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stock, as well as the dividends. But the rights of the complainant may be adjusted without interfering with the right of the claimants of the stock, or with the balance arising from its sale, which yet remains in the hands of the Merchants’ Bank. For it is immaterial to the complainant whether the stock is replaced or not. All that she has a right to demand is, that the amount of dividends on 282 shares of stock, which she has lost by the negligence or misconduct of the officers of the bank, shall be paid to her, as if the stock had never been transferred. The jurisdiction therefore to decree in the controversy, as to the stock, cannot, we think, be maintained.

We have said nothing of the decree of the Chancery Court of Maryland, which has been filed in the case. Neither of the banks were parties to the proceedings in that case: nor do they appear to have had notice of it; neither was the complainant a necessary party. She had no interest in the property to be divided; and it was not proposed to change or modify in any respect the trust in her favor. And the decree passed by the court leaves her interests precisely where they stood before.

In regard to the stock itself, the decree for partition has in a material respect changed the character of the trust. For the two executors, instead of holding it in undivided portions for the cestui que trusts, named in the will, hold under the decree, as trustees for those to whom it has been specially assigned in severalty. And it may be doubted whether this circumstance does not form an additional objection to the jurisdiction of this court in regard to the stock: and whether Samuel Jones and Andrew D. Jones ought not to be considered as trustees appointed in that respect by the Court of Chancery, to hold this stock in trust for the cestui que trusts named in the decree; and therefore responsible for their conduct to that court, rather than to a court of the United States. It is, however, not necessary to examine this question, because it does not affect the dividends bequeathed to the complainant, and certainly can form no objection to the jurisdiction in her case.

It appears from the evidence, that the stock sold for more than enough to pay the note for which it was hypothecated; and that besides the surplus arising from this sale, one of the semi-annual dividends upon these 282 shares remains in the hands of the Merchants’ Bank, deducting therefrom the amount paid by the bank for taxes on this stock. The amount of the dividend remaining in the hands of the Merchants' Bank, subject to the deduction aforesaid, belongs in equity to the complainant, and for that amount she is entitled to a decree against the Merchants’ Bank. For the residue of the dividends due to her, and remaining unpaid, the Commercial and Farmers' Bank must answer.

The case must be referred to a master, to state an account according this opinion, preparatory to a final decree.


This case came on for trial at a special session of the Circuit Court for the Dis. trict of Maryland, held in July, 1848.

Counsel for the complainant, J. Mason Campbell, Esq.; and for the defendants, Dobbin & Talbott, J. V. L. McMahon, Brown & Brune, John Glenn, Samuel J. Donaldson and Reverdy Johnson, Esquires.



Communicated for the Bankers' Magazine. My examination of the cases relating to the power of the States to tax in respect of the stock loans of the United States, I submit with pleasure, and shall be glad to receive any further knowledge on the subject.

In the case of McCulloch vs. State of Maryland, 4 Wheat. 317, the State of Maryland by an Act passed 11th Feb., 1818, levied a stamp tax on “all banks in the State not chartered by the Legislature," and required all notes of such banks to be issued on stamped paper, and inhibited under penalties the circulation of the notes of such banks, except upon stamped paper, and after elaborate arguments on both sides, it was decided by the Supreme Court of the United States, that this tax was a political tax, levelled at the Bank of the United States, and could not under the Constitution of the United States, be levied on the notes of the Bank of the United States, because it would be a restraint on the necessary and proper exercise of the powers of the United States, repugnant to the exercise of its supremacy, and that no single State could tax, control, or impede this banking franchise of circulation which it could not create.

In the case of Osborne vs. Bank of the United States, 9 Wheat. 738, the tax was levied on the Bank of the United States, specifically by the State of Ohio, and the effects were seized under order of the Auditor of Ohio, by distraint, and it was again decided that this tax was unconstitutional. In the case of Plouden Weston vs. City Comm’rs of Charleston, 2 Pet. S. C. R. 449, there was a tax specifically levied by statute of the city, on the stock loan of the United States as such, and it was decided that a tax so laid was in restraint of the power of the General Government to borrow money, and unconstitutional; such also is the case of Palon vs. City Council, &c., 1 Nott & McCord, 527.

A similar case is that of Commonwealth vs. Morrison, 2 Atk. Marsh's Kentucky Rep. 75.

It appears to me however that none of these cases affirming the decision in McCulloch vs. State, 4 Wheat. 317, have overruled the opinion of Ch. J. Marshall, that the State can tax the real estate of the Bank of the United States, in common with other real estate in the State, and can tax its citizen by an equable tax in respect of the worth of his interest in the joint-stock of the Bank of the United States, in common with his other property.” And it is difficult to reconcile with this decision, an impression prevalent in the country, that a citizen cannot be taxed by his State in respect of his interest in the stock loans of the United States, in common with his other estate, and that he has in this view an exemption beyond what he could have as a joint-holder of capital stock of the Bank of the United States.

A mode is said to prevail in Boston to ascertain the wealth of the citizen, by the assessors assuming him worth such sum as they believe him to be, and at this he is rated, unless he under oath deny the correctness of the estimate, and then sums are assumed successively, until he fails under oath to deny the limit,—and how, under this system, can it matter whether the citizen's worth was of real estate, chattels, or United States' Bank Stock, or United States' Loan;—nor can this be held in any justice a restraint of the franchises of the General Government. I am aware that the Act of Maryland of 1841, section ), chapter 23, exempts specifically in terms, the United States' stock loans from assessment, and as the Acts on this subject were intended to introduce the system adopted in Boston, the exemption appears singular, unless it is based on some decision of the Courts of the United States, with which I am unaquainted; and even if it be so, its conformity to the Constitution and Bill of Rights of this State might well be denied, as the 13th sec. of our Bill of Rights declares that “taxes shall be laid on every person (except paupers) in the State, in proportion, according to his actual worth in real or personal property within the State,” for the support of government or benefit of community.

I shall be glad to learn how this exemption, tending to favor the capitalist, can be reconciled with the Bill of Rights of this State, or with the decision of Ch. J. Marshall in 4 Wheat. 317, M. C. vs. State.

J. S. M.

From the New York Courier and Enquirer. A paragraph was inadvertently inserted under our money head of Saturday night, expressing surprise at the general impression that prevails, that United States' Stocks are exempt from taxation, and declaring very emphatically that such impression was erroneous.

Our surprise certainly was great at seeing this paragraph, as we had before expressed, and still entertain a decidedly opposite opinion; and for the reason, that the Supreme Court of the United States have decided that Stocks created by the United States are not liable to taxation by any State government nor any corporation within any State government.

The case arose under a tax imposed by the City Council of Charleston, S. C., upon U. S. stocks or loans. The opinion of the Supreme Court of the United States was delivered in 1829 by Chief Justice Marshall. In that opinion he lays down clearly the right of the General Government under the Constitution to borrow money; and therefore rejects any interpretation which would authorize every State and every corporation in the Union, which possesses the power of taxation, to burihen at their discretion the exercise of the borrowing power of the General Government.

“ If,” says this opinion, “the right to tax exists, it is a right, which in its nature acknowledges no limits. It may be carried to any extent within the jurisdiction of the State or corporation that imposes it, which the will of such State and corporation may prescribe. A power which is given by the whole American people for their common good, which is to be exercised at the most critical period for the most important purposes; on the free exercise of which the interests certainly, perhaps the liberty of the whole may depend;--may be burthened, impeded, if not arrested, by any of the organized parts of the confederacy.

The power of taxation is one of the most essential to a State, and of


the most extensive in its operations. The attempt to maintain a rule which shall limit its exercise, is undoubtedly among the most delicate and difficult duties, which can devolve on those whose province it is to expound the supreme law of the land in its application to the cases of individuals. This duty has more than once devolved on this court. In the performance of it, we have considered it, as a necessary consequence, from the supremacy of the government of the whole, that its action in the exercise of its legitimate powers should be free and unembarrassed by any conflicting powers in the possession of the parts; that the powers of a State cannot rightfully be so exercised as to impede and obstruct the free course of those measures which the government of the United States may rightfully adopt.

In the case of McCulloch vs. the State of Maryland, this subject was thoroughly argued. It was discussed at the bar in all its relations, and examined by the court with the utmost attention.

The conclusion was, that “all subjects over which the power of a State extends are objects of taxation; but those over which it does not extend, are upon the soundest principles exempt from taxation.”

The sovereignty of a State extends to every thing which exists by its own authority, or is introduced by its permission—but not to those which are employed by Congress to carry into effect powers conferred on that body by the people of the United States. “The attempt to use the power of taxation on the means employed by the government of the United States in pursuance of the Constitution is in itself an abuse, because it is the usurpation of a power which the people of a single State cannot give.”

6 The States have no power by taxation or otherwise to retard,

66 impede, burthen, or in any manner control the operation of the Constitutional laws enacted by Congress to carry into execution the power vested in the General Government."

We retain the opinions which were then expressed. A control made by the government in the exercise of its power to borrow money on the credit of the United States, is undoubtedly independent of the will of every State, in which the individual who lends money may reside; and is undoubtedly an operation essential to the important objects for which the government was created. It ought, therefore, on the principles settled in the case of McCulloch vs. the State of Maryland to be exempt from taxation, and consequently from being taxed by corporations deriving their power from States."

Nothing can be clearer nor more explicit than this language-and as the decisions of the Supreme Court of the United States are the law of the land, it matters little what may be the opinions of this counsellor or that counsellor feed ad hoc that States or Corporations may tax United States' Stocks.

A question is indeed made whether, as included in the general amount of personal property, United States' Stocks may not be reached by a general tax on personal property--but it seems fair reasoning and applicable in this case, that what cannot be done directly cannot be afforded indirectly, and consequently that if United States' Stocks cannot be taxed eo nomine, they cannot be any more rightfully taxed by classing them under another name.




OF VIRGINIA, BY Robert R. Howison.” Published by Drinker & MORRIS, RICHMOND, AND Wiley & Putnam, New YORK.—1848.

January, 1804. It was at this time that the Bank of Virginia was first chartered and established. The expediency of this step had long been discussed, and was generally admitted. The State had been flooded with bank notes from the North, and though their character was often more than doubtful, yet the want of gold and silver, and the advantages of these notes for currency, introduced them into general circulation. In December, 1785, the old Bank of the United States had been authorised to establish one or more offices in Virginia, and to charge six per cent. on its loans; but its issues had not long supplied an acceptable currency. The evils arising from private bank notes had been so great, that the Legislature had positively forbidden them; and the demands of trade required that Virginia should no longer be behind the age in providing good investment for capital. The Act originally establishing the Bank of Virginia, provided that its stock should be one million five hundred thousand dollars, to be divided into fifteen thousand shares of one hundred dollars each; but by an Act passed ten years afterwards, its stock was increased one million of dollars, in ten thousand shares, of one hundred dollars each. Under the first law, the State was to subscribe for three thousand shares, and the whole amount of three hundred thousand dollars was to be loaned by the bank to the State, at four per cent. per annum interest. Under the last Act, the State was to retain two thousand shares, and the bank pledged itself to loan to her, when required, three hundred and fifty thousand dollars, at seven per cent. interest. The bank was clothed with regular corporate powers, and was authorised to establish branches in sundry towns in Virginia. Though its notes could not be made a legal tender for debt, yet the State sought to give them every sanction in her power, by making them receivable for public dues, and by depositing all of her inactive funds in the vaults of the bank.

Thus the system went into operation, and the subsequent favor bestowed on it by the Legislature, induces us to suppose that it was well managed. Yet very few years had elapsed before we read complaints and remonstrances in the public prints. Writers over feigned signatures began to talk of partiality and intriguing, and injury to public manners and morals. The salaries of the officers were said to be exorbitant, and were contrasted with those of the judges. Why should the president of the bank receive twenty-five hundred dollars, and the cashier three thousand, while a learned judge received but fifteen hundred? And these writers complain bitterly of inequality in discounts. They said the rich got all and the poor none. They drew a picture of a man coming from the country to live in the metropolis. “He is not long a resident of the city, before the most important traits in his character are strictly scrutinized. Is his paper good at the bank? says one;

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