Page:Popular Science Monthly Volume 50.djvu/491

Rh, held "that a tax on stock of the United States, held by an individual citizen of a State, is a tax on the power to borrow money on the credit of the United States, and can not be levied on the authority of a State consistently with the Constitution," and, further, "that if the right to impose a 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 which imposes it, which the will of such State or corporation may prescribe. Can anything," continued the Chief Justice, "be more dangerous or more injurious than the admission of a principle which authorizes every State and every corporation in the Union which possesses the right of taxation to burden the exercise of this (borrowing) power at their discretion?" A tax on the stock or bonds of a State is therefore a tax on the borrowing power of such State.

The court further held that a tax of this description was a tax upon contracts, using the following language: "Congress has power to borrow money on the credit of the United States. The stock it issues is evidence of a debt created by the exercise of this power. The tax in question is a tax upon the contract subsisting between the Government and the individual. It bears directly upon the contract. While subsisting and in full force, the power operates upon the contract the instant it is framed, and must imply a right to affect that contract. If the States and corporations throughout the Union possess the power to tax a contract for the loan of money, what shall arrest the principle in its application to every other contract? What measure can Government adopt which will not be exposed to its influence? 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