The writ of error must be dismissed, this the power of borrowing money on the government, court having no jurisdiction in the case.

449*] *PLOWDEN WESTON et al., Plain- the provisions hereinafter specified; that is to

The writ of error is to the highest tribunal of the State of South Carolina; and the decision of that court has been in favor of the constitutionality of the ordinance; thus bringing *the case fully within the 25th sec- [*452 tion of the Judiciary Act. Let this court cer tify its opinion, and the controversy will be at an end.

and stock of the incorporated banks of this | terfere with those means on emergencies of State and the United States Bank excepted), the deepest interest. It is a constitutional twenty-five cents upon every hundred dollars." question, and as such is peculiarly under the In the Court of Common Pleas for the Charles- guardianship of this court. ton District, the plaintiffs in error, in May, 1823, filed a suggestion for a prohibition, as owners of United States stock, against the city council of Charleston, to restrain them from levying under the ordinances, on six and seven per cent, stock of the United States and the tax imposed under the ordinance; on the ground that the ordinance cannot so far as it imposes a tax on the stock of the United States is contrary to the Constitution of the United States. The prohibition having been granted, the eity council applied to the Constitutional Court, the highest court of law in the State, to reverse the order, on the ground that the ordinance was not repugnant to the Constitution of the United States; and the proceedings in the case having been removed to the said court, the said court in May term, 1823, by a majority or their judges (four being in favor of the constitutionality of the ordinance, and three against it), decided that the said ordinance did not violate the Constitution of the United States, in imposing a tax upon the holders of United States stock. From this decision the relators appealed by writ of error to the Supreme Court of the United States.

The error assigned in this court was, that 451*] the judgment *of the Constitutional Court was erroneous, in that it decided the ordinance of the city council of Charleston not to be repugnant to the Constitution of the United States.

The case was argued by Mr. Hayne for the plaintiffs in error, and by Mr. Crager and Mr. Legare for the defendants.

On more occasions than one, when the court has felt some embarrassment as to its jurisdiction, it has expressed an opinion upon important questions; and when the general good required a decision. United States v. Kirkpatrick, 9 Wheaton, 720.

2. The Act of Congress organizing the courts of the United States, authorizes this court to form and mould its process, so as to enforce and carry into effect the objects and purposes for which the Federal courts were established. It is conceived that the writ of prohibition is a mode of exercising jurisdiction which is essential to those purposes. There is a strong analogy between the prohibition asked in this case, and those issued to district courts under the law. But if the writ of prohibition may not be adopted, and the court should decide this case in favor of the plaintiffs in error, the case may be remanded to the Court of Common Pleas for the Charleston District; and should that court refuse to proceed as required, the Supreme Court may itself enforce its judg

ment.

Upon the general question, the counsel for the plaintiffs in error argued, that the ordinance does not impose a tax on all public funds, but specifically on the six and seven per cent stock of the United States. Thus there are selected, as the particular object of taxation, those debts of the government of the United States; and the sum the government has stipulated to pay for the loan is diminished to the extent of the tax. The contract of the general government is invaded, and its credit impaired. Its competency to negotiate loans may be destroyed by the admission of this power of taxation. There are two sources of revenue which are essentially the right of the

The counsel for the plaintiffs in error submitted, that if the course of proceeding adopted by the plaintiffs in error was not approved of, by requiring a prohibition in the Court of Common Pleas, and on the decision of the Constitutional Court being against them by taking the writ of error, some other mode would be employed. It was the wish of all the parties to have the decision of this court on the question involved in the case; and a ready and entire acquiescence would be yielded to the judgment of the court by all who were interested. It was submitted to the court, that for the pur-general government-that of imposing duties, poses of justice, the court would give an opinion upon the matter assigned for error; and if the form in which the case had been brought up was not proper, the judgment of the court would be equally operative, and would be yielded to by the parties, plaintiffs and defendants in error.

The subject in controversy is one of proper cognizance for this court. It involves a most important constitutional question; the right of the States, or of State authorities, to tax the funded debt of the United States.

The subject-matter of the case belongs to this court. The soundest rule that can be adopted is, that when the matter in question belongs to the jurisdiction of the Federal Courts, a liberal construction in favor of the powers of the court over it should be given.

The question in this case concerns the vital means of the nation; and the power claimed to be exercised under the ordinance, would in

and that of borrowing money on the credit of the nation. The safety of the whole depends upon the free and undisturbed exercise of these powers. In peace, the first is necessary to revenue; in war, the second *is vital to [*453 defense and success. If these powers and rights are not guarded and preserved, the functions and purposes of the Union will be suspended and destroyed.

There is no warrant for this tax, to be de rived from the opinion of this court in the case of M'Culloch v. The State of Maryland, 4 Wheaton, 316. The court, at the close of the opinion delivered in that case, sanction a tax on property held by citizens of Maryland in the Bank of the United States, in common with other property throughout the State; but they say expressly, that "a particular tax upon the operation of an instrument employed by the government to carry its powers into execution, is void."

Mr. Hayne presented, as a part of his argument, the opinion of Mr. Justice Huger in the Constitutional Court; who, with Nott and Bay, Justices, dissented from the opinion of the majority of the court.'

454*] *Mr. Cruger and Mr. Legare, for the defendants in error, contended that a writ of error could not be sustained on proceedings in prohibition.

455*] *Should the Supreme Court reverse the judgment below in this case, a mandate will 456*] be direced to the inferior State *court. 3 Dall. 342. In the event of the State court declining or refusing to carry that mandate 457*] into effect, a question *will then arise

I

as to the mode of proceeding to be adopted as a remedy. That a futile exercise of jurisdiction may not on this occasion tako place, the difficulty ought to be anticipated; for if it be insurmountable, this tribunal will not, from self-respect, hold cognizance of the principal inquiry involved in the present suit.

Unless the Supreme Court acts in this matter through the intervention of the State tribunal, it must issue a prohibition of itself, addressed to the tax collector individually. Should he disobey, it will then have to proceed against him for a contempt, and inflict a fine; and thus be thrown into a course of practice unprecedented and extremely inconvenient. is equally within their power to tax twenty per cent. or one hundred per cent. as one-half per cent. What shall govern their discretion, it is impossible to foresee. A State or a few States may concur in a policy at variance with that of the government, nay, in hostility to it. This, unfortunately, has been already witnessed. They may, indeed, be indisposed to dissolve the Union and declare war; when they might have no objection to counteract Congress, and control its measures by the exercise of a power strictly constitutional. Seven-tenths of the stock of the United States are owned in the cities of Boston, New York, Philadelphia, Baltimore, and Charleston.

1. HUGER, J., dissentiente. This was an application for a prohibition to restrain the treasurer of the city of Charleston from levying a tax, imposed by a city ordinance, on six and seven per cent stock of the United States. The words of the ordinance are: All personal estate, consisting of bonds, notes, &c., six and seven per cent stock of the United States, or other obligations, upon which interest has been or will be received during the year, over and above the interest which has been paid (except, &c., &c.), twenty-five cents on every $100. The prohibition was ordered. A motion is now submitted for the reversal of that order. am unwilling, on so important a question, merely to express my dissent from the judgment of the court. It is now for the first time agitated, and ought to be fully discussed that it might be better understood. It affects the use of a power, as essential to the general government in periods of diffculty and danger, as any other which the people have delegated to it. If the city council of Charleston can tax the stock of the United States, eo nomine, the States can; and if the States can, it is impossible not to perceive that the fiscal operations of the general government may be completely frustrated by the States. It will be in vain for Congress to pass acts authorizing the Secretary of the Treasury to borrow money, if the holders of their stock can be taxed for having done so by the States. Congress may offer ten per cent for loans, but who will lend, if the States can appropriate the whole to their own use? Whether the States will do so or not may be problematical, but if they can do so, the risk of their doing so must be covered by the terms on which the loans will be made. There is but one substantial security for the proper administration of our governments-the immediate responsibility of the administrators thereof to the people. If, however, the people have or feel no interest in the measures of a government, its administrators are only nominally responsible; they will only be checked where they act in derogation of what is understood or felt to be the interest of their constituents. Remote interests are not seen by the better informed, and they always must present grounds for much difference of opinion, even among the best informed. It is not a sufficient guard to the powers of the general government, that the constituents of the administrators of the State governments have a remote interest in the preservation of those powers, or in an unembarrassed exercise of them by the general government. They must not be seen, or may not be understood, and the very case before us presents a full illustration of the truth. No government, not revolutionary, has ever attempted to tax its own stock, and among others, for two very satisfactory reasons. 1. Because such a tax must necessarily operate injuriously upon all future loans; and 2. Because there is in fact a violation of contract in so doing, and therefore immoral and impolitic. Under the influence of these reasons, the Legislation of the number, which an instrument so comture of this State has refused to tax the stock of the United States; but it appears that the city council of Charleston have thought differently, and have taxed it. There are, however, some very obvious reasons why the council of Charleston should be less disposed to impose such a tax than the Legislature. In the first place, the city of Charleston being commercial, is more within the influence of the policy of the general government than the Legislature: if, therefore, the council of the city can believe it politic and just to tax the stock of the United States, can it be thought improbable that the Legislature may do so? If they can do so at all, they may do so to any extent; it

The same causes which have concentrated the stock in these cities, will, in all probability, continue to operate, and the greater part of future loans will be effected there. Should, therefore, even so small a portion of the United States as these cities, unite in taxing stock to any considerable amount, the government may be defeated, and will certainly be impeded in its fiscal operations, to the extent of any tax imposed. It may be supposed, that these cities would be checked in such proceedings by their State Legislatures. Whether this could be done, must depend upon the constitutions of the States, and the charters of the cities. It may not suit the prevailing policy of a State to interfere in such a case, even if it possess the power. We know, from the charter of the city of Charleston, that the Legislature of this State can interfere and repeal the ordinance in question; this, however, has not been done, although they have refused to impose such a tax themselves; and South Carolina is, has always been, and I hope will ever continue to be, as national as any other State in the Union. It may be said, that admit all this to be true, it cannot affect the question before the court; who are called upon to decide what the constitution is, and not what it ought to be. The judicial branch of the government most certainly does not possess the power of legislating; much less, then, can they claim the power of making a constitution. But, in construing the Constitution, they must look to the objects it professes to obtain, and they cannot so as to defeat the very end and aim of its creation, nor can they make it inconsistent with itself, if it be possible to avoid it. The general powers of Congress may be sufficiently designated in the Constitution, but the extent and ramifications of each power, it was not in the wisdom of man to foresee and precisely describe. How they are to operate and exhibit themselves, must depend upon the future contingent circumstances of the nation; and, as these must be forever varying, constitutional questions or doubts must arise, as long as the Constitution shall exist. These are the certain and legitimate consequences of a written constitution. The numerous questions which the statute of frauds has given rise to, simple as was its object, may afford some intimaplicated and general in its objects as the Constitution may be expected to produce. The great difficulty is, not only in ascertaining and defining the powers which result from those which are expressly given to the government, but (as in this case, and in that of the Bank of the United States) in determining the influence of these on the powers of the different States. In the decision of such cases, there must, at least, be the semblance of legislation. I am not conscious of even a desire to extend unnecessarily the powers of the judiciary; the pursuits and habits of near twenty years, by far the better part of my life, have given at least to my feelings a direction decidedly favorable to the

of proceeding under the appellate authority of this court are dependent upon the *Acts [*458 of Congress for their regulation. 6 Cr. 307. Although the 14th section of the Judiciary Act gives to the courts of the United States "power to issue all writs necessary for the exercise of their respective jurisdictions and agreeable to the principles and usages of law," this general grant is limited by the 25th section in the particular instance of writs of error from final judgments of State courts to "awarding executions." No construction of these words consistent with technical accuracy will bring a prohibition within their meaning; and original jurisdiction will scarcely be assumed to admit the procedure.

That it will not award compulsory process directed to a recusant State court may safely be assumed upon the strength of the reasoning in Martin v. Hunter's Lessee, 1 Wheaton, 362. If not from a regard to the sovereignty of a State in its last refuge of the judiciary, this resort will not be had at least because it seems to be negatively precluded by the 25th section of the Act of the 24th of September, 1789. That section provides for the Supreme Court's "proceeding to a final decision of the cause, and awarding execution therein if it has been once remanded before." Whether under these words on the refusal of a State court to fulfil its mandate this court has jurisdiction in prohibition so as to enable it to execute its own judgment, by inhibiting the officers personally from collecting the tax under consideration, if adjudged unconstitutional, must first be decided. If the power be wanting, nothing but an Act of Congress can supply the deficiency. The mode and forms legislative branch of the government; when attached in fact, as I was in feeling, to that branch, I could not but discern the importance of the judicial branch of the government, and the necessity of leaving to its decisions all questions like the one before the court, though they savored of legislation. I shall certainly not omit to do now what I formerly regarded as incumbent upon the judiciary to perform. I shall now proceed to inquire-eign to the State governments, or had they hoarded 1st. Whether the tax in question be an income tax? That it is not, appears very clearly from the facts of the case, as well as from the terms of the ordinance. The stock of the State; the stock of the city bank stock universally, as well as the profits of agriculture, enjoyed by those who reside in the city, are not taxed; nor does the ordinance affect to regard it as an income tax. It is a tax upon the United States stock eo nomine. As this is not a tax upon income, it is unnecessary to inquire if the city council, or a State, have the power to tax income, and include therein the interest received on United States stock. I shall, therefore, proceed to inquire if the city council, or a State, have the power to tax the United States stock, eo nomine. The first question presented by the inquiry is, the meaning of the term United States stock. It is, I apprehend, a credit on the government for SO much money, on which they have agreed to pay a certain interest. He who has the credit is the holder, and the certificate is the evidence of the credit, and the terms on which the credit has been given. The power to create this credit is expressly given by the 8th section, 1st article, of the Constitution of the United States: "Congress shall have power to borrow money on the credit of the United States." The credit of the United States is the essence of the stock; without it the stock is of no value. The credit of the United States is a creation of the general government, which did not exist until they brought it into being; and, in the production of which, the State governments did not participate. The State could not tax it before the Constitution was formed, for it did not exist: if, therefore, they can tax it now, it must be by some new power vested in them by that instrument; but there is no such power given; the credit of the United States cannot be taxed by the States. It is contended that to deny the States a power to tax money loaned to the general government, is to deprive them of a great resource without any adequate object. In the first place, I must observe

that if the States cannot tax the stock of the United States, the general government, will be able to borrow on better terms, and in this way the people of the United States will be compensated for any inconvenience that might result from the exemption of the stock from the taxation of the State governments. In the second place, I must repeat, they have no cause to complain, because it is a creation of the general government which the States did not possess before its establishment. But on this subject I cannot but think that a very erroneous opinion prevails. It appears to be thought that for every thousand dollars loaned to the general government, so much taxable property has been withdrawn from the States. But this is

certainly not so. Of the one hundred millions of dollars loaned to the general government, during |

The power of Congress to incorporate a bank, or even to invade the territory of a State to establish its branches, cannot be controverted after the decisions in M'Cullock v. Maryland, 4 Wheat. 316, and Osborne v. United States the late war, how much of it remains with the government? Not one cent. Where, then, is it? Certainly in the States. If a certain number of individuals paid it into the Treasury of the United States, the government has returned it to individuals living in the different States; and if liable to taxation at all, can now be taxed by the States. If the general government had been forit up, this objection might have had some force; but as fast as they got it, they returned it, and no means of the State governments were affected, but an increased difficulty in borrowing money, owing to the competition of the general government. One of the great objects of the Constitution was to render the general government independent of the State government for those pecuniary means which are necessary to effect the great purpose for which it was established, viz., to form a more perfect union, establish justice, ensure domestic tranquillity, provide for the common defense, promote the general welfare, &c., &c. If, however, means so essential in periods of distress and danger, as loans, can be controlled by the States, Congress is yet essentially dependent upon the States. is another objection to this tax. I regard it as a violation of the contract made with the holders of the United States stock. The people of the United States, of whom the citizens of Charleston are a part, have contracted to pay so much per centum on the stock by their agents, the general government. To authorize the citizens of Charleston to deduct a part from the interest agreed upon, they must possess the power of altering the contract, without the consent of the holders of the stock, which would be a violation of the obligation of the contract. But the Constitution expressly declares that they shall not violate the obligation of contract.

There

are:
To recapitulate my objections to the tax, they
1. Because a tax
States, eo nomine, is a tax upon the credit of the
upon stock of the United
United States.

2. Because the credit of the United States was
not a subject for taxation by the States, anterior
to the adoption of the Constitution; the credit of
the United States being a result of the establish-
ment of the government of the United States; and
State governments.
the Constitution has given no new powers to the

governments are not diminished by withholding
3. Because the objects of taxation by the State
from them the power of taxing stock of the United
States; as
States is immediately, by disbursements, returned
the money borrowed by the United
to the people of the different States.
4. Because it renders the general government
dependent upon the discretion of the State gov-
ernments, for one of its essential means in accom-
plishing the purposes for which it was established,
a result at variance with one of the principle ob-
general government independent of the pecuniary
jects of the Constitution, which was to render the
aid of the State governments.

And lastly, because it is a violation of the obligation of contract.

Bank, 9 Wheat. 738; much less could their | reason, if of any avail, will go to exonerate all right to raise loans for carrying on the opera- the territories and other property of the United tions of government be drawn into question. States acquired subsequently to that epoch; On the other hand, it would be taken as con- and failing of that result, must be discarded alceded that the right of the States to impose together. taxes is sovereign and concurrent; and that The objection most strongly urged, howthere are no express limitations upon this at-ever, against this ordinance, is that it intertribute, except those contained in the 18th sec- feres with a law of the general government, tion, article 1st, of the Federal Constitution, as which, being supreme, must predominate, and to duties or imposts on imports, exports and it is roundly laid down that "should any State tonnage. directly or indirectly *modify, alter or [*460 abridge any of the acts of sovereignty of the United States, or render any of its measures nugatory or inoperative, or in any manner impeach the credit or impair the resources of the Union by taxation or otherwise, the act would be an interference repugnant to the Constitution," and that "a State cannot tax any of the constitutional means employed by the government of the United States to execute its constitutional powers;" "nor can it, by taxation or otherwise, retard, impede, burden, or in any manner control the operation of the constitutional laws enacted by Congress to carry into effect the powers vested in the national government."

Through these mutual admissions, the question now to be disposed of is simply, can a State constitutionally tax the income accruing to its citizens from six and seven per cent stock of the United States owned by them individually?

The purpose of plaintiffs in error is to make out by implication a restriction upon a sovereign and vital, though a concurrent State right. This is attempted upon substantially three grounds: 1st. That the tax in dispute is a violation of the faith and obligation of a contract. 2d. That the credit of the United States upon which it bears did not exist until after the Constitution was framed. And 3d, because it interferes with the means of the federal government necessary to carry their powers into effect.

Throughout this discussion the State has been treated as in an antagonistic position towards the federal government, and as seeking purposely to incommode and destroy its fiscal operations; while the direct effect of these upon the resources of the State has been allowed no consideration. The ordinance in question is assumed to be a measure passed expressly to countervail and defeat a law of Congress. But it is nowhere demonstrated that a tax on this stock owned by individuals will be attended by any such consequence. The utmost that may ensue will be a prejudice to the preference of this stock in market, and perhaps the citizens of the State imposing the tax may find it more profitable to invest their capital otherwise. This creates a question of policy, at the discretion of the State alone, whether it will drive abroad a particular means of speculation; but the reflection is beside the constitutional inquiry now agitated.

As to the first objection, certainly if the United States were to impose a tax going to diminish the interest it had stipulated to pay the purchasers of this stock, such a measure 459*] *would be a violation of faith. But the reason does not hold as to a third person, not a party to the contract; and in this light the State of South Carolina stands; for her faith is pledged as an integral part of the Union in this respect only, quoad federal taxation. She has come under no obligation individually, not to draw her resources from these funds, though emanating from the common authority whenever they pass into the hands of her peculiar citizens; and it may be presumed that the liability of this stock so situated to State taxation, was perfectly understood by those who became holders and entered into their contract with the general government. As The position broadly taken here is that if the well might a tax imposed by a State on the exercise of a concurrent power by a State inpublic lands within its limits when sold out to terferes with a power of the general governprivate persons be treated as a departure from ment, the former must give way. What is the good faith and a violation of the contract of extent of interference which is to be thus resale, for here, as much as where public stock is sisted? and how is this interference to be created and sold, a State is a party to the en-graduated? Here it is always put as mounting gagement that no more than a certain price is to the point of destruction, and as brought into to be paid for the property, and that its profits action ipso intuitu. To presuppose hostility on are not to be diminished. It is said, however, the part of the State is wholly gratuitous, and that where lands are sold, the United States greatly to be deprecated. As much may be parts with the freehold with no prospect of re-trusted to the liberality and forbearance of a sumption, and that it is otherwise with stock. State, as of the federal government; and Yet in point of fact the only difference is be- *comity and cordial confidence should [*461 tween the real and personal property of the characterize all their relations. All the reasongovernment, for in the case of a sale of the ing in this case is against the abuse of a conformer on credit, liable to a foreclosure of mort- ceded State right, and it is founded upon a gage, there will be a chance of its reverting to quia timet, and its materials are extremes. Not the public domain; and surely it will not be ex- even a surmise is thrown out that this tax has, empted from State taxation until the last cent in point of fact, impeded, much less frustrated of the price is paid off. a fiscal operation of government; but it is said that if the power it involves were pushed further it might have that effect; and that as it is without any limit or control save the discretion of a State, no guarantee against its abuse short of abolition should be accepted. This is

It is next said that this stock constitutes the credit of the Union which, not having existed anterior to the adoption of the Constitution, cannot be subjected to State taxes unless by virtue of some provision in that instrument. This