CH. XIV.]
POWERS OF CONGRESS—TAXES.
499
to the important objects, for which the government was created. It ought, therefore, on the principles settled in the case of M'Culloch v. The Slate of Maryland to be exempt from state taxation, and consequently from being taxed by corporations, deriving their power from states.
It is admitted, that the- power of the government to borrow money cannot be directly opposed; and that any law, directly obstructing its operations, would be void. But a distinction is taken between direct opposition, and those measures, which may consequentially affect it; that is, a law prohibiting loans to the United States, would be void; but a tax on them to any amount is allowable. It is, we think, impossible not to perceive the intimate connection, which exists between these two modes of acting on the subject. It is not the want of original power in an independent sovereign state, to prohibit loans to a foreign government, which restrains the legislature from direct opposition to those made by the United States. The restraint is imposed by our constitution. The American people have conferred the power of borrowing money on their government; and by making that government supreme, have shielded its action, in the exercise of this power, from the action of the local governments. The grant of the power is incompatible with a restraining or controlling power; and the declaration of supremacy is a declaration, that no such restraining or controlling power shall be exercised. The right to tax the contract to any extent, when made, must operate upon the power to borrow, before it is exercised, and have a sensible influence on the contract. The extent of this influence depends on
