Page:Harvard Law Review Volume 32.djvu/947

INDIRECT ENCROACHMENT ON FEDERAL AUTHORITY 911 conflict with the Act of Congress authorizing its payment from the federal treasury .^^ The element of discrimination which had been present in the three cases decided in Marshall's time, and which had passed un- noticed, received explicit consideration from Mr. Justice Nelson in Bank of Commerce v. New York City ^^ decided in the second year of the Civil War. The learned justice's treatment of the point is not wholly immune from criticism. The tax before him was one on the capital stock of a bank, and the decision was that a tax on the capital was a tax on the property in which the capital was invested, and that such part of this capital as was invested in United States bonds must be excluded from assessment. In answer to the con- tention that the Weston case did not apply to such a tax, he said: "It is true that the ordinance imposing the tax in the case of Weston vs. The City of Charleston, did discriminate between the stock of the United States and other property — that is, the ordinance did not purport to impose a tax upon all the property owned by the taxpayers of the City, and specially excepted certain property altogether from taxation. The only uniformity in the taxation was, that it was levied equally upon the articles enumerated, and which were taxed. To this extent it might be regarded as a tax on the stock eo nomine. But does this distinction thus put forth between the two cases distinguish them in principle? The argument admits that a tax eo nomine, or one that dis- tinguishes unfavorably the stock of the United States from the other property of the taxpayer, cannot be upheld. Why? Because, as is said, if this power to discriminate be admitted to belong to the State it might be exercised to the destruction of the value of the stock, and, conse- quently, of the power or function of the Federal Government to issue it for any practical uses. ... It will be seen,|^herefore, that the distinction claimed rests upon a limitation of the exercise of the taxing power of the State; that if the tax is imposed indiscriminately upon all the property of the individual or corporation, the stock may be included in the valua- 2* "The compensation of an ofl&cer of the United States is fixed by a law made by Congress. It is in its conclusive discretion to determine what shall be given. It exer- cises the discretion and fixes the amount, and confers upon the officer the right to re- ceive it when it has been earned. Does not a tax then by a state upon the office, dimi- nishing the recompense, conflict with the law of the United States, which secures it to the officer in its entireness? It certainly has such an effect; and any law of a state im- posing such a tax cannot be constitutional, because it conflicts with a law of Congress made in pursuance of the Constitution, and which makes it the supreme law of the land." (16 Pet. (U. S.) 43S, 449-So.) » 2 Black (U. S.) 620 (1862), 31 Harv. L. Rev. 329.