in collection of revenues by means of the punctuality of payments introduced by its system, the facilities granted to importers and loans that as long as the necessities of the Treasury required were made to it by the bank."

In a letter written by him in 1811, advocating the re-chartering of the bank he declared "the use of banks to be at present necessary to the exercise of the legitimate powers of the general government."

That they might be provided and were to a more or less satisfactory degree provided through the action of the state was advanced in opposition to the claim of federal authority. That argument was answered in the opinion of the court as follows:

"It can scarcely be necessary to say, that the existence of State banks can have no possible influence on the question. No trace is to be found in the Constitution of an intention to create a dependence of the government of the Union on those of the States, for the execution of the great powers assigned to it. Its means are adequate to its ends; and on those means alone was it expected to rely for the accomplishment of its ends. To impose on it the necessity of resorting to means which it cannot control, which another government may furnish or withhold, would render its course precarious, the result of its measures uncertain, and create a dependence on other governments, which might disappoint its most important designs, and is incompatible with the language of the Constitution. But were it otherwise, the choice of means implies a right to choose a national bank in preference to State banks, and Congress alone can make the election."

McCulloch vs. State of Maryland, 4 Wheaton, 424.

It will be observed that it is nowhere suggested that the power to issue bills circulating as currency is an essential attribute of a national bank or even that such a feature of the law or any feature peculiar to any of the acts canvassed and wanting in the bill under consideration is even important upon the question of federal power. In the Osborn case, the court speaking through the Chief Justice, propounds the inquiry:

"Why is it that Congress can incorporate or create a bank?"

9 Wheaton, 861,

and then proceeds:

"This question was answered in the case of McCulloch vs. The State of Maryland. It is an instrument which is 'necessary and proper' for carrying on the fiscal operations of government. Can this instrument, on any rational calculation, effect its object, unless it be endowed with that faculty of lending and dealing in money, which is conferred by its charter?"

9 Wheaton, 861-862.

In the opinion in that case it is said that

"The currency which it circulates by means of its trade with individuals, is believed to make it a more fit instrument for the purposes of government, than it could otherwise be." Id. 864.

That faculty made it simply a more fit instrument than it would otherwise be.

In Juillard vs. Greenman, 110 U. S. 421-445, (the Legal Tender Case) the Court said:

"The power of Congress to charter a bank was maintained in McCulloch vs. Maryland, 4 Wheat. 316 and in Osborn vs. United States Bank, 9 Wheat. 738, chiefly upon the ground that it was an appropriate means for carrying on the money transactions of the government. But Chief Justice Marshall said: "The currency which it circulates, by means of its trade with individuals, is believed to make it a more fit instrument for the purposes of government than it could otherwise be.'

But the chief ground upon which the judgment of the court was based is that a bank is an appropriate means for carrying on the money transactions of the government.

The language employed in Section 5153 of the Revised Statutes of the United States, through which the existing national banks become depositaries of public funds and fiscal agents of the government is adopted in the Land Bank Bill for the purpose of investing the federal land banks and joint stock land banks with the same attributes.

Indisputably, whether the exigency requires that additional banking facilities be provided rests altogether with Congress. The system, as a whole, can not be successfully assailed. How about the tax exemption features of the bill?

The two great cases to which reference has been made McCulloch vs. Maryland and Osborn vs. Bank—arose by reason of efforts on the part of the state of Maryland in the one case and of Ohio, in the other, to tax the United States Bank. The former was an action of debt brought by the State of Maryland against McCulloch, the cashier of a branch of the bank operating in the City of Baltimore, to recover penalties to which it was alleged he was subject for issuing notes on paper other than stamped paper provided by said state, procurable only upon payment of a tax as prescribed by the state law. The statute obligated in terms every bank not chartered by the Maryland legislature to issue its notes only upon such stamped paper, from which requirement it could. be relieved by the annual payment of $15,000.

It was on the consideration of this feature of the case that the court asserted epigrammatically that the power to tax is the power to destroy. If the State of Maryland could tax the bank $15,000 a year, it could tax it out of existence. Indeed the requirement of the law probably was prohibitive and was intended to be prohibitive. To concede such a right in a state would be to concede its right to destroy the instrumentalities designed and called into existence by the federal government for the discharge of its functions.

The waves of passion aroused by the continuing agitation over the constitutionality of the bank acts, aggravated rather than stilled by the decision in the McCulloch case, as well as over the wisdom of the law from an economic and governmental standpoint, ran high in the State of Ohio. Acrimonious controversies arose between the state banks on the one hand and the United States Bank and its branches at Cincinnati and Chillicothe on the other. A fierce rivalry sprang up between the state banks generally and the federal institution. Emulating the example of Maryland, an act of the legislature of the State of Tennessee imposed a tax of $50,000 upon any bank undertaking to do business in that state, except under a charter granted by its authority. Georgia went through the form of levying an onerous annual tax on the hated bank. Illinois adopted a constitution forbidding the entrance to that state of any bank not sanctioned by its legislature.

Kentucky asked the modest sum of $60,000 of each branch of the bank doing business in that state, and Ohio demanded $50,000 a piece from those located within her borders. That state assumed a leadership in the war upon the bank. Undeterred by the decision in the McCulloch case, rendered March 6, 1819, the state authorities spurred by the intense enmity that prevailed announced their determination to collect the tax for which the state law declared a liability. The bank on September 14, 1819, the day before that on which the tax became due, filed a bill in equity to enjoin them, and secured a restraining order which, however, was not served, until the 18th though the fact that it had been issued was publicly known on the 17th, when agents of the State auditor appeared at the branch bank at Chillicothe, leaped over the counter, seized the vaults of the bank, and forcibly collected the tax. By supplemental averments these facts were presented and further appropriate relief was asked. The Circuit Court granted the relief prayed for, and the Supreme Court, on appeal, upon a review of both questions to which it addressed itself in the McCulloch case, reaffirmed the doctrines it asserted. The view of the court on the one with which we are now particularly concerned is to be gathered from the following pithy sentences:

*

"Deprive a bank of its trade and business which is its sustenance, and its immortality, if it have that property, will be a very useless attribute. * **To tax its faculties, its trade and occupation is to tax the bank itself. To destroy or preserve the one, is to destroy or preserve the other."

"If the trade of the bank be essential to its character, as a machine for the fiscal operations of the government, that trade must be as exempt from State control as the actual conveyance of the public money. Indeed, a tax bears upon the whole machine; as well upon the faculty of collecting and transmitting the money of the nation, as on that of discounting the notes of individuals."

Osborn vs. United States Bank, 9 Wheaton, 867.

Mention is made of the conditions out of which the Osborn and McCulloch cases arose, not alone because of their historical interest, but because they serve to emphasize the fact that the tax denounced was one levied upon the operations of the bank, as dis

tinguished from a tax upon its property. Such a distinction was made in the Pacific Railroad cases, in which exemption from State taxation was claimed for all the properties of the transcontinental lines upon the ground that they were agencies created or adopted by the Federal government to effectuate national purposes. It was asserted and refuted first in the case of Thompson vs. Pacific Railroad, 9 Wall. 579, in which immunity was claimed on behalf of a government aided road organized under a State charter, and later in Railroad Co. vs. Peniston, 18 Wall. 5, in which the claimant was a corporation created by virtue of an Act of Congress. It is under the doctrine and upon the authority of these cases that reliance is placed, for the greater part, for the claim that the tax exemption section of the bill under review is void.

Before entering upon an examination of those cases, it will be particularly pertinent to inquire, as to the rulings of the courts concerning the power of the States to tax the existing national banks or their property. The analogy between them and the national land banks about to be brought into being is much more close, if, indeed, so far as the question under consideration is concerned, there is not entire identity between the two kinds of national banks.

The national bank Act in terms authorizes the States to tax the owners or holders of shares of national banks at the rate at which other moneyed capital is assessed, and any bank on its real estate as other real estate is assessed.

In Owensboro National Bank vs. Owensboro, 173 U. S. 664, the court, considering the validity of a statute of the State of Kentucky under which a tax was laid upon the bank under a valuation equal to the sum of its capital, surplus and undivided profits, said:

"Early in the history of this Government, in cases affecting the Bank of the United States, it was held that an agency, such as that bank was adjudged to be, created for carrying into effect National powers granted by the Constitution, was not in its capital, franchises and operations subject to the taxing powers of a State. McCulloch vs. Maryland, 4 Wheat. 316; Osborn vs. Bank of the United States, 9 Wheat. 738.