banking law. It caused to be delivered, in proper season, to the tax commissioners, a statement embracing the particular matters required by the statute to be stated; by which it appeared that its capital actually paid in, and secured to be paid in, was the sum of $750,000; that it had invested in real estate, consisting of its banking-house in the first ward of the city, the sum of $188,099.84, leaving a balance of capital of $561,900.16. It further stated that the bank had loaned to the Government of the United States the whole balance of its personal property, namely, the sum lastly above mentioned, "being the entire amount of their capital stock after deducting the amount paid for real estate as aforesaid, and that they have taken and hold for such loans the securities of the United States, being stocks, bonds, notes, evidences of debt, and securities for money." It therefore claimed to be exempt from taxation except for the value of its said real estate. The Commissioners rejected the claim to exemption, and the corporation was accordingly assessed the sum above mentioned in respect to real estate, and the whole balance of $561,900 as personal estate. The bank sued out a certiorari to the Supreme Court under the act of 1859, ch. 302, § 20.

The present appeal was from the judgment of affirmance in the Supreme Court of the proceedings of the Commissioners.

A. W. Bradford, for the appellant.1

John E. Develin and James T. Brady, for the respondents.

DENIO, C. J.-It must be considered a settled point that the power of taxation residing in the state governments does not embrace as a possible subject the securities of the public debt of the United States. The Supreme Court of the United States, the ultimate arbiter upon questions of federal power and constitutional limitations upon state authority, having so pronounced, it becomes the duty of the tribunals of the states, which, upon such subjects,

1 Mr. Daniel Lord was also heard on the general question involved in the case, he being of counsel for the appellant in the case of The People, ex rel. The Bank of Commerce, vs. The Commissioners of Taxes, &c., which was argued on the same day, and depended upon the same question.

are subordinate to the national court, to yield to the judgment implicit and unreserved obedience. The circumstance that we were unable to perceive the supposed repugnancy between the power of the states to tax all the property of its citizens, and the authority committed to the general government to become the borrower of money of any individual or corporation who might be willing to lend it, will not justify us in attempting to qualify or evade the plainly expressed opinion of the federal judiciary. I come to the consideration of the question involved in this case, therefore, unconscious of any bias arising out of the views which I entertained, and which I cannot avoid saying I individually still entertain, upon the power of the states over the subject of taxation for state purposes. The consideration that since the former judg ment of this court, Congress has seen fit to affirm, so far as it had power to do so, the construction by which the states are disabled from the full exercise of this power, by a positive inhibition to tax the property of our citizens invested in federal securities, would not change my opinion, if the principle were now open for consideration. The question as to the power of Congress to intervene was not before us on the former occasion, as no such act had then been passed, and we therefore avoided all expression of opinion on that subject; but if the states were not restrained by the Constitution itself, I think it was not in the power of Congress to impose, by its own authority, a limitation of the power of the state legislatures over the subject. But dismissing this question as one settled against our opinions by the supreme tribunal, the point now to be considered is: whether the effect of the state law which was in force when the determination under review was made, did assume to tax the securities of the general government in the hands of the banks, or, in other words, whether the assessment which is in controversy was upon these securities

or not.

The statute of this state on which the question arises, was passed on the 29th of April, 1863, and took effect immediately upon its passage. It is in these words: "All banks, banking associations, and other moneyed corporations and associations,

shall be liable to taxation on a valuation equal to the amount of their capital stock paid in or secured to be paid in, and their surplus earnings (less ten per cent. of such surplus), in the manner now provided by law, deducting the value of the real estate held by any such corporation or association, and taxable as real estate." (Ch. 240.)

The force of the words, paid in or secured to be paid in, if otherwise obscure, will be understood by a reference to the legislative history of banking in this state. When banks were created by special charter, the amount of capital stock and the number and amount of shares was stated in the act, and it was usually or at least sometimes provided that the institution might go into operation when a given number of shares less than the whole had been subscribed. So when the general banking law came to be passed, the articles of association were required to state the amount of the capital stock; and authority was given to increase it. (Laws 1838, ch. 260, §§ 16, 20.) Then the periodical statements required to be made, were to specify 'the amount of the capital stock paid in * * or secured to be paid." (§ 26.) So in regard to the chartered banks; they were to specify, in their statements, the amount of the capital stock of the corporation paid in or invested, according to the provisions of its charter, and the amount of such stock as then possessed." (2 R. S., 593, § 20.)

The distinction between capital originally paid in or secured, and that possessed at a particular time, is sharply defined in various provisions. For instance, in the limitation of the amount of loans and discounts: they are not to exceed three times its capital stock, then paid in and actually possessed. (Id., p. 589, § 1, subd. 8). So in the safety fund act, there is a limitation as to the circulating notes which may be issued, which are not to exceed twice the capital stock then paid in and actually possessed. But when the tation of this class of corporators comes to be provided for, it is the capital stock "paid in and secured to be paid in,” which is to be stated by the corporate officers to the assessors, and set down in their assessment rolls, and upon this the tax is to be imposed (1 R. S., 414, 415, 416, §§ 1, 6, 10); and the same

expression was used in the same connection in the act under immediate consideration. This amount of capital fixed by the charter or articles of association, and either actually paid in or secured to be paid in, is wholly irrespective of the moneys, securities, and property which the corporation may at any given time possess, and it may be a greater or less sum, varying from time to time, as it necessarily must, according to the vicissitudes of business and the success of the enterprise. It is usually called the nominal capital, to distinguish it from the amount of the positive assets which may constitute the actual capital at any particular period. The interest of the stockholders, called shares, are aliquot parts of this nominal capital, and they are said to be at par when the actual property or investment are supposed to be equal to the amount paid in or secured to be paid, or, in other words, to the nominal capital, and to be above or below par, as the actual capiital shall be increased or diminished.

The assessment or valuation, which by the Revised Statutes is to constitute the taxable personal property of the corporation, is the amount of this nominal capital, after there has been deducted from it, the amount paid out for real estate, and the amount of stock, if any, belonging to the state, and to literary and charitable corporations. (1 R. S., 415, §§ 6, 7.) Whatever may have been the effect of these provisions, if they had remained unchanged, upon the question we are considering, it is very clear that the same effect must be attributed to the act of 1863.

Between the time of the enactment of the Revised Statutes and the passage of the act of 1863, a very great alteration in principle was made in the method of assessing and taxing this class of corporators. By the act of 1857 (ch. 456, § 3), the mode of arriving at the valuation upon which the tax was to be levied, was altered in an important respect. Instead of taxing the nominal capital, expressed by the words capital paid in or secured to be paid in, the officers were required to assess the capital stock at its actual value. There were certain deductions to be made from that actual value, which are not necessary to be now stated. The principal feature of the alteration, was the departure from the nominal

amount or the sum which had been originally paid in or secured to be paid in, as the taxable valuation, and the substitution of the real or actual value of the capital, that is, the moneys and other property, independent of the real estate of the corporation possessed by it when the assessment is made. It was a change from a valuation to some extent fictitious, to one, to be obtained by actual inquiry, appraisement or other evidence, to be resorted to by the assessors. The system established by the act of 1857 was abolished by the act of 1863, and was superseded by the arrangements of that act. I cannot bring myself to entertain any doubt that the intention of the legislature in passing this last-mentioned act was to return substantially, and so far as this question is concerned exactly, to the system of the Revised Statutes. The nominal capital which was defined by the same precise words used in the Revised Statutes, were again made use of to describe the taxable valuation upon which the corporation was to be taxed. In declaring that such corporations should be liable to taxation upon a valuation equal to the amount of their capital stock paid in and secured to be paid in, they effected the same object which the Revised Statutes had accomplished in enacting that the capital stock paid in and secured to be paid in, should be inserted in the column of the valuations of personal estate, and that the capital as thus valued and entered should be taxed like other real and personal estate. The language is well and aptly chosen to denote a return to a system of valuation and taxation which had been firmly established by the Revised Statutes, and had been departed from by the act of 1857. Some emphasis has been placed in the argument, upon the word valuation as used in this act, as though it indicated that an estimate or appraisal of the capital of the company was to be made, at the time of assessing the corporation. But a little regard to the phraseology of the tax laws will show that the columns of the taxable amount of the real and personal estate of the taxpayers are the valuations of the real and personal estate of the several taxpayers, and the aggregate is the valuation of the counties. A reference to 1 R. S., pp. 395 and 417, §§ 34 and 16, will make this very plain. The words on a valuation