with whom concurred Mr. Justice DAVIS, dissenting.
I am unable to concur in the opinion of a majority of the court in this case. •
The Yeazie Bank was incorporated by. the legislature of the State of Maine, in 1848, with a capital of $200,000, and was invested with the customary powers of a banking institution ; and, among others, the power of receiving deposits, *550discounting paper, and issuing notes or bills for circulation. The constitutional authority of the State to create these institutions, and to invest them with full banking powers, is hardly denied.. But, it may bo useful to recur for a few moments to the source of this authority.
The tenth amendment to the Constitution is as follows: “ The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” On looking into the Constitution, it will be found that there is no clause or provision which either expressly, or by reasonable implication, delegates this power to the Federal Government, which origiually belonged to the States, nor which prohibits it to them. In the discussions on the subject of the creation of the first Bank of the United States, in the first Congress, and in the Cabinet of Washington, in 1790 and 1791, no question was made as to the constitutionality of the State banks. The only doubt that existed, and which divided the opinion of the most eminent statesmen of the day, many of whom had just largely participated in the formation of the Constitution, the government under which they wore then engaged in organizing, was, whether or not Congress possessed a concurrent power to incorporate a banking institution of the United States?
Mr. Hamilton, in his celebrated report on a National bank to the House of Representatives, discusses at some length the question, whether or not it would be expedient to substitute the Bank of North America, located in Philadelphia, and which had accepted a charter from the legislature of Pennsylvania, in the place of organizing a new bank. And, although he finally came to the conclusion to organize a new one, there is not a suggestion, or intimation, as to the illegality or unconstitutionality of this State bank.
The act incorporating this bank, passed February 25th, 1791, prohibited the establishment of any other by Congress, during its charter, but said nothing as to the State banks. A like prohibition is contained in the act incorporating the Bank of theUnited States of 1816. The constitutionality of a *551bank incorporated by Congress was .first settled by the judgment of this court in McCulloch v. The State of Maryland,* in 1819. In that case both the counsel and the court recognize the legality and constitutionality of banks incorporated by the States.
The constitutionality of the Bank of the United States.was again discussed, and decided in the ease of Osborn v. United States Bank.† And, in connection with this, was argued and decided a point in the case of The.United States Bank v. The Planters’ Bank of Georgia, which was common to both, cases. The question was, whether the Circuit Courts of the United States had jurisdiction of a suit, brought by the United States Bank against the Planters’ Bank of Georgia,' incorporated by that State, and in which the State was a stockholder.‡
The court held in both cases that it had. Since the adoption of the Constitution, down to the present act of Congress, and the case now before us, the question in Congress and in the courts has been, not whether the State banks were constitutional institutions, but whether Congress had the power conferred on it by the States, to establish a National bank. As we have said, that question was closed by the judgment of this court in McCulloch v. The State of Maryland. At the time of the adoption of the Constitution, there were four State banks in existence and in operation — one in each of the States of Pennsylvania, New York, Massachusetts, and Maryland. The one in Philadelphia had been originally chartered by the Confederation, but subsequently took a charter under the State of Pennsylvania. The framers of the Constitution were, therefore, familiar with these State banks, and the circulation of their paper as money; and were also familiar with the practice of the States, that was so common, to issue bills of credit, which were bills issued by the State, exclusively on its owu credit, and intended to circulate as currency, redeemable at a future day. They guarded the people against the evils of this practice of the State governments *552by the provision in the tenth section of the first article, “ that no State shall” “emit bills of credit,” and, in the same section, guard against any abuse of paper money of the State banks in the following words: “nor make anything but gold and silver coin a tender in payment of debts.” As bills of credit were thus entirely abolished, the paper money of the State banks was the only currency or circulating medium to which this prohibition could have had any application, and was the only currency, except gold and silver, left to the States. The prohibition took from this paper all coercive circulation, and left it to stand alone upon the credit of the banks.
It was no longer an irredeemable currency, as the banks were under obligation, including, frequently, that of its stockholders, to redeem their paper in circulation, in gold or silver, at the counter. The State banks were left in this condition by the Constitution, untouched by any other provision. As a consequence, they were gradually established in most or all of the States, and had not been encroached upon or legislated against, or in any other way interfered with, by acts of -Congress, for more than three-quarters of a century — from 1787 to 1864.
But, in addition to the above recognition of the State banks, the question of their constitutionality came directly before this court in the case of Briscoe v. The Bank of the Commonwealth of Kentucky.*
The case was most elaborately discussed, both by counsel and the court. The court, after the fullest consideration, held that the States possessed the power to grant charters to State banks; that the power was incident to sovereignty; and that there was no limitation in the Federal Constitution on its exercise by the States. The cotirt observed that-the Bank of North America and of Massachusetts, and some others, were in operation at the time o'f the adoption of the Constitution, and that it could'not be supposed the notes of these banks were intended to be inhibited by that instrument, or, that *553they were considered as bills of credit within its meaning. All the judges concurred in this judgment, except Mr. Justice Story. The decision in this case was affirmed in Woodruff v. Trapnall;* in Barrington v. The Bank of Alabama;† and in Curran v. State of Arkansas.‡
Chancellor Kent observes, that Mr. Justice Story, in his Commentaries on the Constitution,§ seems to be of opinion that independent of the long-continued practice, from the time of the adoption of the Constitution, the States would not, upon a sound construction of the Constitution, if the question was res integra, be authorized to incorporate banks with a power to circulate bank.paper as currency, inasmuch as they are expressly prohibited from coining money. He cites the opinions of Mr. Webster, of the Senate of the United States, and of Mr. Dexter, formerly Secretary of War, on the same side. But the Chancellor observes, that the equal, if not the greater, authority of Mr. Hamilton, the earliest Secretary of the Treasury, may be cited in support of a different opinion; and the contemporary sense and uniform practice of the nation are decisive of the question. He further observes, the prohibition (of bills of credit) does not extend to bills emitted by individuals, singly or collectively, whether associated under a private agreement for banking purposes, as was the case with the Bank of New York, prior to its earliest charter, which was in the winter of 1791, or acting under a charter of incorporation, so long as the State lends not its credit, or obligation, or coercion to sustain the circulation.
In the case of Briscoe v. The Bank of the Commonwealth of Kentucky, he observes, that this question was put at rest by the opinion of the court, that there was no limitation in the Constitution on the power of the States to incorporate banks, and their notes were not intended nor were considered as bills of credit.ǁ
The constitutional power of the States, being thus estab*554lished by incontrovertible authority, to create State banking institutions, the next question is, whether or not the tax in question- can bé upheld, consistently with the enjoyment of this power.
The act of Congress, July 13th, 1866,* declares, that the State banks shall pay ten per centum on the amount of their ■notes,, or the notes of any person, or other State bank, used for circulation, and-paid out by them after the 1st of August, 1866. In addition to this tax, there is also a tax of five per centum per. annum, upon all dividends to stockholders,† besides a duty of one twenty-fourth of one per centum, monthly, upon all deposits, and the same monthly' duty upon the capital of the bank.‡ This makes an aggregate of some sixteen per cent, imposed annually upon these banks. It will be observed, the tax of ten per centum upon the bills in circulation is not a tax on the property of the institutions. The bills in circulation are not the property, but the debts of the bank, and, in their account of debits and credits, are placed to the debit side. Certainly, no government has yet made the discovery of taxing both sides of this account, debit and credit, as the property of a taxable person or corporation. If both these items could be made available for this purpose, a heavy National debt need not create any very great alarm, neither, as it respects its pressure on the industry of the country, for the time being, or of its possible duration. There is nothing in the debts of a bank to distinguish them in this respect from the debts of individuals or persons. The discounted paper received for the notes in circulation is the property of the bank, and is taxed as such, as is the property of individuals received for their notes that may be outstanding.-
• The imposition upon the banks cannot be upheld as a tax upon property; neither could it have been so intended. It is, simply, a mode by which the powers or faculties of the States, to incorporate, banks, are subjected to taxation, and, which, if maintainable, may annihilate those powers.
*555No person questions the authority of Congress to tax the property of the banks, and of all other corporate bodies of a State, the same as that of individuals. They are artificial bodies, representing the associated pecuniary means of real persons, which constitute their business capital, and the property thus invested is open and subject to taxation, with all the property, real and personal, of the State. A tax upon this property, and which, by the Constitution, is to be uniform, affords full scope to the taxing power of the Federal government, and is consistent with the-power of the States to create the banks, and, in our judgment, is the only subject of taxation, by this government, to which these institutions are liable.
. As we have seen, in the forepart of this opinion, the power to incorporate banks was not surrendered to the Federal Government, but reserved to the States; and it follows that the Constitution itself protects them, or should protect them, from any encroachment upon this right. As to the powers thus reserved, the States are as supreme as before they entered into the Union, and are entitled to the unrestrained exercise of them. The question as to the taxation of the powers and faculties belonging to governments is not new in this court. The bonds of the Federal Government have been held to be exempt from State taxation. Why? Because they wore issued under the power in the Constitution to borrow money, and the tax would bo a tax upon this power; and, as there can be no limitation to the extent of the tax, the power to borrow might be destroyed. So, in the instance of the United States notes, or legal tenders, as they are called, issued under a constructive power to issue bills of credit, as no express power is given in the Constitution, they are exempt from State taxation for a like reason as in the case of government bonds; and, we learn from the opinion of the court in this case, that one step further is taken, and that is, that the notes of the National banks are to be regarded as bills of credit, issued indirectly by the government; and it follows, of course, from this, that the banks used as instruments to issue and put in circulation *556these notes, are also exempt. "We are not complaining of this. Our purpose is to show how important it is to the proper protection of the reserved rights of the States, that these powers and prerogatives should be exempt from Federal taxation, and how fatal to their existence, if permitted. And, also, that even if this tax could be regarded as one upon property, still, under the decisions above réferred to, it would be a tax upon the powers and faculties of .the States to create these banks, and, therefore, unconstitutional.
It is true, that the present decision strikes only at the power to create banks, but no person can fail to see that the principle involved affects the power to create any'other description of corporations, such as railroads, turnpikes, manufacturing companies, and others.
This taxation,of the powers and faculties of the "State governments, which are esseutial to their sovereignty, and to the efficient and independent management and administration of their internal affairs, is, for the first time, advanced as an attribute of Federal authority. It finds no support or countenance in the early history of the government, or in the opinions of the illustrious statesmen who founded it. These statesmen scrupulously abstained from any encroachment upon the reserved rights of the States; and, within these limits, sustained and supported them as sovereign States.
We say nothing, as to the purpose of this heavy tax of some sixteen per centum upon the banks, ten of which we cannot but regard as imposed upon the power of the States to create them. Indeed, the purpose is scarcely concealed, in the opinion of the court, namely, to encourage the National banks. It is sufficient to add, that the burden of the tax, while it has encouraged these banks, has proved fatal to those of the States; and, if we are at liberty to judge of the purpose of an act, from the consequences that have followed, it is not, perhaps, going too far to say,, that these consequences were intended.
4 Wheaton, 316.
9 Id. 738.
Ib. 804, 904.
11 Peters, 257.
10 Howard, 205.
13 Id. 12.
15 Id. 317.
Vol. 3, p. 19,
1 Kent’s Commentaries, p. 409, marg. note A, 10th ed.
14 Stat. at Large, 146, § 9.
Ib. 277, § 110.
13 Id. p. 283, § 120.