32 Ind. 27 | Ind. | 1869
This was a complaint hy the appellee against the board of commissioners and treasurer of Montgomery county, to restrain a sale of certain personal property, levied upon by the said treasurer by virtue of a warrant to collect the sum of four hundred and eighteen dollars and forty-nine cents, being the amount of tax and penalty on twenty-seven thousand one hundred and seventy-five dollars in the hands of the appellee on the first day of January, 1868.
One-half of this sum was in treasury notes of the United States, known as “greenbacks;” the remaining portion was in the notes of the national banks, designated as “ national currency.” This sum had beenreturned fortaxation under protest.
A demurrer was overruled to this complaint, and a perpetual injunction was granted.
That the moiety of this sum upon which the tax was assessed which consisted of treasury notes was not liable to taxation, has been already decided by the Supreme Court of the United States, in the case of Bank v. Supervisors, 7 Wal. 26.
While it is ruled, that these notes were issued under the
“But it was insisted that they were issued as money; that their controlling quality was that of money, and that therefore they were subject to taxation in the same manner, and to the same extent, as coin issued under like authority.
“And there is certainly much force in the argument. It is clear that these notes were intended to circulate as money, and, with the national bank notes, to constitute the credit currency of the country.
“Nor is it easy to see that taxation of these notes, used as money, and held by individual owners, can control or embarrass the power of the government in issuing them for circulation, more than like taxation embarrasses its power in coining and issuing gold and silver money for circulation.
“Apart from the quality of legal tender impressed upon them by acts of Congress, of which we now say nothing, their circulation as currency depends on the extent to which they ai’e received in payment, on the quantity in circulation, and on the credit given to the promises they bear. In these respects they resemble the bank notes'formerly issued as currency.
“But, on the other hand, it is equally clear that these notes are obligations of the United States. Their name imports obligation. Every one of them expresses upon its face an engagement of the nation to pay to the bearer a eertain sum. The dollar note is an engagement to pay a dollar, and the dollar intended is the coined dollar of the United States; a certain quantity in weight and fineness of gold or silver, authenticated as such by the stamp of the government. No other dollars had before been recognized by the legislation of the national government as lawful money.
•“Would, then, their usefulness and value as means to the
“It cannot be said, as we have already intimated, that the same inconveniences as would arise from the taxation of bonds and other interest bearing obligations of the government, would attend the .taxation of notes issued for circulation as money. But we cannot say that no embarrassment would arise from such taxation. And we' think it clearly within the discretion of Congress to determine whether, in view of all the circumstances attending the issue of the notes, their usefulness, as a means of carrying on the government, would be enhanced by exemption from taxation; and within the constitutional power of Congress, having resolved>the question of usefulness affirmatively, to provide' by law for such exemption.”
The evident foundation upon which the power of the government to exempt her treasury notes from taxation reposes is, that the sole value of such notes depends upon the promise of the government to ultimately redeem them in gold. They circulate as currency, not, like gold and silver, by reason of their intrinsic value, but by virtue of the pi’omise impressed upon them and the faith given to that promise; in other words, upon the credit of the government. And therefore a tax upon the notes is simply a tax upon that which gives them value, the promise of the government—a tax upon her credit.
It is not a reason why treasury notes should be taxed, that they circulate as bank notes recently issued by private corporations. Such circulation depended upon the credit of the private corporation, and that was a proper and legitimate subject for taxation. These notes circulate by reason of the trust reposed in the credit of the government, and that credit is not a subject within the sovereignty of the state to tax.
It was upon this ground, that it was held, in Weston v. The City of Charleston, 2 Pet. 449,. that a tax imposed by a law of any state on stock issued for loanB to the United States is unconstitutional.
“If the right to impose the tax exists, it is a right whigh in its nature acknowledges no limits. It may be earned to any extent within the jurisdiction of the state or corporation which imposes it, which the will of each state and corporation may prescribe. A power- which is givexx by the whole American people for their common good, which is to be exercised at the most critical periods for the most impox’tant purposes, on the free exercise of which the interests certainly, perhaps the liberty, of the whole may depend, may be burdened, impeded, if not an’ested, by any of the organized parts of the confederacy. * * * We have considered it as a necessary consequence from the supremacy of the government of the whole that its action in the exercise of its legitimate powers should be free and unembarrassed by any conflicting powers, in the possession of its parts; that the powers of a state cannot rightfully be so
And what was this issue of these treasury' notes, to circulate as money among the people, but a borrowing of money without interest from the people?
These treasury notes had their origin in the very exigency contemplated by this learned jurist. They were issued at a moment when the government, stripped of her property and menaced in her capital, was compelled to demand of her citizens the peril of property and life alike on the faith of her promise.
' It is pleasant that we may look away from these scenes of conflict and strife—from the plea of public necessity— back to those times of peace and quiet, when, in the calm discussion of legal propositions, principles were evolved, which now protect that public faith, pledged in such desperate strait.
There remain but two questions. Has Congress attempted to extend this exemption from state taxation to the currency issued by the national banks? If she has declared this exemption, was the subject within her jurisdiction?
The act of February, 1862, declares, that “ all stocks, bonds, and other securities of the United States held by individuals, corporations, or associations, within, the United States, shall be exempt from taxation by or under state authority.” 12 Stat. at Large, 846, § 2.
And this provision is re-enacted, in application to the second issue of United States notes, by the act of July 11th, 1868. 12 Stat.' at Large, 546.
And, as if to remove every possible doubt from the intention of Congress, so far as treasury notes were involved
It is insisted, however, that the act approved June 30 th, 1864, entitled an “act to provide ways and means for the support of the government, and for other purposes,” 13 Stat. at Large, 218, exempts this issue of the “national cm’rency,” as it is entitled. The first section of that act declares that “ all bonds, treasury notes and other obligations of the United States shall be exempt from taxation by or under state or municipal authority.”
The last section is as follows:
This, at a first glance, might seem to bring “national currency ” within the exemption, and, as we are not indebted to counsel for a solution of the difficulty, doubtless has misled them in the argument. But the words in quotation íd the thirteenth section are technical, and are not the identical words used in the same order in the first section, and therefore the reference to that section would be more than questionable. All doubt, however, is removed, by the use of the same technical phrase, in the eleventh section of the same act, in which it is provided, “that if any person having-control, custody, or possession of any plate or plates from which any obligation or other security or any part thereof shall, have been printed,” &c., “ or shall have or retain in his custody or possession, after a distinctive paper shall have been adopted by the Secretary of the Treasury for obligations and' other securities of the United States, any similar paper adapted to the making of any such obligations or other security,”' &c., “ every person so offending shall be deemed guilty of a felony and shall, on conviction thereof, be punished,” &c.
It thus appears plain that the entire intent and purpose of the last section of the act was to throw around “ national currency” the same guards against counterfeiting that were by law provided for “obligations and other securieties of the United States.”
Clearly, no exemption in any act prior to the authority given to issue “national currency” can apply, and as they are not obligations of the United States, in any proper sense of'
It follows, that the amount of the assessment on the moiety consisting of treasury notes was unauthorized and illegal; and that the amount rated upon that portion consistiug of currency of the national banks was le¿’al and proper.
Under a rule often expressed in this court, the appellee, not having tendered to the treasurer of the county the amount legally due, cannot successfully invoke the aid of the court by the interposition of its extraordinary remedy of injunction to prevent the collection of a tax in part legal and in part illegally assessed.
Judgment reversed, and cause remanded, with direction to sustain a demurrer to the complaint for injunction. Costs here.