UNITED STATES SUPREME COURT.

ELIAS S. A. DE LIMA AND OTHERS AGAINST GEORGE R. BIDWELL.

No. 456.

SAMUEL E. DOWNES AGAINST GEORGE R. BIDWELL.

No. 507.

BRIEF IN REPLY FOR PLAINTIFFS IN ERROR.

By leave of the court the plaintiffs in error submit the following brief in reply to the positions taken by the Government and to suggestions made in the course of the argument.

PRELIMINARY.

JURISDICTION.

The only point on this subject not fully anticipated in the briefs already filed is in the position taken by the Solicitor-General in reply to a suggestion from Mr. Justice Brewer.

The Solicitor-General contended that because the present action is brought at common law against the collector on the ground that the goods upon which he exacted the payment of duty were not imported merchandise, and did not fall within the purview of the tariff act, it was not therefore "a suit at law or in equity arising under the revenue laws," as to which section 629, subdivision fourth, of the Rev. Stat., gives jurisdiction to the circuit court without reference to the amount involved.

The jurisdiction of the circuit court is not confined to the adjudication of rights arising under the revenue law, but extends to suits, i. e., controversies arising under such law.

The controversy" in the present case certainly arose out of the revenue law; the collector claimed and insisted that the merchandise from Porto Rico was subject to such revenue law and he exacted the payment of duty in accordance with what he conceived to be the provisions of such law; the plaintiff disputed this contention and under protest forcibly submitted to the exaction.

The Solicitor-General suggested that plaintiff in error might have followed the example of the claimant in re Fassett, 142 U. S., who resorted to a libel in admiralty to get possession of his yacht, but unfortunately the plaintiff's merchandise in the present case was not

maritime, and sec. 934, U. S. Rev. Stat., specifically prescribes that property detained by any officer under the revenue laws shall be irrepleviable.

ANSWERS TO INQUIRIES.

WHAT POWER CONGRESS WIELDS WITHIN THE TERRITORY AS A LOCAL GOVERNMENT.

Whence these powers are derived.

Several of the honorable justices inquired into the position which plaintiff in error would insist on in reference to these questions:

I. Is the power of Congress to lay taxes within a Territory for the benefit of such Territory subject to the limitation imposed by Art. I. Sec. VIII, of the Constitution, that "all duties, imposts, and excises shall be uniform throughout the United States?"

II. Whence does Congress derive the power to lay taxes within a Territory for the benefit of that Territory?

III. Are those powers of taxation unlimited?

We believe the following answers to these questions are in accord with judicial interpretations:

I. The power of local taxation within the boundaries of a Territory for the benefit of such Territory is not limited by Art. I, Sec. VIII, of the Constitution for this reason:

The power given by that section is the power to lay certain taxes “to pay the debts and provide for the common defense and general welfare of the United States;" it is only for that purpose that Congress as a National Legislature was thus empowered to lay taxes, and the limita tion is that taxes laid for that purpose and under that power “shall be uniform throughout the United States."

II. Whence does Congress derive the power to lay taxes within a Territory, etc.?

Apart from the power granted to Congress to raise revenue for the common defense and welfare, it is also given the power "to dispose of and make all needful rules and regulations respecting the territory o other property belonging to the United States;" it is given discretion as to the admission of new States into the Union (Art. IV, Sec. III. Const.).

The Government has power to make war; to enter into treaties. These faculties involve the power to acquire territory. The power to acquire territory has been repeatedly held to imply of necessity the power to govern it.

* * *

"All territory within the jurisdiction of the United States not included in any State must necessarily be governed by or under the authority of Congress there have been some differences of opinion as to the particular clause of the Constitution from which the power is derived, but that it exists has always been conceded." (Nat. Bank v. County of Yankton, 101 U. S., 132, 133.)

The power of taxation is the fundamental right of all government. Without it no real government is possible. Without it no laws can be enforced, no provision made for the safety and protection of the inhabitants, no crime repressed, no justice administered.

If Congress can govern territory at all, it can raise revenue in such territory, for this is the first and indispensable requisite to all governmental administration.

III. Are these powers of taxation unlimited?

We must accept as settled jurisprudence that Congress possesses in the Territory whatever powers a State government possesses within the limits of a State.

What, then, are the powers of a State and what are its limitations? (a) The powers of a State are of a certainty confined to persons and property within its own border.

As a local legislature levying taxes for the benefit of a local circumscription, known as a Territory, Congress must assuredly be limited in the exercise of this power to the persons and property within such Territory.

The power of taxation which Congress exercises for the benefit of each Territory is not the power of taxation lodged in Congress as representing the entire Federation, for this taxing power is to be found only in Art. I, Sec. VIII, of the Constitution, and can only be exercised for the common benefit of the entire nation, and with the exception of direct taxes must be exercised uniformly throughout the nation. The taxation within the Territory, then, is the exercise of the express or implied power to govern the Territory out of which it has the privi lege to admit new States into the Union.

As the jurisdiction and sovereignty of a State legislature is confined to the limits of a State, so Congress, as the legislature of the District of Columbia, is confined in the exercise of its powers to that District, and can not lay a tax on the merchants of New York for the benefit of the District. (Gibbons v. Dist. of Col., 116 U. S., at p. 407.)

(b) By what else than the boundaries of its own commonwealth is a State restricted in its powers of taxation?

By the terms of its own constitution.

Is Congress governed and restrained by no constitution when it is administering to the local needs of a Territory?

Is it, as Mr. Justice White inquired, free to tax without equality, without justice between man and man? May it, in other words, deprive any citizen of the Territory of his property without due process of law? (Art. V, U. S Const.)

To this we must answer that it is bound and restrained by the provisions of the Constitution in virtue of which it governs the Territory. This is the Constitution of the United States.

This court said in the Yankton case, supra, that Congress "may do for the Territories what the people under the Constitution of the United States may do for the States."

It would seem clear from this language that Congress in the Territories is bound by the Constitution.

To put it in another way. The legislature of a State is an agent of its people empowered to do all that its principal has authorized it by its constitution. Congress in each Territory is the agent of the people for the government of that Territory, endowed with all the authority and with no other authority than that transmitted under the terms of the Constitution.

It is true that in the Yankton case (101 U. S., 133) there is a remark in the opinion of Chief Justice Waite to the effect that the organic law of a Territory takes the place of a constitution, as the fundamen