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pose, and that is to see how far this Government can lay a tax upon franchises granted by a State. It is the case of the Veazie Bank v. Fenno, in Eighth Wallace, page 547. It is only a few lines. This was the case, as we all recollect, that laid a tax of 10 per cent. upon the circulation of State banks.

I am only quoting this case now for one purpose, and that is in support of the third proposition that I have advanced-that the proposed amendment is not an infringement upon the rights of the States. Chief Justice Chase delivered the opinion of the court. Mr. Justice Nelson and Mr. Justice Davis dissented. It was argued as ably as any case ever was argued before the Supreme Court of the United States, and, with great respect to that illustrious tribunal, it was decided about as meagerly as any case was ever decided by the Supreme Court of the United States. There it is; and it has been recognized since 1869 in one case after another as the law of the land.

Is it

Speaking of this tax

Is it, then, a tax on a franchise granted by a State

That is, on the circulation of banks chartered by the Statewhich Congress, upon any principle exempting the reserved powers of the States from impairment by taxation, must be held to have no authority to lay and collect?

That is where the law stands. I do not know what the opinion of the Senator from Texas, Mr. BAILEY, is upon that point. Perhaps he differs with me upon it. He may think, perhaps, that the Government has a right to lay a tax upon a franchise granted by a State. I do not think so. I find nothing further to aid me in arriving at a conclusion upon that matter except this ambiguous language of the Supreme Court.

Let me finish this case, and let me examine that line of cases. If I do not give them correctly, the Senator from Iowa will

correct me. Just let me finish these few lines from the case of the Veazie Bank v. Fenno. I think the Senator is perfectly right in his construction of the cases. The court say:

We do not say that there may not be such a tax. It may be admitted that the reserved rights of the States, such as the right to pass laws, to give effect to laws through executive action, to administer justice through the courts, and to employ all necessary agencies for legitimate purposes of State government, are not proper subjects of the taxing power of Congress. But it can not be admitted that franchises granted by a State are necessarily exempt from taxation; for franchises are property

I do not cite this case for that portion of it

often very valuable and productive property; and when not conferred for the purpose of giving effect to some reserved power of a State, seem to be as properly objects of taxation as any other property.

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I am not prepared to say, without any the court, that I would go as far as this. has given me trouble in this case; and I stand from the Senator from New York whether he agrees with me upon that point. I do not believe, if this was a tax levied upon a charter, that it would be a good tax. I do not think, if we were to pass a law here levying a Federal tax upon a State Charter, upon the power of a State to grant a charter, that that would be a valid tax. I do not know what the opinion of the Senator from New York is upon that point. I draw a clear distinction between a tax levied upon the power of a State to grant a corporate charter and a tax levied upon the business of the corporation to which it grants the charter.

The Senator from Iowa has all these points under consideration, and we come now-and I will dispose of them in a moment to just that line of cases. Let us look at them a moment. The State can not invade the functions of the Federal Government, and the Federal Government can not invade the function of the State. The Government has its powers under the Constitution; the State has its reserved rights, and it would

have its reserved rights if the tenth amendment had never been adopted. The tenth amendment never conferred upon the States their reserved rights, because the States possessed those reserved rights. All the tenth amendment did was simply to confirm them; for the States had the reserved rights without the confirmation.

A State can not tax the functions of the Federal Government. I have here Judson on Taxation, a book written by an eminent lawyer of Missouri, who was, I think, the colleague of Mr. Harmon. Strange to say, he is not related to him, but his last name is Mr. Harmon's first name. They were the gentlemen who went out of the Government cases, I think— Harmon and Judson. But, at any rate, Mr. Judson is a distinguished lawyer, and he wrote this book on taxation. I have looked at it, but he does not give a full report of the cases.

One of these States taxed the franchises of the Pacific Railroad. The Supreme Court held that they had no right to tax the franchises of the Pacific Railroad, because it was a government franchise. One of the other States taxed the roadbed and other property of the corporation. What did the Supreme Court say? As I recollect, the Supreme Court said that the first tax was unconstitutional, and the second tax was constitutional. Why? Because the tax upon the roadbed of a railroad, while it might ultimately destroy the governmental franchise of the railroad, was nevertheless primarily a tax upon the property of the road-though it might operate from a secondary point of view upon the franchise of the road, it was valid.

I am satisfied in my own mind that this is not a tax upon the franchises of a State. If it were, I should never stand here and vote for it. I should lift my voice in a humble protest against such a proposition as that, because, I want to say in conclusion, I have always been what is known as a “States'rights Democrat." I am not ashamed of the title. I am proud

of it. I represent one of the original States that signed the covenant, and it is that covenant that ties the Constitution in the bonds of eternal unity. That covenant must be kept sacred and inviolate. On that rock we stand. When that rock disintegrates we perish. Every crumbling fragment of it imperils the Republic. And if during the time I have been in this body I have accomplished no other purpose than that of slightly impressing upon the rising generation that this covenant must be kept intact in all its essential parts and that the reserved rights of sovereign States must be kept inviolate and unprofaned, then I am satisfied with that accomplishment, if I shall never receive another honor at the hands of my countrymen.

AFFAIRS IN NICARAGUA.

Speaking to his resolution December 13, 1909, holding that President Zelaya had no right to execute two Americans enlisted in the revolutionary army of General Estrada, Senator Rayner plead for the arrest and trial by the United States of the perpetrator of the crime.

Mr. President, in making a brief presentation of the subject involved in this resolution, I realize the fact that I am dealing with a delicate matter, and I do not propose to permit my feelings to influence my judgment. I have given the legal aspects of the case my most patient consideration, and I desire to say that, so far as the law that governs it is concerned, in order to arrive at a proper conclusion the most diligent investigation of precedents and authorities that relate to the question at issue is absolutely demanded, and no opinion that is simply based upon a superficial familiarity with the principles involved, no matter from how high a source it emanates, would carry much weight. Having given the subject my most laborious attention, realizing the complications and embarrassment that surround it, I have arrived at certain conclusions based upon cases

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and decisions that satisfy me that we can reach the crime set forth in the resolution by a method which may amount technically to a declaration of hostilities against Zelaya, but will not carry with it a general declaration of war against the Government of Nicaragua.

Mr. President, in offering the resolution, I want it understood that I have not done so for the purpose simply of addressing the Senate upon it, but I propose to follow it up with all the zeal I can command.

The question that I present is one more of law than of war. A great crime has been committed against the rights of American citizenship which can not be allowed to slumber. The guilt does not rest upon the people of Nicaragua, and therefore to punish them or to seize their ports or customhouses, which would be an easy matter to accomplish, would not subserve the purpose of my inquiry. We must not confound the action of the Dictator of Nicaragua with the conduct of the subjects over whom he rules. This resolution is directed against him individually, and I want it entirely separated from any proposed steps that we may take in reference to our interference in Nicaragua. The two propositions must be kept apart.

I also desire to say that my strongest sympathies are and always have been enlisted in favor of the people of Central America, and I want to see the friendliest relationship maintained between their governments and ours. I believe in cementing the ties that now exist between us, and earnestly hope that nothing will ever occur that will compel us to assume any unfriendly attitude toward them. I, therefore, want to separate this unfortunate occurrence from the general situation of good will and amity that prevails between these republics and the United States, so that it shall be isolated and rest upon the environment that surrounds it, without affecting in the slightest degree the policy that the United States has

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