delivered the opinion of the court.
This is a writ of error to the Supreme Cpurt of the State of Ohio.
The proceeding was instituted to reverse a decree of that court,- entered in behalf of Jacob Knoop, treasurer, against the Piqua Branch of the State- Bank of Ohio, for a tax of. twelve hundred and sixty-six dollars and sixty-three cents, assessed against the said branch bank for the year 1851.
By the act of 1845, under which this bank was incorporated, any number of individuals, not less than fNe, were authorized to form banking associations to carry on the business of banking in the State of Ohio, at a place designated; the aggregate amount of capital stock in all the companies not to exceed six millions one hundred and fifty thousand dollars.
■ In the fifty-first section it Is provided that every banking* company authorized under the act to carry on the business of banking, whether as a branch of the State Bank of Ohio, or as an independent banking association, “ shall be held and adjudged to be a body corporate, with succession, until the 1st of May, *3771866 ; and thereafter until its affairs shall be closed.” It was made subject to the restrictions of t.he act.
The fifty-ninth section requires “the directors of'each banking company, semiannually, on the first Mondays of May and -November, to declare, a dividend of so much of the net profits of the company as they shall judge expedient-; and on each dividend day the' cashier shall make out and verify by oath, a full, clear, and accurate statement' of the condition of the company as it shall be on that day, after declaring the dividend, and similar statements shall also be made on .the first Mondays of February and August in each year.” -This statement is required to be transmitted to-the auditor, of State.
The sixtieth section provides that each banking company under the act, or accepting thereof, and complying with its provisions, shall, semiannually, on the days designated for declaring dividends, set off to the State six per cent, on file profits, deducting therefrom the expenses and ascertained losses of the company for the six months next preceding, which sum or amount so' set off shall be in lieu of all taxes to which the company, or the stockholders therein, would otherwise be subject. The sum so set off to be paid to. the treasurer, on the order of the auditor of State.
The Piqua Branch Bank was organized in the year 1847, under the above act; and still continues io carry on the business of -banking, and continued to set off and pay the semiannual amount as required; and on the first Mondays of May and No- ' vember, in 1851, there was set oil to the State six per cent, of the profits, deducting expenses and ascertained losses for /the six'months next, preceding each' of those days, and the cashier did, within ten days thereafter, inform the auditor of .State of the amount so set off on the 15th of November, 1851,-the same amounting to $862.50;' which sum was paid to the treasurer of State, on the order of the auditor; which payment the bank claims was in lieu of all taxes .to which the company or its stockholders were subject for the year 1851.
On the 21st of March, 1851, an act was passed entitled “An act to tax banks and bank and other stocks, flic same as property Is now taxable by the laws of the State.”
This act provides that the capital stock* of cveiy banking company incorporated by the laws of the State, and having the right to issue bills or notes for circulation, shall be listed at its true value in money, with the-amount of the surplus and contingent fund belonging to such bank ;•' and that, the amount of such capital stock, surplus, and contingent fund, should be taxed, for the same purposes and to the same extent that personal property was or might be required to be. taxed in the place *378■ where such bank/is located; and that such tax should be collected -and paid over in the same manner that taxes- on other personal property are required by law to be collected and paid over.
In pursuance of this act there was assessed, for the year 1851, . on the capital stock, contingent and surplus fund'of the Piqua Bank, a tax-amounting to the sum of twelve hundred and sixty-, six dollars’ and sixty-three cents. The bank refused to pay this ' :ax on the ground that it was in violation of its charter. Suit was brought by the Slate against the bank for' this tax. The defence set up by the bank was, that the' tax imposed was in violation of its charter, which fixed the rate of taxation at six •per cent, on -its dividends, deducting expenses and losses; but the Supreme Court- of the State sustained the act of 1851, against the provision of the charter by which, it is insisted, the contract in the charter was'impaired.
We will first consider whether the specific mode of taxation, provided in the sixtieth section of the charter, is a contract.
The operative words are, that the bank shall, “ semiannually on the days designated in the fifty-ninth section 'for declaring dividends, set off to the State six- per cent, on the profits, deducting therefrom the expenses and ascertained losses, of the company for the six months next preceding, which sum or amount so set off shall be in lieu of all taxes to which such company, or the stockholders thereof, on account of stock owned-therein,-would otherwise'be subject.”
. This sentence is so explicit, that it would seem to be susceptible of but one construction. There is not one word of doubtful meaning when taken singly, or as it stands connected with the sentence in which it is used. Nothing is left to inference. The time, the áinount to be set off, the means of ascertaining it, to whom it is to be paid, and the object of the payment, áre so clearly stated, that no one who reads the provision can fail to understand it. The payment was to be in lieu of all taxes to which .the company or stockholders would otherwise be subject. This is the full measure of taxation on the bank. It is in the place of any other tax which, had it not been for this stipulation, xhight have been imposed on the company or stockholders.
This construction, I can say, was given to the act by the executive authorities of Ohio, by those who-were interested in the bank, and gexxerally by the public, from the time the bank was organized down to the tax law of 1851.
In the case of Debolt v. The Ohio Insurance and Trust Company, 1 Ohio Rep. 563, new series, the Supreme Court, in considering the 60th section now before us, say: “ It must be admitted the section contains ixo language importing a surrender *379of the right to alter the taxation prescribed, unless it is to be inferred from the words, shall be in lieu of all taxes to which such company, or the stockholders thereof, on account of stock owned therein, would otherwise be subject;’ and it is frankly conceded that if these words had occurred in , a general law they would not be open to such a construction. If the place where they are found is important,'we have already seen this law is general in many of its provisions, and .upon a general subject. Why may not this be classed with these provisions, especially in view of the fact, that in its nature it properly belongs there 1 We-think it should be regarded as a law prescribing a'rule of taxation, until changed, and not a contract stipulating against any change: a legislative command and not a legislative compact with these institutions.” ' And the court further say, “ the taxes required by this act are to be in lieu of other taxes —'that is, to take the pláce of other taxes. What other taxes ? The answer is, such as the banks or the stockholders ‘ would otherwise be subject to pay. The taxes to which they would be otherwise subject were prescribed by existing laws, and this, in effect, operated as a repeal of them, so far as these institutions were concerned.’ ”
With great respect, it may be suggested there was no general tax law existing, as supposed by the court, under which the banks chartered by the act of 1845 could have been taxed, and on which the above provision could, “ in effect, operate to repeal.”
The general tax law of the 12th of March, 1831, which raised the tax to five per cent, on dividends, and which operated on all the banks of Ohio, except the “ Commercial Bank of Cincinnati,” was repealed by the small note act of 1836, and that could operate only on banks doing business at the time of its passage.
.The act of the 13th of March, 1838, repealed the act of 1836, so far “ as it restricts or prohibits the issuing and circulation of small bills.” The act of 1836 authorized the treasurer of State to draw upon the banks for the amount of twenty per cent, upon their dividends, as their proportion of the State tax; and provided that if any bank should relinquish its charter privilege of issuing bills of less denomination than three and five dollars, the tax should be reduced to five per cent, upon its dividends. As the prohibition of circulating small notes was repealed, the tax necessarily fell. Neither the twenty nor thé five per cent, could be exacted. The five per cent, was a compromise for the twenty; as the twenty was repealed by the repeal of the prohibition of small notes, neither the one nor the other could be collected.
But if this were not so, the Bank Act of. 1842, which imposed *380a tax of one half per cent, on the capital stock of the bank, repealed, by its repugnancy, any part of the act of 1886 which, by construction or otherwise, could be considered in force. And the act of 1842 was repealed by the act of 1845. There is a general act in Ohio declaring that the repeal of an act shall not revive any act which had been previously repealed. Swan’s Stat. 59.
If this statement be correct, as it is believed to be, the legislature could not have intended, by the special provision in the sixtieth section, to exempt the bank from tax by the existing law,, as no such law existed, but to exempt’from the operation of tax laws subsequently passed. This is the clear and fair import .of the compact, which we think would not be rendered doubtful if a tax law had existed at the time the act of 1845 was passed.
The 60th section is not found in a general law, as is intimated by the Supreme Court of the State. The act of 1845 is general only in the sense, that all banking associations were permitted to organize under it; but the act is as special to each bank as. if no other institution were incorporated by it. We suppose this cannot be controverted by any one. This view is so clear in itself that no’ illustration can make it clearer.
Every valuable privilege given by the charter, and which conduced to an acceptance of it and an organization under it, is a contract which cannot be changed by the legislature, where the power to do so is not reserved in the charter. The rate of discount, the duration of the charter, the specific tax agreed to be paid, and other provisions essentially connected with the franchise, and necessary to the business of the bank, cannot, without its consent, become a subject for legislative action.
A municipal corporation, in whiph is vested some portion of the administration of the government, may be changed at the will of the legislature. . Such is a public corporation, used for public purposes. But a bank, where the stock is owned by individuals, is a private corporation. This was not denied or questioned by. the ’ counsel in argument, although it has been' controverted in this case elsewhere. But this court and the courts of the different States, not excepting the Supreme Court of Ohio, have so universally held that banks, where the stock is owned by individuals, are private corporations, that no legal fact is susceptible of less doubt. Mr. Justice Story, in his learned and able remarks in the Dartmouth College case, says: “A bank created by the' government for its own uses,- where the stock is exclusively owned by the government is, in the'strictest sense, a public corporation.”.
“ But a bank whose stock is owned by private persons is a *381private corporation, although it is erected by the government, and its objects and operations partake of a public nature. The same doctrine, he says, may be affirmed of insurance, canal, bridge, and turnpike companies. There can be no doubt that these definitions are sound, and are sustained by the settled principles of law.”
It by no means follows that because the action of a corporation may be beneficial to the-public, therefore it is a public corporation. This maybe said of-all corporations whose objects are the administration of charities. But these are not public, though incorporated by the legislature, unless their funds-belong to the government. Where the property of a corporation is private it give's the samé character to the institution; and to this there is no exception. Men who are engaged in banking understand the -distinction above stated, and also that privileges granted in private corporations are not a legislative command, but a legislative contract, not liable to be changed.
This fact is shown by the following circumstances: “An act to regulate banking in Ohio,” passed the 7th of March, 1842. The 1st section provided. “ that all companies or associations of persons desiring to engage in and carry on the business of banking within this State, which may hereafter be incorporated, shall be subjept to the rules, regulations, limitations, conditions, and provisions contained in this act, and such other acts to regu-' late banking as are now in force, or may hereafter be enacted, in this State.”
The 20th section of that act provided that a tax of one hall-per cent, per anniim on its capital should be paid, arid such other tax upon its capital or circulation as the general assembly may hereafter impose. An amendment to this act was passed the 21st February, 1843; but the act and the amendment remained a dead letter upon the statute book. No stock was subscribed under them, and they were both repealed by the act of 1845, under which nearly three fourths of the banks in Ohio were organized. This act -contained the express stipulation that “ six per cent, on the dividends, after deducting expenses and losses, should be paid in lieu of all taxes.”
This compact was accepted, and on-the faith of it fifty banks were organized, which áre still in operation. Up to the year 1851, I believe, the banks, the profession, and the bench, considered this as a contract, and binding upon the State and the banks. For more than thirty-five years this mode of taxing'the dividends of banks had been sanctioned in the State of Ohio. With few excepiions the banks were so taxed, where any tax on'them was imposed. In the case of the State of Ohio v. The Commercial Bank of Cincinnati, 10 Ohio Rep. 535, the Supreme *382Court of Ohio say, we take it to be well settled, thstt the charter of a private corporation is in the nature of a contract between the S.ate and the corporation. Had there ever been any doubts upon this subject, those doubts must have been removed by the decision of the Supreme Court of the United States, in the case of Woodward v. Dartmouth College. And the court remark, “the general assembly say to such persons as may take the stock, you may enjoy the privileges of banking, if you will consent to' pay to the State of Ohio, lor this privilege, four per cent, on your dividends, as they shall from time to time be made. The charter is. accepted, the stock is subscribed, and the corporation pays, or is willing to pay, the consideration stipulated, to wit, the four per cent.” • And the court say, “ here is a contract, specific in its terms, and easy to be understood.” “A contract between the State and individuals is as obligatory as any other contract. Until a Slate is lost to all sense of justice and propriety, she will scrupulously abide by her contracts more scrupulously than she will exact their fulfilment -by the opposite contracting party.”
This opinion commends itself to the judgment,- both on account of its sound constitutional views and its elevated morality. It was pronounced at December term, 1835. That decision was calculated to give confidence to those who were desirous to make investments in banking operations, or otherwise, in the State of Ohio.
Ten years after this opinion, and after an ineffectual attempt had been made by the act of 1842, and its amendment in 1843, to organize banks in Ohio, without a. compact as to taxation, the act of 1845 was .passed, containing a compactarauch more specific than that which had jaeen sustained by the Supreme. Court of the State. Under such circumstances, can the intentions of the Legislature of Ohio, in passing the act of 1845, be doubted, or the inducements of the stockholders to vest their money under it. Could either have supposed that the 60th section proposed a temporary taxation ? Such a supposition does great injustice to the legislature of 1845. It is against the clear language of the section, which must ever shield them from the imputation of having acted inconsiderately or in.bad faith. They passed -the' charter of 1845, which they knew would be accepted, as it removed the objections to the act of 1842.
Can the compact in the 60th section be “ regarded as a law prescribing a rule of taxation until changed, and not a contract stipulating against any change; a legislative command, and not a legislative compact with these institutions ? ” We cannot but treat .with great respect the language of the highest judicial tribunal of a State, and we would say, that in our opinion it does *383not import to be a legislative command nor a rule of taxation until changed, but a contract stipulating against any change, from the nature of -the language used and the circumstances under which it was adopted. According to our views, no other construction can be given to the contract, than that the tax of six per cent, on the dividends is in lieu of all subsequent taxes which might otherwise be imposed; in other words, taxes to which the company or the stockholders would have been liable, had the specific tax on the dividends on the terms stated not been enacted.
In the opinion of the Supreme Court of the State, it is said, the 60th section, in effect, repealed the existing law under which the bank would have been taxed, and that this is the obvious application of the language used; and they add, “ that the General Assembly intended only this, and did not intend it to operate upon the sovereign power of the State, or to tie qp the hands of their successors, we feel fully assured. To suppose the contrary would be to mpeach them of gross violation of public duty, if not usurpation of authority.”
So far as regards the effect of the 60th section to repeal existing laws, if no _such laws existed, it would follow that no .such effect was produced, and we may presume that this was in the knowledge of the legislature of 1845; and in saying that the compact was intended to run with the charter, we only impute to the legislature a full knowledge .of their own powers, and the highest regard ^ the püblic interest. The idea that a State, by exempting from taxation certain property, parts with a portion of its sovereignty, is of modern growth; and so is the argument that if a State may part with this in one instance it may in every other, so as to divest itself of the sovereign power of taxation. Such an argument would be as strong and as conclusive against the exercise of the taxing'power. For if' the legislature may levy a tax upon property, they may absorb the entire property of the tax-payer. The same may be said of every power where there is-an exercise of judgment.
The Legislature of Ohio passes a statute of limitations- to all civil and criminal actions. Is there no danger that in. the exercise of this power it may not be abused ? Suppose a year, a. month, a week, or a day should be fixed as the time within which all actions shall be brought on existing demands, and if not so brought, the remedy should be barred. This is a supposition more probable under circumstances of great embarrassment; when the voice of the debtor is always potent, than that the legislature will inconsiderately exempt property from taxa-
Onder a statute of limitation, as supposed, the remedy of the *384creditor would be cut off, unless the courts should decide that a limitation to bar the right must be reasonable, but this power could not be exercised under any constitutional provision. It could rest only on the great and immutable principles of justice, unless the time was so short as manifestly to have been intended to impair or destroy the contract. To carry on a government, a more practical view of public duties must be taken.
When the State of Ohio was admitted into the Union by the act of the 30th of April, 1802, it was admitted under a compact that “ the lands within the State sold by Congress shall remain exempt from íy tax laid by or under the authority of.the State, whether for .rate, county, township, or any other purpose whatever, for the term of five years from and after the day of sale.” And yet by the same law the State “ was admitted into the Union upon the same footing with the original States in all respects whatever.”
Now, if this new doctrine of sovereignty be correct, Ohio was not admitted into the Union on the footing of the other sovereign States. Whatever may be considered of such a compact now, it was not held to be objectionable at the time it was made.
The assumption that a State, in exempting certain property from taxation, relinquishes a part of its sovereign power, is unfounded. The taxing power may select its objects of taxation; and this is generally.regulated by the amount necessary to answer the purposes of the State. Now the éxemption of property from taxation is a question of policy and not of power. A sound currency should be a desirable object to every government; and this in our country is secured generally through the instrumentality of a well-regulated system of banking. To establish such institutions as shall meet the public wants and secure the public confidence, inducements must be held out to capitalists to invest their funds. They must know the rate of interest to be charged by the bank,, the time the charter shall run, the liabilities of the company, the rate of taxation, and other privileges necessary to 'a successful banking operation.
These privileges are proffered by the State, accepted by the stockholders, and in consideration funds are invested in the bank. Here is a contract by the State and the bank, a contract founded upon considerations of policy required by the general interests of the community, a contract protected by the laws of England and America, and by all civilized States where the common, or the civil law is established. In Fletcher v. Peck, 6 Cranch, 135, Chief Justice Marshall says, “ The principle asserted is, tíiat one legislature is competent to repeal any act *385which a former legislature was competent to pass, and that one legislature cannot abridge the powers of a succeeding legislature.”
“ The correctness of this principle,” he says, “ so far as respects general legislation, can never be controverted. But if an act be done under a law, a succeeding legislature’ cannot undo it. When, then, a law is in its nature a contract, a repeal of the law cannot divest those rights ; and the act of annulling them, if legitimate, is rendered so by a power applicable to the case of every individual in the community.”
And in another part of the opinion he says, “ Whatever respect might have been felt for the State sovereignties, it is not to be disguised that the .framers of the Constitution viewed, with some apprehension, the violent acts which might grow out of the feelings of the moment, and that the people of the United States, in adopting that instrument, have manifested a determination to shield themselves and their property from the effects of those sudden and strong passions to which men are exposed. The restrictions on the legislative power.of the States are obviously founded on this sentiment; and the Constitution "of the United States contains what may be deemed a bill of rights, for the people of each State.”
“ No State shall pass any bill of attainder, ex post facto law., or law impairing the obligations of contracts. A bill of attainder may affect the life of an individual, or may confiscate his property, or may do both.”
In this form, he says, “the power of the legislature oyer the lives and fortunes of individuals is expressly restrained. What motive, then, for implying, in words which import a general prohibition to impair the obligation of contracts, ah exception-in favor of the right to impair the obligations of those contracts into which the State may enter.”
The history of England affords melancholy instances where bills of attainder were, prosecuted in parliament to-tne destruction of the lives and fortunes of some of its most eminent subjects. A knowledge of this caused a prohibition in the Constitution against such a procedure by the States.
In the case of the State of New Jersey v. Wilson, 7 Cranch, 164, it was held, “that a legislative act, declaring that certain lands, which should be purchased for the Indians, should not thereafter be subject- to any tax, constituted a contract which could not be rescinded by a subsequent legislative actt Such repealing act being void under that clause of the Constitution of the United States which prohibits a State from passing any law impairing the obligation of contracts.”
In 1758 the government of New Jersey purchased the Indians’ *386title to lands in that State, in consideration of which the government bought a tract of land on which the Indians might reside, an act having previously been passed that “the lands-to be purchased for them shall not hereafter be subject to any tax, any law, usage, or custom to the contrary thereof in any wise notwithstanding.” The Indians continued in possession of the lands purchased until 1801, when they applied for and obtained an act of the legislature, authorizing a sale of their lands. This act contained no provision in regard to taxation; under it the Indian lands were sold.
In October, 1804, the legislature repealed the act of August, 1758, which exempted these lands from taxes; the lands were then assessed, and the taxes demanded. The court held the repealing law was unconstitutional, as impairing the obligation -of the contract, although the land was in the hands of the grantee of the Indians. This case shows that although a State government may make a contract to exempt property from, taxation, yet the sovereignty cannot annul that contract. •
In the case of Gordon v. The Appeal Tax, 3 How. 133, Mr. Justice Wayne, giving the opinion of the court, held, “ that the charter of a bank is a franchise, which is .not taxable as. such, if a price has been paid for it, which the legislature accepted. But that the corporate property of the bank, being separable from the franchise, may be taxed, unless there is a special agreement to the contrary.”
And the court say, the language of the eleventh section oí the • act of 1821 is, “And be it enacted, that upon any of the aloresaid banks accepting and complying with the terms and conditions of this act, the faith of the State is hereby pledged not to impose any further tax or burden upon them during the con- • tinuance of their charters under this act.” This, the court say, is the language of grave deliberation, pledging the faith of the State for some purpose, some, effectual purpose. Was that purpose the protection of the banks from what that legislature and succeeding legislatures could not do, if- the banks accepted the act, or from what they might do in the exercise of the taxing power. The terms and conditions of the act-were, that the banks should construct the road and pay annually a ’designated charge upon their capital stocks, as the price of the prolongation of their franchise of banking. The power of the State to lay any further tax upon the franchise was exhausted. That is the contract between the State and the banks. It follows, then,'as a matter of course, when the legislature go out of the contract, proposing to pledge its faith, if the banks shall accept the act not to. impose any further tax or burden upon them,'that it-must have meant by these \vords an exemption *387from some other tax than a. further tax upon the franchise of the banks. The latter was already provided against; and the court held that the exemption extended to the respective capital stocks of the banks as an aggregate, and to the stockholders, as persons on account of their stocks. The judgment of the Court of Appeals of Maryland, which sustained the act imposing an additional, tax on the banks, was reversed.
It will be observed that the above compact was applied to the stocks of the bank and the interest of the stockholders by construction.
The Supreme Court of Ohio say in relation to this case, that “the power to tax and the right to limit the power were both admitted by counsel, and taken for granted in the consideration of the case; and that a very large consideration had been paid for the extension of the franchise and the exemption of the stock from taxation.”
In relation to the admissions of the counsel it may be said that' they were men not likely to admit any thing to the prejudicé of their clients, which could be successfully opposed; nor would the court, on a constitutional question, rest their judgment on the admissions 6f counsel. Whether the consideration paid by the banks was large’ or small, we suppose was not “a matter for the court, as the motives or consideration which induced a sovereign State to make a contract, cannot be inquired into as affecting the validity of the act.
In the argument, the case of the Providence Bank v. Billing, " was referred to, 4 Peters, 561. This reference impresses me with the shortness and uncertainty of human life. Of all the judges on this bench, when that decision was given, I am the only survivor. From several circumstances the principles of that case were strongly impressed upon my memory; and I was surprised when it was cited in support of the doctrines maintained in the case before us. The principle held in that case was, that where there was no exemption from taxation in the charter, the bank might be taxed. This was the unanimous opinion of the judges, but no one of them doubted that the legislature had the power, in the charter or otherwise, from motives of public policy, to exempt the bank from taxation, or by compact to impose a specific tax on it. And this is clear from the language of the court.
The chief justice in that case says: “ that the taxing power is of vital importance, that it is essential to the éxistence of government, are truths which it cannot be necessary to reaffirm. They are acknowledged and asserted by all. It would seem that' the relinquishment of such a power is never to be presumed. No one can controvert the correctness of these axioms.” *388The relinquishment of such a power is never to be presumed; but this implies it may be relinquished-, or taxable objects may be exempted, if specially provided for in the charter. And this is still more clearly expressed, as follows: “ We will not say that a State may not relinquish it; that a consideration sufficiently valuable to induce a partial release of it may not exist; but as the whole community is interested in retaining it undiminished, that community has a right to insist, that its abandonment ought not to be presumed, in a case in which the deliberate purpose of a State to abandon it does not appear.”
Such a case was not then before the court. There was. no provision in the Providence Bank charter which exempted it from taxation, and in that case the'court could presume no such intention.
But suppose, in the language of that great man, “ a consideration sufficiently valuable to induce a partial release of it, and' such release had been contained in the charter; would not that have been held sufficient? And of the sufficiency of the consideration, whether it was a bonus paid by the bank, or in supplying a sound currency, the legislature would be the exclusive judges. This would constitute a contract which a legislature could not impair.
The above case is a strong authority against the defendants. The Chief Justice further says, “ any privileges which may exempt the corporation from the burdens common to individuals, do not flow necessarily from the charter, but must be expressed in it, or they do not exist.” But if so expressed, do they not exist ?
A case is cited from the Stourbridge Canal v. Wheely, 2 Barn. & Adol. 793, to show that no implications in favor of chartered rights are admissible. Lord'Tenterden says,. “ that any ambiguity in the terms of the contract must operate against the adventurers, and in favor of the public; and the plaintiffs can claim nothing that is not cléarly given them by the act.” In the same opinion his lordship.said; “ No,w; it-is quite certain that the company have no right expressly to receive any compensation, except the tonnage paid for goods carried through some of the canals or the locks on the canal, or the collateral cuts, and it is therefore incumbent upon them to show that they have a right clearly given by inference from some of the other clauses.”
Neither this, the Rhode Island Bank case, nor. the Charles River Bridge case, affords any aid to the doctrines maintained, with the single exception, that a right set up undef a grant must clearly appear, and cannot be presumed; and this has not been controverted.
*389That a State has power to make a contract which shall bind it in future, is so universally held by the courts of the United States and of the States, that a general citation of authorities is unnecessary on the subject. Dartmouth College v. Woodward, 4 Wheat. 518 ; Terrett v. Taylor, 9 Cranch, 43; Town of Pawlett, 9 Cranch, 292.
Mr. Justice Blackstone says, 2 Bl. Com. 37, that the same franchise that has before been granted to one, cannot be bestowed on another, because it would prejudice the former grant. In the King v. Pasmore, 3 Term, 246, Lord Kenyon says, that an existing corporation cannot have another charter obtruded upon it, or accept the whole or any part of the new charter. The reason of this, it is said, is obvious. A charter is a contract, to the validity of which the consent of both parties is essential, and therefere it cannot be altered or added to without , consent.”
There is no constitutional objection to the exercise of the power .to make' a binding contract by a State. It necessarily exists in its sovereignty, and it has been so held by all the courts in this country. A denial of this is a denial of State sovereignty. It takes from the State a power essential to the discharge of its functions as sovereign. If it do not possess this attribute, it could not communicate it to others. There is no power possessed by it more essential than this. Through the instrumentality of contracts, the machinery of the government is carried on. Money is borrowed, and obligations given for payment. Contracts are made with individuals, who give bonds to the State. So in the granting of charters. If there be any force in the argument, it applies to contracts made with individuals, the same as with corporations. But it is said the State cannot barter away any part, of its sovereignty. No one ever contended that it could.
A State, in granting privileges to a bank, with a view of affording a sound currency, or of advancing any policy connected with the public interest, exercises its sovereignty, and for a public purpose, of which it is the exclusive judge. Under such circumstances, a contract made for a specific tax, as in the case before us, is binding. This-tax continues, although all other banks should be exempted from taxation. Having the power to make the contract, and rights becoming vested under it, it can no more be disregarded nor set aside by a subsequent legislature, than a grant for land. This act, so far from parting with any .portion of the sovereignty, is an exercise of it. Can any one deny this power to the legislature ? Has it not a right to select the objects of taxation and determine the amount?' To deny either of these, is to take away State sovereignty.
*390It must be admitted that the State has the sovereign power to do this, and it would have the sovereign power to impair or annul a contract so made, had not the Constitution of the United States inhibited the exercise of such a power. The vague and undefined and indefinable notion, that every exemption from taxation or a specific tax, which withdraws certain objects from the general tax law, affects the sovereignty of the State, is indefensible.
There has been rarely, if ever, it is believed, a tax law passed by any State in the Union, which did not contain some exemptions from general taxation. The act of Ohio of the 25th of March, 1851, in the fifty-eighth section, declared that “ the-provisions of that act shall not extend to any joint-stock company which now is, or may hereafter be organized, whose charter or act of incorporation shall have guaranteed to such company an exemption from taxation, or has prescribed any other as the exclusive mode of taxing the same.” Here is a recognition of the principle now repudiated. In the same act, there are eighteen exemptions from taxation.
The federal government enters into an arrangement with a foreign State for reciprocal duties on imported merchandise, from the one country to the other. Does this affect the "sovereign power of either State ? The sovereign power in each was exercised in making the compact, and this was done for the mutual advantage of both countries. Whether this be done by treaty, or by law, is immaterial. The compact is made, and it is binding on both countries.
The argument is, and must be, that a sovereign State-may make a binding contract with one of its citizens, and, in the exercise of. its sovereignty, repudiate it.
The Constitution of the Union, when first adopted, made States subject to the federal judicial power. Could a State, while this power confirmed, being sued for a, debt contracted in its sovereign capacity, have repudiated it in the same capacity ? In this respect the Constitution was very properly changed, as no State should be subject to the judicial power generally.
Much stress was laid on the argument, and in the decisions of the Supreme Court, on the fact that the banks paid no'bonus for their charters, and that no contract can be binding which is not mutual.
This is a matter which can have no influence in deciding the legal question. The State did not require a bonus, but other requisitions are-found in the charter, which the 'legislature deemed sufficient, and this is not questionable by any other authority. The obligation is as strong on the State, from *391the privileges granted and accepted, as if a bonus had been paid.
Another assumption is made, .that the banks are taxed as property is taxed in the hands of individuals. No deduction, it appears, is made from banks on account of debts due to’depositors or others, whilst debts due by an individual are deducted from his credits. If this be so, it places banks on a very different footing from individuals.
The power of taxation has been compared to that of eminent domain, and it-is said, as regards the question before us, they are substantially the same. These powers exist in the same sovereignty, but their exercise involves different principles. Property may be appropriated for public purposes, but it must be paid for. Taxes are assessed on property for the support of the government under a legislative act.
■ We were not prepared for the position taken by the Supreme Court of Ohio, that “ no control over the right of taxation by the States was intended to be conferred upon the General Government by the section referred to, or any other, except in relation to duties upon imports and exports.” This has never been pretended by any one. The section referred to gives the federal government no power over taxation by a State. Such an idea does not belong to the case, and the argument used, we submit, is not legitimate. We have power only to deal with contracts under the tenth section of the first article of the Constitution, whether made by a State or an individual; if such contract be impaired by an act of the State such act is void, as the power is prohibited to the State. This is the extent of our jurisdiction. As well might it be contended under the above sectionthat.no power was given to the federal government to regulate the numberless internal concerns of a State which are the subjects of contracts.. With those concerns we have nothing to do ; but when contracts growing out of them are impaired by an act of the State, under the federal Constitution we inquire whether the act complained of is in violation of it.
The rule observed by this court to follow the construction of the statute of the State by its Supreme Court is strongly urged. This is done when we are required to administer the laws of the State. The established construction of a statute of the State is received as a part of the statute. But we are called in the case before us not to carry into effect a law of the State, but to test the validity of such a law by the Constitutiofi of the Union. We are exercising an appellate jurisdiction. . The decision of the Supreme Court of the State is before us for revision, and if their construction of the contract in question'impairs, its obligation, we are required to reverse' their judgment. ' To follow the *392construction of a State court in such a case, would be to surrender one of the most important provisions in the federal Constitution.
There is no jurisdiction which we are called to exercise of higher importance, nor one- of deeper interest to the people of the States. It is, in the emphatic language of Chief Justice Marshall, a bill of rights to the people of the States, incorporated into the fundamental law of the Union. And whilst we have all-the respect for the learning and ability which the opinions of the judges of the Supreme Court of the State command, we are called upon to exercise our own judgments in the case.
- In the discussion of the principles of this case, we have not felt ourselves at liberty to indulge in general remarks on the theory of our government. That is a subject which belongs to a convention for the formation of a constitution ; and, in a limited view, to the law-making power. Theories depend so much on the qualities of the human mind,- and these are so diversified by education and habit as to constitute an unsafe rule for judicial action. Our prosperity, individually and nationally, depends upon a close adherence to the settled rules of law, and especially to the great fundamental law of the Union.
Having considered this case in its legal aspects, as presented in the arguments of counsel, and in the views of the Supreme Court of the State, and especially as regards the rights of the-bank under the charter, we are brought to the conclusion, that . in the acceptance of the charter, on its terms, and the payment of the , capital stock, under an agreement to pay six per cent, semi-annually on the dividends made, deducting expenses and ascertained losses, in lieu of all taxes, a contract was made binding on the State and on the bank; and that the tax law of 1851, under which a higher tax has been assessed on the bank-than was stipulated in its charter* impairs the obligation of the contract, which is prohibited by the Constitution of the United States, and, consequently, that the act of 1851, as regards the tax thus imposed, is void. The judgment of the Supreme Court of Ohio, in giving effect to that law, is, therefore, reversed.
Mr.. Justice CATRON, Mr. Justice DANIEL, and Mr. Justice CAMPBELL, dissented.