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. The power to tax would involve the power to destroy, and the power to destroy might defeat and render useless the power to create. There would be a plain repugnance in conferring on one government the power to control the constitutional measures of another, which other, with respect to those very measures, was declared to be supreme over that which exerts the control. If the right of the States to tax the means employed by the general government did really exist, then the declaration that the Constitution and the laws made in pursuance thereof should be the supreme law of the land, would be empty and unmeaning declamation. If the States might tax one instrument employed by the government in the execution of its powers, they might tax every other instrument. They might tax the mail; they might tax the mint; they might tax the papers of the custom house; they might tax judicial process; they might tax all the means employed by the government to an excess which would defeat all the ends of government.1

"The claim of the States to tax the Bank of the United States was thus denied, and shown to be fallacious; and that there was a manifest repugnancy between the power of Maryland to tax, and the power of Congress to preserve the institution of the Branch Bank. A tax on the operations of the bank was a tax on the operations of an instrument employed by the government of the Union to carry its powers into execution, and was consequently unconstitutional."

"The decision pronounced in this case against the validity of the Maryland tax was made on the 7th of March, 1819, and it was on the 7th of February preceding, 1 Kent's Commentaries, I, 429.

that the legislature of the State of Ohio imposed a similar tax, to the amount of fifty thousand dollars annually, on the Branch Bank of the United States established in that State. Notwithstanding this decision, the officers of the State of Ohio proceeded to levy the tax, and that act brought up before the Supreme Court a renewed discussion and consideration of the legality of such a tax. It was attempted to withdraw this case from the influence and authority of the former decision, by the suggestion that the Bank of the United States was a mere private corporation, engaged in its own business, with its own views, and that its great end and principal object were private trade and private profit. It was admitted that, if that were the case, the bank would be subject to the taxing power of the State, as any individual would be. But it was not the case. The bank was not created for its own sake, or for private purposes. It has never been supposed that Congress would create such a corporation. It was not a private but a public corporation, created for public and national purposes, and as an instrument necessary and proper for carrying into effect the powers vested in the government of the United States. The business of lending and dealing in money for private purposes was an incidental circumstance, and not the primary object, and the bank was endowed with the faculty, in order to enable it to effect the great public ends of the institution, and without such faculty and business the bank would want a capacity to perform its public functions. And if the trade of the bank was essential to its character as a machine for the fiscal operations of the government, that trade must be exempt from State control, and a tax upon that trade bears upon the whole machine, and was, consequently, inadmissible, and repugnant to the Constitution. In Weston v. The City Council of Charleston, it was decided, that

1 Osborn v. Bank of the United States, 9 Wheat. 738; Horn Silver Mining Co. v. New York, 143 U. S. 305. 2 2 Pet. 449.

a State tax on stock issued for loans made to the United States, was unconstitutional. The court considered it to be a tax on the power given to Congress to borrow money on the credit of the United States, and thereby to diminish the means of the United States, used in the exercise of its powers, and that it was, consequently, repugnant to the Constitution. By declaring the powers of the general government supreme, the Constitution has shielded its actions in the exercise of its powers from any restraining or controlling action of the local government." 1

"Nor can this inhibition upon the States be evaded by any change in the mode or form of the taxation, provided the same result is effected; that is, an impediment is thereby interposed to the exercise of a power of the United States. That which cannot be accomplished directly cannot be accomplished indirectly. Through all such attempts the court will look to the end sought to be reached; and if that would trench upon a power of the government, the law creating it will be set aside, or its enforcement restrained." 2

"And a State cannot tax a franchise conferred upon a State corporation by the United States. But a tax may be laid upon the property of the corporation within the State; and the Federal Constitution must receive a practical construction. Its limitations and its implied prohibitions must not be extended so far as to destroy the necessary powers of the States or prevent their efficient exercise.'

The words "mere private corporation" mean "bare franchise to be a corporation" without more;" public corporation" means "exercising a public calling" or "using public property." The uniform taxation of State corporations

1 Kent, I, 429.

2 Home Insurance Co. v. New York, 134 U. S. 594.

3 California v. Central Pacific R. R., 127 U. S. 1; A. & P. Tel. Co. v. Philadelphia, 190 U. S. 160.

'W. U. Tel. Co. v. Mass., 125 U. S. 530; W. U. Tel. Co. v. Mo., 190 U. S. 412.

R. R. v. Peniston, 18 Wall. 5, 30.

engaged in interstate commerce and the incorporation under general national laws of companies for the purpose of engaging in interstate commerce, whatever the incidental purposes, would be no less direct, proper, and necessary a means of exercising the power to regulate interstate commerce, than the same procedure with respect to national banks. It is the only effective means. And whether insurance companies are held to be banking institutions and to emit bills of credit, which they might do, or to be engaged incidentally in interstate commerce, the nationalization of the contract of incorporation is necessary, first, to prevent them from engaging in interstate commerce and to prevent them from emitting bills of credit either directly or through their notorious control of national banks. The fact that insurance itself was held not to be interstate commerce merely shows that the necessary police power would be left to the States together with the coöperation of the national government in making an insurance company under a national certificate of incorporation nothing but an insurance company and the same thing in every State. The national bank act alone prevented the powerful Manhattan Company and other trading and manufacturing companies incorporated by the State of New York, from being incidentally and uncontrollably State corporations exercising a national public calling. The exercise of the power to control is called for by the necessity of preventing conditions which can be prevented only by the exercise of the

3

1 Circulating notes are not bills of credit within the meaning of the Constitution unless issued by the State. Briscoe v. Bank of the Commonwealth of Kentucky, 11 Peters 257; Morse on Banking, 3d Ed. 665; Horace White, Money and Banking, 238, 378.

Paul v. Virginia, 8 Wall. 168; N. Y. Life Ins. Co. v. Cravens, 178 U. S. 389; Liverpool Ins. Co. v. Mass. 10 Wall. 566; Phil. Fire Ass'n, 119 U. S. 110; Hooper v. California, 155 U. S. 648.

See as to the Charter of the Manhattan Company, C. A. Conant, History of Modern Banks of Issue, 322; White, 336. The issue of circulating notes was a common-law right until restrained by statute. White, 238, 378.

power to create as incidental to the power to control. It is with all deference submitted that the Committee of the House of Representatives which drafted Report No. 2491, 59th Congress, first session, dated March 23d, 1906, in opposition to the President's argument for national incorporation, did not touch the question at all, and merely relying upon the phrases of a few decisions misinterpreted them in their bearing upon the power of the nation to authorize incorporation under national law.

"The State cannot destroy a national corporation, but the nation may destroy a State private corporation.1 The judicial cannot prescribe to the legislative department of the government, limitations upon the exercise of its acknowledged powers. A tax on bank circulation is not a tax on the franchise of the bank but upon property created or contracts made and issued under the franchise. If a particular tax bears heavily upon a corporation, or a class of corporations, it cannot for that reason only be pronounced contrary to the Constitution. Congress may restrain by suitable enactments the circulation as money of any notes not issued under its own authority. The act of Congress imposing a tax on the circulation of State banks, is constitutional. " 2

§ 40. THE THEORY OF STATE INCORPORATION MAKES IT IMPOSSIBLE TO REGULATE CORPORATIONS. - The modern corporation is not an octopus but a beast of forty-five heads, each self-sufficient and sufficient to the whole body, so that all forty-five must be killed at once.

The recognition in the acts of Congress of the power and right of the State to tax, control, or regulate any business carried on within its limits does not include