§ 166. “Borrowing Money.”

Under the power to borrow money on the credit of the United States, and to issue circulating notes for the money borrowed, the authority of Congress to define the quality and force of these notes as currency is as broad as the like power over metallic currency under the power to coin money and regulate the value thereof. Under the two powers, taken together, Congress is authorized to establish a national currency, either in coin or in paper, and to make that currency lawful money for all purposes as regards the national government or individuals, and this whether in time of war or peace. (Juilliard v. Greenman, 110 U.S. 421. Baker, Annot. Const. 19.)

A tax imposed by a State or under its authority on stock issued for loans made to the United States is unconstitutional. (Weston v. City of Charleston, 2 Pet. 449. Id. p. 17.)

The stock of the United States, constituting the whole or part of the capital stock of a State Bank, is not subject to State taxation. A tax on Federal stock is regarded as a tax upon the exercise of the borrowing powers conferred upon Congress. It is immaterial that the tax is on the aggregate property of the taxpayer, and the stock is not taxed by name. (Bank Tax Case, 2 Wall. 200.)

Securities of the United States are exempt from State taxation; and this exemption extends to the capital stock of a corporation if made up of such securities. (Provident Institution v. Massachusetts, 6 Wall. 611. Id. p. 17.)

United States notes are exempt from taxation by State or municipal authority. (Mitchell v. County Commissioners, 91 U.S. 206. Id. p. 18.)

A tax by a State upon the bonds of the United States is a tax upon the borrowing power of Congress, and is invalid. But the fact that a corporation has invested part of its capital in United States bonds does not prevent the State from taxing the corporate franchises or business of the corporation. (Home Insurance Co. v. New York, 134 U.S. 594. Id. p. 19.)

51. (v.) Postal167, telegraphic, telephonic, and other like services:

HISTORICAL NOTE.—The corresponding power in the Constitution of the United States is “to establish post-offices and post-roads;” in the British North America Act, “Postal service.” Earl Grey's Committee of the Privy Council in 1849 suggested “The conveyance of letters” as a federal subject (p. 85, supra). Wentworth's Constitutional Committee in 1853 specified “Postage between the said colonies;” and the draft Bill annexed to Wentworth's Memorial in 1857 specified “Intercolonial telegraphs and postage” (pp. 91–94, supra). In the Federal Council of Australasia Act, 1885, posts and telegraphs, curiously enough, were not mentioned.

In the Commonwealth Bill of 1891, “Postal and telegraphic services” were specified (sub-cl. 8). At the Adelaide session, 1897, the same words were adopted in the first draft. In Committee, Mr. Holder moved to add the words “without the boundaries of the Commonwealth,” on the ground that inland posts and telegraphs were matters of purely local concern. This was defeated by 30 votes to 5. On Mr. Wise's motion, the words “telephonic and other like services” were added. (Conv. Deb., Adel., pp. 767–75.)

At the Sydney session, a suggestion by the Legislative Assembly of South Australia (similar to a suggestion by the Legislative Assembly of Western Australia) to add the words “outside the limits of the Commonwealth” was negatived. (Conv. Deb., Syd., 1897, pp. 1068–9.)

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