Railroad Co. v. Peniston

Company Oct. 1873.] Railroad

Syllabus. as is a circumstances. principle impracticable many to be administered the courts. There is of action by rule us we able known to which are to no standard that by say not to debt. defendant pay plaintiff’s wrong that the letter not We are of the does opinion produced a the debt iu and suit, evidence of to contain promise pay must from judgment appealed

Affirmed. Company v. Peniston. Railroad agencies government by of the taxation Federal exemption up agents, nor is-dependent, upon not on the nature of the States (cid:127) constitution, .they agents, nor the fact that are but upon mode of their is, tax; question the tax upon whether does upon the effect they serve the as in- in truth them to were deprive it, of their A power. serve hinder the efficient exercise tax tended to or effect, necessary such and merely, having leaving up'on their may have undertaken to discharge perform, the duties them free to being upon A rightfully by laid the States. tax bo may not be. to the exercise Federal direct obstruction real and to the case of a tax a State applied 2. This doctrine the Union distinguished franchises, from its as personal propertyT by Congress for Company, corporation chartered Pacific Railroad individuals, but which and all stock was owned private gain, whose loans, of board of directors donations and whose assisted two, reports gov- makes to the which annual government appoints working and its rail- ernment,'whose operations laying, constructing, lines, toll, regu- as well its rates of telegraph as road and charter, regulations Congress and to such further imposed . lations and con- make; on whosefailure to terms may comply hereafter charter, use, Congress and keep the road repair ditions of its thereof, management devote the incometo the control and assumethe which, States; the loan of the United States amount- use of United millions, is failure to ing many property, a lien on all the Secretary Treasury authorized take loan, redeem functions, immunities, possession rights, all its road with and, ; finally, appurtenances, the use and of United benefit grants to the are declared to be company where all made advanced, that, bonds paying condition besides use, lines in repair shall the railroad and keep telegraph mails, dispatches transport troops, and shall at times transmit Statement case. (cid:127) war, supplies and munitions of stores for the government, required by any so department thereof; to do whenever and that . government preference shall have the at rates charged exceed those to private parties, payable being to the applied payment of the aforesaid; control, to bonds and in addition obligations and the company, Congress, tax, liabilities of the not. forbidding and a State to, alter, amend, repeal right the to add the reserves charter. in of unorganized territory Nebraska west Lincoln

3. The and the County Cheyenrie county having of unorganized been attached by statute to. Nebraska, county Lincoln, in of for revenue purposes, the authori- the were the County proper of Lincoln authorities to levy ties taxes n charge. thus under their placed property from the Circuit Court for the District of Ne- Appeal braska; the case thus: being of 1862,* act of 1st, entitled July “An

By Congress act of a aid construction railroad and to line telegraph the the River to from Mississippi Ocepm,and to se .Pacific the use of the same cure the postal, mili other and purposes,” incorporated tary, certain successors, associates and as the individuals}.their “Union''. with Railroad to Company,” authority Pacific build con a¡ on rai|road the telegraph point one tinuous bun-. to the western 'dredth boundary Nevada meridian Terri (cid:127) act fixed the amount of the stock capital . tory. .. and .declared that “the stockholders shares, should consti said body politic tute corporate.” road, -stock had though through President of it was to the United States two appoint directors, not stock out of which the holders, fifteen, charter provided for as the to be all. Annual appointed reports were to be number to Secretary made The act Treasury. to granted company right way through lands, and construction purpose aiding “for of said rail line, and to secure the safe road'and.telegraph and speedy the mails, troops, munitions of transportation wai*, thereon,”-made stores anit extensive the public grant n lands,and provided for the issuing patents therefor. And

* 12 Large., Stat. at Oct. 1873.]

' of the ease. Statement did to, the United States same for the agreed purposes cent, bonds, thirty years, issue its 6 per payable for each sec- mile, of $16,000 amount per company, act declared miles; which bonds tion “ original of forty whole on the a first constitute shall, facto,- ipso mortgage rolling the railroad and telegraph, together made kind,” spe- fixtures, every stock, com- the failure as to cific provision proceedings redeem the bonds. pany was and the 2d, 1864,* an act of changed, July By bouds to t > issue first authorized mortgage States,”

an the bonds amount exceeding declared and the lien of the bonds of the United States so issued be subordinate to bonds company, dis with the exception relating transportation mails, &c.,tor the troops, patches, government. to declared the the were company grants original made that the shall

act to condition upon (1) bonds the at the United States maturity; pay keep (2) and use; their line in “transmit road and dispatches repair (3) over said and line, mails, and troops, telegraph transport munitions of said war, and stores rail- supplies, public road for the the the &e., government,” giving government at fair and reasonable rates preference compensation, those to the individuals, amount charged exceeding private bonds, in thus earned he the as well applied payment cent, as after of the net of the road its per earnings com- pletion. the seventeenth the same act it section of was

By pro- finished, if when should road, vided that for unrea- any time be to remain out of sonable or unfit permitted repair, should have for same in use, authority put use, and from the income road repair reimburse for thus expenditures caused. n section that when the provided net earn- eighteenth the road should exceed 10 of its Con- ings per cost, cept.

* 13 Stat. Large, at n Ck Statement of case. reduce, fix, rates of fare thereon,

gress might regulate and declared better to accomplish object (cid:127) act, this interest and wit, to welfare promote public construction said railroad line, and telegraph order, same secure the keeping working gov- ernment at all' in times times particularly (but -war) use and benefits of same for and other postal, military, at due time, purposes, Congress may any having regard of said named herein, to, add companies alter, rights amend, or this' repeal act.” also

The act contained far as that so provisions, were concerned the railroad and branches as should be worked one connected and continuous line. There was act of provision, Congress relating this the taxation company, respecting prop- the States which its erty by through run. roads-might The road was completed put operation May, 1869, and with the Central Pacific Railroad formed a con- tinuous line from the Missouri River and the Eastern States Pacific, to California and thus the extremities uniting At the time country. charter, the of.granting over line which this projected territory belonged the United But was admitted States. Nevada into the Union in 1864, as State and Nebraska in 1867, the road, as crosses the constructed, latter State in its whole breadth, ' from east to west. So far as to the of Union history Pacific Now Railway. to a certain tax laid it, suit. On the 15th of 1869, February, of legislature Nebraska “ an act to define western passed of Lincoln boundary after which, it, County,” defining provided, That all unorganized country west lying western of Lincoln, east of boundary line east of Cheyenne and south North County, Platte River be, and the same said, attached to the hereby, county Lincoln, for judicial revenue and that the purposes., county Cheyenne be,and Peniston.;

Statement the ease. attached, for the same and revenue hereby, judicial purposes, to said Lincoln.'”* county

In this state of authorities Lincoln things, County, in the State Nebraska, State, under revenue law of the bn the same 15th of 1869, laid tax passed February, upon of the railroad embraced property company, within taxation, $16,000 valuation upon for a per mile, length hundred and seventy-six miles.† oftone The thus rhtod and property taxed con- of its road-bed, sisted depots,'wood-stations, water-stations, and other realty; telegraph-poles, telegraph-wires, bridges, office boats, books, furniture papers, and fixtures, money movable credits, property, &e. engines, The of Lincoln population all the attached County the census of 1870, was territory, by persons.

whole amount of the tax list was $4,081,904, of which was Property of the company, .......$3,936,000 of other

Property taxpayers,..... 145,904 The tax levied was $41,328 the com- county upon pany’s property, $6350.45 other taxpayers.

The tax levied company’s property distrib- uted under the heads or following purposes taxation : n . general^fund,

Por . $7,872 . . State sinking Por fund,.......3,936 n Por school fund. . ......3,936 fund, county . general Por . 19,680 . .' . . . county sinking Por fund,.......3,936 And for district school purposes,......1,968 road length company’s within the terri- lying ascribed to Lincoln tory taxation, was County as follows: In miles; Lincoln Count}', eight Cheyenne County (un- miles; one hundred and five organized), between the two * Nebraska, 1869, Laws of p. 249. was, fact, The tax laid on two and forty-six † hundred miles; but, as it was admitted pf defendant'-that seventy there was miles excessive computation, question the only here was tax on the remaining one and seventy-six.miles. hundred Company Railroad of the case.

Statement a total of one hundred miles; making counties, sixty-three miles. and seventy-six Treasurer, Peniston, Lin- one this state of things,

In the Union laid, collect the tax about to coln County., being filed a bill Court Railroad Circuit Company Pacific him, in the District Nebraska against of the United for the bill so his grounds restrain assigning' doing others— among of Nebraska no power

That had road-bed, and for State purposes rolling-stock, taxation for the use'and necessary operation other property as it ivas asserted ex*' bill, ; by such road power resting, United States. in the government clusively was not law authorized tax County That Lincoln road-bed company, portion within its limits. as was situate geographical such except and heard proofs, cause pleadings agreed refused to restrain the collection Court and Circuit and the one huudred miles of the seventy-six tax against same to have been lawfully imposed, road, holding to be taxation. open the property here decree present being brought Upon appeal, were errors assigned: the following valid to hold the tax it was error That imposition First. of the Union Pacific Railroad the property Company from State taxa- it., exempt such property being subjected virtue of incorporation tion, company by aas means for the of certain performance United States authorized enjoined' duties the Constitution. hold the That was error to rating . taxing Second.- of Lincoln, outside county of the company, the property valid lawful the authorities county, under.the- of the State. legislation M. Evarts, appellant:

Mr. W. so far as it The tax the statute au- of-Nebraska, I.

Argument against the tax. thorized void, were tax, the company’s property should have been' relieved, therefrom protected by the n judgment of .the court.

1. The railroad was created and endowed company by with its franchises, and Congress, as a powers, property, and means, instrument, the execution of the agency'for vested in the General powers the Constitu- government by tion of the United States.

'2. At the time of the of the act of under passage Congress, which the were created corporate powers and conferred, of the United States government the sole and exercised un- divided dominion over the territories to be traversed by or affected railroad, of this powers or corporation their administration.

(cid:127) The tax here authorized the statute of Nebraska, rated,- and laid actually Lincoln, is county and assessed whatever constitutes the property-anffthe means of the as collected, combined, prepare»}, worked or act of (under hs the authority Congress) instrument--and of the General for the- agent execution of its constitutional and the powers performance of its duties,' constitutional so-far as this-instrument and has its structure, agent capital form of every use investment, its within the local range power. taxing of the taxation is an theory apportionment of the . total and means of the aggregated mile péf (cid:127)its railroad, and a valuation and taxation of the ratable share of the railroad found within the length different counties State. .

4. If the tax be looked at in its circumstances as well as in its is not too much to that the principle, say introduc- tion and of this means and operation agency General within the territorial limits of what now consti- tutes the is made the Nebraska, occasion, and the made of taxation means for local agent subject, in exoneration of the State purposes, general which should bear those burdens. population Company Pbniston. v. against

Argument the tax. II. The settled doctrines of court, expounding means, relations which the instruments and created agencies, consti- for the execution Greneral taxation under the tutional States, bear to the Pacific Railroad Union States, exempt authority it is sub- to be from the taxation to sought jected. cases in the celebrated of McCulloch established principles * stand States,† v. Bank United Maryland, Osborn their the force of unbroken and Neither impregnable. in the.least, is,

reason, nor the authority, weight in pari materia. abated adjudications by any subsequent these dec Chase thus The late Chief Justice speaks isions:‡ or 'constitute constitutionally organize That Congress may effect National powers into for carrying granted

agencies the Constitution; may organized by agencies the by that.the individuals, sanctioned by of Congress; association voluntary so to such organized, corpo- give agencies, that Congress that such agencies efficiency; rate unity, permanence, are not sub- franchises, capital, their being, operations, in been, the have ever States, regai’ded, of to the taxing power ject decisions, doctrines of this court. settled those as since men of the of great decisions were judgments “Those the most illustrious by ivere They j>ronounced great judges. his clearness number, by peculiar and’ are distinguished For half a century prin- nearly reasoning. and cogency borne the kéen of an them have scrutiny vindicated by ciples able statesmen, criticism of sharp profession enlightened who All concurred remain unshaken. judges and they into honored since but their descended graves, them have long n judgments endure, from time and vigor general gathering the force of constitutional sanc- acquired have almost consent, tions.” statement of what

A and authoritative concise principles v. Bank Maryland, Osborn v. decided were McCulloch * Wheaton, Id.9 4 316. 738. † Wallace, Assessors, Allen v. The Van ‡

Argument the tax. in its States, court opinion, United by given in Westonv. Marshall, J., delivered O. Charleston* which conducted us to “We will not reasoning repeat was, that all sub- formed; but that conclusion thus conclusion extends, are ob- a State which the power sovereign jects (cid:127), does neft extend, are, but over which it of taxation those jects from taxation. the soundest principles, exempt “1 of a extends to which ex The everything sovereignty^ is introduced but its own or authority, ists by permission means which are to carry not to those employed by Congress conferred on that into execution powers body people States. em- to use the on means “The taxation attempt of the Union pursuance ployed abuse, in itself because it is Constitution, is an usurpation cannot which the single give. of a power people taxation, otherwise, to re- “The States have no power by burden, or in control the tard, operation manner impede, into exe- carry constitutional laws enacted by Congress, vested in the General cution government.” in its constitutional, if State act be III. But, applica- it, it is of this tion to company subjected property , outside Lincoln(cid:127) is county submitted that taxable the authorities of that under lawfully county the laws of the State. Woolworth,

Mr. J. M. contra: are im- is, main to these taxes objection an of the Federal posed upon agent, government- cannot be as an objection proposition. supported original We that those has estab- concede which Congress agencies lished for the execution into purpose carrying powers- conferred are in in the Federal liable Constitution, way interference This court has reiterated that States. times, and with But there principle many great emphasis. as often and as is another which court has principle asserted, and which is emphatically equally necessary

* Peters, 2 466. ' 14 [Sup, Argument the tax.

harmonious relations of the State and Federal It powers. is, that the exists in the States unrestricted power taxing the Federal Constitution except as to the government, to the latter to its functions. means-necessary discharge matter received full from this This court exposition (Chase, C. J., County in Lane v. Oregon.* speaking it),

These two are fundamental in our principles complex . system:

1. The a State extends power matter taxing every within its value sovereignty. ' cannot those 2. But reach which are agencies execution, into employed carry Federal conferred Constitution. are

These coefficient. the one, the principles By. just necessary powers States, by other just of the Nation necessary powers are preserved. But are they The co-ordinate. first the second rule, the excep- tion thereto. devolves It those who.would withdraw busineás, or within their “any property, persons, respective from the limits, States,” to show the taxing power same to within the exception.

But there are the Federal many agencies which do not whatever enjoy from taxation any exemption States; do not claim such They even in exemption, which use when respect serving gov- ernment. ocean, on the bears steamship ambassador court, and the foreign which the' dispatches by diplo intercourse of

matic the nation is are guided, agents most discharge valuable, necessary, efficient service. railroad companies, one of every car, whose trains postal orders of the bearing execu tive to subordinate officers scattered all the wide through and which the country, domestic policy are directed, also dis agents, * Wallace, 71; previous 7 and see the Louisiana, cases Nathan v. 73; Howard, Hamilton Company Massachusetts, Wallace, 15 Company Oct. 1873.] Railroad the tax. Argument support and efficient service. valuable, most .necessary, charging frontier, carryi.g taking.up The stage-coach this centre the so from that orders, these remote into parts extremi to the are and felt obeyed volitions pulsations in the vast service of republic. shares land, ties and thousands these service, all this And, for agents, a small Not are them, government. others like paid by dividends which and the they of their earnings, proportion from is derived stockholders, distribute among these even to the State taxes upon They pay government. service, have conveniences for doing earnings. They for this service steamship, apartments; used exclusively; cars; the railroad, they wagons; postal stage-coach, thereon; claim never taxes exemption yet pay Railroad, if one the Kansas Pacific them, taxes. Or if it has claimed exemption is any exception, ground, claim, alone in such and it- stands solitary asserting * failed it. has establishing signally to which know; as there such But, exemp agencies drawn The line clearly is conceded. separation tion The United Marshall Osbornv. Bank Chief Justice He States. says: † in favor of of a

“The foundation argument right bank, is laid in the tax character supposed to have argument supposes institution. for the of an concern, been individual management originated individuals, contract between private to be founded having for its private great trade and profit principal object. true, “If were these conclusion drawn from premises This mere them would inevitable. en- private corporation, business, in its own with its own views, would certainly gaged be . State, to the individual taxing power any be; would and the casual circumstance of its employed being affairs, in the transaction its fiscal would more business from the of that exempt private operation than it would business of indi- exempt private power, in the same manner. But the vidual are not employed premises * Wallace, Wheaton, v. Railroad 9 Thompson Company, 859. † Ct

Argument of the tax. The bank is true. not considered as a private corporation, whose is individual trade and individual principal object profit, but a created a public corporation, national That the mere business of in own na- purpose. is, its banking ture, business, a individuals private carried on may by or companies, connection with the having political govern- ment, admitted; is but the is not bank such or com- individual It was sake, for its own or for pany. private pur- created . . . pose. is it that

“Why can create bank? incorporate This was answered case of question State McCulloch v. It an Maryland. is instrument which is ‘necessaryand'proper’ of for on the fiscal operations carrying government.” From of the relations and immunities of exposition cited, of the traced in the case these ageucies principles deducible:

1. M whose is private indi- corporation, principal object vidual trade and individual is not profit, exempted State taxation casual circumstance of being employed (cid:127) in the transaction of its government fiscal affairs. 2. While- it is true that the entitled to agent exemption transact business, its private so do must be may capacity an incident to its and be in aid thereof. agency, Its in

3. business private must transacting its character and necessary as a machine em- efficiency, ployed government.

But it is not all of of the property Fed any'agents eral bemay from the' government withdrawn taxing of the States. The Bank of the United awas of the fiscal agent bore most government; intimate re to that lation government; McCullochv. Maryla yet nd,* Marshall, C. J., said: “ This does not opinion the States of deprive any resources It does not originally possessed. extend ato tax bank, the real of the common paid property with other real within State.” property

* Wheaton, Argument the tax. States,* in Osbornv. TheBank

And the United he again, said, local the bank be taxed property as the State, the same of other citizens. property there is a in which the But Federal officer en position is titled-to the of the Federal While protection power. is officer general taxation, his And the same entirely exempt salary therefrom.† If true tax be its corporate agent. opera tions, and of an operation instrument consequently 'Union, its empowered by carry into then tax is execution,” unconstitutional. rule reason marks limitations. The National must be-free such to use means as it selects, to out its functions, else it cannot exist. When.a carry tax impairs which Con efficiency any instrumentality selects out the of the Fed gress carry purposes legitimate it is When eral unconstitutional.' it government, does not have that it is within the effect, of the State to competency it. impose J,, the unanimous

Miller, of the delivering opinion court, National Bank v. one of the Commonwealth,‡ cases the of cases in taxes, bank the the we where distinguishes way do, and where it not He tax. may may says: banks, “It that being instrumentalities of the argued of Federal which some government, important operations bo conducted, are cannot to such State subjected It legislation. true that Bank certainly States, and its were to be held from State exempt taxation on the capital, here stated; and this laid down in principle, ground case of v. The State has been Maryland, McCulloch repeatedly affirmed court. But doctrine has its foundation in the propo that the sition, taxation be used in may so such right cases, destroy as to instrumentalities which the government to effectits lawful States; and cer proposes purposes it cannot be maintained banks, that or tainly other corporations * Wheaton, 9 867. Dobbins v. The Peters, Commissioners Erie 16 County, 435. † 353, Wallace, 9 ‡ von. xvm. Qt.

Argument of the tax. to be of the are with wholly or instrumentalities The most im of State drawn from the operation legislation. ; its officers but Federal are government portant agents when a an officer of Onewill contend that man.becomes he to the laws of the State. ceases be subject government limitation; has its are limitation discussing principle'we on which the itself is necessity out principle growing is, limitation Federal founded. That agencies far from State so are only exempted legislation that, their efficiency, interfere may impair or legislation serv,e were designed the functions by performing rule would convert a other Any principle government. necessity founded alone securing its, legitimate States the means of exercising of the /United invasion of the into an unauthorized and unjustifiable powers, of a Federal officer may the States. salary rights service which be from any be he taxed; exempted personal because those duties, his official with the interferes discharge him to those duties. essential to enable perform are exemptions which affect his- to all the laws the State he is But subject he is liable to relations, or his (cid:127), or social family crime, that punishment imprisonment though punishment are to the laws of of the banks. They death. So business, in their far daily are course State, governed than of the nation." All their laws the State more by laws.' Their and construed ac contracts governed their collect their and transfer property, right quisition debts, sued for are all based liability debts, their when State law incapacitates It is only State laws. duties government.’that discharging banks unconstitutional.” becomes that no case this court is

Indeed, adjudged by it believed of a on the third of tax found, party— be property can other than an some this-term integral agency, meaning use of the of of the machinery part —made has held invalid. The which b'een National government, v. Osbornv. The Maryland, in in McCulloch tax question, the of the’bank, was Bank, UnitedStates upon not upon property. 19 1878,] v.

Argument in the fax. the bank of the cases of the taxation of tax,* And one banks has been the national the same supported present upon that it wit, the the use, new theory, upon' theory: which the bonds the'business Federal were banking, the bonds nor the' not banks that upon put, taxes were imposed. that the be some of the

It language judges, which have the reasoning seem'to favor pursued, even total of an exemption agent- doctrine from State National taxes. But, as n of^the ,C- said Chase, J-, Thompsonv. these Railroad, Pacific limited to the eases are before the court. decisions obvious, is above principle cited, It cases that like the agencies old .there States, the United nature of which Bank them places the States. But there reach are other beyond agencies, whose business is banks, new principal hs the private, is an incident thereto, business caunot be placed toAs this latter tlie same it class, category;. not tod insist that State exemption much should regulation direction of secured by express if that Con Congress; terms not in does graut exemption gress sov It is is not displaced. needful to this ereignty ease, of this court in judgments order to go through ascertain whether State power displaced without a direct enact to that effect. There ment was a Congress long disagree on this ment between subject.† But in judges Gilman J., Philadelphia,‡ v. Swayne, delivering opinion as one of court, the-reasons for assigned sustaining.the laiv authorizing bridge, against objections that it con the commercial flicted with power nation, the fact whenever may interpose shall be deemed laws,” the necessary, by general special inference being, until such interposition the.State must and in Parham,§ v. respected; Miller, J., also Woodruff * Assessors, Wallace, Allen Van 573. Howard, Cases, Wallace, See the License 504. † 3‡ Wallace, 123, 140. 8 § Company [feup. v. Railroad support of the tax.

Argument the same intimates court, for the pretty clearly speaking view. case as. Is this immediate before now to the

Turning taxation from State railroad entitled to exemption because it is au of the Federal government? agency is indi

It whose is á principal object private corporation it is True, incorporated vidual trade and individual profit. had but, circumstances, when regard Congress; a has It was authorized to build this fact no signifieancy. meridian* to “the a hundredth road from one point At that time, western of Nevada boundary Territory.” was act whole when the of 1864 amendatory passed, was not within State. there territory any Again: section the claim of a careful abstineuce from was any within was a road State. It any authorize building the work, secure in order to advantages important, States; it and of it in branches but tb construct parts branches were to be built and those bjr those p,arts and not the Union Pacific Railroad Com corporations, here. appellant pany a California was to Pacific,

The build corporation, Central coast, Sacramento, the Pacific or the headwaters of from Leavenworth, the eastern boundary California.† a Western, Kansas was build Pawnee, corporation, one River, the Kansas hundredth Missouri, ne,ar the. from Hannibal and Missouri St. Joseph, meri dian.‡ into with the consent to build Kansas, corporatinn, own franchise or derived State, under its one either And so on. mile road be built Kansas.g Every limits of State was to be built State cor within several And these received same corporations poration. and lands from the United States as did the rail aid iu bonds which is now here as the this case. appellant road company we was formed trade This corporation, private say, * line, it, is on a north and south point, Eeporter This as the understands equally. about dividing Nebraska Id. 10. 1862, See Act of § § ‡Id. †

Argument of the tax. The service which it renders to the and private profit. gov- an incident ernment Its business. only op- general are are con- erations not accidentally, only inseparably nected with those of the Between it and the government. old Bank of the United States there is in this respect ' n widest distinction. The bank, possible system maintained which it between different sections exchanges was converted into a for convenient .country, agency funds from public transferring place "Every place. bill drawn one branch at transmitted and another, was an not of which the only paid, operation it itself, avail but increased to might facility.of degree which the had communication need of. And the treasury to the most facile and certain and necessity treasury means'for the transmission efficient of funds was what justi- fied the bank. But who shall incorporation say that the of its trains is company, running daily this.railroad thus needful or useful to government? are "What the services of it required ? “ are stated to be to transmit

They over said tele- dispatches line, and mails, graph transport munitions troops, stores war, supplies, said railroad for the of land ever Every made government.” grant by Congress has railroad the same terms provided for the same services.

Not to farther back than 1850, to Illinois go grant in aid what became the Illinois contains this Central, clause :* . branches, The said railroad and shall be and remain a public for the use States, of United free from toll or

highway other upon the charge, transportation troops the United States.”

And— “TheUnited shall, States mail at all times, be oh transported railroad, said under the direction of the PostofficeDepart- ment, at such as the price law direct.” Congressmay by

* at Large, 9 Stat.

Argument of the tax. Missouri, These exact words are found for grant Railroad,* Hannibal St. in that to Arkansas Joseph Iowa,§ and Ala Missouri,† Florida Minnesota,‡ Louisiana,** Wisconsin,†† bama, || Michigan,‡‡ Alabama¶ on act the kiud and so down to last Mississippi,§§ by Congress. passed rendered to be

The service stipulated Congress, as as nec- railroad in country, every large, land-grant to be as valuable rendered essary, these will that all And argued yet, appellant. as the this service part rendering principal agencies an incidental service business, and rendering only the public. claim of has not interposed any exemption the character set the the up by ap-

behalf .government pellant. the the act nor the terms used in act the title of

Neither reach or such force. hav.e section, in declared the as the act, eighteenth The pbjects interest, &c.; the to || first, promote public are-twofold: || n the 'the use of secure to to and secondly, in as evidently prominent road. these ‘objects One as the other.'- circumstances the mind knowl are matters of common incorporation company’s to act by was moved pass original edge. Congress mind, consideration, time at the greatly agitating of their reason by the Pacific States that Territories^ follow the other country, from parts might separation seek withdraw States and to of the Southern the example distant more parts To bind those closely the Union. commerce, was the most rest, bands of argument by in the transportation Facility upon Congress. pressed was rather of the stores mails, troops, So that to- this broad and policy. incident patriotic * 302. Ib. Id. Large, Stat. at 9. 156. ‡ † Ib. 18. Ib. 16. || 11 Id. 9. ¶ § ** 22. Ib. Ib. 20. Ib. 19. ‡‡ †† 7, Supra, pp. Ib. 31. |||| §§

Argument in' tax. we whether words of the acts or circum- regard of their it is services, stances obvious"that those passage, from State is here account taxation exemption incidental, claimed, must considered only. in There is this record' to show the taxes nothing here of will interfere with or complained the effi impair of the- railroad the service ciency .company performing of it the acts. And if we look by to the effect required taxation the services to be rendered, generally, nothing at all within-the rule as laid down appears Miller, J., Bank v. National Commonwealth.* Congress gave make contracts, which also the corporation power-to implies to make debts. could creditor sue A his demand and, and recover enforce it. judgment, process, proper duties and These liabilities would be as much interfered such as sale for judicial taxes;, process in supreme rights government may reasonably in one- as the Those case other. terposed rights, however^ find their the fact that, whether the protection property in the remains it is corporation passes another, bound liabilities; duties and those say, purchaser is. takes the them both instances. property is no

There need words to show that this tax is upon and‘not upon its'operations, and that it is not constituent .element but a third made use of party render to incidentally ait certain service.

A private corporation, organized private trade to a profit, service inci- private rendering the course its private business, not dentally insep- connected with arably government operations; not a constituent part machinery but called in a for which discharge duty it is compensated; as not claimed an- by Congress entitled to freedom agency control; its its efficiency not discharge duty, the taxation impaired by of, and its complained

* Wallace, 9 353. Company ,v. Railroad support of the tax. Ai'gument in taxes; com and not its subjected operations, 011I37, —this all cor citizens all must in common submit, pany must which the State exactions reasonable to those porations, which make protection gives its business and value to property. decided this court.

. been this case has substantially But said it is Bank, emphatically The States In United Osbornev. was a Federal corpora that the bank that the circumstance only ques tion The was important. question, nature as what was the tion, was, there treated vital of'it services government? required Na v. TheAssessorand Allen the bank-tax cases Van In we the distinction Commonwealth, The tional Bank v. of a Federal cor interests w.hat seek maintain between non-taxable is a and what are taxable by poration taken. clearly the services, Company,* The Railroad v.

In Thompson were relations of the duties, liabilities, questiou, this were They the same as those of plaintiff. all precisely been acts we have these same considering. all imposed I137 nine, of the of section In the words first:. Pawnee, and Railroad Tho-Leavenworthj Western Compaq* Kansas, railroad and authorized to a are .construct horcb3r conditions, the same terms and line . '. .

telegraph this act for construction of provided respects, Union Railroad.” Pacific

' services, duties, liabilities, relations, And those grants, 3;et secure the It is did not subsidies exemption- sought. the Chief that the confined true Justice opinion the case of But Osbornev. Bank put State corporation. with that and the rule of case casé this The case of Thompson establiáhed. directly the same that State holds corporation, rendering samé duties and liabilities, to the services, subject sustaining the same relations as must its State taxes. appellant, pay v. The Bank United States The ease of Osborne holds * Wallace, Company Railroad Peniston. v. Reply Against the tax. —

that a State and a are on corporation Federal corporation same these precisely footing respects. conclusion covers this company.

And, after all, it must is Here plain principles, so. the whole Nebraska, four running length hundred and miles, millions fifty con- owning property, an immense and ducting traffic. profitable Every day ap- officers of the peals State for should protection. Why it not contribute to the State a due share and of what portion is to maintain the State’s it? necessary protecting is

II. It further only miles of road objected eight in Lincoln and that there is law County, for provision of its lies authorities what in the other But sections. taxing the Revised Statutes of Nebraska provide unorgan- ized counties shall be attached to the nearest organized them, east for election, and reve- county direct-ly judicial, This seems nue conclusive. purposes.” Reply: bank tax adjudications cases .cited by or the counsel, rest, opposing reasoning upon not in least do impair scope princi vigor and the authorities cited us, in efficient ples, already State means taxation, protection agencies created the General in execution con The cases stitutional mentioned hold that powers. simply it is in its aud competent establishment ar Congress, these means and to concedeto rangement agencies, States such measure modes of taxation, deems consistent with'the of these means and safety efficiency of the General agencies, executing govern taxation, This is au ment. by predominance favor of Federal submission of but thority, Federal taxation, to State motives of But this policy. concession not Th^ conclusion judicial question. judicial excludes the taxation of the States from the province Federal means assent express requires agencies, taxation, of Federal and fix authority its measure and its make mode modes. To the measure or

Reply Against tax. — or excessive, as allowable taxation, judicial ques of State cited, to the celebrated cases tion, is flatly repugnant of subversive their reasoning.* v. as declared in court, Thompson of this

The doctrine relied on the also much Railroad,† by opposing Pacific counsel, the aid or Of that the adoption by Congress the States, in by created corporations performing of operation constitu the execution of the services in connection with absence of the the tional Federal (in of the that State of all indication on part agencies such in of should be so exempted, consequencb employed such State does not from exempt taxation), employment, has taxation, no State application State from corporations an iu- Pacific to the case of this Railroad.Company, Union n under, of General government confessedly, corporation That decision rests distinc acts of Congress. of State employment corpora between the case tion service and the creation of tion a Federal within the discretion of means and aas agency, Federal execution the constitutional for the Congress, held that, The court case'of' General government. of 'State was corporations by Congress, the employment “ its discretion, exempt, for Congress competent in such services taxation from any employed agencies or really impede performance which will prevent them.” therefore, raised decided by

The only question, was thus stated case court: in this court of this road to from such taxa- right But can exemption any be maintained absence legislation Congress tion ?” effect to that the’court McCulloch

The argumentjhat thé.do.ctrine.of States, the Bank the United with exempted v. Maryland * Black, 2 v. 620; Van Allen The City, New v. York of Commerce Bank 16; Id. Wallace, 592; Mayor, National Banks v. 7 Assessors, 3 Commonwealth, Id. 353. v. Bank Wallace, 579. 9†

Reply Against tax. — branches, its from taxation State of al Maryland, was found charter, express exemption though doctrine, under a Slate an corporation, employed of the General was agent government, is thus the court :* equally exempt, disposed “But it must be remembered that the Bank the United States was a corporation States; and, created as an of the constitutional agent forms was en- dowed faculties, act of creation its powers, functions. It did owe its existence its qualities And legislation. taxation exemption put ground.”

And again :† “ tax, The State held to be to the repugnant Constitution, an or imposed directly upon an instrument operation That such taxes government. cannot on the imposed of the is a government operations proposition needs no to it. And the same will argument reasoning apply instruments of the created itself for government by public constitutional ends.”

And the doctrine of the is court thus expressed :‡ “ But will safe to in conclude, general, in to per- reference sons in corporations employed service, government when has not interposed protect property ” taxation, from such taxation not obnoxious to that objection (i. e., to the that the State taxation is objection used to defeat hinder the National operations government.”)

The tax under consideration does not fall, the counsel to us within the limitation opposed argue, suggested by in v. court, Maryland, McCulloch in the incorporated Bank Act by National The court Congress. say ex that— asserted, emption

“ It does not extend to a tax the real paid of property bank, with the common other real within the property State, nor a tax on the interest which the imposed citizens of Mary-

* Railroad, Thompson v. Wallace, Pacific 589. Ib. Ib. 591. † ‡ Company Railroad v.

Reply Against the tax. — hold in commonwith other land property institution same State.” description throughout is not laid The tax of the State of Nebraska upon held citi shares of the Union Pacific State, zens of that nor the real of the com property with the other within common real the. pany tax is and re universal State. possessions combined, as collected, sources of company, prepared, within the State, operations gov applied, created for which this instrument was services, ernment final' tax, This then, endowed by Congress. after the the above court, statement of proposition of an instrument em a tax on the “is limitation, operation carry Union ployed Such tax must be execution. unconstitutional.”* into that the intimated is not liability It necessary suggest of the real estate the bank to Maryland, in McCulloch of reason be held taxation, could by parity the State of its a railroad —the corpus real estate of very expose for which structure and endowed—to taxation. was created the company to as of referred real estate the bank manifestly relation to the incidental, substantial, and not merely which it was created bank, for uses of the Congress. drawn the absence ex- can be of any No intendment taxation the act of of State exclusion Congress, press to State taxation was contem- this company the exposure road, The whole to which the act of Congress. plated by was within Territories applies, incorporation .of there was whose States, and State government needed to be considered or provided against operation could have been further Manifestly, nothing Congress. who entered into the the expectations capitalists to them the acts of incor- enterprise proposed than that their this company, endowing prop- porating to be rated and invested National road was taxed .this erty

* Wheaton, 4 Maryland, McCulloch v. 436.

Oct. v. Clifford, Miller, Davis, Strong, JJ. the local of the States that should come into route. the estab- They accepted being along lished doctrines of this court possessing, language Chase, force C. of constitutional sanctions.” J.,

Mr. delivered Justice STRONG court. judgment That the of a State is one of its attributes power taxing that it exists of the Consti sovereignty; independently States, tution of the United underived from that instru be ment; and that it exercised to an unlimited extent may trades, business, all and avocations property, existing territorial carried on within the or boundaries of the State, far as it has been surrendered so to the Federal except gov or either ernment, expressly by necessary implication, that have often been asserted propositions court. And in thus extent of the to tax power acknowledging we have declared States, to the that it is indis belonging their continued No ever one existence. doubted pensable that before the Constitution of the United adoption States each of States unlimited possessed tax, power either or indirectly, persons within directly alike taxes on their or duties on in polls, jurisdiction, or manufacture, use, ternal so far as such production, except with taxation was inconsistent certain treaties which had been made. And Constitution contains no re express other than a striction of this prohibition power lay any or or any impost, duty ex duty tonnage, imports what for execut except absolutely necessary ports, laws. As said State’s Lane inspection County ing .in “In respect propertj', business, persons Oregon:* limits, of taxation within respective and remains remained, entire, notwithstanding a concurrent is, indeed, It Constitution. power (concurrent that of the General the case of government), the same both tax subject by claim governments, as the the United States must supreme authority pre-

* Wallace, Company Railroad Miller, Clifford, Davis, Strong, JJ. Opinion it is The ex- absolute. ferred; but with this qualification be'exercised, which lent which it shall subjects upon in which it be ex- and the mode exercised', it shall be shall within the discretion of the ercised, are all legisla- equally the exercise of the which the States commit tures to pqwer. the will of the is restrained That discretion only by people or constitutions, elections, in the State through expressed that it must not he so used to burden condition of the National government. or embarrass operations in the which Constitution contemplates There is nothing direct of this Na- authorizes any abridgment power by or- the extent indicated it is as To com- just tional legislation. limits of as the like within the power States plete Such are the is complete Congress.” opin- Constitution adhere heretofore, we to them have expressed we. ions now. we certain are, admit, subjects which

There taxation of the States, not are withdrawn power by any Constitution, of the Federal but direct or provision express as its be- necessary implications. what may regarded of our complex system out government, They grow that- National fact authority govern- out exercised within the States. While it isment legitimately exercise its cannot of taxation power true n soas to destroy or the State embarrass their governments, that the it is true action, equally may lawful levy which shall be to hinder the direct effect exer- taxes which to the National cise of belong any powers govern- that none of those The Constitution contemplates ment. State be restrained But it is legislation. whether a tax a a difficult question imposed by often the-domain General in fact invade does to such an extent, with its or in interfere such or it unwarranted. It as to render cannot be that manner, a affects efficient a exercise of remotely tax alone that reason inhibited the Con- Federal power would be to to the hold that States all To deny stitution. tax levied tax Every persons property. v. Pkniston. Miller, Davis, Clifford, Strong, JJ. Federal a reach of withdraws from the taxation por- ex- which it and that taken, tion of the property which Federal taxes tent diminishes the upon subject be,.coexistent ever are, and must be laid. Neither the the may destroy National government. a must receive Hence the Constitution prac- other. Federal Its, and its prohibi- tical limitations construction. implied the so far to destroy tions must not be extended necessary their efficient exercise. the or States, of prevent powers are the be- These observations directly applicable .case of that the on behalf the fore It is insisted plaintins us. an has been laid of tax of which upon agent they complain as an constituted -and the General organized government effect the vested in that instrument iuto to carry and it is claimed that such Constitution, by government is not to State'taxation. That an Union agency subserve, part created to w$s Pacific Railroad Company the National lawful at least, purposes government; a to construct and maintain was authorized railroad it litre and route, prescribed and along telegraph and conferred it, it, were made upon privileges, grants at all times that it should transmit condition dispatches mails, and and line, mu- transport troops, over telegraph stores, railroad war, public nitions of supplies whenever to do so' de- required for the any government, that the should at all thereof, government partment for use same all the have times preference aforesaid, must conceded. Such the plain purposes charter. So it was that in provided of its case provisions to redeem the or bonds refusal failure to it part them, advanced required Secretary when lawfully Treasury, functions, immunities, with all rights, the road, ap- and also lands thereunto all belonging, granted purtenances the United States which at the time of the company remain in the should ownership the default company, taken Treas- possession Secretary might of the United and benefit the use States. The char- ury Clifford, of Strong, Miller, Davis, JJ7 ter also contains other ato provisions looking supervision and control of the road and line, with the avowed telegraph purpose the use securing and benefit thereof for postal It is military purposes. unnecessary to mention these in detail. look to They purpose to secure an under agency competent obliga- tion to certain offices perform for the General government. the railroad this, and the line Notwithstanding telegraph are neither in whole nor in part govern- ment. is in the cor- ownership complainants, private poration, for the though existing performance duties. The owns none of its stock, though two the directors, may appoint thus to ap- right is reserved for the of point plainly sole'purpose enabling the enforcement of the which the engagements company assumed, to which we have alluded. engagements already we then, do,-that as is an Admitting, fully, of the General tobe agent government, designed employed, and in the of the service actually employed, legitimate gov- both ernment, and does it follow military postal, necessarily that its is from State property exempt taxation?

In v. The Thompson Union Company,*after Pacific Railroad we much held that the consideration, of com property was not from State taxation, their rail pany’’ exenjpt though a road was of roads constructed under the part system and direction of the United and States, authority for largely the uses and of the General purposes government. in that were case,

compauy, agents government, pre as these claimants to the same extent and are, for cisely had same made the same purposes. Congress grants them, and attached to the same conditions. grants They, had received and tod, land, of bonds, grants of a in the and for the purpose con right way aiding line, struction of their but railroad with the telegraph their condition that should railroad and keep telegraph at times line in and should transmit dis- use, repair * Wallace, Pjbniston. Miller, Davis, Clifford, JJ. Strong, line, and over transport.mails, troops, patches their-telegraph their stores, war, and munitions of supplies upon for the whenever do so railroad required at thereof, and that the should any department all times have the the use thereof for preference pur- difference which can aforesaid. There is no be pointed poses extent, between the of their nature, out purposes agency and those present corporation complainants have tax Yet, case. we said, upon property road-bed, company, rolling-stock, personalty court not be in ruled conflict general, the Federal Constitution. It be considered therefore, may, as settled that no State- constitutional implications prohibit an tax property agent government merely because it is the of such an A property agent. contrary the States in the collec- would embarrass doctrine greatly revenue without of their tion necessary any corresponding A States. very large proportion advantage of, execution within employed the property It govern- belongs government. used, but it is necessaiy mental only agents, and muni- mails, United States troops, agencies. are almost Tele- war carried railroad. every tions service. are National So are lines employed graph foundries, steamboats, horses, ship-yards, stage-coaches, establishments. of manufacturing They multitudes or of who are in- natural corporations, persons, General government, they or agents struments which the are objects hands by are contribute liability they exempt Were attained. it is manifest the States State govern- revenue While it is of the utmost im- be paralyzed. would ments all the vested Constitution that by portance in the General should be pre- while events recent have called full efficiency, served exercise of unembarrassed those many most decided that State taxation' never been it has powers, is prohibited. impliedly such property 3 YOL. XVIII. '

34 Company Eailroad Strong, Clifford, Miller, Davis, JJ7 (cid:127) It is, however, insisted that the ease of v. Thompson frpm Union differs the ease we have Pacific now in hand in the fact that it was the Ter incorporated by ritorial and the legislature State of legislature Kansas, while.these were complainants incorporated by Congress. We do not perceive presents that reason for-the any ap of a rule different from that which was plication applied the former It is case. true in. that, delivered opinion Justice, the Chief reference was made to the fact by that defendants were ah corporation, argument to be drawn was from this to attempted cáse distinguish v. The State Maryland.* from McCulloch But when the in, is, case, whether the present taxation of question taxation means; is instruments, or property agencies by which the United States carries out its it is powers, impos see it can sible to how pertinent whence the inquire or from whom its property originated, owners present ob The United tained it. States have no more ownership the road authorized than by had in Congress they the road Kansas, f the taxation of authorized either is unlawful, the States cannot because obstruct the exercise of Na As said in Weston tional v. powers. Charleston,†they taxation or cannot, otherwise, retard, impede, burden, (cid:127) manner control the or any operation constitutional laws enacted into execution carry the powers vested in General rnment.” The gov. implied inhibition, exists, is if obstruction, against must be s^ch whether the the same whose is taxed property was created by Congress legislature. we think, decisions past of this

Nothing, court inconsistent with the we now hold. opinions McCulloch Maryland The State Osborn v. Bank the United are much relied appellants, but an ex States‡ of what was decided in those eases amination will reveal full with the harmony doctrine that the of an of the General agent government may Wheaton, Peters, 316. 467. 9 Wheaton, * † ‡ Company Oct. Peniston Railroad v. Clifford, Miller, Davis, JJ. Strong,

Opinion cases to State taxation. In the former of those subjected was laid the notes of the tax held unconstitutional upon notes at institution was bank. The prohibited issuing State, furnished upon stamped paper except for on each note to be delivery, stamp upon paid being was therefore, to its The tax, denomination. proportioned one its batik, ope not but upou upon any property exist, was a rations, in as created. It fact, its upon right direct in the of a way operation impediment governmental an a the bauk as It was very agent. performed through effect, both its nature and from a tax on different thing, . it of the that was wonder, then, bank. No property But even in that case the court lim held carefully illegal. said extend, the decision. It does ited the effect to a tax the real Justice, property bank, Chief paid State, with the other real nor in common property on the interest which the citizens of a tax imposed Mary in common with the other institution, hold in the land may same the State. But of the description throughout property bank, a on the conse is, tax operations of an instrument a employed quently, operations t*x its of the Union to ex into carry government Here is a tax must unconstitutional. a ecution. Such made a tax distinction between upon clear property a tax upon agent for the government. agent acting Bank the tax held unconstitutional was

In Osbornv. — its the existence the bank a tax upon right within the It Ohio. was, business transact a direct be, intended those impediment way was had for National authorized purposes, acts Congress, For this reason the the bank perform. at the it was but same time it was denied, to direct that the local the court of the bank property

declared and, as in McCulloch taxed, Maryland, differ- might a tax out between ence pointed an its action. In noticing resemblance alleged one upon and a contractor, bank Chief between Jus- Ct 3&i Miller, Strong, Clifford, Davis, Jtf. tice Marshall Can a for a mili contractor said: supplying be restrained from tary post provisions making pur State, chases within a or to transporting provisions he at which were could stationed ? Or place troops be fined or have heard these so? We not doing ffixed answered in the affirmative. It is true the questions prop taxed; contractor be and so the local erty may may of the bank. But we not act of do admit that the property or of can be articles purchasing,, purchased, conveying under Stale control.” This so drawn distinction, clearly the earlier between a decisions, tax on of gov property a tax action or ernmental of such upon agent, agent, has been All be, his to ever since upon right recognized. taxation which does not State impair agent’s efficiency in the his duties to the has been discharge government when and a tax sustained his challenged, upon property has as not 'been generally regarded beyond power National Bank v. The State Commonwealth impose. .In when Kentucky,* tax National banks was under right it asserted consideration, was us that the cannot doctrine banks, maintained or that other instru or corporations mentalities are withdrawn wholly from the Yet it was conceded operation legislation. of the Federal that the are uncontrol agencies so far as it lable interfere or legislation, with, their the functions efficiency impair performing are to serve that they designed government. is, therefore,

It manifest exemption Federal agen- cies from State taxation dependent, upon nature or the mode of their agents, upon constitution, or the fact that they but the effect of agents, upon upon tax; is, whether the tax upon question does in truth them serve deprive were they to serve or it, intended does'hinder the efficient exercise A tax their has upon their power. such property neces- It them free effect. leaves the duties sary discharge

* 9 Wallace, 353. v. Pbniston. J., concurring of Swayne, judgment. have undertaken to A tax perform. upon is a direct obstruction to the exercise of Federal powers.

In this case the tax is laid of the rail- property road as w'as the tax of in company precisely complained Thompson Union It is not the fran- imposed upon Pacific. chises or the exist and right company perform functions for which it was into Nor is it being. brought laid act which the has been authorized is not to do. It the transmission of nor the dispatches, of United States or transportation mails, munitions troops, war that is but the real and taxed, exclusively per- sonal taxed in with all common other property agent, in the State aof It is similar character.' impossible to maintain that this is an interference with the exercise of to the any power General and if it is belonging not, it is no constitutional prohibited by implication.

It remains to notice one other taken only the position It is that if complainants. the act of the State under which laid the tax was in its constitutional to their application within Lincoln property outside of County, property Lincoln is not taxable County authorities lawfully of that under the laws of the To this county State. we are unable to our assent. the statutes of Nebraska give By west territory Lincoln unorganized un- Count}-, of are organized county attached to Cheyenne, county Lincoln for judicial revenue The authorities purposes. that therefore, were the county, authorities to proper levy tax thus under upon property placed charge revenue purposes.

The decree of the Circuit is affirmed. Court Mr. Justice SWAYNE, I concurring judgment: concur the affirmance of the in this I see case. judgment no reason doubt that it was the intention not claimed. The exercise exemption give power be waived. But I hold road is a National in- of such a character strumentality inter- Congress may it from State protect taxation pose whenever that body v. Field, JJ., Bradley dissenting. au to do so. For some of the shall deem leading proper view of involved in this thorities in principle Railway and Northwestern I refer to subject Chicago a short time decided this court Fuller,* ago. affirmed.

Decree whom concurred Mr. Jus- BRADLEY, with Mr. Justice FIELD, tice dissenting. decree the court be to the the errors

One of assigned has no Nebraska power That State low is: stock, road-bed, rolling for State taxation, purposes, use and for the operation necessary other has such whether road; and the complainants’ in this cause. In my judg questiou controlling power is based exists, opinion my such ment, no power Maryl in the cases of McCullochv. established the principles Those princi v. The United and,† Osborn Bank.‡ Marshall himself, Chief Justice summed up by ples, were as Charleston,§ v. The City case of Weston the later follows: of a to which sovereign subjects “That

1. taxation; those but over which extends, objects the soundest are, principles, extend exempt it does taxation.” extends to of a State the sovereignty everything That is introduced its own authority, exists means which are those not to employed by but permission; execution conferred on into powers to carry States.” the United the people body by “ the taxation to use on the power'of the attempt That 8. of the Union in the pursu- by means employed an is itself Constitution, abuse, because it the ance of a aof power.which people the usurpation single cannot give.” ’ taxation, have or other- power by 4. That inor manner burden, control retard, impede, to wise, * Peters, Wheaton, 2 4 316. 9 738. 466. Id. Wallace, 560. § 17 ‡ † Field, Bradley JJ., dissenting. of the constitutional laws enacted operation Con- by to into execution the vested in the gress, carry Gen- powers eral government.”

If we needed an to show that the example application these extends a to such case as the principles we present, could not frame oue more to than that of the purpose' United States Bank, to which were an respect cases, nounced in referred to. The between it parallel and the Union Pacific Railroad for and, striking, pur case In the question, bank poses complete. created, was with full The powers. banking capi stock was subscribed individuals, tal the. mostly govern ment an interest seven millions out of reserving thirty- five. Its affairs directors, of by twenty-five were managed were five whom President of the United appointed and with the States, advice consent of the Senate. by. of the directors were The defined and restricted the charter. was authorized, Secretary Treasury time call from to to the bank for a time, statement of Por the and benefits its affairs. privileges conferred, the United States bank bonus of required pay of the bank books were to be $1,500,000. always open ,of aof committee either house inspection Con for Penalties and purpose. forfeitures appointed gress, the breach of for certain limitations were imposed di the bills and rections; and, notes of the bauk finally, were dues; be receivable payment public public were to be bank deposited and its branches, moneys should otherwise Secretary Treasury order;' unless the bank was to on his and, requisition, give necessary funds public transferring facilities place and for States, within the same distributing place creditors, without in payment com charging was a Here, then, missions exchange.* corporation, con individuals, created stituted maiuly private by Congress, aid, its laws, its amenable regulated established

* Large, at Stat. Company Railroad v. Peniston. JJ., Field, dissenting. Opinion Bradley and and subser- and tlie executive committees to department, in exe- the uses and of the vient to purposes government, of its constitutional and out a particular part carrying cuting functions. one in the

Now all of these respects, except single Pacific Union stock, of its the of a capital ownership portion Railroad case. presents parallel aid the General creature of it receives large Congress; loans; and the President ap both donations government, of the directors; and all the two its points and its railroad constructing, working company laying, are to toll, as well as its rates of lines, and telegraph further and to such charter, regu imposed regulations failure to hereafter- make. On lations Congress may charter, or to conditions of the with the terms and comply use, and assume road in Congress may keep repair to thereof, and devote the income and control management Annual States. use United reports The loan of Treasury. made to Secretary millions, amounting many United States to company, and on failure to redeem the it, on all the property, a lien to take is authorized of the Treasury possession Secretary and function's, immunities, road, its rights, States; for the use and benefit of appurtenances, are de made all the and, company finally, grants besides that, to be condition clared paying shall advanced, bonds keep and and shall at use, lines railroad repair telegraph mails, all times transmit dispatches transport troops, stores for the war, and munitions supplies whenever to do so department required by7any thereof; and that the shall have preference rates to exceed those parties, at private charged of the bonds afore payment being applied payable said; and addition to all control Congress, re liabilities company7, the obligations the charter. amend, add to,-alter, repeal serves right be- the same close connection we see these provisions In Bield, JJ., Bradley dissenting. tween the and the the same government corporation, control reserved the the same or an former, interest in equal the and scheme, a like creation of means for into exe- carrying the cution conferred powers In the one' Congress. case, the was to facilitate the financial object transactions the and the bank used was as a means government, to that in end; the other, the is to establish a object National post- road for the and a mails, line for the transmission telegraph and to facilitate intelligence, government transportation kind and between East as every West, well as and the commerce bet ween promote regulate those sec- tions; and the railroad is used a means to these ends. to me that

It seems unless we are to overrule prepared decisions referred we must to, the same law to apply this' to the case which United States Bank. applied I trust to overrule we are those decisions. prepared Whilst no in taxation one disputes general States, set forth in is so which elaborately opinion ma- it must be conceded that there are limits to that jority, The States cannot tax the powers, power. operations, nor States, or means property which its into carry powers execution. employs govern- States, the United within the of its ment scope powers, Cannot be interfered with or impeded supreme, exercise. case differs loto.codofrom that wherein the govern- into a contract with an enters individual or

ment corporation services for necessary carrying perform functions mails, or carrying or government troops, sup- —as or works for or for ships building government use. plies, no eases the has further those concern government In with his contract and its contractor.than execution. It has his his with or faculties concern property independent he be taxed much How what may by, duties that. he towards, his State is perform of no obliged con- may to the so as his government, contract long sequence are uot interfered with. In its execution that case the con- Gt. Field, , dissenting. Bradley JJ tract is the into execution the means for carrying employed the contract and not alone, and' or other contractor, from taxation interference exempt the State government.

But where the creates General corporation as a out means .of a national that corpbra- carrying object, faculties, tioft its employed powers, property, service, are the instrumentalities accomplishing its Hence effects corporation objects. And it matters not that is not taxable by authorit}". individuals are for their private interested private gain individual interest the stock of the Such corporation. but the itself, be taxable cannot without be, interfering agen- of its for accomplishment

cies used by government objects. between

This distinction private corporations performing and created corporations for public services government for on its purpose opera- carrying government therefrom, are resulting forcibly and tions, consequences Marshall Osborn v. The Chief Justice United drawn by He Bank. says: in favor of The foundation argument right character in the is laid of that insti- tax the bank supposed have tution. The supposes argument an for individual con- been management originated contract cern, individuals, founded between hav- be for its end trade private profit great private ing were true, If these the conclusion premises object. principal be inevitable. This mere them would drawn from private business, in its own with views, its own corporation, engaged taxing power State, would certainly be; casual individual would circumstance any the government its transaction of being employed woqM no more its private fiscal affairs business exempt its than it that power would operation'of exempt individual in the same employed business private not true. The But the bank is not manner. premises-are ¶. Bradley Field, dissenting. 33., considered as a whose private corporation, principal object is individual trade a and individual but as cor- public profit, created for and national That poration, public purposes. the mere business of in its is, nature, own private banking com- business, individuals or carried with the connection panies, having political admitted; but the bank is not such an or com- individual sake, It was not created for its own pany. for'private It has never been could supposed purposes. Congress whole the court create such The corporation. opinion is founded on and sustained Maryland McCulloch is an instrument which is the idea that the bank necessary for into effect the vested in the carrying proper States. It is not an instrument government made, found and has which the ready supposed its but one which was created in purposes, be adapted which it now for national form appears purposes only. as well as It is, capable private undoubtedly, transacting it is the instrument busiuess. While great effected, the fiscal operations individuals for its own also trading advantage. endeavor to between this trade and appellants distinguish between its public, agency banking which it in commou with those qualities possesses every such as &c. individuality, immortality,” corporation, .of Chief Marshall the above Justice suggestion cannot create ex any corporations quotation, national is purposes, particular for public worthy cept is that obvious, inference any The corporation right notice. created na necessarily public by Congress, being fully the reach in its is of State tional taxation. beyond object, true, in reference is was made to a That cor suggestion, for within the established business States purposes poration it is And in such a evident case, that the Union. must cannot 'cre true, be namely, Congress proposition for a national a except ate public purpose. of the United States, in a But Territory supreme, Congress as the fountain of local as well and is national public Comf-any Railroad JJ., Field, dissentipg. Bradley over such law. It exercises municipal powers, usually But of Territorial governments. agency Territories exercise them it is to this. It directly, not do might obliged As the for the includes less. source of greater power Nebraska, there municipal legislation Territory could established local and have fore, undoubtedly Congress financial, for corporations mining, private manufacturing, it has and other business the same as been accus purposes, Columbia, tomed do in reference to District of prior to Now, establishment a therein. to the recent legislature and local created by such corporations private Congress would cease to be United States in a- corporations Territory, a be when became State. would then such Territory The}7 of not a to State control reason possessing come subject warranto from State courts character. A national quo charters in case of issued the repeal could be or non-feasance. The for misfeasance admission forfeiture a be as State would a virtual of Territory assignment such institutions the State as control over Congress successor But this municipal sovereignty. the proper the case of a be corporations not with regard public would as could such have created character, national Congress had a State at the time. been- will Territory They if United corporations, Congressional, remain control. Pacific was authorized to con- The Union then Territories the United entirely belonging structed and national in work was its charac- public But States. was a and national and the corporation corpora- ter, as created so much would tion, New Orleans to a railroad New construct York, States. circumstance,' the old long-admitted through road authorized in the therefore, originally does not from the detract importance States territory, in its Marshall’s suggestion Chief Justice bearing upon fact charter that the of the com- in hand. very case instead at all as a of a stand Congressional can pany has not been seriously questioned, proof charter, Company Kailroad v. Field, Bradley JJ., dissenting. and Opinion of character; national its national for without such character to cease national control. it would has the under the Federal Constitu- That power create and establish such a for such tion to pur- character was demonstrated the un- national poses Mr. the creation of answerable Hamilton on argument rest bank, the first and was set at National equally Marshall in the of Chief Justice unanswerable argument Maryland. case McCulloch “ the enumerated powers govern Although among Justice,* find we do not the word ment,” Chief says * we bank’ or find powers levy ‘incorporation,’ great borrow commerce, and collect taxes,- money, regulate raise and armies war, declare and conduct and to and rela navies. The sword external purse, inconsiderable tions, portion industry nation, are to its It can never be intrusted government. vast after them that these draw others pretended because inferior. Such merely inferior importance with cau never be advanced. rea idea But may an great that a be contended intrusted with such son. the due execution of which the powers, ample happiuess of the nation so must also be prosperity vitally depends, means for their execution. intrusted ample interest it is the of the nation to facilitate its being given, this vast execution. . . republic, . Throughout St. Mexico, Atlantic to the from the to the Gulf Pacific, Croix collected armies is to be are to be revenue expended, nation marched supported. exigencies raised treasure in the North should be trans require that raised in the East South, to the to the conveyed ferred should Is that or that order be reversed. con West, preferred which would of the Constitution to struction hazardous, difficult, ? these expensive render operatious ánd has the do an act, . The . right . ae act, must, on it duty has imposed performing * 4 Wheaton, 407. JJ., Field,

Opinion Bradley dissenting. to the dictates of be allowed select the reason, cording means; and those who contend that it not select may any means, that one mode of effecting appropriate particular is take themselves the burden of estab object excepted, . . . a lishing exception. power corpo creating is ration, like not, though appertaining sovereignty, war, or or of taxes, power making levying regulating a commerce, substantive and power, great independent cannot which as incidental other implied powers, as a means of used them. It is never the end for executing other a exercised, but means which powers are No are made objects other contributions accomplished. the sake for of an but a charity incorporation, corporation is created to administer the charity; seminary learning is in order to be but instituted incorporated, corporate character conferred to subserve the of education. purposes was ever built with the No sole city object incorpo being but is as rated, best means incorporated, affording n well governed. being creating corporation its is never used for own but sake, for the of effect purpose else. No sufficient is, reason something therefore, ing per not as ceived may pass incidental to those why powers if which are it be given, a direct mode of expressly exe them.” cuting th,e I think it cannot be

Now, doubted at present day, have been whatever contended in former times, that of national and creation roads other .means of communi- between the is within States, cation power Congress out in commerce carrying between regulating States, and establishing postoffices postroads, in for national defence and for providing military operai in time of war. And no tious one will contend if the that, of a creation is a suitable corporation means of agency on the financial of carrying of a creation as an equally apposite agency and means of above carrying objects out mentioned. has been This so stated one of the forcibly justices case court, of The Clinton decided Bridge, 47, Rjsniston. Oct. 1873.] v. Railroad Ifield, JJ., dissenting. Bradley and shall not further that I October, 1867,* Circuit, Eighth the point. enlarge therefore, Pacific Company, being

The Union created for national objects States corporation United existence, its its its duties, powers, deriving purposes, alone; liabilities, responsible its being a whole now States, formerly, conge- to the United observances; to the for- duties subjected being ries franchises, powers, feiture of corporate State; and not to individual States, the United being duties connected with charged important, very consideration adduced functions of every government: v. The Maryland, the cases of McCulloch Osborn seem to it should be would Bank, require exempt taxation, but from State control and in- from State only so far as relates to the of terference, except preservation and the of its and con-- performance obligations peace, reference these and In to the tracts. police ordinary and the for imposed sanitary purposes preserva- regulations it is amenable and order, course, of to State tion of good laws. local of as well as an instrument national commerce

As govern- Can it has been it ment by Congress. operations, regulated Can the State State ? further legislation be regulated its its fran- fares, its its route, connections, alter its gauge, of its charter? Can State be- step or chises, any part or to which it and the it superior power sovereignty tween an it seems to is in- me, ? Such hypothesis, is responsible relations and to the necessary admissible repugnant arising an would in the case. Such hypothesis greatly and existing useless and ineffective and render almost from derogate com- unexecuted regulate hitherto it the several States. If be declared land, merce among commerce, such no Con- in advance that agency can be freed from local establish, hereafter impo- may gress free and un- future tolls, and sitions, taxation, hopes * Woolworth, Bradley Field, JJ., dissenting. and restricted intercourse between all parts great country will be greatly discouraged repressed.

These considerations show how different this case totally is from that of The Kansas Thompsonv. Railroad Com Pacific That was a pany. State its corporation, deriving origin laws, State State regulation respon sibilities. It would be subversive our ideas of the nec the National and essary independence.of State governments, in their for the-General acting respective spheres, govern ment to take the control, management, regulation out of the hands State to which corporations owe their existence, without its or consent, to attempt to exonerate them from the duties, performance any taxes or to which their pajnnent contributions, as creatures of State renders them liable. position, legislation, if the States cannot a But, asked, tax United- may created for national purposes, what can the General tax local cor principle government created the State porations governments local If the States cannot tax National bank, State purposes? can the United States tax State bank? how answer and is manifest, stated Chief Justice Marshall very b}- “The Maryland.* McCulloch Union, in its within its powers, supreme sphere though'limited This action. would seem to result from its necessarily all; It is the nature. delegated all; it for all. all, acts represents one Though any to control its willing operations, State is to allow control them.” others to : “It has willing Again insisted of as the taxation in the that, also been Gen power is and State be concur eral acknowledged governments which would sustaiu the of the rent, every right argument banks chartered the States, to tax by General government of the to tax sustain the States banks char will equally right the But two cases are General tered by government. of the same reason. States have not on people * Wheaton, Oct. 1873.] Peniston:' Bradley and-Field, JJ., dissenting. have conferred General upon tbe created all the taxation. The people it general in themselves, and the States Con- States, represented exercise this and, their representatives, power. gress, the chartered institutions of the States, tax they they When constituents; these taxes must uniform. be their tax a taxes the when State operations government But it acts institutions created, States, upon United constituents, but over whom people own acts It the measures of a control. claim govern- as well themselves, others as- benefit created for the ment themselves, is in The difference common of others exists, and must between exist, which always always a whole on and the' of a action part the action part, the laws of a declared whole—between on and those a when in which, supreme, is laws, to those not supreme.” opposition that the a is contended tax the road- But laying more than tax on a bed of company nothing laying in real ivas conceded done estate, might ordinary reference its bauk- Bank, case taken due lands for claims in the course or other iug-house is' a This but plausible its business. my suggestion, not a sound one. In what is apprehension, ascertaining case, must be had to. every respect essential always The State of undertook to tax Maryland subject-matter. United States branch bank established circulation thereto; to be affixed that State requiring stamps $50,000 a tax of Ohio general imposed taxes were established therein. These declared un- branch void. impeded They operations constitutional estate Real was not a neces- as a financial bank agent. the exercise functions of the bank. appurtenant sary its or it office, hire rooms It purchase might might erect building. aof railroad is commerce object

But primary as In a railroad case, track just and transportation. the use of or the to its currency, essential XVIII. VOL. Hunt,

Dissent J. issue or bills purchase exchange.is the a bank. To tax the road to tax the very instrumentality establish, which desired to Congress operate it created the corporation. all that a

Besides, railroad in reference company possesses to its road-bed is and the use the right way, right land for the This is a franchise purpose way. conferred connected with the iuseparately franchises which it other enable the duties for perform it which was created. estate in performance Any soil—the land—the underlying this, beyond belongs earth — ip to the original proprietor; proprietor present case.is the that, itself. So look at it what way we there no room for the will, of the State. taxing soil estate cannot be taxed, for that remains in States; the franchise the United and ma- right way cannot be taxed, terials of track because essentially and form a connected with part powérs, faculties, which the national capital by purposes organization are accomplished. it taxed,

If the road-bed be seized and may sold may of taxes —seized and sold in non-payment parts par- or State lines—and thus cels, separated by county whole and estab- purpose creating the line be subverted and lishing destroyed.

In the tax laid in this case an my judgment, uncon- interference with stitutional the instrumentalities created by the National out the carrying objects conferred Constitution. Mr. Justice HUNT: I dissent from the opinion court.

Case Details

Case Name: Railroad Co. v. Peniston

Court Name: Supreme Court of the United States

Date Published: Dec 15, 1873

Citation: 85 U.S. 5

Court Abbreviation: SCOTUS