730 



UNITED STATES. 



tax on the shares of its stock it must be because the 

 Constitution of the United States or some act of Con- 

 gress forbids it. There is certainly no express pro- 

 vision of the Constitution on the subject. But it is 

 argued that the banKs, being instrumentalities of the 

 Federal Government, by which some of its important 

 opeiations are conducted, cannot be subjected to such 

 State legislation. 



It is certainly true that the Bank of the United 

 States and its capital were held to be exempt from 

 State taxation on the ground hero stated, and this 

 principle, laid down in the case of McCulloch vs. 

 The State of Maryland, has been repeatedly reaffirmed 

 by the court. But the doctrine has its foundations 

 in the proposition that the right of taxation may be 

 so used in such cases as to destroy the instrumentali- 

 ties by which the Government proposes to effect its 

 lawful purposes in the States, and it certainly cannot 

 be maintained that banks or other corporations or 

 instrumentalities of the Government are to be wholly 

 withdrawn from the operation of State legislation. 

 The most important agents of the Federal Govern- 

 ment are its officers, but no one will contend that 

 when a man becomes an officer of the Government 

 he ceases to be subject to the laws of the State. The 

 principle we are discussing has its limitation, a limi- 

 tation growing out of the necessity on which the prin- 

 ciple itself is founded. 



That limitation is, that the agencies of the Federal 

 Government are only exempted from State legislation 

 so far as that legislation may interfere with or impair 

 their efficiency in performing the functions by which 

 they are designed to serve that Government. 



The judgment of the court below was af- 

 firmed, sustaining the legality of the tax. 



In a case in which an administrator had 

 made an investment in Confederate bonds, 

 Chief-Justice Chase, presiding in the Fourth 

 Circuit and District of Virginia, ordered a new 

 settlement to be made. He said : 



The important questions in the case are two : 



First. Was the investment in the loan of the Con- 

 federate States one which a prudent person, acting as 

 trustee or administrator, might make ? And 



Second. Was the investment, being actually made 

 in a loan to a politico-military organization formed 

 for the purpose of overthrowing the Union of the 

 States under the national Constitution and establish- 

 ing a new confederation in a portion of those States, 

 one which, under any circumstances, can be rec- 

 ognized in the courts of the United States as excus- 

 ing the administrator from accounting for the funds 

 in nis hands to the parties otherwise entitled lawfully 

 to receive them ? 



Upon the first question little may be said. It must 

 indeed be regarded as already decided. The court of 

 the State authorized by_ law to consider and sanction 

 investments by administrators sanctioned the loan 

 under consideration ; and it is agreed that the most 

 prudent and careful business men were in the constant 

 habit of making such investments. It would seem, 

 therefore, to be unreasonable to call in question the 

 good faith or prudence of the administrator in the 

 circumstances by which he was surrounded. If there 

 had been no decision of the State court approving 

 the investment, we could not say that the adminis- 

 trator ought to be charged if the investment were 

 free from objection on other grounds. 



This makes it necessary to consider the second 

 question. But we need not examine it at length, for, 

 in the case of Bolts vs. Crenshaw, in this court, we 

 held that the investment even of Confederate cur- 

 rency in Confederate bonds, by an attorney who had 

 collected a debt due to a citizen of Kentucky, in the 

 currency, under what were considered to be justifying 

 circumstances, did not absolve him from accounting 

 Jbr its value, although, in that case as in this, the in- 

 vestment had been sanctioned by a court whose deci- 



sion, but for the abnormal condition created by tho 

 rebellion, would have been conclusive. 



This case, we think, covers the present in principle. 

 Whatever may have been the motive inducing such an 

 investment, however it may have been warranted by 

 example, or even by judicial authority, itself involved 

 in the general rebellion, it is impossible that it should 

 receive the sanction of a court of the United States. 



We must hold, therefore, the investment com- 

 plained of to be inoperative as a discharge from re- 

 sponsibility to the complainant. 



Numerous conventions, relating to industrial 

 and social affairs, assembled during the year. 

 The second annual Southern Commercial Con- 

 vention convened at Cincinnati on October 

 4th. The attendance was large, and the sub- 

 jects considered were as follows: 1. Direct 

 trade between Southern Atlantic cities and 

 Europe. 2. Southern Pacific Railroad. 3. Ob- 

 struction to navigation by narrow-span bridge- 

 piers. 4. Continuous water-line communica- 

 tion between the Mississippi Eiver and the At- 

 lantic seaboard. 6. Removal of obstructions 

 from the mouth of the Mississippi River. 6. 

 Construction of permanent levees on the Mis- 

 sissippi River. *r. To abolish all charges on the 

 navigable rivers of tho United States. 8. The 

 enlargement of the more important lines of 

 canal in the United States so as to render them 

 navigable for vessels propelled by steam. 9. 

 Finance and taxation. 10. Free trade in money. 

 11. A settled policy, in the public interest, in 

 regard to the disposition of the government 

 lands. 12. That all railroad viaducts over navi- 

 gable rivers be made highways for railroad 

 companies, which will pay their pro-rata toll 

 on the same ; and that efforts be made to se- 

 cure legislation to that effect. 13. The charges 

 on passenger and freight traffic by rail and 

 water lines. 14. To abolish throughout the 

 whole country all license imposed on commer- 

 cial travellers. 15. Removal of the national 

 capital. 



The committee on direct trade with Europe 

 from Southern cities made the following re- 

 port: 



Your committee have given, in the limited time 

 allowed them, all the attention which its paramount 

 importance so eminently deserves. These interests 

 involve the restoration of American shipping, which 

 most important question occupies the public mind, 

 the consideration of which the American people will 

 require from their representatives in Congress.as it 

 is alone to Congress we can look for relief. From 

 them we require legislation to secure the desired 

 result, which being accomplished, all sections of 

 the country will be placed on an equal footing. The 

 South will see ships under our own flag taking 

 off their products and bringing in their imports direct 

 to their own cities, saving the varied expenses of 

 transportation, labor, etc.. now involved in exports 

 and imports through indirect ports. Under such 

 proper arrangements ships loaded with the products 

 of the South would return to their own ports, not 

 only with such foreign merchandise as they require 

 for trade and consumption, but with immigrants with 

 large or small capital and sturdy muscle and energy, 

 to settle her fertile, cheap lands, and develop her re- 

 sources, to the direct benefit, not only to the South, 

 but the country at large. 



To accomplish these results your committee think 

 that it is the true policy of the Government to grant 



