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not be exercised. Above all, everything which comes exclusively within the jurisdiction of the states must be left alone by congress. Every tax which is confessedly laid for a private purpose is unconstitutional. But the tax laws of congress never specify an object to which the funds yielded by the tax shall be applied. The courts are therefore not in a position to guard against the burdens imposed by a law upon the ground that an unconstitutional application of the resulting funds is intended. The constitutionality of federal taxes and of the use made of the federal funds are wholly distinct questions, which must be kept far apart. So far as appropriations are concerned, the courts evidently should decide against the power assumed by congress only in perfectly clear cases. For, in the nature of things, the legislative and not the judicial power has to discover what the “ general welfare" demands and what may promote it. In congress, however, the very comprehensiveness and vagueness of the expression make it possible to raise the constitutional question continually, but the decision is usually made from a political rather than a legal standpoint, however much legal arguments may have been formally pushed into the foreground during the debate. The legislative history of the Union, especially until the outbreak of the rebellion, forms a continuous chain of illustrations of this fact. Protective taxes and those levied for the so-called "internal improvements," i. e., building roads, improving rivers, etc., have been claimed to be unconstitutional. Theoretically the contest is not entirely at an end at the present day, but the actual development of affairs has been so great that the one set

1 Gibbons vs. Ogden, Wheaton, IX., 199.

2 See a number of instances and the judicial decisions upon them in Cooley, Principles, 58.

of contestants carry on the conflict on politico-economical grounds exclusively, and the others make their defense on the basis of the industrial and political interests concerned in the particular case, unless, indeed, no national importance can be given to the interest in dispute.

Finally, the states' concurrent right of taxation puts certain limitations upon the congressional right. Both are alike limited by several express provisions of the constitution. Without the consent of congress, the states can burden imports and exports with imposts of any kind whatever, only so far as is absolutely necessary for the execution of their inspection laws (art. I., sec. 10, § 2).1 The states cannot levy a tonnage tax without the consent of congress (art. I., sec. 10, § 3). If, however, the conclusion were drawn from these express prohibitions that the states' right of taxation were subject to no further limitations, they might exert it in such a way that the federal government would be unable, except under great disadvantages, and perhaps not able at all, to carry out what it had found best to do in the discharge of its constitutional functions. And if the congressional power of taxation were subject only to the restrictions thus far noted, congress could so use it that the states would be hindered and crippled, even when they were acting within the constitutional limits of their authority. In either event, violence would be done to the fundamental idea of the constitution, that the federal government and the state governments have the same aim the welfare of the people. The concurrent right, therefore, is subject in each case to those limitations which are necessary for the security of the interests entrusted by

1 The net proceeds of such imposts must be paid over to the United States, and all such laws are subject to the revision and control of congress.

the people to the protection of the other political factor. It is impossible to point out every single consequence of this general principle. A few instances will make the matter sufficiently clear. The states cannot tax a bank created by the United States and acting as their fiscal agent, or the salary or other emoluments of federal offi

cials, or federal bonds, etc. Congress cannot tax state property, such as a railroad, salaries of state officials, municipalities and their property, etc.2

Among the debts of the United States for the payment of which congress could levy taxes are to be understood

1 The fact that a corporation created by the United States renders its creator some service does not entitle it to exemption from all taxation by the states. Railroad Co. vs. Peniston, Wallace, XVIII., 5.

2 See on this point, McCulloch vs. Maryland, Wheaton, IV., 316; Veazie Bank vs. Fenno, Wallace, VIII., 533; and Collector vs. Day, Wallace, XI., 113. The principal sources of income of the Union are the customs and the internal revenue taxes. The latter are sufficiently characterized by giving the principal heads of the income derived from them. The nation received in 1884 from distilled liquors, $76,905,385; from tobacco, $26,092,400; from malt liquors, $18,084,954. In 1883, it received from the sale of stamps, with which various articles had to be provided, $7,053,053; and from banks and bankers, $3,784,995. The taxation of business formerly went much further than at present. But even now it is not restricted to banks and bankers, as might appear from the above list. (The taxation of the capital and deposits of banks and bankers ceased March 3, 1883; they are, however, burdened with several other taxes.) Every manufacturer and dealer in tobacco or the liquors designated is still subject to taxation as such. The articles and occupations which had to be taxed during the war, but which have since been freed, yielded in 1866 an income of $236,236,037. The proceeds of the customs were, in 1884, $195,067,489. The total imports for the year 1883 represented a value of $723,180,914, of which $515,676,196 consisted of merchandise subject to duties. These goods paid an average duty of 41.63 per cent., equal to 29.68 per cent. on the total import. In 1884 the imports decreased to $667,697,993. On the questions here treated, see F. Hilliard, Taxation, Boston, 1885, and Cooley, Law of Taxation, Chicago, 1876.

those incurred under the articles of confederation as well as those contracted afterwards. The former are covered

by the provisions of article VI., § 1, that the validity of existing obligations shall not be touched by the adoption of the constitution. The latter are covered by the express grant of the right to contract new debts. Congress is empowered "to borrow money on the credit of the United States" (art. I., sec. 8, § 2). This power is granted without any limitation. Money may therefore be borrowed in every way known to modern mercantile life; nay, according to the decisions of the supreme court, in such a way that there is no borrowing whatever, even in the broadest sense of the term, but simply an advantage gained to the nation by the strengthening of its credit. The right to create the United States bank was deduced from this provision. Upon this clause, moreover, the constitutionality of the present system of national banks must be based. Whether (and, if so, how far) congress has the power of making the federal currency a legal tender is a question which has formerly, and again quite recently, actively engaged the attention of the people, the politicians and the courts. But, in spite of the repeated decisions of the supreme court sustaining it, this power is

1 In this connection the fourth section of the fourteenth amend

ment, which needs no commentary, may be cited. "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 or rebellion, shall not 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, or any claim for loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void."

2 They are compelled to invest a large portion of their capital in government bonds, and thus the federal government can naturally borrow money much more easily.

not considered as definitely established, since public opinion looks upon these decisions and their motives, at least in part, as very doubtful. Efforts are therefore being made to settle this very important question beyond doubt by an amendment to the constitution. At this point I can supplement what has been stated in another connection concerning this great contest by pointing out another constitutional provision, which cannot be properly wholly disregarded in the argument, but, nevertheless, contains no certain indication of the intentions of the authors of the constitution on this question. The states are forbidden to "make anything but gold and silver coin a tender in payment of debts." The question was therefore not overlooked by the Philadelphia convention. But what conclusion is to be drawn from the express prohibition on the one hand and silence on the other? Was there no need of prohibiting congress because it has only the powers granted it? Or may the disputed power be deduced from this silence, because without it the worth of the power to borrow money would have been substantially diminished and this power was granted without any limitation? No party and no political school has ever declared it to be a general principle of constitutional law that the federal government must be authorized to do whatever the states are expressly forbidden to do. And the very matters most closely related to the question in hand are not so treated by the constitution as to necessitate such a conclusion. In the very same paragraph the states are forbidden to coin money, but although this right must rest somewhere and could appertain only to the federal government if denied the states, yet the constitution does not let the matter rest with that

1 Not "their" debts, as Schlief (p. 469) very arbitrarily translates this.