THE SOLE PURPOSES OF TAXATION.
Taxes can only be levied, and collected, for public purposes; but all
the property of the country can be taxed to its entire value, when the
public good requires it. The exigency demanding high rates of taxation
is left to the determination of the legislatures of the states, and of
the general government. No taxes can be legally levied or collected save
for the support of the government, state and national, and subject to
the restrictions incorporated in the constitution. All other taxes
imposed upon the people are unconstitutional, illegal, and oppressive,
and should be declared absolutely void. Direct taxation, for the support
of the general government, has never been practiced in time of peace.
The usual method for raising a sufficient revenue for its support has
been by duties, or tariff imposed by acts of congress upon imports. This
has always been deemed the best method for raising the revenue necessary
for the support of the government. The powers and duties of the general
government are limited and restricted by the constitution of the United
States; and as its legislative, executive, and judicial powers are thus
limited, it follows that its power to impose taxes upon the people is
limited in the same manner, and that it can tax for no purpose save for
defraying the expenses of its different departments in the exercise of
the powers delegated by the federal constitution. This conceded, all
that can be claimed by those who administer the affairs of the nation,
unless they transcend the constitutional limit, is conceded. The power
to appropriate the lands or money of the public to private parties or
corporations not being found in the constitution, nor implied in any of
the granted powers, all such appropriations are usurpations; they are
donations of the people's money and property to private corporations
and individuals in violation of the constitutional restrictions; and no
authority is vested in congress to tax the people, either directly or
indirectly, for the purpose of making return of the money and property
thus wrongfully taken from them. A private corporation is not a public
necessity; its franchises are private property, and even if the United
States owned the whole of its stock, and took the entire control of its
business, it could not become a public corporation, for the reason that
congress does not possess the power, under the constitution, to create
private corporations. The fact that the United States owned the stock
and controlled the corporation would not impart to it any of the
attributes of sovereignty, but in so far as the general government was
interested in the corporation, it would be treated as any other private
party, and would be amenable to the same law and subject to the same
jurisdiction as private parties or individuals. If the action of the
general government can confer none of the attributes of sovereignty upon
a private corporation--if it has no constitutional authority to donate
lands or money to railroad companies--how can it lawfully collect taxes
from the people, either by direct levies, or in duties upon articles of
commerce, for the purpose of re-imbursing the government for the lands
donated to corporations, or to pay either the principal or interest on
the bonds given to these corporations? As well might congress levy a
direct tax upon the property of the people for the purpose of donating
to a private party sufficient means to build a residence; there is not
found in the constitution any warrant for either of such levies. Both
alike are unwarranted usurpations of power, not to be justified under
any grant of power from the people to the federal government. To admit
that the congress of the United States possesses the power to tax the
people for any purpose save for the support of the general government,
is to admit that the constitution is elastic, subject to any
congressional construction, and liable to be used as an instrument for
promoting personal and private ends. Congress had no power to vote
subsidy bonds to railroad corporations, as we have already shown; nor
could it release these corporations from the payment of these bonds, and
the interest as it accrues, and collect the amount from the people in
duties on imports, or in any other kind of taxes. No such power was
ever delegated to the general government by the people. This power
cannot be found in any part of the constitution. While this is true, the
people are now taxed annually to the amount of many millions of dollars
to pay the interest on the bonds issued to the Pacific railroads. Taxes
are also collected to the amount of $18,000,000 or $20,000,000 to pay
the interest on the banking capital of the country, the stock of a
gigantic corporation, chartered by congress, but in the hands and under
the control of private parties and companies. While the general
government, under the constitution, has the control of the money of the
country, and its coinage, value, etc., and can provide such means as
shall be deemed best for the administration of the national or public
finances, it has no power to enter into private banking; and because it
has not this power, it cannot create private banking institutions and
tax the people for their support. Any tax levied upon the citizen by the
general government for any purpose whatsoever, save for the necessary
expenses in the administration of the same, in all of its departments,
in accordance with the letter and spirit of the constitution, is without
authority, and violates the fundamental law. The levy of taxes in aid of
private corporations subserves none of the purposes of the government,
and is the exercise of a power not possessed by congress. Our position
is fully sustained by legal adjudications, and by the writings of
eminent jurists. Chief Justice Marshall, in his writings upon the
constitution, has considered this point. He says, on page 345 of his
work: "It is, we think, a sound principle, that when a government
becomes a partner in a trading company, it divests itself, so far as
concerns the transactions of the company, of its sovereign character,
and takes that of a private citizen. Instead of communicating to the
company its privileges and its prerogatives, it descends to a level
with those with whom it associates itself, and takes the character
which belongs to its associates, and to the business which it
transacts. * * * As a member of a corporation, a government never
exercises its sovereignty. It acts merely as a corporator, and exercises
no other powers in the management of the affairs of the corporation than
are expressly given by the incorporation act. The government of the
Union held shares in the old Bank of the United States; but the
privileges of the government were not imparted by that circumstance to
the bank."
If there exists any authority in the general government to create a
corporation for any purpose, it is in relation to the finances of the
country. The necessity of a fiscal agent of some kind would seem to
warrant the creation of a banking corporation. But, if the power is
conceded, it does not follow that the people should be taxed to provide
a bounty, payable semi-annually, to the private companies who are
engaged in banking, and who alone receive the profits arising from the
business. Yet the act of congress creating the banks provides for the
payment of semi-annual interest on the capital invested; and this
interest is collected from the people. All railroad corporations,
created by act of congress, are absolutely private corporations. The
insertion in the charter of the words--"to secure the more safe and
speedy transportation of the mails, troops, munitions of war, and
government supplies"--found in all of these charters, does not change
the character of the corporations. The grants are made to private
parties; the roads are under their control; they receive aid from the
general government, but in their own names own and control the roads,
and can, at any time, dispose of the roads and franchises, and the
general government has no power to prevent any action the companies may
choose to adopt so long as they regard the provisions of their charters.
No statesman or jurist of our country has at any time, until within the
last few years, claimed that congress could create corporations for
private purposes; on the contrary, in all of the earlier decisions of
the federal courts, it was uniformly conceded that congress did not
possess the power to create such corporations. Chancellor Kent, Chief
Justice Marshall, and other eminent writers, are all agreed that, under
the constitution, congress cannot create a private corporation. If
congress had no constitutional right to create railroad corporations,
how can it possess the power to tax the people to pay their debts? The
people are now paying at least $8,000,000 per annum in shape of taxes
for the purpose of liquidating the interest due from railroads chartered
by congress in violation of the fundamental law of the land. This large
amount of taxes is collected and applied by the general government in
payment of interest due from railroad companies, because the influence
of congressmen and their friends, in these companies, was sufficiently
powerful to override constitutional barriers, and to procure the passage
of an act enabling the parties holding the stock to pocket the earnings
of their roads and make good the deficit in their interest account by
taxing the people.
The whole history of congressional legislation does not present a case
of such entire disregard of the provisions of the constitution, and such
dishonest and corrupt legislation as is contained in the acts of
congress relating to the Pacific railroads. It is questionable whether
another instance can be found in this or any other country, having a
constitutional government, where legislators, by direct vote, have taken
millions of money from the public treasury and given it to private
corporations of which they were members and directors, and to make good
the amount thus taken from the treasury have provided _by law_ for its
collection from the people in the shape of taxes and duties! When we
remember that congress does not possess the power to charter private
corporations; that in so doing it violates the letter and spirit of the
constitution; upon what principle can it claim the right to tax the
people for the benefit of these private corporations? We repeat, no
country in the world, governed by a written constitution, offers a
parallel case. Not even in France, under the personal government of the
late emperor, would such an unwarranted act have been attempted.
We are aware that it is claimed that railroad corporations are public
corporations--and this granted, taxes may be rightfully levied and
collected for their benefit. But we do _not_ grant this, and shall, in
the following pages, essay to demonstrate that all railroad corporations
are private, being owned and controlled by private citizens, and not by
the state or national government. But admitting they are public and not
private corporations, the general government even then cannot legally
charter or control them, because the power for that purpose has never
been delegated by the states or the people; and it follows that the
general government cannot rightfully impose taxes upon the people for
the support of corporations over which it can have no control. If
congress can levy taxes for the construction and support of railroads,
and take the management and control of them, it certainly can take the
entire supervision of all the highways in all the states, provide for
their construction, and tax the people at will for that purpose. This
being admitted, no local or police regulation in any of the states is
exclusively under the jurisdiction of the state governments; but the
general government may at any time take the absolute control of the
governmental affairs of the several states, and thus complete the
centralization of power now so rapidly developing in all the departments
at Washington. The assumption of the right to tax the people for any and
every purpose that to congress shall seem expedient, irrespective of
constitutional prohibition, is at once destructive of the rights that
were supposed to be guaranteed and preserved to the whole people by the
constitution. If the will of those men who happen to occupy seats in
congress (and that will too often controlled by personal interest) is to
govern, then all constitutional government is at an end, and the liberty
and property of the citizen have no constitutional safeguard. Taxes to
the entire value of all the wealth in the country may be levied by the
general government, and the citizen of this republic holds his entire
estate at the will of the persons who fill the offices of the country.
Under the system of congressional legislation that now obtains, the
laboring and producing classes are being rapidly reduced to a state of
servitude that would grace the most despotic government.