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 could 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 this 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, (b) it was decided, that 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 action in the exercise of its powers from *429 any restraining or controlling action of the local governments. (a) 1 (b) 2 Peters, 449. (a) A decision upon the same principle was made in the case of Dobbins v. The Commissioners of Erie County, 16 Peters, 435, where it was held that an officer of the United States was not liable to be rated and assessed for his office by state rates and levies; for this would be to diminish the recompense secured by law to the officer. In the case of Melcher v. The City of Boston, in the Sup. Judicial Court of Massachusetts, March, 1845, [9 Metcalf, 73,] it was stated as a question undecided, whether a tax assessed upon the income of an officer of the United States would not be lawful, and not within the case of Dobbins. It was decided in the Massachusetts case, that a clerk in a post-office was not an officer exempted from taxation of his income. 1 State and United States Taxes. — McCulloch v. Maryland seems to be somewhat limited by other decisions. The power of a state to tax operations of the government, or instruments of the gov ernment, created by itself for public and constitutional ends, is still denied. But it will be observed that later cases (National Bank v. Commonwealth, and Lionberger v. Rouse, hereinafter given) come 7. Nor exercise Power over Ceded Places. The state governments may likewise lose all jurisdiction over places purchased by very near the line, and in the case of the Union Pacific Railway Company it was held not enough to exempt their road from state taxation that it was constructed under the direction and authority of Congress for the uses and purposes of the United States, as a part of a system of roads thus constructed; the difference being that this corporation, unlike the Bank of the United States, was created and exercised its franchise under state law, and held its property within state jurisdiction and under state protection. Thomson v. Pacific R.R., 9 Wall. 579. The earlier decision of Crandall v. Nevada, 6 Wall. 35, that a state tax on every person leaving the state by any vehicle employed in the business of transporting passengers for hire, to be paid by the proprietors, was unconstitutional, was put by the majority of the court largely on the ground that the power to lay such a tax carries with it the power to prohibit the passage of government officers, troops, &c., or of citizens through the state. But the Chief Justice (who delivered the opinion in Pacific R.R. case, sup.) thought that the tax was only void as inconsistent with the power of Congress to regulate commerce. Post, 439, n. 1. Woodruff v. Parham, 8 Wall. 123, 138; Hinson v. Lott, ib. 148, 152. The mere fact that a business has been taxed by Congress does not prevent a state from taxing or prohibiting it. Pervear v. Commonwealth, 5 Wall. 475, 479; License Tax Cases, ib. 462; post, 439, n. 1. Several important cases have arisen under the present national currency and banking acts. In the first of these the New York Court of Appeals took a distinction between a tax on United States stock eo nomine, which was the case of Weston v. Charleston, and one on the actual value of the capital stock of a bank, part of whose property was in fact invested in United States stock, and held a tax of the latter description valid. This decision was reversed in Washington. People v. Commissioners of Taxes, 2 Black, 620; s. c. 23 N. Y. 192; 26 N. Y. 163. A statute was then passed by the state legislature taxing the banks "on a valuation equal to the amount of their capital stock paid in, or secured to be paid in, and their surplus earnings," &c. This also, after having been upheld by the courts of the state, was declared by the Supreme Court to be a tax on the property of the banks, and therefore, like the previous one, invalid, when that property consisted of United States stock. Bank Tax Case, 2 Wall. 200. On like principles, it has been further held, contrary to the opinion of the New York judges, that certificates of indebtedness issued by the United States for supplies, bearing interest, and payable in a year or earlier at the option of the government, are exempt from state taxation; The Bank v. The Mayor, 7 Wall. 16; see 37 N. Y. 9; as are also legal-tender treasury notes issued under the acts of Feb. 25, 1862, and July 11, 1862. Bank v. Supervisors, 7 Wall. 26. See 37 N. Y. 21. The State, however, can tax a bank on its franchise, and the Supreme Court have gone very far in sustaining taxes on this ground. Thus, a tax on savings banks of "a sum equal to three fourths of one per cent on the total amount of deposits," has been held valid, although part of such deposits were invested in United States stocks. Society for Savings v. Coite, 6 Wall. 594; Provident Institution v. Massachusetts, ib. 611; Hamilton Co. v. Massachusetts, ib. 632. So, a tax on the "excess of the market value of all the capital stock" of a corporation, "over the value of its real estate and machinery," the two latter being taxed separately. Hamilton Co. v. Massachusetts, 6 Wall Congress, by the consent of the legislature of the state, for the erection of forts, dock-yards, light-houses, hospitals, military academies, and other needful buildings. (b) The question which has arisen on the subject was as to the effect of the proviso or reservation, usually annexed to the consent of the state, that all civil and criminal process, issued under the authority of the state, might be executed on the lands so ceded, in like manner as if the cession had not been made. This point was much discussed in the Circuit Court of the United States in Rhode Island, in the case of The United States v. Cornell. (c) It was held that a purchase of lands within the jurisdiction of a state, with the consent of the state, for the national purposes contemplated by the Constitution, did, ipso facto, by the very terms of the Constitution, fall within the exclusive legislation of Congress, and that the state jurisdiction was completely ousted. What, then, is the true (b) Const. art. 1, sec. 8. (c) 2 Mason, 60, 91; United States v. Davis, 5 id. 356, s. p. 632; s. c. 12 Allen, 298. See further Monroe Savings Bank v. Rochester, 87 N. Y. 365. Taxes on the shareholders in national banks stand on a different footing from taxes on the banks. By the act of June 3, 1864, § 41, and act of Feb. 4, 1868, § 1, shares in such a bank may be included in the valuation of the personal property of their owner in the assessment of state taxes in the state within which such bank is located and not elsewhere. It has been held that this section subjects the shares to state taxation without regard to the fact that a part or the whole of the capital of the bank is invested in national securities issued under statutes exempting them from such taxation. Van Allen v. The Assessors, 3 Wall. 573; s. c. 33 N. Y. 161; People v. The Commissioners, 4 Wall. 244; s. c. 35 N. Y. 423; State v. Haight, 2 Vroom, (31 N. J.) 399. Further more, it may lawfully be provided that the officers of the bank shall pay the tax on the shares. National Bank v. Commonwealth, 9 Wall. 353; Lionberger v. Rouse, 9 Wall. 468. But the act provided against unfavorable discrimination, and therefore shares in national banks cannot be taxed, when state banks are taxed only on capital. Bradley v. The People, 4 Wall. 459; s. c. 39 Ill. 130; Van Allen v. The Assessors, sup. See Austin v. The Aldermen, 7 Wall. 694; Hubbard v. Board of Supervi sors, 23 Iowa, 130; Pittsburg v. First National Bank of Pittsburg, 55 Penn. St. 45. The principle of self-preservation, which was held in McCulloch v. Maryland, &c., to invalidate attempts by the state to tax certain instruments and operations of the general government, is considered to also limit the power of the United States to tax instruments and operations of the states, and it has been held that Congress cannot constitutionally tax the salary of a state judge. The Collector (Buffington) v. Day, 11 Wall. 113. And the same principle has been thought by several state courts to apply to the requirement of a stamp on the récords of state judicial proceedings, &c. Moore v. Moore, 47 N. Y. 467. On the other hand, a tax on circulation by banks of state bank notes, so heavy as to put an end to it, has been upheld Veazie Bank v. Fenno, 8 Wall. 533. * intent and effect of the saving clause annexed to the cessions? It does not imply the reservation of any concurrent jurisdiction or legislation, or that the state retained a right to punish for acts done within the ceded lands. The whole apparent object of the proviso was to prevent the ceded lands from becoming a sanctuary for fugitives from justice, for acts done within the acknowledged jurisdiction of the state; and such permission to execute process is not incompatible with exclusive sovereignty and jurisdiction. The acceptance of a cession, with this reservation, amounts to an agreement of the new sovereign to permit the free exercise *430 of such process, as being quoad hoc his own process. This construction has been frequently declared by the courts of the United States, and it comports entirely with the intention of the parties; and upon any other construction the cession would be nugatory and void. Judge Story doubted whether Congress were even at liberty, by the terms of the Constitution, to purchase lands with the consent of a state, under any qualification of that consent, which would deprive them of exclusive legisla tion over the place. The courts of the United States have sole and exclusive jurisdiction over an offence committed within a ceded place, notwithstanding the ordinary reservation of the right to execute civil and criminal process of the state. That was no reservation of any sovereignty or jurisdiction. Congress, in exercising powers of exclusive legislation over a ceded place or district, unite the powers of general with those of local legislation. The power of local legislation carries with it, as an incident, the right to make that power effectual. Congress exercises that particular local power, like all its other powers, in its high character as the legislature of the Union; and its general power may come in aid of these local powers. It is, therefore, competent for Congress to try and punish an offender for an offence committed within one of those local districts, in a place not within such jurisdiction; or to provide for the pursuit and arrest of a criminal escaping from one of those districts after committing a felony there; or to punish a person for concealing, out of the district, a felony committed within it. All these incidental powers are necessary to the complete execution of the principal power; and the Supreme Court, in Cohens v. Virginia, (a) held, that they were vested in Congress. (a) 6 Wheaton, 426-429. It follows, as a consequence, from this doctrine of the federal courts, that state courts cannot take cognizance of any *offences committed within such ceded districts; and, on 431 the other hand, that the inhabitants of such places cannot exercise any civil or political privileges under the laws of the state, because they are not bound by those laws. This has been so decided in the state courts. (a) But if, in any case, the United States have not actually purchased, and the state has not, in point of fact, ceded the place or territory to the United States, its jurisdiction remains, notwithstanding the place may have been occupied, ever since its surrender by Great Britain, by the troops of the United States, as a fort or garrison. The Supreme Court of New York accordingly held, in the case of The People v. Godfrey, (b) that they had jurisdiction of a murder committed by one soldier upon another within Niagara fort. Nor would the purchase of the land by the United States be alone sufficient to vest them with the jurisdiction, or to oust that of the state, without being accompanied or followed with the consent of the legislature of the state. This was so decided in the case of The Commonwealth of Pennsylvania v. Young. (c) (a) Commonwealth v. Clary, 8 Mass. 72; Same v. Young, 1 Hall's Journal of Jurisprudence, 53. (b) 17 Johns. 225. (c) 1 Hall's Journal of Jurisprudence, 47. The jurisdiction of the United States over the lands within places ceded by a state was fully and learnedly examined by Mr. Justice Woodbury, in the Circuit Court of the United States in Massachusetts in October, 1845, in the case of The United States v. Ames, Law Reporter for November, 1846 [1 Woodb. & Minot, 76.] It was adjudged, that if the United States own lands in any state, and there be no cession of the jurisdiction, the lex rei sita applicable to the landowners of the state, governs, as to rights and remedies, equally applying to non-residents and citizens, when the laws of Congress have not otherwise provided; such, for instance, is the case under an analogous principle, when the United States are the holders of a bill of exchange, United States v. Barker, 12 Wheaton, 561, and when liable to damages on foreign bills of exchange, as, see supra, 297; and as to liability to general average. See infra, iii. 171, n. (a); and as to alluvions and land deposits, 10 Peters, 662, 717; and as to set-off, see supra, 297. But if the ceded lands have been accompanied with a cession of the jurisdiction, the lands are subject to the laws of Congress, and not to those of the state; and those state laws cannot be permitted to thwart or embarrass the object of the cession by taxes, or by overflowing the land with water, or otherwise in any degree to conflict with what is required or provided by the general government of the United States, which may punish offences and trespasses, and remove intruders thereon. On the other hand, if Congress have not provided any adequate and exclusive remedy for injuries to public property, then the common law or laws of the states apply. But the United States have jurisdiction over its territory, though the particular lands have not been ceded, inasmuch as the lands are held for special purposes, and are to be protected. |