences of debt, whatever form those evidences may assume, scrip of stock, bonds, treasury notes, certificates of indebtedness, and the like. This has been the usual mode, but it is by no means the only one in which money can be borrowed. Of course the legislature may also adopt all ancillary measures which have the effect to render its obligations more certain and secure in the hands of public creditors; it may declare certain acts to be crimes, and affix punishments upon the offenders. As a long series of decisions made by the Supreme Court has settled the rule that the states may not tax the public securities of the nation in the hands of owners, a fortiori Congress has power by a declaratory statute to exempt them from such taxation.

§ 315. But the power to borrow money may be exercised by the use of measures and methods whose relation to the end proposed does not seem to be so immediate and direct as in the cases last referred to. At a very early day in our history it was thought proper to establish a United States Bank, for the purpose of assisting the government in the management of its finances. The right in Congress to create such an institution was partly rested upon the general grant of power to borrow money; the bank was said to be a means conducive to this end, a legitimate measure for the execution of this attribute. I do not purpose to enter into the discussion of the question whether Congress has authority to charter such a bank; much less to inquire into the policy of such an act. It is enough to say that the Supreme Court has most deliberately affirmed the power in the great cases of McCulloch v. Maryland,1 and Osborn v. The Bank of the United States; and the rule may be considered as settled in that court, and of course in the state tribunals.

The validity of the statute creating the present system of National Banks must be rested upon the same principles. Indeed, these institutions seem to have a more intimate connection with the function of borrowing money, and to be a more direct means of exercising that function. A large proportion of their capital must be invested in the national securities, and thus a very extensive demand for those securities is created, and borrowing by the government is made easier.

§ 316. But another and much more difficult question has arisen. Congress, impelled by what were considered to be the necessities of the situation, resorted to a measure which would hardly have been accepted under the ordinary circumstances of peace. In the exercise of its power to borrow money, the legislature provided for the issue of treasury notes designed to circulate generally as money. No question has been raised, no doubt has been expressed, as to the legality of this act. These notes are not different in kind from certificates of stock, or bonds; they are promises to pay, and therefore evidences of debt. Paying them out by the government

1 4 Wheaton's R. 316.

29 Wheaton's R. 738.

for value received by it of some kind, is really and directly borrowing money. Had the statute, therefore, stopped here, not a suspicion could have been cast upon its validity. But Congress went further, and declared that these notes should be a legal tender for the payment of all debts due to the United States, with a few specified exceptions; and also for the payment of all private debts. In respect to one of these provisions there can be no dispute: the government may lawfully make these its promises a legal tender in payment of debts to itself. This point is universally conceded. Indeed, the legislature has, from time to time, since the adoption of the Constitution, resorted to such an expedient, and its authority to do so has never been denied. The controversy upon the statute is narrowed down to a single question: Is the provision declaring these treasury notes to be a legal tender in the payment of private debts, a lawful and constitutional exercise of any general power conferred upon Congress?

§ 317. The Supreme Court of the United States has not as yet formally considered this subject, and passed upon the legality of the measure. In several of the state courts, however, cases necessarily and directly involving the question have arisen and been decided. In some of these courts the authority of Congress to enact the legal tender clause has been positively affirmed, in others as positively denied.1 In the cases of Metropolitan Bank v. Van Dyck, and Meyer v. Roosevelt, decided by the Court of Appeals in New York, the whole subject was examined in a most thorough and exhaustive manner, and it is proper to state in outline the arguments by which the court and the dissenting judges respectively reached their conclusions. The authority of the legislature to affix the compulsive attribute of legal tender to the treasury notes was rested upon the general grant of power to borrow

1 The following are some of the cases reported: In favor of the validity, Thayer v. Hedges, 23 Indiana R. 141; Brown v. Wilch, 26 Indiana R. 116; Lick v. Faulkner, 25 California R. 404; Hintrager v. Bates, 18 Iowa R. 174; Van Husen v. Kanouse, 13 Michigan R. 303. Opposed: Thayer v. Hedges, 22 Indiana R. 282.

2 13 Smith's (27 N. Y.) R. 400.