State. 4 Wheat. 316, 425-431, 436 [17 U. 8. | Governments in a greater degree than under the Confederation? If this power of taxation In Osborn v. Bank of U. S. 9 Wheat. 738, To guard against any misunderstanding of the scope and effect of the decision in McCullochy. Md. [supra] Chief Justice Marshall added: This opinion does not deprive the States of any resources which they originally possessed. It does not extend to a tax paid by the real property of the bank, in common with the other real property within the State, nor to a tax imposed on the interest which the citizens of Maryland may hold in this institution, in common with other property of the same description throughout the State." And in Osborn Bank of U.S.[supra], speaking of contractors with the United States, he said: "It is true that the property of the contractor may be taxed, as the property of other citizens; and so may the local property of the bank." But the only taxes thus spoken of as valid are those upon property not owned by the United States, but either real estate owned by the bank, or bank stock or other property owned by individuals. Throughout the discussion, both by the counsel and by the court, in McCulloch v. Md. state taxes upon any property of the United States had been treated as not distinguishable in principle from the particular tax whose validity was in controversy. This will be clearly shown by referring to a few pasBages of the arguments and the opinion. Not only did each of the counsel for the State of Maryland, Mr. Hopkinson, Mr. Jones and Mr. Martin, make it a corner stone of his argunent in support of the validity of the tax on the bank, that the property of the United States such was not exempt from taxation by the State in which it was situated-4 Wheat. 343, 3,375 [17 U. S. bk. 4, L. ed. 586, 592, 593], but the opposing counsel frankly accepted the issue. Mr. Webster, opening the argument against The validity of the tax, said: "The Government of the United States has itself a great pecuniary interest in this corporation. Can the States tax this property? Under the Confederation, when the National Government, not having the power of direct legislation, could not protect its own property by its own laws, was expressly stipulated, that 'No impositis, duties or restrictions should be laid by any State on the property of the United States.' Is it supposed that property of the United States is now subject to the power of the State the army and navy and treasure and judicature Chief Justice Marshall, in delivering judg- "Gentlemen say, they do not claim the right to extend state taxation to these objects. They limit their pretensions to property. But on what principle is this distinction made? Those who make it have furnished no reason for it, and the principle for which they contend denies it." 4 Wheat. 432 [608]. So in Weston v. City Council of Charleston, the exemption of the public lands, while owned by the United States, from state taxation was assumed, both in the argument of counsel that a state tax on stock issued by the United States to individuals was equally valid with a tax on lands after they had been sold by the United States to private persons; and in the answer made by Chief Justice Marshall: "The distinction is, we think, apparent. When lands are sold, no connection remains between the purchaser and the government. The lands purchased become a part of the mass of property in the country, with no exemption from common burthens." 2 Pet. 459, 468 [27 U. S. bk. 7, L. ed. 485, 488]. The United States do not and cannot hold property, as a monarch may, for private or personal purposes. All the property and revenues of the United States must be held and applied, as all taxes, duties, imposts and excises must be laid and collected, "to pay the debts and provide for the common defense and general welfare of the United States." Constitution, art. 1, § 8, cl. 1; Dobbins v. Erie County Comrs. 16 Pet. 435, 448 [41 U. S. bk. 10, L. eď. [158] [159] [160] 1022, 1027]. The principal reason assigned in The more thoroughly the proceedings by In the Articles of Confederation of 1778, it had been expressly stipulated that "No imposition, duties or restriction shall be laid by any State on the property of the United States." And in the articles which the Ordinance of 1787 for the government of the Northwest Territory declared should "be considered as articles of compact between the original States and the people and States in said Territory, and forever remain unalterable, unless by common consent," it had been provided that "no tax shall be imposed on lands the property of the United States." Constitutions and Charters, 8, 432. The Articles of Confederation ceased to exist upon the adoption of the Federal Constitution; and the Ordinance of 1787, like all Acts of Congress for the government of the Territories, had no force in any State after its admission into the Union under that Constitution. Permoli v. First Municipality of New Orleans, 3 How. 589, 610 [44 U. S. bk. 11, L. ed. 739]. Strader v. Graham, 10 How. 82 [51 U. S. bk. 13, L. ed. 337]. republic, in 1845; or of West Virginia, formed out of part of Virginia, in 1862. Constitutions and Charters, 1875, 646, 1676, 810, 1764, 1992. The first State formed out of territory not within the jurisdiction of an existing State was Ohio, admitted into the Union in 1802, under an Act of Congress containing three propositions, offered by Congress for her acceptance or rejection, and which were accepted by the State, namely: that one section of land should be granted to each township for the use of schools; that certain salt springs should be granted to the State; and that one twentieth part of the net proceeds of lands lying within the State and sold by Congress after June 30, 1802, should be applied to the laying out of public roads; "Provided always, That the three foregoing propositions herein offered are on the conditions that the convention of the said State shall provide, by an ordinance irrevocable without the consent of the United States, that every and each tract of land sold by Congress from and after the 30th day of June next shall be and remain exempt from any tax laid by order or under authority of the State, whether for State, county, township or any other purpose whatever, for the term of five years from and after the day of sale." Constitutions and Charters, 1454, 1455. The Acts for the admission of Indiana in 1816, and Illinois in 1818, contained similar provisions to those in the Act for the admission of Ohio. Constitutions and Charters, 499, 438. Neither of these three Acts contained any stipulation for the exemption of the lands of the United States from state taxation; but each, assuming that exemption as undoubted, and requiring no affirmance, so long as the United States owned the lands, only provided for its continuance for five years after the United States should have sold them, and thereby ceased to have any interest in them. The statement of Mr. Justice McLean, in a case in the circuit court concerning land in Illinois: "In the admission of new States into the Union, compacts were entered into with the Federal Government, that they would not tax the lands of the United States," was therefore as applied to the case before him, an inadvertence which impairs the weight of his dictum, based upon it, that "this implies that the States had power to tax such land, if unrestrained by compact." U. S. v. R. R. Bridge Co. 6 McLean, 517, 531–533. The Constitution, creating a more perfect union and increasing the powers of the National Government, expressly authorized the Congress of the United States "to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States;" "to exercise exclusive legislation over all places purchased by the consent of the Legislature of the State in which the same shall be, for the erection of forts, magazines, arsenals, dock yards and other needful buildings;" and to "dispose of and make needful rules and regulations re- | specting the territory or other property belong- The question in issue ir, that case was not of ing to the United States;" and declared, "This the State's right of taxation, but of its right of Constitution and the laws of the United States eminent domain for the construction of roads which shall be made in pursuance thereof shall and bridges. The decision of the learned jusbe the supreme law of the land; and the judges tice in favor of the validity of the exercise of in every State shall be bound thereby, any- that right by a State over lands of the United thing in the constitution or laws of any State to States, without the consent of the United States, the contrary notwithstanding." No further manifested either by an express Act of Conprovision was necessary to secure the lands or gress, or by the assent of a department or offiother property of the United States from tax-cer vested by law with the power of disposing ation by the States. Nor was any provision on this subject inserted in the Acts of Congress for the admission into the Union of Vermont in 1791; of Kentucky, formed out of part of Virginia, in the same year; of Tennessee, formed out of part of North Carolina, in 1796; of Maine, formed out of part of Massachusetts, in 1820; of Texas, previously a foreign and independent of lands of the United States, appears to have [10 power by the State was adjudged to be unlawful U. S. v. Chicago, 7 How. 185, 194, 195 (48 U. S. bk. 12, L. ed. 661, 664, 665]. But it can hardly be reconciled with the views expressed by Congress, in Acts concerning particular railroads, too numerous to be cited, as well as in general legislation. Acts of August 4. 1852, chap. 80, and March 3, 1855, chap. 200, 10 Stat. at L. 28, 683; July 26, 1866, chap. 262, 8, 14 Stat. at L. 253; R. S. § 2477. When that question shall be brought into judgment here, it will require and will receive the careful consideration of the court. of being quoted in full. It is in these words: By the conditions of the Acts of 1811 and Upon the question of taxation of lands of the United States by the State of Illinois, two well considered opinions of the Supreme Court of that State are worthy of reference in this connection. In one of them it was held that a lot of land in Chicago, owned by the United States, used by them for a custom house, postoffice and court house, and which the Legislature of the State had consented might be so used, and had ceded jurisdiction over, was not liable to assessment by the municipal authorities, under a statute of the State, for the amount of the benefi: to the land from the laying out of a highway; and the court said: "Nor under our system of government can the States tax the General Government, its agents or property; nor can the General Government tax the States, their agents or property." "A municipal corporation has no power to assess or exact from Upon the admission of every other State into the State or the General Government any sum the Union, the exemption of the lands of the for benefits conferred. The power to levy taxes United States from taxation by the State has or impose assessments for benefits can only be been declared (sometimes in the form of a conexercised on the governed, and not on the gov-dition imposed by Congress, and sometimes in erning power, whether state or federal." Fafan v. Chicago, 84 Ill. 227, 233, 234. In the other case, it was directly adjudged that from the very nature of the relation between the Federal and State Governments, and without regard to any supposed compact contained in the Ordinance of 1787, or in any Act of Congress, Do property lawfully vested in the United States could be taxed by the State; and that therefore land sold, purchased and held by the United States for nonpayment of direct taxes was exempt from State taxation. People v. U. S. 93 Il 30. In Louisiana, the first territory acquired by the United States from a foreign country, the Act of March 26, 1804, establishing a Territorial Government over it by the name of the Territory of Orleans, provided that the legislative power should be vested in the Governor and legislative council, and "shall extend to all the rightful subjects of legislation; but no law shall be valid which is inconsistent with the Constitution and laws of the United States;" and that "the Governor or legislative council shall have no power over the primary disposal of the oil, nor to tax the lands of the United States." Constitutions and Charters, 691. On April 28, 1806, John Breckenbridge, of Kentucky, Attorney-General of the United States, gave to Mr. Madison, Secretary of State, brief and comprehensive opinion, not based pon the restrictions imposed by the Territoral Act on the legislative council, or upon any considerations peculiar to Louisiana, but upon general principles applicable to all the States and Territories alike, and therefore, and as the earliest legal opinion upon the question, worthy the form of a proviso to a proposition to grant In the Acts for the admission of Mississippi Ib. 1246, Florida was admitted in 1845, upon the express condition that it should never interfere with the primary disposal of the public lands lying within it, nor levy any tax on the same whilst remaining the property of the United States;" and California in 1850, "upon the express condition that the people of said State, through their Legislature or otherwise, shall never interfere with the primary disposal of the public lands within its limits, and shall pass no law and do no act whereby the title of the United States to, and right to dispose of, the same shall be impaired or questioned; and that they shall never lay any tax or assessment of any description whatsoever upon the public do [164] main of the United States." Constitutions and tional relinquishment of that right, were not S. bk. 18, L. ed. 667], only because even the In the debate in the Senate in June, 1850, on the Act for the admission of California, a motion to amend the Act by requiring California before its admission to pass in convention an ordinance providing, among other things, "that she relinquishes all title or claim to tax, dispose of, or in any way to interfere with the primary [165] disposal by the United States of the public domain within her limits," was opposed by Mr. Douglas and Mr. Webster as unnecessary, and was defeated by a vote of 36 to 19. In the course of the debate, Mr. Douglas, after showing that the United States acquired title to the public lands, not by virtue of their sovereignty, but by deeds of cession from the old States, or by treaty of cession from France, Spain or Mexico, and referring to the provision of the Constitution authorizing Congress "to dispose of and make all needful rules and regulations concerning the territory or other property of the United States," said: "This provision authorizes the United States to be and become a land owner, and prescribes the mode in which the lands may be disposed of and the title conveyed to the purchaser. Congress is to make the need-348, reversed by this court in 5 Wall. 737 [72 U. ful rules and regulations upon this subject. The title of the United States can be devested by no other power, by no other means, in no other mode, than that which Congress shall sanction and prescribe. It cannot be done by the action of the people or Legislature of a Territory or State." And he supported this conclusion by a review of all the Acts of Congress under which States had theretofore been admited. Mr. Webster said that those precedents demonstrated that "The general idea has been, The taxation by the State of Kansas, the vain the creation of a State, that its admission as lidity of which was upheld by the decision of a State has no effect at all on the property of the Supreme Court of that State in Fort Leav the United States lying within its limits; " and enworth R. R. Co. v. Lowce, 27 Kan. 749, that it was settled by the judgment of this court affirmed by this court, 525 [ante, 264], was not in Pollard v. Hagan, 3 How. 212, 224 [44 U. S. upon property of the United States, but upon bk. 11, L. ed. 565, 571], "that the authority of property of a railroad corporation in lands sitthe United States does so far extend as, by force uated within the boundaries of the Fort Leavof itself, proprio vigore, to exempt the public enworth Military Reservation, yet not in that lands from taxation, when new States are cre- part of the lands occupied or used by the United ated in the Territory in which the lands lie." States for a fort or military post. The civil and Congressional Globe, 31st Cong. 1st session, criminal jurisdiction over the Reservation had Vol. 21, p. 1314; Vol. 22, pp. 848, et seq. 960, passed to the State upon its admission into the 986, 1004; 5 Webster's Works, 395, 396, 405. Union; and the cession of exclusive jurisdiction The Supreme Court of the State of Califor- by the subsequent Statute of Kansas of 1875, nia appears at one period to have assumed that chap. 66, which, because it conferred a benefit, the exemption of the lands of the United States was presumed to have been accepted by the from taxation depended upon the terms of the United States, expressly saved "to said State Act of Congress admitting the State into the the right to tax railroad, bridge and other corUnion, or upon the statutes of the State.porations, their franchises and property, on People v. Morrison, 22 Cal. 73; People v. said Reservation." Shearer, 30 Cal. 645. But in later cases it has taken broader ground, and has defined the [166] meaning of "taxation as "a charge levied by the sovereign power upon the property of its subject. It is not a charge upon its own property, nor upon property over which it has no dominion. This excludes the property of the State, whether lands, revenues or other property, and the property of the United States." People v. McCreery, 34 Cal. 432, 456; People v. Austin, 46 Cal. 520. The recital in the ordinance prefixed to the It cannot be doubted that the provisions which speak of the exemption of property of the United States from taxation, in the various Acts of Congress admitting States into the Union, are equivalent to each other; and that, like the other provision, which often accompa nies them (that the State "shall not interfere with the primary disposal of the soil by the United States "), they are but declaratory, and confer no new right or power upon the United States. In Gibson v. Chouteau, 13 Wall. 92, 99 [80 U. S. bk. 20, L. ed. 534, 536], Mr. Justice Field, delivering the judgment of this court, said: "With respect to the public domain, the Con [10 stitution vests in Congress the power of disposi- | lic lands, granted by the United States to a rail- Upon the admission of a State into the Un168] ion, the state doubtless acquires general jurisdiction, civil and criminal, for the preservation of public order and the protection of persons and property throughout its limits, except where it has ceded exclusive jurisdiction to the United States. The rights of local sovereignty, including the title in lands held in trust for municipal uses, and in the shores of navigable waters below high water mark, vest in the State, and not in the United States. New Orleans v. U. 8. 10 Pet. 662, 737 [35 U. S. bk. 9, L. ed. 573, 602]; Pollard v. Hagan, 3 How. 212 [44 U. S. bk. 11, L. ed. 566]; Goodtitle v. Kibbe, 9 How. 471 [50 U. S. bk. 13, L. ed. 220]; Doe v. Beebe, 13 How. 25 [54 U. S. bk. 14, L. ed. 85]; Barney v. Keokuk, 94 U. S. 324 [Bk. 24, L. ed. 224. But public and unoccupied lands, to which the United States have acquired title, either by deeds of cession from other States or by treaty with a foreign country, Congress, under the power conferred upon it by the Constitution, to dispose of and make all needful rules and regulations respecting the territory or other property of the United States," has the exclusive right to control and dispose of, as it has with regard to other property of the United States; and no State can interfere with this right, or embarrass its exercise. U. S. v. Gratist, 14 Pet. 526 [39 U. S. bk. 10, L. ed. 573]; Pollard v. Hagan [supra]; Irvine v. Marshall, 20 How. 558, 563 [61 U. S. bk. 15. L. ed. 994, 997); Gibson v. Chouteau, above cited. Even in the courts of the several States, the decided and increasing preponderance of authority is in favor of the absolute exemption of all property of the United States from state taxation. The only instances that have been brought to our notice, in which a state court has countenanced the right of a State to tax any property of the United States, are the judgment now under review; some remarks in Louisville v. Com monwealth, 1 Duvall, 295, in which the only matter in issue was a tax laid by the State of Kentucky on property of one of its own municipal corporations; a dictum in People v. Shearer, 30 Cal. 645, 658, and two cases in the Supreme Court of Pennsylvania, not found in the regular series of its reports, but only in law periodicals, and in a reprint of one of them in a collection of nisi prius and other cases. Commonwealth v. Young, 1 Hall's Journal of Jurisprudence, 47; 8. C. Brightly, 302; Roach v. Philadelphia Co. 2 Am. Law Journal (N. 8.) 444. In Commonwealth v. Young, decided in 1818, a person employed by the President of the United States, with the authority of Congress, to In McGoon v. Scales, 9 Wall. 23, 27 [76 U. S. sell by public auction land in Pittsburgh, owned bk. 19, L. ed. 545,546], part of the public lands by the United States, was indicted and fined in Wisconsin being claimed under a sale for for so selling it, because he had not been listate taxes, this court, speaking by Mr. Justice censed as an auctioneer under the statutes of the Miller, said: "The answer to this is, that the State. It was found by special verdict that the land was then owned by the United States, and title to the land under the late proprietary of was not subject to state taxation." No refer- Pennsylvania was vested in fee simple in the ence was made to any Act of Congress, or com- United States; that the United States had pact with the State; but the fact that the land erected a fort thereon, which had been used as was then owned by the United States was given a barrack, military depot and place of defense, as the only and conclusive reason why it could but had been disused as such a short time benot be taxed by the State. So in Tucker v. Fer- fore the sale; and that the State had never gun, 22 Wall. 527,752 [89 U.S. bk. 22, L. ed. 805, ceded its jurisdiction over it to the Federal GovS15], in which it was decided that public lands ernment. By the Act of Congress of August in Michigan, granted by Act of Congress to the 2, 1813, chap. 48, the President had been au State, to be held by the State to aid in the con- thorized to cause this land to be sold, and the struction of a railroad, could not be taxed by proceeds of the sale were "appropriated, under the State, Mr. Justice Śwayne, delivering judg- the direction of the President, to the erection ment, said: "Upon general principles, she could of arsenals, armories and laboratories." 3 Stat. nt tax the lands while the title remained in the at L. 75. The ground of the decision, as asUnited States, nor while she held them as the signed by the court, was that the United States 9 trustee of the United States, which, in the view held this lot as an individual, and therefore of the law, was the same thing." "the lot was subject to taxation for state purThe cases in which it has been held that pub- | poses, to the laws directing the mode of aliena [170] |