Indeed, experience has proved that a tax on imports is more cheerfully paid, because less felt by those upon whom it ultimately falls. From the view now taken, it follows that the States must depend chiefly, if not entirely, upon direct taxation, in the literal sense of these words; since the power of indirect taxation is mostly taken away. (a) The constitution of Ohio contains no limitation upon the taxing power of the State, except the prohibition "to levy a polltax for county or State purposes." (b) By a poll-tax is here meant

(a) The doctrine is now well settled, though there is no express provision in the constitution to that effect, that the State governments cannot, without the consent of Congress at least, tax any of the instrumentalities employed by the general government in accomplishing its ends. The doctrine was first laid down in McCulloch v. Maryland, 4 Wheaton, 316, with reference to the Bank of the U. S. See note to § 73. Thus, certificates given by the United States to creditors for supplies in war, are not taxable by the States. The Banks v. The Mayor, 7 Wall. 16. Nor are United States notes intended to circulate as money, when the statute provides that they shall not be. Bank v. Supervisors, 7 Wall. 26. This prohibition does not apply to taxation remitted by the law of Congress as not impairing the usefulness. National Bank v. Commonwealth, 9 Wall. 353. It does not extend to corporations chartered by government when the charter is silent. Thompson v. Pacific R. R., 9 Wall. 579. The capital of a national bank, so far as it is invested in United States bonds, cannot be taxed, nor can the corporation be taxed in any way as the owner of them but the stockholders may be taxed within the limitations prescribed by Congress, no matter how the capital is invested. National Bank v. Commonwealth, 9 Wall. 353. The provision that the tax on such shares shall not be higher than it is on shares in banks organized under the laws of the State, applies only to State banks, the taxation of which is not limited by contract in their charter. Lionberger v. Rouse, 9 Wall. 468. This protection of the instrumentalities of the government is reciprocal, and the United States cannot tax the salary of a judicial officer of a State. The Collector v. Day, 11 Wall. 113.

A State can tax property only when within its jurisdiction. So when a railroad extends into two States, and bonds are issued secured on the whole line, such bonds are not taxable in either State. Railroad Co. v. Jackson, 7 Wall. 262. Nor can a State tax bonds of State corporations, owned by non-residents, and compel the corporation to retain the tax. Railroad Co. v. Penn., 15 Wall. 300. Nor can a State require non-resident traders to pay a larger license than the resident traders, as this is in contravention of the clause giving a citizen of one State all the privileges and immunities of citizens of all the States. Ward v. Maryland, 12 Wall. 418.

(b) Ohio v. Gazlay, 5 Ohio, 14; Ohio v. Proudfit, 2 Ohio, 61; Ohio v. Hibbard, 3 Ohio, 61. In Ohio v. Gazlay, the taxing power of the Ohio legislature, under the first constitution, was drawn in question. This constitution contained no express grant of power to impose any tax whatever. The only provision on the subject of taxation was a prohibition, in the following words: "The levying taxes by the poll is grievous and oppressive, therefore the legislature shall never levy a poll tax for county or State purposes." But this prohibition of one particular species of tax contains, by implication, a grant of power to lay any other, so that it be not repugnant to the State or federal constitution And such has been the practical construction by our legislature. We levy taxes, not only upon property of every description, but upon professions and occupations. In a word, as the court observed, in Raguet v. Wade, 4 Ohio, 107, the power to tax, so long as it does not contravene the federal constitution, "is an unlimited sovereign power." The question in the present case was, upon the right to tax the professions. A law was passed, laying a tax not exceeding five dollars, upon all practising lawyers and physicians. Gazlay was regularly licensed and admitted to practice, before this law was passed, and one of his grounds for refusing to pay the tax was, that the license to practice was a contract, and subsequent taxation was a violation of that contract. But the court said that a law providing for a license was made for the public benefit, and not to confer any vested privileges. It might therefore be modified whenever the public welfare required it. Another ground of objection was, that this was a capitation or poll-tax. This the court denied. It was a faculty tax, and not a personal one. It had express reference to the ability to pay, and the amount was to be fixed by the amount of profits. In a word, it was a tax upon lucrative professions, and as proper as any other tax upon occupations or franchises. As to its being opposed to the general spirit of our institutions, this was too vague an objection to be examined.

a personal or capitation tax, the objection to which is, that it operates unequally upon the poor and the rich, by being the same for all, and not in proportion to the means of each. But the prohibition does not include taxation for township purposes; and it has also been decided not to include a tax upon professions, as those of law and medicine, sometimes called a faculty tax. We have already seen, that, by the ordinance of 1787, no tax can be laid upon the public lands within our limits until sold by Congress; and that the lands of non-residents cannot be taxed higher than those of residents. We have also seen, that, by the terms of admission into the Union, Ohio has relinquished the power of taxing lands sold by Congress until five years after the sale. (a)

The various kinds of taxes are as follows: First, the State tax, the rate of which is fixed by the legislature for each year. Secondly, the county tax, the rate of which is fixed by the county commissioners, within certain limits, varying according to the property in the county. Thirdly, the township tax, the rate of which is fixed by the township trustees. Fourthly, the school tax, the rate of which is fixed by the legislature: but the county commissioners may add one-fourth of a mill if they think proper. Fifthly, the school house tax, the rate of which is fixed by the voters of the school districts. Sixthly, the poor tax, the rate of which is fixed by the county commissioners. Seventhly, the poor-house tax, the rate of which is fixed by the county commissioners. (b)

§ 52. Power to Borrow Money. (e) Congress has the general

(a) The rule of State taxation, as prescribed by the new constitution, has been the subject of much controversy, especially in relation to debts and credits. The intention manifestly is, to require all property of every description, whether of individuals or corporations, to be taxed by a uniform rule, according to its actual money value. The difficulty is to carry this rule into practice. The legislature, in taxing individuals, authorized debts to be deducted from moneys and credits, but not from any thing else, in making up a statement for taxation; while it prohibited such deduction by banks and bankers. But the court held this provision, in favor of individuals, to be a violation of the rule of uniformity established by the constitution; and thus required credits to be taxed without any deduction of debts. See Exchange Bank v. Hines, and Ellis & Morton v. Linck, in the preface to the 2 Ohio State Reports, 3 id. 1, 66; Latimer v. Morgan, 6 id. 279; City of Zanesville v. Richards, 5 id. 589; Osborn v. Bank U. S., 9 Wheat. 738; Portland Bank v. Apthorp, 12 Mass. 252. The power of the legislature to authorize municipal corporations to subscribe to the stock of railroad companies, and levy taxes for that purpose, has been affirmed in this State. The State er rel. Smead v. The Trustees of Union Township, 8 Ohio State, 400. and cases cited; see Pierce on American Railroad Law, pp. 108-26. Its power to authorize assessments, as distinguished from taxes, has been affirmed. Reeves v. Treasurer of Wood County, 8 id. 333; Hill v. Higdon, 5 id. 243.

(b) The act of April 5, 1859, contains the present system of taxation, and repeals several previous acts. It would be impossible now to specify accurately in a short space the State taxes at present. They are generally the State tax for State purposes, the county tax for county purposes, and local taxes, either township or municipal, as the case may be, levied for the various local purposes.

(c) When this clause was originally reported to the convention, it included a power "to emit bills."— Mad. Pap. 1232. This was afterwards stricken out by a vote of 9 to 2, for the avowed purpose of prohibiting paper-money-id. 1343-6.

The fourth section of the 14th amendment provides, that the validity of the public debt of the United States authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection and rebellion, shall not

power "to borrow money on the credit of the United States." This is intimately connected with the revenue power, and almost equally indispensable. In tranquil times, the amount required for national expenditures will not vary essentially from year to year; and by means of estimates from the treasury department, the revenue system may be easily adjusted to meet the average. But in case of war, or any other contingency, which either greatly increases the necessary expenditures, or diminishes the estimated revenue, or both, the exercise of the power to borrow money becomes absolutely necessary. When a public debt has thus been contracted, arrangements are usually made for paying it off gradually, by means of a sinking fund, and the revenue system is adjusted accordingly. In this way, the burden is so distributed as to be scarcely felt. Thus in 1816, our public debt exceeded one hundred and twenty millions. In the course of eighteen years it was wholly paid off, and the question was, how to dispose of the surplus revenue. This power of Congress does not conflict with the exercise of a similar power by the States, for their own wants. They accordingly contract debts at their pleasure. Thus in 1825,

be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, nor any claim for the loss or emancipation of any slave; but all such debts, obligations, and claims shall be held illegal and void.

The power of Congress to issue bills of credit and make them a legal tender for the payment of debts, has been discussed lately in many cases. On the 25th of February, 1862, Congress authorized the issue of United States notes, not bearing interest and payable to bearer, and declared that such notes should be lawful money and a legal tender in payment of all debts public and private within the United States, except duties on imports and interest on the public debt. Subsequent issues have also been authorized. These acts have been held constitutional by the highest judicial tribunals in New Hampshire (George v. Concord, 45 N. H. 434), New York (Metropolitan Bank v. Van Dyck, 27 N. Y. 400), Pennsylvania (Schollenberger v. Brinton, 52 Penn. St. 1), Iowa (Hintrager v. Bates, 18 Iowa, 174), Nevada (Maynard v. Newman, 1 Nevada, 271), Michigan (Vanhousen v. Kanouse, 13 Mich. 303), Wisconsin (Breitenbach v. Turner, 18 Wis. 140), California (Lick v. Faulkner, 25 Cal. 404); Indiana (Thayer v. Hedges, 23 Ind. 141); Vermont (Carpenter v. Northfield Bank. 39 Vt. 46), and Massachusetts (Essex Co. v. Pacific Mills, supreme court, March, 1867).

The supreme court of Kentucky, in Griswold v. Hepburn, 2 Duvall, 20 (Williams, C. J., dissenting), held them unconstitutional. The power is derived by some of the judges from the general power to borrow money, and is considered one mode of exercising that power, while in others it is vested on the power to provide for the common defence. For a more particular statement of the lines and arguments in the several cases, see an able article in the Am. Law Review, vol. 2, p. 403. The Supreme court of the United States held that a bond given before the passage of the acts, and made payable expressly in gold or silver, or specie, could not be discharged in legal tender notes. Butler v. Horwitz, 7 Wall. 258; Bronson v. Rods, 9 Wall. 229; Trebilcock v. Wilson, 12 Wall. 687. The first time the general question was decided they held the acts unconstitutional by a divided court. Hepburn r. Griswold, 8 Wall. 603. But afterwards by a divided court also overruled this holding, and held them constitutional as to debts contracted before as well as after their passage, without any special agreement as to the mode of payment. Legal Tender Cases, 12 Wall. 457; Bigler v. Waller, 14 Wall. 297. A State may require its taxes to be paid in gold. Lane Co. v. Oregon, 7 Wall. 71. A judgment on a debt payable in gold, should be for the sum in gold, and not its equivalent in legal tenders, and the sheriff must then make the sum in gold on the execution. Philips v. Dugan, 21 Ohio St. 466.

The new constitution prohibits the contracting of any debt for purposes of internal improvement.

the State of Ohio, with no surplus revenue, undertook to construct upon credit alone, her immense canals, which already extend more than four hundred miles. And it has been computed that the aggregate of debts thus contracted by the different States amounts to two hundred millions of dollars, which is about one-fifth of the public debt of France, and about one-twentieth of that of Great Britain. For these debts the creditors depend solely upon the good faith of their debtors. There seems to be a peculiar propriety in contracting debts of this kind, for lasting and valuable improvements. They are in fact constructed for the benefit of posterity, and it is but just that posterity should share the burden of paying for them. Indeed, upon no other principle would great public works be undertaken. The present generation would rather forego their share of benefit, than consent to bear the whole burden. Still it cannot be denied that this power over the public purse is the most dangerous power intrusted to government. And hence the paramount necessity of surrounding it with all possible safeguards. To this end, both the federal and State constitutions provide that "no money shall be drawn from the treasury, but in consequence of appropriations made by law." In other words, the consent of the legislature must be given beforehand, for expending money, as well as for raising it; and that the people may know what their representatives do in this behalf, it is further declared that "a regular statement and account of the receipts and expenditures of the public money shall be published," for their information. § 53. Power to Regulate Commerce. (a) Commerce, in its most enlarged signification, comprehends every description of intercourse between man and man. In its legal acceptation, it includes whatever relates to the exchange of commodities between individuals. and nations. In civilized life, scarcely any individual consumes exactly what he produces. If the products of the earth were everywhere the same instead of varying, as they do, with the almost infinite diversities of soil and climate-even then the division of labor, ever extending with the progress of society— until the sphere of productive effort assigned to each laborer is contracted within the smallest possible limits would still make a countless number of individuals contribute to supply the wants of each; so that traffic between man and man would even then be immense. But when to the results of the division of labor among individuals of the same vicinity we add the results of that endless variety of soil, climate, taste, and character, by which the different portions of the globe and its inhabitants are distinguished from each other, we find that traffic between man and man in the same nation, almost dwindles into insignificance when compared with traffic among the nations of the earth. And it is only when we contemplate commerce on this enlarged scale when we think of

(a) The convention was so generally impressed with the necessity of this power, that it occasioned little debate. Mad. Pap. 1343, 1450-6. The principal question was whether two-thirds should be required to pass laws for this end.

all the productions of human labor, in every region of the earth, as passing from hand to hand in an almost ceaseless process of exchange and distribution - that we can form an adequate conception of the importance of commerce, and of that part of the law, by which its vast operations are regulated. In general terms, commercial law, lex mercatoria, or the law-merchant comprehends all that portion of the municipal law which relates directly or indirectly to the buying, selling, or transporting of merchandise. I shall have occasion to consider its various subdivisions hereafter, and will, at present, merely indicate them. The persons engaged in commerce are called merchants, meaning thereby those who make a business of buying and selling. Others buy to consume; the merchant buys to sell again. He stands between the producer and consumer, buying of the former, and selling to the latter. A distinction is sometimes made between wholesale and retail dealers, according to which, those who buy and sell in large quantities, are called merchants, and those who deal in small quantities, traders. In this view, traders are those who buy of merchants, and sell to consumers. This, however, is a distinction in degree, rather than kind, for in the eye of the law they are all equally merchants. But seldom merchants transact business alone. Sometimes they are associated as members of a corporation, sometimes they form a partnership, and sometimes they sustain the relation of principal and agent. So far, then, as persons are concerned, commercial law includes that which regulates all these relations. And passing from persons to things, we come first to the law governing the contract of sale, the warranty either of title or quality connected therewith, and the weights or measures by which quantity is determined. If the sale be for cash, this brings up the law relating to money or other currency. If the sale be on credit, the law relating to book accounts, bills of exchange, promissory notes, and contracts of guaranty, comes into application; and perhaps, also, the law regulating bankruptcy or insolvency. Passing, then, from the sale to the transportation of merchandise, we have first, the law governing carriers in general, together with all those particular regulations which apply to shipping; and next, the law of insurance, of stoppage in transitu, of lien, revenue laws, and in case of war, belligerent and neutral rights. Of this extensive body of law, a large proportion is unwritten, has come down to us from distant ages, and is nearly the same in all commercial nations. this connection I am to discuss only those topics suggested by the provisions of the constitution.

One of the most palpable defects in the articles of confederation, as evinced by a short experience, was the absence of all provision for regulating commerce. This occasioned the meeting at Annapolis, which recommended the convention at Philadelphia, and thus led eventually to the formation of the constitution in which this defect is abundantly cured. The words of the provision are these: "Congress shall have power to regulate commerce with