Rules for taxation.

(3.) The construction of the powers of congress relative to taxation was brought before the Supreme Court, in 1796, in the case of Hylton v. The United States. (a) By the act of * 5th June, 1794, congress laid *255 a duty upon carriages for the conveyance of persons, and the question was, whether this was a direct tax, within the meaning of the constitution. If it was not a direct tax, it was admitted to be rightly laid, under that part of the constitution which declares that all duties, imposts, and excises shall be uniform throughout the United States; but if it was a direct tax, it was not constitutionally laid, for it must then be laid accordding to the census, under that part of the constitution which declares that direct taxes shall be apportioned among the several states according to numbers. The Circuit Court in Virginia was divided in opinion on the question; but, on appeal to the Supreme Court, it was decided, that the tax on carriages was not a direct tax, within the letter or meaning of the constitution, and was therefore constitutionally laid.

Court of the United States, it was considered as a settled question, not open for further discussion. The constitution declared, that "all legislative powers therein granted should be vested in the congress of the United States ;" and that "the executive power should be vested in a President of the United States; and that the judicial power of the United States should be vested in one Supreme Court, and in such inferior courts as the congress might, from time to time, ordain and establish; and that the judicial power should extend to all cases in law and equity, arising under the constitution.” (Art. 1, sec. 1; Art. 2, sec. 1; Art. 3, sec. 1, 2.) This simple and beautiful distribution of power would seem to be too clear to be mistaken, and too sacred to be invaded. The oath to support the constitution necessarily includes, in its meaning and efficacy, the support of this distribution of power, and of the judicial cognizance of all cases arising under the constitution. That cognizance extends, of course, to the question, whether congress have the constitutional power to incorporate a national bank. It is a case arising under the constitution; and the decisions of the Supreme Court are in favor of the existence of such a power, and of the valid exercise of it in the establishment of a national bank. The words necessary and proper in the constitution, were not to be confined to means that were indispensable in the exercise of any express power; but extended to all means that congress should deem expedient and useful, and conducive to the end proposed in the execution of any express power. That construction is binding and conclusive, as well upon the other departments of the government as upon the nation at large. The congress, in whom is vested the legislative power, and the President, in whom is vested the executive power, are respectively bound to receive and obey that construction of the constitution which has been duly settled by the judicial power. See, further, infra, pp. 449, 456, note b.

(a) 3 Dal. Rep. 171.

The question was deemed of very great importance, and was elaborately argued. It was held, that a general power was given to congress to lay and collect taxes of every kind or nature, without any restraint. They had plenary power over every species of taxable property except exports. But there were two rules prescribed for their government: the rule of uniformity and the rule of apportionment. Three kinds of taxes, viz: duties, imposts, and excises, were to be laid by the first rule; and capitation, and other direct taxes, by the second rule. If there were any other species of taxes, as the court seemed to suppose there might be, that were not direct, and not included within the words duties, imposts, or excises, they were to be laid by the rule of uniformity or not, as congress should think proper and reasonable.

The constitution contemplated no taxes as direct taxes, but such as congress could lay in proportion to the census; and the rule of apportionment could not reasonably apply to a tax on carriages, nor could the tax on carriages be laid by that rule, without very great inequality and injustice. If two states,

equal in census, were each to pay 8,000 dollars, by a tax *256 on carriages, and in one state there were 100 carriages,

and in another 1,000, the tax on each carriage would be ten times as much in one state as in the other. While A, in the one state, would pay for his carriage eight dollars, B, in the other state, would pay for his carriage eighty dollars. In this way, it was shown by the court, that the notion that a tax on carriages was a direct tax, within the purview of the constitution, and to be apportioned according to the census, would lead to the grossest abuse and oppression. This argument was conclusive against the construction set up, and the tax on carriages was considered as included within the power to lay duties; and the better opinion seemed to be, that the direct taxes contemplated by the constitution were only two, viz: a capitation, or poll tax, and a tax on land. The court concluded that the tax on carriages was an indirect tax on expense or consumption, and, therefore, properly laid, pursuant to the rule of uniformity. In Loughborough v. Blake, (a) the power of taxation was

(a) 5 Wheaton, 317.

again brought under judicial discussion. The question was immediately of a local nature, and it was, whether congress had the right to impose a direct tax upon the unrepresented District of Columbia. But there were principles involved in the decision, which had an extensive and important relation to the whole United States.

It was declared that the power to tax extended equally to all places over which the government extended. It extended as well to the District of Columbia, and to the territories which were not represented in congress, as to the rest of the United States. Though duties were to be uniform, and taxes were to be apportioned according to numbers, the power was coextensive with the empire. The inhabitants of the then territories of Michigan, and of Florida and Arkansas, for instance, as well as the District of Columbia, though without any representation in congress, were subject to the full operation of *257 the power of taxation, equally as the people of New York or Massachusetts. But the court held, that congress are not bound, though they may, in their discretion, extend a direct tax to the territories as well as to the states. A direct tax, if laid at all, must be laid on every state conformably to the census, and therefore congress has no power to exempt any state from its due share of the burden. But it was understood that congress were under no necessity of extending a tax to the unrepresented District of Columbia, and to the territories though, if they be taxed, then the constitution gives the rule of assessment. This construction was admitted to be most convenient, for the expense of assessing and collecting a tax in a territory, as the Northwest territory, for instance, then existed, might exceed the amount of the tax. Here was an anomalous case in our government, in which representation and taxation are not inseparable, though the principle that the power of taxation could not rightfully exist without representation, was a fundamental ground of our Revolution. The court did not consider a departure from a general principle, in this case, to be very material or important, because the case was that of territories which were in a state of infancy, advancing to manhood, and looking forward to complete equality, as soon as that state of manhood should be attained. It was the case, also, of the

District of Columbia, which had voluntarily relinquished the right of representation, and adopted the whole body of congress for its legitimate government.

Right of

to Indian

lands.

(4.) Congress have the exclusive right of preemption domain as to all Indian lands lying within the territories of the United States. This was so decided in the case of Johnson v. M'Intosh. (a) Upon the doctrine of the court in that case, and in that of Fletcher v. Peck, (b) the United States own the soil, as well as the jurisdiction of the immense tracts of

unpatented lands included within their territories, and of * 258 *all the productive funds which those lands may hereafter create. The title is in the United States by the treaty of peace with Great Britian, and by subsequent cessions from France and Spain, and by cessions from the individual states; and the Indians have only a right of occupancy, and the United States possess the legal title, subject to that occupancy, and with an absolute and exclusive right to extinguish the Indian title of occupancy either by conquest or purchase. The title of the European nations, and which passed to the United States, to this immense territorial empire, was founded on discovery and conquest; and, by the European customary law of nations, prior discovery gave this title to the soil, subject to the possessory right of the natives, and which occupancy was all the right that European conquerors and discoverers, and which the United States, as succeeding to their title, would admit to reside in the native Indians. The principle is, that the Indians are to be considered merely as occupants, to be protected while in peace in the possession of their lands, but to be deemed incapable of transferring the absolute title to any other than the sovereign of the country. The constitution (c) gave to congress the power to dispose of, and to make all needful rules and regulations respecting the territory, or other property belonging to the United States, and to admit new states into the Union. Since the constitution was formed, the value and efficacy of this power have been magnified to an incalculable extent, by the purchase of Louisiana and Florida; and, under the doctrine contained in the cases I have referred to, congress

(a) 8 Wheaton, 543. (b) 6 Cranch, 142, 143.

(c) Art. 4, sec. 3.

have a large and magnificent portion of territory under their absolute control and disposal. This immense property has become national and productive stock, and congress, in the administration of this stock, have erected temporary governments under the provisions of the ordinance of the congress. under the confederation, and under the constitutional power; and they have appointed the officers to each territory, and allowed delegates in congress to be chosen by the *inhabitants every second year, and with a right to debate, but not to vote, in the house of representatives. (a)

*259

The unpatented lands belonging to the United States, within the states of Ohio, Indiana, Illinois, Michigan, and the territory of Wisconsin, arose from cessions from the states of Virginia, Massachusetts, Connecticut, and New York, before the adoption of the present constitution of the United States. (b) North

(a) Ordinance of congress of 13th July, 1787. Acts of congress of August 7th, 1789; January 14th, 1805; March 3d, 1817; February 16th, 1819; April 24th, 1820; March 30th, 1822. The acquisition of the foreign territories of Louisiana and Florida by the United States, by purchase, was to be supported only by a very liberal and latitudinary construction of the incidental powers of the government under the constitution. The objections to such a construction, which were urged at the time, are stated in 3 Story's Comm. 156-161. But the constitutionality of the acquisition of foreign territory is vindicated, established, and settled by the Supreme Court, as one necessarily flowing from the power of the Union to make treaties. American Ins. Co. v. Canter, 1 Peters's U. S. Rep. 511. It belongs, therefore, upon that principle, exclusively to the President, with the advice and consent of two thirds of the members of the senate present, to make the acquisition. But in 1845, congress, by joint resolution, under the power in the constitution, (art. 4, sec. 3,) that "new states may be admitted by the congress into this Union," admitted the foreign and independent state of Texas into the Union as a separate state, upon terms to which Texas afterwards acceded. Resolution of congress of March 1, 1845. This was giving a new legislative construction, of enormous efficacy and extent, to the constitutional power to acquire foreign states, and would appear to be contrary to the principle of construction recognized by the Supreme Court, that the annexation of foreign states out of the limits of the United States, must be the act of the treaty-making power.

(b) That of New York was made March 1st, 1781, under the authority of the act of the legislature of that state, of the 19th February, 1780. That of Virginia was made March 1st, 1784, under the authority of an act of the 20th December, 1783. That of Massachusetts, on the 19th of April, 1785, under the authority of the acts of that state, of 13th November, 1784, and 17th March, 1785; and that of Connecticut, on the 14th September, 1786, under the authority of an act of that state, of May, 1786. That of South Carolina, in August, 1787. The title to the lands belonging to the United States west of the Mississippi is supported by treaties made with Great