to expect that the necessary expenditures of government will be met by taxation to be levied on the few.

Taxation in the territories.

20. Long ago the court said in an unanimous judgment, 76 pronounced by Marshall, C. J., "Does this term 'the United States,' designate the whole, or any particular portion, of the American Empire? Certainly this question can admit of but one answer. It is the name given to our great republic, which is composed of states and territories. The District of Columbia, or the territory west of the Missouri, is not less within the United States than Maryland or Pennsylvania; and it is not less necessary, on the principles of our Constitution, that uniformity in the imposition of imposts, duties, and excises, should be observed in the one than in the other." This expression of opinion by the greatest of the judicial commentators on the Constitution was not a dictum, obiter or otherwise, but was a statement of the rule of law which was applied to, and which decided, the case before the court. Nevertheless that case has been, in effect though not in form, overruled, for it has been decided by a divided court, four justices dissenting and the five justices constituting the majority agreeing only in the judgment, and differing widely in the reasoning upon which it rests, that the Act of 12th April, 1900, imposing for a limited period certain duties upon importations into ports of the United States from Porto Rico, and into ports of Porto Rico from the United States, differing from the duties imposed upon importations into the United States from foreign countries, is constitutional, and that, from and after the taking effect of that act, the duties thereby imposed were rightfully collected.78 The

76 Loughborough v. Blake, 5 Wheat. 317.

31 Stat. 77, c. 191.

Downes v. Bidwell, 182 U. S. 244.

judgment in that case is, therefore, authority for the proposition that after a territory has been acquired by treaty and has so far become a part of the United States that goods brought from it to ports of the United States are not subject to the duties imposed by the laws of the United States upon importations from foreign countries,"" Congress may, by subsequent legislation, organize it as a territory of the United States, and by the same act impose upon it taxation by tariff which if imposed upon any state or upon any territory on the continent of North America would be confessedly unconstitutional, because a violation of the rule of uniformity. That the justices who concurred in the judgment did not agree in the reasoning upon which that judgment is based does not detract from the authority of the case as a binding precedent, for, as Marshall, C. J., said,80 "The authority of a decision is coextensive with the facts upon which it is founded." Mr. Justice Brown bases the judgment upon the proposition that in the uniformity clause the words "throughout the United States" do not include territories acquired by treaty or conquest, except in so far as Congress shall direct. Mr. Justice White, Mr. Justice Shiras, and Mr. Justice McKenna base it on the theory that while territory may be acquired by treaty, and thereby become the property of the United States, it does not become territory of the United States subject to constitutional restraints upon congressional action until it shall have been "incorporated" with the United States by an act of Congress. Justice Gray, concurring in the judgment of affirmance, and in substance concurring in the opinion of Mr. Justice White, also held that territory acquired by conquest or cession does not become domestic territory in the sense of

Mr.

"De Lima v. Bidwell, 182 U. S. 1; Fourteen Diamond Rings, Pepke, Claimant, v. U. S., 183 id. 176.

the revenue laws, and that Congress may establish a temporary government therefor, "which is not subject to all the restrictions of the Constitution." Mr. Chief Justice Fuller, Mr. Justice Brewer, and Mr. Justice Peckham dissented, and held that the powers granted by the Constitution and the restrictions upon the exercise of those powers extend to every part of the territory of the United States. Mr. Justice Harlan concurred in the dissenting opinion of the chief justice, and held that "Congress has no existence and can exercise no authority outside of the Constitution," and he agreed with the chief justice in his opposition to the view that Porto Rico has not been "incorporated" into the United States.

Exemption of state agencies from taxation by the United States.

21. The United States cannot tax the agencies of a state, as, for instance, the salary of a judicial officer of a state,s1 nor the revenue of a municipal corporation derived from its loan of capital to a railway; 82 nor may it tax, in the hands of an individual, the income from municipal bonds.83 But the federal government may tax a bequest to a municipality for public purposes, although the tax incidentally reduces the amount of the bequest to that municipality.84

Charges which are not taxes exempt from constitutional restraints.

22. The duty on the transportation of passengers by sea from foreign countries imposed by the United States

"Pollock v. F. L. & T. Co., 158 U. S. 601. On taxation of state agencies in general, see Ambrosini v. U. S., 187 id. 1.

84

Snyder v. Bettman, 190 U. S. 249. Three justices dissented.

in the exercise of the power of regulating commerce, not being in its nature a tax, is not subject to the constitutional restrictions on the exercise of the power of taxation; 85 and the same view has been taken of the tax imposed by the United States on the circulating notes of state banks for the purpose of preventing the circulation of any other than national bank notes.86

Taxation by the states.

23. A state may, so far as it is not restrained by the Constitution, tax all persons, natural or corporate, and all property, real or personal, within its territory and subject to its sovereignty, and may regulate, in the exercise of legislative discretion, the manner of levying and collecting its taxes,87 and the United States cannot, either by legislative or judicial action, afford any relief against

85 The Head Money Cases, 112 U. S. 580.

* Veazie Bank v. Fenno, 8 Wall. 533. See also Twin City Bk. v. Nebeker, 167 U. S. 196.

87

Witherspoon v. Duncan, 4 Wall. 210; Spencer v. Merchant, 125 U. S. 345; P. P. C. Co. v. Pennsylvania, 141 id. 18; W. U. T. Co. v. Indiana, 165 id. 304; A. Ex. Co. v. Ohio, 166 id. 185; Savings Society v. Multnomah County, 169 id. 421; Magoun v. I. T. & S. Bank, 170 id. 283; King v. Mullins, 171 id. 404; New Orleans v. Stempel, 175 id. 309; Bristol v. Washington County, 177 id. 133; Orr v. Gilman, 183 id. 278; F. C. & P. R. v. Reynolds, ibid. 471; League v. Texas, 184 id. 156; Blackstone v. Miller, 188 id. 189; Board of Assrs. v. C. N. D'E., 191 id. 388; Carstairs v. Cochran, 193 id. 10. See also opinion of Brown, J., in Eidman v. Martinez, 184 id. 578. A state may tax an interstate railway, car, express, or telegraph company upon its property within the state, finding the value of the whole property, both tangible and intangible, of the corporation, which is used in its business, and then computing the value of the line within the state by its relative length to the whole: P., C., C. & St. L. Ry. v. Backus, 154 U. S. 421; C., C., C. & St. L. Ry. v. Backus, ibid. 439; P. P. C. Co. v. Pennsylvania, 141 id. 18; A. R. T. Co. v. Hall, 174 id. 70; U. R. T. Co. v. Lynch, 177 id. 149; A. Ex. Co. v. Ohio, 165 id. 194, 166 id. 185; A. Ex. Co. v. Kentucky, 166 id. 171; W. U. T. Co. v. Massachusetts, 125 id. 530; W. U. T. Co. v. Taggart, 163 id. 1; and see W. U. T. Co. v. Missouri, 190 id. 412. But in estimating the value of the whole property the state may not include property in another state which is not used by the company in its business: Fargo v. Hart, 193 id. 490.

"state taxation, however unjust, oppressive, or onerous," so long as that taxation "does not entrench upon the legitimate authority of the Union, or violate any right recognized or secured by the Constitution of the United States."' 88

Under the general rule which permits a government to tax all persons and property within its jurisdiction, the states may impose a succession duty on the devolution of title to real estate from their citizens to alien nonresidents; 89 they may tax descents and inheritances, and they may classify and vary the rate of taxation with reference to lineal and collateral relationship, strangers, and the amount of the legacy; 90 they may tax goods and chattels which are actually within the state when assessed for taxation, though owned by a non-resident; 91 they may tax mortgages of lands within their limits, and notes secured by such mortgages, although held by residents of other states; 92 they may tax the transfer by will of money deposited within the state by a non-resident; 93 and, for

Providence Bk. v. Billings, 4 Pet. 563; Carpenter v. Pennsylvania, 17 How. 456; St. Louis v. W. F. Co., 11 Wall. 423; The State Tax on Foreignheld Bonds, 15 id. 300; Kirtland v. Hotchkiss, 100 U. S. 491, 498; M. G. Co. v. Shelby County, 109 id. 398; Magoun v. I. T. & S. Bank, 170 id. 283; Orr v. Gilman, 183 id. 278; Blackstone v. Miller, 188 id. 189. The Fourteenth Amendment does not compel the states to adopt an iron rule of equal taxation: B. G. R. v. Pennsylvania, 134 U. S. 232; P. Ex. Co. v. Seibert, 142 id. 339; Jennings v. C. R. C. Co., 147 id. 147; Giozza v. Tiernan, 148 id. 657; Merchants & Manufacturers' Bk. v. Pennsylvania, 167 id. 461; Magoun v. I. T. & S. Bank, 170 id. 283; Clark v. Titusville, 184 id. 329; Kidd v. Alabama, 188 id. 730. See also F. C. & P. R. v. Reynolds, 183 id. 471; Connolly v. U. S. P. Co., 184 id. 540; Missouri v. Dockery, 191 id. 165.

"Mager v. Grima, 8 How. 490.

"Magoun v. I. T. & S. Bank, 170 U. S. 283. See also Billings v. Illinois, 188 id. 97.

"Coe v. Errol, 116 U. S. 517.

Savings Society v. Multnomah County, 169 U. S. 421; New Orleans v. Stempel, 175 id. 309; Bristol v. Washington County, 177 id. 133. See also Board of Assessors v. C. N. D'E., 191 id. 388.

* Blackstone v. Miller, 188 U. S. 189.