Osborn V. U.S. Bank. so as to give operative effect to that grant, they 1824. acquire in it a private vested right; it becomes their private property; and so long as they comply with its terms, they can no-more be disturbed in the possession of it, by the grantors, than by a third person or stranger. Such is the situation of the Bank. The charter is their property, derived, to be sure, from a public grant, but, nevertheless, as distinctly the private property of the individuals, as if derived from a contract or grant from individuals, its former proprietors. Why is it an incident to this species of property, that it should be exempt from taxation by the States? One reason only is offered. It is granted by the national government; and if the States can tax it, they may, in effect, render it useless to the grantees. But the States may confessedly exercise this power over the employments and property of individuals. All property is held subject to it, when held by individuals, no matter whence it is derived. In Ohio, the State cannot tax the public lands, while owned by the government, nor for five years after they become the property of individuals. She is bound by compact on this point. But it never was conceived, that because it was once owned by the nation, and the title to the individual derived from a national grant, the States could not tax it. Restricted as this power of taxation is in the State of Ohio, yet there can be no possible difficulty in so employing it, as to defeat all future sales of public lands within that State. It is only to provide by law for assessing such tax upon all lands hereafter sold, to be collected after 1824. Osborn V. U. S. Bank. the expiration of five years from the sale, as would render the lands a burthen to the proprietor, and the object would be effected. Yet the power to do this would hardly be held a sufficient ground for attaching to lands thus sold, an exemption from State taxation as incident to the grant. Why should a grant of franchises be distinguished from a grant of land, when the grantee, in both cases, receives it in confirmation of a purchase from the government, to be held as his own individual property? We are warranted by the opinion of at least one of the Judges of this Court, in asserting, that "a grant of franchises is not, in point of principle. distinguishable from a grant of any other property." If this be correct, then there can be no reason for attaching any exemption to a grant of franchises, because the grant is conferred by the national government. The grantee must hold the property subject to all the burthens which might be imposed upon it, had he obtained it from any other source. but It may be objected, that this doctrine asserts a power in the States to tax the patent rights granted by the national government. And why not? By the grant it is constitued individual property; does the power conferred upon the national government, to secure to the authors of useful inventions the exclusive use of their machines, necessarily attach to the patent for such exclusive right an exemption from taxation also? Is it not enough, that the inventor of a new species of pro a 4 Wheat. Rep. 684. Osborn U.S. Bank. perty may be secured in a monopoly of its employ- 1824. ment? Does the mere fact of conferring such monopoly, of necessity imply a right to enjoy it exempt from the burthens to which other property is subject? How far is this exemption to be carried? Would it exempt a steam loom from a general tax upon looms? or a steam mill from a general tax upon milis? Would a barrel of flour be subject to taxation, if, in the process of manufactory, it were carried from the meal chest to the cooling room upon a miller's shoulder; but exempt if it were hoisted by elevators, or gathered to the bolt-hopper by a hopper boy? Does this exemption attach to the grant, only in the hands of the monopolist, or extend also to his grantees of the monopoly? Is the exemption to be withdrawn so soon as the invention passes into the hands of the mechanic for practical purposes? or does it adhere to the machinery, and attach to the fabric manufactured? At whatever point it is withdrawn, the same consequences may follow. The power of State taxation, if it attach at all, may be so used as to render the patent of very little value. If the patent itself, or the machinery when constructed, or the employment of such machinery, or the fabrics manufactured by it, may taxed, an excessive tax can, in one way as well as another, affect the benefits derived by the patentee from the patent, and may even prevent its use. Still, in this respect, it stands upon the same footing with other private property, and there is no sound reason for conferring upon it any be Osborn V. U.S. Bank. 1824. higher privilege. Every thing in the nature of property, produced by the labour of the husbandman and the mechanic, may be taxed. They have no other security that the tax may not be excessive and oppressive, than what is afforded by their weight in the government, and a sense of justice in legislative assemblies. If the powers of genius be so applied as to produce any thing in which the inventor claims a property, this product of labour must be treated as other productions of the same class. No special exemptions are necessary incidents of its invention or creation. So far, then, as there is a just analogy between the Bank and patent rights, so far they are alike to be looked upon as private property, and no exemption from taxation can be conceded to either, as an incident of the franchise conferred upon them by a grant from the National Legislature. Last of all, this exemption from taxation is not an incident essential to the very existence of the Bank; the Bank may exist without it; may exist beneficially without it, as we contend, did exist for twenty years without it, and was extensively useful. This exemption may conduce much to its convenience, and, perhaps, very considerably to its profit. But many things may be convenient and beneficial in the account of mercantile profit or Bank dividends, which are not necessary to the very existence of the corporation. Certainly the exemption from taxation is of this character. It is not incident to the corporation. If necessary to secure to it the most beneficial uses of its corporate franchises, it must obtain it by a special Osborn V. grant; it must be specially inserted. An inquiry, 1824. how far Congress have constitutional power to do this, were they to attempt it, would still further elucidate the erroneous character of the position, that it is an incident of the charter, independent of special grant. Mr. Clay, for the respondents, declined arguing the question of the right of the State of Ohio to tax the Bank, considering it as finally determined by the former decision of the Court, which was supported by irresistible arguments, to which he could add no farther illustration. But this was not, like the law of Maryland, a case of taxation. It was a law enacted for the purpose of expelling the branches of the Bank from the State of Ohio, by inflicting penalties amounting to a prohibition. It might be called a bill of pains and penalties. An examination of its provisions, would show, that the penalties were greater in amount than the entire dividends. It was unequal and unjust in its operations. It was a confiscation, and not a tax. It was the same on the branch at Cincinnati, which had a capital of one million and a half, with that at Chilicothe, which had only a capital of half a million of dollars. It was obvious, that if one State could, in this manner, expel one of the offices of discount and deposit from its territory, every State might do the same thing. If one State may expel a branch, another State may expel the parent Bank itself; and thus this great institution of the national government, would be extirpated and de U. S. Bartk. |