This case is of more than ordinary importance, both from the amount of the interests at stake and the nature of the principles involved. Savings institutions have ever been favorites of the public and of legislative bodies. Immense sums are entrusted to their keeping. Great care should therefore be exercised to prevent injuring their undoubted rights. Very great care should also be observed, especially at the present time, not to lessen, however slightly, the ability of the nation to obtain by its credit the means to sustain its life.
On the other hand, no portion of the community should be released from its proper share of the public burdens, and the rightful authority of a state over the taxation of its own citizens should be rigidly upheld.
*184This right of a state to tax, is necessary to its very existence, and its power, except when restrained by some constitutional limitation, or by the fundamental principles of natural justice, (which control all legislation,) is supreme. Chief Justice Marshall, in the case of Weston v. The City of Charleston, (2 Peters, 449,) speaking of this authority, says, “it is a right which in its nature acknowledges no limits.” In the use of this power the state may act judiciously or otherwise, but with the exercise of its discretion no court can interfere.
It was justly remarked by Judge Ellsworth, in Savings Bank v. New London, 20 Conn., 117, and again in Carrington v. Farmington, 21 Conn., 72, that taxes are at best arbitrary and unequal. Studied discriminations are made in all tax laws in favor of or against particular persons, or subjects, or trades, or business, or institutions. The character of this kind of legislation, as arbitrary, pai'tial, cumulative, and capricious, is well exemplified in the recent acts of Congress. From the nature of the case there can be no uniform rule of making ".the assessments. Most commonly the tax is laid upon property. But this is'not always the more convenient, expedient, or just mode. A large portion of the national revenues accrues from a tax on incomes, dividends, licences, .legacies, stamps, &c., irrespective of property.
In this state, for many years and until very lately, the form of taxing lawyers, physicians, traders, tavern keepers, manufacturers, and mechanics, was to assess them, either at a fixed sum for each respective class, or at the discretion of the “listers.” In familiar language this was called “an assessment on the faculty.” The present statutes are not free from similar provisions. A capitation fax still remains. The agent in this state of an insurance company existing out of the state, is required, in consequence of being allowed to conduct business here, to pay a certain percentage on the amount of his premiums and collections. Auctioneers and express companies are assessed in a like manner. In the case of quarry, mine, and ore bed companies, (joint stock or incorporated,) not only the stock itself, but the franchise, is expressly made *185subject to assessment. By a law of 1862 it is enacted that for the purposes of taxation no stock of any railroad company Shall be estimated in the list at less than ten per cent of its par value, although it was then notorious that much of the stock so to be valued was utterly worthless.
These examples show that the state has ever adopted, at its own will, different bases of taxation as applied to different subjects, and there is no occasion for surprise that the legislature in the matter before us thought proper to impose a tax directly and specifically on these corporations, as such, without reference to their assets.
There is no reason why they should not contribute their full share to support the government through which they exist and flourish. At first their number and deposits were so small, and their objects and results so beneficent, that they were properly relieved from the common burden. They have since been found so advantageous, not only to ,the humble few whose interests they were expected to subserve, but to the public at large, that in this state they have attracted to their vaults nearly thirty millions of dollars. They act under charters from the state for which other banks formerly paid high premiums. Their franchise confers privileges of great value. A corporation is a creature of law, invisible and intangible, and possessing properties by which a succession of persons are considered the same. It may buy, sell, and contract, sue and be sued, take, hold and transmit property, as though it were a single individual, and that one an immortal being. Marshall, O. J., in Dartmouth College v. Woodward, 4 Wheaton, 636.
Over this class of corporations the state keeps careful and continual watch. It requires that the trustees shall neither receive any pay, nor derive any benefit from the use of the funds, and that they shall render their regular accounts. It sends its commissioners to examine their condition and protect their interests. It exempts them from all taxation except the one in question, and a tax on their real estate not *186used for banking! purposes. The importance of this exemption is very great and is increasing with a fearful rapidity.
; In return for these privileges an equivalent is exacted in •the payment of a tribute in the form prescribed by statute. There is a difficulty in arranging the mode of taxation adapted .to theáe institutions. It was said by Judge Ellsworth, in the -case of Savings Bank v. New London, 20 Conn., 117, that they have properly “ no stock and no capital.” They are merely •places of deposit where money can be left, to remain or be -taken ,'out at the pleasure of the owner. The sums held by them are perpetually changing. On these accounts the legislature established as a rule of assessment the amount of deposits on hand at particular times.
. The act of Congress declares that the bonds, treasury notes, ■and other obligations of the United States,- shall be exempt ■from taxation by or under state or municipal authority. The •statute of Connecticut requires that each of the savings banks -shall annually pay to the treasurer of the state a sum equal to three-fourlhs of one per cent on the total amount of deposits in such savings bank, on .the first day of July, in each successive year. The question is whether this law interferes with the act of Congress. Unless such an interference clearly appears, every presumption must be that the state has not violated its duty and, exceeded its power.
It is a well-known rule of construction that laws relating to the same subjects shall not be held to be inconsistent with each other, unless the conflict results from the express terms used or from a necessary implication.. In this case no difficulty exists in the language of the laws, and very little, as we think, in the meaning and spirit of them. The nation says that its obligations shall not be taxed. . The state does not tax them. It lays its hand on the bank itself. ■ It does not allude to any property as such. It provides for no valuation of property. It creates no lien. It; directs no sale or forfeiture for neglect of payment. It treats the. deposits as a sum of money left with the bank by its ownera on interest for a time, and liable at any moment to be withdrawn.- It takes no notice of the manner in which this sum may be invested, *187or whether it is invested at all; and it never inquires into the profits, or losses, or condition, or prospects, of the bank. If its assets double in value it pays no more; if they decrease one-half it pays no less. If they consist partly of forged notes not' collectible, no allowance is made ; why then should a deduction be claimed when, a like part is invested in notes not taxable merely ?
These considerations prove, as it seems tó me, conclusively, that the tax is not imposed on the securities, but on the bank;, and it is not imposed on the bank because of its holding the securities, but in consequence of its doing, under favor of the state, certain business which that favor renders profitable. The tax is a payment for the benefit. It is proportionate to the extent of the business, and the amount of the deposits is the index or measure of that extent. The tax stands upon the same ground as that collected of an insurance agent or an auctioneer, as before referred to. It resembles an assessment on a stock and exchange broker, dealing" in these securities, not on account of the securities but for the occupation which he pursues ; or perhaps more nearly a percentage levied upon a pawn broker, depending upon the amount of his loans, which is certainly no tax upon the heterogeneous articles left with him in pledge. It is hardly more a tax upon property than would be a contribution demanded by a military commander of a captured city, ^s the price of his protection.
In this case it has been shown that the tax is not only laid upon a legitimate subject, but is eminently just and proper. This fact, however, is immaterial, for the law of the state, not conflicting with the act of Congress, is peremptory and supreme. The legislature may well say, “ Sic volo, sic jubeo; stet pro ratione voluntas.”
This view of the subject avoids any objection arising from the decisions of the Supreme Court of the United States in the case of McCulloch v. Maryland, and other cases of that class, relied upon by the counsel for the defendants.
But an earnest and a very plausible argument against the state law, is, that it deprives the national obligations of an immunity which contributes materially to their value. The reply to this *188is, that such is not the object of the law, nor its direct and immediate effect. The tax is laid, as we have seen, on the corporation for its facilities of business, and not on its assets. The mode is chosen as the best, if not the only one, appropriate to the institutions. Their assets are continually varying in character as well as in amount. The securities pass by delivery. On the day of the required return the bank may be holding none; or it may have a large portion of its deposits thus invested, possibly so arranged for the very occasion, and in reference to the tax. The law is unable to follow these changes, perhaps dodges, and ignores them altogether. The state, in a friendly spirit, allows large amounts from its banks and trust funds to be placed in the national obligations ; and this favor probably enhances, as much as the tax lessens their worth.
If the unintentional, remote, and indirect result of the law is, in some degree, to affect their value, surely that circumstance should not be held sufficient to nullify the high prerogative of the state in a matter so vitally important as the taxation of its own citizens, and especially the institutions of its own creation.
Suppose that the state should extort from private bankers, operating, as they do, extensively in government paper, a license tax so' onerous as to diminish, or even terminate their business; or suppose that now, as formerly, the statute required that the money of banks, trust funds, Ac., should be loaned on interest in such a manner as to exclude the use of national securities ; the tendency of these measures would of course be to obstruct a wide channel for the circulation of the paper, close a profitable market against it, impair its credit, and reduce its value. But would the laws be unconstitutional? Would an assessment of a certain percentage upon legacies be inoperative in a particular instance because the estate to be charged consisted wholly or in part of government bonds ? And yet the immunity in such a case might add greatly to their demand for the purposes of investment. It is never within the scope of human law to embrace distant and con*189tingent consequences. The connexion between cause and ultimate, effect is an endless chain.
The conclusion to which we have come corresponds with the decisions elsewhere in similar cases. In Massachusetts a question arose as to the power of the state under its constitution “ to impose upon savings banks an annual tax on account of their depositors upon the amounts of their deposits,” to be assessed at certain times of the year as provided by the statute. The court sustained the law. Bigelow, Ch. J., after stating some general propositions, says:—“Having in mind these well settled rules of exposition, it appears to us that the assessment imposed by the provisions of the statute under consideration must be regarded as an excise or duty on the privilege of the corporation, and not as a direct tax on money in its hands belonging to depositors.” Again:—“ If it be objected to this view of the effect of placing an excise on the franchise of savings banks, that it, in its essence and operation, is a direct tax on property because the burden actually falls on depositors, the sufficient answer is, that this result flows from the peculiar nature of the franchise on which the tax is laid.” And again:—“ The subject to be taxed was the present existing value of the franchise of these corporations, that is, the amount of benefit and advantage which the charter of each bank conferred on those who held it and enjoyed its privileges.” Commonwealth v. People's Savings Bank, 5 Allen, 428.
By the revised statutes of New York in 1830, it was provided that moneyed corporations should be assessed on “ the amount of capital stock paid in and secured to be paid in, ” &c. The courts held in numerous cases that the tax was not on the property but on the corporation. The People v. Commissioners of Taxes, 23 N. York, 192; The People v. Supervisors of Niagara County, 4 Hill, 20; Farmers' Loan & Trust Co. v. City of New York, 7 id., 261; Bank of Utica v. City of Utica, 4 Paige, 399; Mutual Ins. Co. of Buffalo v. Supervisors of Erie County, 4 Comst. 442; Sun Mutual Ins. Co. v. City of New York, 4 Seld., 241; Bank of Commerce v. Commissioners of Taxes, 25 How. Pr. R., 9. In 1857 the law was changed, and; the; statute enacted that instead of taxing *190the nominal capital, expressed by the words “ capital paid in,” the officers should assess the capital stock at its actual value. In the cases of the Bank of Commerce and the Bank of the Commonwealth, 2 Black, 620 and 635, the Supreme Court of the United States, held—Judge Nelson giving the opinion— that by the law as it stood prior to the act of 1857, (that is, under the law of 1830,) “ it was immaterial as to the character or description of property which constituted the capital, as the tax was wholly irrespective of it. The tax was like one annexed to the franchise as a royalty for the grant. But since the change of the system, it is agreed the tax is on the property constituting the capital.”' And therefore it was held that the securities were exempt from taxation.
The principle recognized in these cases is directly applicable to the case under consideration.
But the course of legislation and litigation on the subject in New York did not rest here. For in 1863, after the decision of the Supreme Court of the United States, in the cases in 2d. Black, exempting the securities—Congress having also, in February 1862, passed a law expressly exempting them when held by a coi’poration as well as an individual—the legislature of that state enacted that all banks should be liable to taxation,, on “ a valuation equal to the amount of their capital stock, paid in or secured to be paid in, and their surplus earnings,” &c. Thereupon the Court of Appeals, in the cases of the Bank of Commerce and the Bank of the Commonwealth, decided that the law- of 1830 was substantially restored and the securities ■ were not-exempt.
These cases were taken to the Supreme Court of the United States, and- it now appears (February 1st, 1865,) that the decisions in New York have been reversed, and the securities have been declared ‘free from liability. The opinion is not yet published. But.'-we can-'not believe that the final settlement of the question before that tribunal will interfere with the determination of this court, as the cases in New York and Connecticut are essentially different. The tenor of our argument points out the difference.
In New York the banks are organized according to a gen*191.eral law, and not under particular enactments. They possess capital and stock. The assessment is on a valuation, which implies and requires property as its basis. The distinction between the assessment of an article at $100, and on a valuation equal to $100, is not very apparent. Indeed the change of the provision in New York is confessedly a sheer evasion of the law of Congress. Not so in Connecticut. Our statute was passed in good faith, without reference and long prior to the national enactment. Our savings institutions, as before stated, are created by special charters, investing them with peculiar powers. They have no stock and no capital. They are in fact large incorporated agencies for receiving and loaning money on account of its owners. The assessment is not based on any valuation of property express or implied. It pertains not to ownership but to privilege. It is exacted of the corporation in the nature of a license or income duty as a remuneration for the advantages afforded by the state, and in accordance with a right which the state will not willingly forego.
We advise that judgment be rendered for the plaintiff.
In this opinion the other judges concurred, except Park, J., who dissented.
Park, J.The question in this case is, whether the statute of 1862 imposes a tax upon the property of savings banks, or upon the corporations themselves, irrespective of their property.
If it imposes a tax upon their assets, then it is conceded by counsel, and by a majority of the court, that the law con.fiicts with the constitution of the United States, and the law of Congress, so far as it attempts to tax the investments made by the defendants in the securities of the United States, and is so far null and void. No doubt such would be the consequence. McCulloch v. Maryland, 4 Wheat., 316; Osborn v. Bank of United States, 9 id., 738; Brown v. Maryland, 12 id., 419; Weston v. Charleston, 2 Peters, 449; Dobbins v. Commissioners of Erie County, 16 id., 435.
*192With all deference to the opinion of a majority of the court, I submit that the law' in question does tax the property of these institutions, notwithstanding its peculiar phraseology.
It will be conceded that what can not be done directly by the legislature of a state, can not be done indirectly, having in view the same end to be accomplished. Whatever may be the means employed, it is the thing done that characterizes the act. It will be conceded further, that so far as the question in this case is concerned, it is a matter of no importance that the standard of taxable liability is the amount of all deposits on the first day of July in each successive year, rather than the amount invested at that time, for the sum in question was not in the bank of the defendants on the 1st day of July, 1863, but had been invested some time previous thereto. It had passed through the bank, and was then in the treasury of the United States, and the bank held its promises to pay in lieu thereof.
Now how does the case stand ?
The constitution of the United States has been held to declare, and the law of Congress expressly declares, that no burden shall be placed upon the power of the general government to borrow money—that its promises to pay shall go free of taxation, into the possession of every creditor of the government, and shall remain free. This exemption from taxation is in the nature of a premium, to induce all persons, natural and artificiál, to loan their money to the government. The defendants have loaned the government more than five hundred thousand dollars, and if the law in question be constitutional, it is impossible to conceive how or wherein they or their depositors, the real creditors, have been benefited or are likely to be, in the slightest degree, by the exemption. The amount of the defendants’ tax is precisely the same to all intents and purposes as it would have been if the law had imposed the tax directly upon the property of the defendants. Will they not see, and will not other savings banks see, where they have in contemplation the loaning of large sums of money to the government, under its many and pressing calls, that this exemption from taxation is a sound without meaning ? Arid *193will they not-be deterred to a certain extent, and the credit of the government burdened to just that extent ?
If this law be constitutional it is not easy to see why every creditor of the general government may not be taxed in a similar manner. Suppose the legislature should pass a law that all persons who have loaned money, or invested the same in stocks of any kind, or who should thereafter do. the same, shall make annual return to the comptroller of public accounts, of the total amount of all such sums of money which remain invested on the 1st day of July in each successive year, and that every such person shall annually pay to the treasurer of the state a sum equal to three-fourths of one per cent on the total amount of all such money. Suppose a person should make return that among other investments he had loaned the general government ten thousand dollars. Wherein does his case differ in principle from the one under consideration ? No one will doubt the power of the legislature to tax individuals, and to discriminate in imposing such tax. It might be said in such a case, with equal propriety,, that the law does not impose the tax upon the property of‘ the individual, but upon the individual himself—upon his capacity to make money. It might be urged that the law does not tax the property of the individual, because it takes no account of the value of his investments. Should they be worth twice or thrice the amount invested, he pays no more ; if not half the amount invested, he pays no less. If he has unwisely invested largely in worthless paper, or forged notes, they are not to be taken into consideration in ascertaining his taxable liability, but it is to be ascertained by a fixed, arbitrary, arithmetical calculation—three-fourths of one per cent on the total amount of money invested. It might be urged that where the law imposes a tax upon property, it usually provides a mode of valuation of such property, and creates a lien enforceable by distress and warrant, but no such provisions exist in the supposed law. These are the principal arguments used by the majority of the court, in coming to the conclusion that the law in question does hot impose a tax upon the property of the defendants, but upon the defendants themselves. But *194wherein does the present case differ in principle from the one supposed ? What argument could be used in support of the present law, that could not be used with equal force and effect in support of the supposed one ? If the law be constitutional in the one case, it is not easy to see why it might not be in the other; and if so, then the capacity of the general government to borrow money at home, is at the mercy of the several states ; for the right to tax carries with it the right in effect to prohibit.
Again, suppose a natural person stood in the place of the defendants, and all the sums of money deposited with the defendants had been deposited with him, to invest as he should think best, for the interest of the depositors, and he had invested such sums in precisely the same manner that the defendants have. Suppose the law had included such a case, and said that he should pay a sum equal to three-fourths of one per cent on the total amount of all such deposits. If the present law be constitutional, it is manifest it would have been if it had gone as far as the case supposed.
Savings banks stand in a similar relation with their depositors. They receive sums of money to invest as they shall judge best, for their interest. The money they receive is not expected to remain in the bank, but to be immediately invested. It may be that the five hundred thousand dollars in question passed directly through the defendants’ bank into the treasury of the United States. The defendants act as agents, and whatever securities they have they hold as trustees. Savings Bank v. New London, 20 Conn., 111.
The case I have last supposed is perfectly legitimate. All that prevents men of great financial ability from establishing agencies of the kind, that would in process of time be co-extensive in business with that of any savings bank in the land, is the fear of the public that the integrity of no one man would be sufficient to withstand the temptations to which he would be exposed.
Much reliance is placed upon the peculiar, phraseology of the law in question. That is doubtless owing to the anxiety of the legislature to avoid every constitutional objection.; for *195what other reason can be given why they should say that these institutions shall pay a tax “ equal to three-fourths of one per cent.” Why not say directly, that they shall pay three-fourths of one per cent on the total amount of all their deposits? The latter expression is the most natural. The other is studied and shows a design in using it. But can so slight a change in the phraseology make such difference in the result, that the one is constitutional and the other not ?
For a similar reason, no doubt, the deposits are taken as the standard of taxation, rather than the amount invested. The legislature knew that such institutions never keep money on deposit more than is absolutely necessary. All their income is derived from investments. But whether the one standard is taken or the other can make no difference.
A majority of the court have relied very much in coming to the conclusion that the law imposes a tax upon the institutions themselves, and not on their property, upon the fact that the law makes no provision for the valuation of their investments, and consequently takes no account whether they are of greater or less value than the sums invested. This may be owing to the reason I have already expressed—the anxiety of the legislature to avoid coming in conflict with the constitution of the United States, or it may be owing to a desire to avoid unnecessary trouble and expense. It is well known that many stocks are above their par value and many below, and should inquiry be made in relation to the value of the investments made by these institutions, many would be found worth more than the sums invested, and many less. The one would offset the other, and the result would vary but little from the amount invested. At all events, it is manifest the legislature considered that these institutions were worth at least the amount of their deposits, and that amount was therefore assumed to be the value of their property ; for no other reason can be given why the deposits are made the basis of taxation. The law shows an intention to tax these institutions in an equal and just proportion ; but, if the deposits have no relation to property, how is this accomplished ? A capitation tax ignores property, and demands of every man a fixed sum. *196no matter how rich or poor he may be ; but this law does not require of each of these institutions a fixed amount, but a sum in proportion to the amount of its deposits. It therefore must assume that the deposits bear a relation to its property, and for the purposes of taxation are equal to the value of its property. If this be so, then no matter whether the amount of property that a particular institution is assumed to possess is strictly in accordance with the fact or not, for the legislature had a right to assume what it pleased, and the tax is none the less a tax Upon property, or the basis of property.
Now wherein lies the difference between a tax- upon property, and a tax upon the person measured by the amount of his property ?' In either case the property is the foundation and moving cause of the tax. If a person has no property he has no tax. If he has small or large possessions his tax is small or large in proportion. The difference is in form and not in substance.
Suppose a person should invest the sum of one thousand dollars in United States securities, and the legislature of the state should say to him in the form of a law, “ inasmuch as we can not tax you for the money loaned to the general government, you as an individual shall pay a sum equal to the tax on one thousand dollars, vested in taxable securities.” Would such a law be in harmony with the constitution of the United States and the law of Congress ? It might be said that the law does not tax the sum loaned ; indeed it expressly declares-it does not, but imposes the tax upon the individual. But it would be said the intent is too obvious. It is in form a tax upon the individual, but in substance a tax upon the sum loaned. And so it seems to me is the case under consideration^ It is in form a tax upon the institutions, but in substance it is a tax upon their property; and it is the duty of courts to look through the form to the substance, through the shadow to the reality. Brown v. Maryland, 12 Wheaton, 419. These considerations are strengthened by the fact that in no instance heretofore has the state taxed the franchise of any corporations. Such a system of taxation has never been known in the state, and surely it is marvelous that it should *197commence with this class of corporations, whose charters are not valuable. Indeed, the same statute that imposes the tax in question imposes taxes upon the property of all other corporations. Why should discriminations be made in relation to savings banks and building associations ?
It is said by a majority of the cour^that - these corporations have been the favorites of the state—that they have been nurtured and reared and petted by the legislature, and well may they tax them for the indulgence they have received. Such considerations go to show that these institutions are the proper subjects of taxation, but they throw no light upon the subject of inquiry, whether this law in fact imposes a tax upon the franchise or the property of these institutions. In either mode the legislature has .unlimited power to tax them in a constitutional way.
A case more in point than any other that can be found has recently arisen in the state of New York. The legislature of the state in April, 1862, passed a law in these words :— “ All banks and other moneyed corporations shall be liable to taxation on a valuation equal to the amount of their capital paid in, or secured to be paid in, and their surplus earnings, &c.” The Bank of the Commonwealth had a capital paid in and secured to be paid in, of seven hundred and fifty thousand dollars. After deducting the value of their real estate, in accordance with certain provisions of the law, it was found that the balance of their capital, amounting to more than five hundred thousand dollars, was invested in' the securities of the United States. The question was whether the amount so invested should be deducted in computing the amount of their tax. The case went to the Court of Appeals and was there decided against the bank. It subsequently went to the Supreme Court of the United States and has there been decided, since the decision was rendered in this case, by a reversal of the decision of the Court of Appeals.
Chief Justice Denio, in giving the opinion of the Court of Appeals, uses the same arguments that are used by a majority of the court in the present case. He says :—“ It would seem plain enough that it is entirely immaterial what the assets of *198the bank then are. If the amount of the original nominal capital is alone to be taken into account, it would be officious and improper, or at least useless, for the assessors to make any examination or enquiry into the actual assets. The tax is not assessed upon the property or capital possessed at the time the annual inquiries are made by the proper officers, but upon the amount originally contributed to the corporate enterprise. ’ This was fixed upon somewhat arbitrarily, it may be said, as representing with sufficient practical accuracy the sum upon which the public burdens ought to be assessed. We have seen that if the sum of this original contribution should be diminished to any extent by losses or depreciation of securites, no corresponding diminution was to be made in the assessed valuation. The reason for this was that the existing assets formed no part of the subject by which, according to the statute, that valuation was to be determined. Another criterion, namely the original capital, was to be taken as representing the taxable value. This reason equally excludes any inquiry into the existing assets, with a view to ascertain whether any part of them are in their own nature not subject to taxation. If it could be shown that the discounted paper held by a bank, or the currency notes in its drawer, were forgeries, the assessors would not regard that circumstance, because the assets do not enter into the question and are no part of the data by which the taxable valuation is to be ascertained. And for the same reason when it was shown on behalf of the bank that its securities were not in their nature taxable, the circumstance became utterly immaterial, since neither the character nor amount of such securities have anything to do with the question which the taxing officers were to determine.” The case referred to seems much stronger in favor of taxation than the one under consideration, from the fact that the bank had capital stock, and the tax is imposed upon the money paid for such stock ; here it is imposed upon money deposited for the purpose of investment, and to be withdrawn from the bank, at the will of the depositors, in accordance with its by-laws.
*199I am of the opinion that the amount invested by the defendants in the securities of the United States should he deducted in computing the amount of their tax.