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ston, 4 Sandf. 492 ; Comm. v. Kimball, 41 Mass. 359; Prigg v. Comm. 16 Pet. 539; Ex parte Perkins, 2 Cal. 424; Willard v. People, 5 III. 461.

The States may pass poor laws and laws to prevent the introduction of paupers or persons likely to become paupers. Norris v. Boston, 45 Mass. 282; Mayor v. Miln, 11 Pet. 102; S. C. 2 Paine, 429.

Every law relates to internal police which concerns the welfare of the whole people of a State, or any individual in it, whether it relates to their rights or their duties ; whether it respects them as men or as citizens of the State ; whether in their public or private relations; whether it relates to the rights of persons or of property, of the whole people of a State or of any individual within it, and whose operation is within the territorial limits of the State, and upon the persons and things within its jurisdiction. Mayor v. Miln, 11 Pet. 102 ; S. C. 2 Paine, 429.

The police power of a State can not be exercised in regard to a subjectmatter which has been confided exclusively to the discretion of Congress. Henderson v. Mayor, 92 U. S. R. 259.

The police power of a State is one of the different means used by sovereignty to accomplish that great object, the good of the State. Police powers and sovereign powers are the same. Passenger Cases, 7 How. 283; S. C. 45 Mass. 282.

State Taxes.

The power of taxation is indispensable to the existence of the State governments, and is a power which, in its own nature, is capable of residing in and being exercised by different authorities at the same time. Taxation is the simple operation of taking small portions from a perpetually r accumulating mass susceptible of almost infinite division, and a power in one to take what is necessary for certain purposes, is not in its nature incompatible with a power in another to take what is necessary for other purposes. Gibbons v. Ogden, 9 Wheat. 1; S. C. 17 Johns. 488; 4 Johns. Ch. 150; Biddle v. Comm. 13 S. & R. 405; M'Culloch v. State, 4 Wheat. 316; Comm. v. Morrison, 2 A. K. Marsh. 75; Raguet v. Wade, 4 Ohio, 107; People v. Naglee, i Cal. 231.

Taxation is an incident of sovereignty, and is coextensive with that to which it is an incident. All subjects over which the sovereign power of a State extends, are objects of taxation, but those over which it does not extend are upon the soundest principles exempt from taxation. The sovereignty of a State extends to everything which exists by its own authority or is introduced by its permission, but it does not extend to those means which are employed by Congress to carry into execution powers conferred on that body by the people of the United States. M'Culloch v. State, 4 Wheat. 316; City v. Churchill, 33 N. Y. 161; S. C. 43 Barb. 550.

The taxing power of the States must have some limits. It can not reach and restrain the action of the National Government within its proper sphere. It can not reach the administration of justice in the Federal courts, or the collection of the taxes of the United States, or restrain the operation of any law which Congress may constitutionally pass. It can not interfere with any regulation of commerce. Brown v. State, 12 Wheat. 419; Comm. v. Morrison, 2 A. K. Marsh. 75; Howell v. State, 3 Gill, 14.

The exemption of Federal agencies from State taxation is dependent, not upon the nature of the agents, or upon the mode of their constitution, or upon the fact that they are agents, but upon the effect of the tax; that is, upon the question whether the tax does in truth deprive them of the power to serve the Government as they were intended to serve it, or does hinder the efficient exercise of their power. Railroad Co. v. Peniston, 18 Wall. 5.

The agencies of the Federal Government are only exempt from State legislation so far as that legislation may interfere with or impair their efsiciency in performing the functions by which they are designed to serve that Government. National Bank v. Comm. 9 Wall. 353.

The power to tax involves the power to destroy. The power to destroy may defeat and render useless the power to create. The several States have no power by taxation or otherwise to retard, impede, burden or in any manner control the operations of the constitutional laws enacted by Congress to carry into execution the powers vested in the General Government. M'Culloch v. State, 4 Wheat. 316; Weston v. Charleston, 2 Pet. 449; S. C. Harp. 340.

There is a difference between a tax imposed by the Federal Government and a tax imposed by the State Governments. The people of all the States have created the Federal Government, and have conferred upon it the general power of taxation. The people of all the States and the States themselves are represented in Congress, and by their representatives exercise this power. When they tax the chartered institutions of the State, they tax their constituents, and these taxes must be uniform. But when a State taxes the operations of the Federal Government, it acts upon institutions not created by itself, but by people over whom it claims no control. It acts upon the measures of a Government created by others as well as itself, for the benefit of others in common with its own people. M'Culloch v. State, 4 Wheat. 316.

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The taxing power of a State is one of its attributes of sovereignty. Where there has been no compact with the Federal Government, or cession of jurisdiction for the purposes specified in the Constitution, this power reaches all the property and business within the State, which are not properly denominated the means of the General Government. This power may be exercised at the discretion of the State. Nathan v. Louisiana, 8 How. 73; People v. Coleman, 4 Cal. 46.

4 The measure of the power of taxation residing in a State is the extent of sovereignty which the people of a single State possess, and can confer on its government. M'Culloch v. State, 4 Wheat. 316; Howell v. State, 3 Gill, 14.

A State tax which remotely affects the efficient exercise of a Federal power is not for that reason alone prohibited. Railroad Co. v. Peniston, 18 Wall. 5.

No constitutional implication prohibits a State tax upon the property of an agent of the Government, merely because it is the property of such agent. Railroad Co. v. Peniston, 18 Wall. 5.

The State power of taxation is restrained by the Constitution whenever its exercise conflicts with the perfect execution of the powers delegated to the United States. That occurs when taxation by a State acts upon the instruments, emoluments and persons which the United States may use and employ as necessary and proper means to execute its sovereign powers. An officer is a means to execute those powers, and his salary is the means by which his services are procured and retained. Hence, the salary is not liable to State taxation. Dobbins v. Commissioners, 16 Pet. 435; S. C. 7 Watts, 513.

A State may tax the salary of a clerk in the post office, who is appointed upon the recommendation of the deputy postmaster, and the approval of the postmaster general. Melcher v. Boston, 50 Mass. 73.

A party who obtains a license to trade from the Government, is not an officer, nor as such exempt from taxation by a State. State v. Bell, Phillips, 76.

The taxing power of the State can not be exerted against the public money in the treasury, the precious metals in the mint, or the lots, structures, ships, material of war or other property devoted to public purposes by the General Government. City v. Churchill, 33 N. Y. 161; S. C. 43

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Barb. 550.

A State tax on stock issued by the Government for loans is a tax on the contract, a tax on the power to borrow money on the credit of the United States, and consequently is repugnant to the Constitution. Weston v. Charleston, 2 Pet. 449; S C. Harp. 340; Bank v. Commissioners, 2 Black, 620; s. C. 23 N. Y. 192; 32 Barb. 509; Opinion of Justices, 53 N. H. 634; contra, People v. Commissioners, 37 Barb. 635; S. C. 26 N. Y. 163.

Congress may forbid any taxation of the stock and bonds of the United States, if in its judgment such restriction is necessary to carry out the power to borrow money. Whether it exercises that power wisely or not is not for the courts to inquire. People v. Commissioners, 37 Barb. 635; S.C. 26 N. Y. 163.

A State can not tax the income derived from interest paid on bonds of the United States. Bank v. Comm. 9 Bush, 46; Opinion of Justices, 53 N. H. 634.

A State can not tax the stock or bonds of the United States, although it taxes the stock or bonds the same as all other property in the State. Bank v. Commissioners, 2 Black, 620; S. C. 23 N. Y. 192; 32 Barb. 509 : Newark City Bank v. Assessor, 30 N. J. 1.

A person who deals in bonds of the United States is not liable to taxation under State laws on the capital in business thus invested. Chicago v. Lunt, 52 Ill. 414.

A State can not tax the notes of the United States issued and intended to circulate as money, when they are made exempt from taxation by Congress. Bank v. Supervisors, 7 Wall. 26; Montgomery v. Elston, 32 Ind. 27; Horne v. Green, 52 Miss. 452.

Internal revenue stamps issued by the United States as a means of collecting a tax are not liable to taxation by a State. Palfrey v. Boston, 101

Mass. 329.

A State can not tax a certificate of indebtedness issued by the United States. Banks v. Mayor, 7 Wall. 16; S. C. 37 N. Y. 9; State v. Haight, 34 N. J. 128; contra, People v. Gardiner, 48 Barb. 608.

There is no distinction between certificates of indebtedness issued for borrowed money and certificates of indebtedness issued directly to creditors in payment of their demands. Banks v. Mayor, 7 Wall. 16; S. C. 37

N. Y.9.

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The money of the Federal Government employed within the limits of a State as tax or revenue, and devoted in that character to its appropriate purposes, is exempt from taxation by the State; but if it is diverted from those purposes, and associated with the money of others in gainful transactions, it loses its sanctity, ceases to be tax or revenue, and becomes money, and in that character may be taxed by the State in which it is so employed, like that with which it is associated. Comm. v. Morrison, 2 A. K. Marsh. 75.

A State can not tax the property which constitutes the capital of a corporation when the capital is invested in stock or bonds of the United States. Bank v. Commissioners, 2 Black, 620; S. C. 23 N. Y. 192; 32 Barb. 509; Whitney v. Madison, 23 Ind 331; International Assurance Society v. Commissioners, 28 Barb. 318; Mechanics' Bank v. Bridges, 30 N. J. 112; St. Louis B. & S. Association v. Lightner, 42 Mo. 421.

A State tax on a corporation upon a valuation equal to its capital is void when that capital is invested in stock or bonds of the United States. Bank Tax Case, 2 Wall. 200,

A State may tax the shares held by an individual in a bank, although its capital is invested in bonds of the United States. Wright v Stilz, 27 Ind. 338; People v. Commissioners, 35 N. Y. 423; S. C. 4 Wall. 244; St. Louis B. & S. Association v. Lightner, 47 Mo. 393; contra, Whitney v. Madison, 23 Ind. 331.

If a savings bank has no capital stock or stockholders, a State may levy a tax of a certain per cent. on its deposits, although the deposits are invested in the bonds of the United States, for the tax is a tax on the franchise. Society v. Coite, 6 Wall. 594 ; S. C. 32 Conn. 173; Provident Institution v. Massachusetts, 6 Wall. 611 ; S. C. 94 Mass. 312.

If a State tax on the capital stock of a corporation, in excess of the value of its real estate and machinery, is a tax on the franchise, it is valid, although a part of the capital is invested in bonds of the United States. Hamilton Company v. Massachusetts, 6 Wall. 632; S. C. 94 Mass. 298.

A State tax upon the franchise of a corporation to an amount not exceeding the surplus earned and in its possession is valid, although the surplus is invested in bonds of the United States. Monroe Savings Bank v. Rochester, 37 N. Y. 365.

A collateral inheritance tạx imposed by a State applies to that part of the estate which consists of bonds of the United States, for the tax is on the estate and not on the bonds. Strode v. Comm. 52 Penn. 181.

If the statute creating a national bank permits a State to tax the shares held by an individual, the tax may be levied, although its capital is invested in bonds or stocks of the United States. Van Allen v. Assessors, 3 Wall.

3 573; S. C. 33 N. Y. 161; 43 Barb. 550 ; People v. Commissioners, 4 Wall. 244 ; S. C. 35 N. Y. 423; National Bank v. Comm. 9 Wall. 353; S. C. 4 Bush, 98; State v. Haight, 31 N. J. 399; First Nat'l Bank v. Douglas, 3 Dillon, 330 ; People v. Assessors, 44 Barb. 148; Wright v. Stilz, 27 Ind. 338; Hubbard v. Supervisors, 23 Iowa, 130; contra, State v. Hart, 31 N. J. 434.

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A State has no right to tax the means employed by the Government for the execution of its powers.

M'Culloch v. State, 4 Wheat. 316; Banks v. Mayor, 7 Wall. 16; S. C. 37 N. Y. 9.

7 A State can not tax a national bank. M'Culloch v. State, 4 Wheat.

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