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ever wild enough to think of breaking down the lines which separate the States, and of compounding the American people into one common mass of consequence; when they act, they act in their States. But the measures they adopt do not, on that account, cease to be the measures of the people themselves, or become the measures of the State governments.

"From these conventions the Constitution derives its whole authority. The government proceeds directly from the people; is ordained and established' in the name of the people; and is declared to be ordained in order to form a more perfect union, establish justice, ensure domestic tranquillity, and secure the blessings of liberty to them selves and to their posterity.' The assent of the States, in their sovereign capacity is implied in calling the Convention, and thus submitting that instrument to the people. But the people were at perfect liberty to accept or reject it; and their act was final. It required not the affirmance, and could not be negatived, by the State governments. The constitution as thus adopted was of complete obligation, and bound the State sovereignties.

“ It has been said, that the people had already surrendered all their powers to the State sovereignties, and had nothing more to give. But, surely, the question whether they may resume and modify the powers granted to government does not remain to be settled in this country. Much more might the legitimacy of the general government be doubted had it been created by the States. The powers delegated to the State sovereignties are to be exercised by themselves and not by a distinct and independent sovereignty created by themselves. For the formation of a league, such as was the confederation, the State sovereignties were certainly competent. But when, ' in order to form a more perfect union,' it was deemed necessary to change this alliance into an effective government, possessing great and sovereign powers, and acting directly on the people, the necessity of referring it to the people, and of deriving its powers directly from them, was felt and acknowledged by all."

INDEPENDENCE OF JUDICIARY At the Virginia Constitutional Convention, John Marshall said:

The judicial department comes home in its effects to every man's fireside; it passes on his property, his reputation, his life, his all. Is it not to the last degree important that he should be rendered perfectly and completely independent, with nothing to control him but God and his conscience? I have always thought from my earliest youth till now, that the greatest scourge an angry Heaven ever inflicted upon an ungrateful and a sinning people was an ignorant, a corrupt, or a dependent judiciary."

SUITS AGAINST STATES At the Virginia Convention 3 called to ratify the Constitution John Marshall said:

“With respect to disputes between a State and the citizens of another State, its jurisdiction has been decried with unusual vehemence. I hope that no gentleman will think that A State will be called at the bar of a federal court. . . . It is not rational to suppose that the sovereign power should be dragged before a court. The intent is to enable States to recover claims of individuals residing in other States. . . . But, say they, there will be partiality in it if a State cannot be defendant – if an individual cannot proceed to obtain judgment against a State, though he may be sued by a State. It is necessary to be so, and cannot be avoided. I see a difficulty in making a State defendant which does not prevent its being plaintiff.”

IMPLIED POWERS In the case of United States v. Harris 4 we read that “ Proper respect for a co-ordinate branch of the government requires the courts of the United States to give effect to the presumption that Congress will pass no act not within its constitutional power. This presumption should prevail unless the lack of constitutional authority to pass an act in question is clearly demonstrated. While conceding this, it must, nevertheless, be stated that the government of the United States is one of delegated, limited and enumerated powers. Therefore every valid act of Congress must find in the Constitution some warrant for its passage. 3 3 “ Elliot's Debates," ad edition, 555. 4 106 U. S., 635

There is nothing to be found in the Constitution which excludes the exercise of incidental or implied powers. In McCulloch v. Maryland - Chief Justice Marshall said, “ If the end be legitimate and within the scope of the Constitution, all the means which are appropriate, which are plainly adapted to that end, and which are not prohibited, may be constitutionally employed to carry it into effect.”

DIRECT TAXES Scores of eminent men expressed their views on this subject, but it seems no one pretended to explain fully what the expression, “ Direct Taxes," as used in the Constitution, meant. John Marshall who was a member of the Constitutional Convention expressed his views more clearly on the matter than any other man.

The objects of direct taxes are well understood; they are but few; what are they? Lands, slaves, stock of all kinds, and a few other articles of domestic property.'

He says:


In regard to the power of the States, Chief Justice Marshall, in the case of Cohens v. Virginia, gives the following opinion:

“ The States can put an end to the Government by refusing to act. They have only not to elect Senators, and it expires without a struggle."


In Weston v. Charleston, Chief Justice Marshall said: The right to tax the contract to any extent, when made, must operate upon the power to borrow before it is exercised, and have a sensible influence on the contract. The extent of this influence depends on the will of a distinct government. To any extent, however inconsiderable, it is a burthen on the operations of government. It may be carried to an extent which shall arrest them entirely. The tax on government stock is thought by this court to be a tax on the contract, a tax on the

54 Wheaton, 421.
6 Wheaton, 391.
72 Peters, 449, 468.

power to borrow money to the credit of the United States, and consequently to be repugnant to the Constitution.”


The basic principles upon which the doctrine of Federal taxation rests were laid down by Chief Justice Marshall in a few early decisions on this subject. These early cases decided by the Supreme Court have controlled very many of the later cases that have come up on this subject, for the principles there established had great weight. The first great case of this kind was that of McCulloch v. Maryland, which arose in the following manner :

In 1816, an act was passed by Congress, “To incorporate the subscribers of the Bank of the United States." The bank was subsequently established in Philadelphia, and a branch thereof was also established in Baltimore. In the 1818 A. D., the General Assembly of Maryland passed an act “To impose a tax on all banks, or branches thereof in the State of Maryland not chartered by the Legislature of that State.” In passing this act Maryland laid a heavy tax on the circulating notes of the branch bank of the United States which was located in the city of Baltimore. The bank naturally having refused payment of the taxes, suit was brought to recover them and the action of course was sustained in all the courts of Maryland. The case was taken to the Supreme Court of the United States thereupon, where the best legal talent of the land argued on the case.

Chief Justice Marshall rendered the opinion of the Court which is one of the most comprehensive and profound he ever delivered.

In this case there were involved two great questions, of which the first was the power of Congress to charter a bank. After a most thorough exposition of the authority of Congress under the implied powers of the Constitution it was held that Congress had the power to incorporate a bank on the ground that it was one of the necessary agencies to carry out the purposes of the Government. The second question was this, could the legislature of Maryland pass a law taxing the branch of a bank located within that State without violating the Federal Constitution? This part of the decision is the one most vital,

84 Wheaton, 316.

and began by saying: “That the power of taxation is one of vital importance; that it is retained by the States; that it is not abridged by the grant of a similar power to the government of the Union; that it is to be concurrently exercised by the two governments; are truths which have never been denied. .

“ The sovereignty of a State extends to everything which exists by its own authority, or is introduced by its permission; but does it extend to those means which are employed by Congress to carry into execution power conferred on that body by the people of the United States? We think it demonstrable that it does not. Those powers are not given by the people of a single State. They are given by the people of the United States, to a government whose laws, made in pursuance of the Constitution, are declared to be supreme. Consequently, the people of a single State can not confer a sovereignty which will extend over them. If we measure the power of taxation residing in a State, by the extent of sovereignty which the people of a single State possess, and can confer on its government, we have an intelligible standard applicable to every case to which the power may be applied. We have a principle which leaves the power of taxing the people and property of a State 'unimpaired; which leaves to a State the command of all its resources, and which places beyond its reach, all those powers which are conferred by the people of the United States on the government of the Union, and all those means which are given for the purpose of carrying those powers into execution. We have a principle which is safe for the States, and safe for the Union. We are relieved, as we ought to be, from clashing sovereignty; from interfering powers; from a repugnancy between a right in one government to pull down what there is an acknowledged right in another to build up; from the incompatibility of a right in one government to destroy what there is a right in another to preserve.

We are not driven to the perplexing inquiry, so unfit for the judicial department, what degree of taxation is the legitimate use, and what degree may amount to the abuse of the power. The attempt to use it on the means employed by the government of the Union, in pursuance of the Constitution, is itself an abuse, because it is the usurpation of a power which the people of a single State can not give. We

then, on just theory, a total failure of this original right to tax the means employed by the government of the Union,

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