1. An enactment in a state statute that "the sheriff shall pay
over to the county treasurer the full amount of the state and
school taxes, in gold and silver coin," and that "the several
county treasurers shall pay over to the state treasurer the state
tax, in gold and silver coin" requires by legitimate, if not
necessary consequence, that the taxes named be collected in coin.
But if, in the judgment of this Court, this were otherwise, yet the
supreme court of the state having held this construction to be
correct, this Court will follow their adjudication.
2. The clauses in the several acts of Congress of 1862 and 1863
making United States notes a legal tender for debts have no
reference to taxes imposed by state authority.
Congress, February, 1862, authorized the issue of
Page 74 U. S. 72
in notes of the United States, and enacted that they should
"be receivable in payment of all taxes, internal duties, levies,
debts, and demands due to the United States except duties on
imports, and of all claims and demands of any kind whatever
against the United States
except interest on bonds and
notes, which shall be paid in coin; and shall also be lawful money
and legal tender in payment of all debts,
private, within the United States, except duties on imports."
A subsequent act authorizing a further issue contained an
enactment very similar as to the legal characteristics of the notes
when issued. A third act authorizing a yet further issue enacted
simply that they should be lawful money or a legal tender. Under
these three acts, a large amount of notes of the United States
which circulated as money were issued.
Subsequently to this, the Legislature of Oregon passed a statute
enacting that "the sheriff shall pay over to the county treasurer,
the full amount of the state and school taxes,
and silver coin,
] and that "the several county treasurers shall pay over to
the state treasurer the state tax in gold and silver
" [Footnote 2
In this condition of statute law, federal and state, the State
of Oregon, in April, 1865, filed a complaint against the County of
Lane in the circuit court of the state for that county to recover
$5,460.96, in gold and silver coin,
which sum was alleged
to have become due as state revenue from the county to the state on
the first Monday of February, 1864.
To this complaint an answer was put in by the county alleging a
tender of the amount claimed by the state, made on the 23d day of
January, 1864, to the state treasurer at his office in United
and averring that the lawful money so tendered
and offered was in truth and fact part of the first moneys
collected and paid into the county treasury after the assessment of
taxes for the year 1862.
To this answer there was a demurrer, which was sustained
Page 74 U. S. 73
by the circuit court, and judgment was given that the plaintiff
recover of the defendant the sum claimed, in gold and silver coin,
with costs of suit. This judgment was affirmed upon writ of error
by the supreme court of the state.
The case was now brought here by writ of error to that
THE CHIEF JUSTICE delivered the opinion of the Court.
Two propositions have been pressed upon our attention ably and
earnestly in behalf of the plaintiff in error.
The first of them will be first considered.
The answer avers substantially that the money tendered was part
of the first moneys collected in Lane County after the assessment
of 1863, and the demurrer admits the truth of the answer.
The fact therefore may be taken as established that the
Page 74 U. S. 74
taxes for that year in Lane County were collected in United
But was this in conformity with the laws of Oregon?
In this Court, the construction given by the state courts to the
laws of a state, relating to local affairs, is uniformly received
as the true construction, and the question first stated must have
been passed upon in reaching a conclusion upon the demurrer, both
by the circuit court for the county and by the supreme court of the
state. Both courts must have held that the statutes of Oregon,
either directly or by clear implication, required the collection of
taxes in gold and silver coin.
Nor do we perceive anything strained or unreasonable in this
construction. The laws of Oregon, as quoted in the brief for the
state, provided that "the sheriff shall pay over to the county
treasurer the full amount of the state and school taxes, in gold
and silver coin," and that "the several county treasurers shall pay
over to the state treasurer the state tax in gold and silver
It is certainly a legitimate if not a necessary inference that
these taxes were required to be collected in coin. Nothing short of
express words would warrant us in saying that the laws authorized
collection in one description of money from the people and required
payment over of the same taxes into the county and state treasuries
If, in our judgment, however, this point were otherwise, we
should still be bound by the soundest principles of judicial
administration, and by a long train of decisions in this Court, to
regard the judgment of the Supreme Court of Oregon, so far as it
depends on the right construction of the statutes of that state, as
free from error.
The second proposition remains to be examined, and this inquiry
brings us to the consideration of the acts of Congress authorizing
the issue of the notes in which the tender was made.
The first of these was the Act of February 25, 1862, which
authorized the Secretary of the Treasury to issue, on the
Page 74 U. S. 75
credit of the United States, one hundred and fifty millions of
dollars in United States notes, and provided that these notes
"shall be receivable in payment of all taxes, internal duties,
excises, debts and demands due to the United States, except duties
on imports, and of all claims and demands against the United States
of every kind whatsoever, except interest on bonds and notes, which
shall be paid in coin, and shall also be lawful money and legal
tender in payment of all debts, public and private, within the
United States except duties on imports and interest as
The second act contains a provision nearly in the same words
with that just recited, and under these two acts two-thirds of the
entire issue was authorized. It is unnecessary, therefore, to refer
to the third act, by which the notes to be issued under it are not
in terms made receivable and payable, but are simply declared to be
lawful money and a legal tender.
In the first act, no emission was authorized of any notes under
five dollars, nor in the other two of any under one dollar. The
notes authorized by different statutes for parts of a dollar were
never declared to be lawful money or a legal tender. [Footnote 3
It is obvious therefore that a legal tender in United States
notes of the precise amount of taxes admitted to be due to the
state could not be made. Coin was then, and is now, the only legal
tender for debts less than one dollar. In the view which we take of
this case, this is not important. It is mentioned only to show that
the general words "all debts" were not intended to be taken in a
sense absolutely literal.
We proceed then to inquire whether, upon a sound construction of
the acts, taxes imposed by a state government upon the people of
the state are "debts" within their true meaning.
In examining this question, it will be proper to give some
attention to the Constitution of the states and to their relations
as United States.
Page 74 U. S. 76
The people of the United States constitute one nation, under one
government, and this government, within the scope of the powers
with which it is invested, is supreme. On the other hand, the
people of each state compose a state having its own government and
endowed with all the functions essential to separate and
independent existence. The states disunited might continue to
exist. Without the states in union, there could be no such
political body as the United States.
Both the states and the United States existed before the
Constitution. The people, through that instrument, established a
more perfect union by substituting a national government, acting,
with ample power, directly upon the citizens, instead of the
confederate government, which acted with powers, greatly
restricted, only upon the states. But in many articles of the
Constitution the necessary existence of the states, and, within
their proper spheres, the independent authority of the states, is
distinctly recognized. To them nearly the whole charge of interior
regulation is committed or left; to them and to the people all
powers not expressly delegated to the national government are
reserved. The general condition was well stated by Mr. Madison in
the Federalist thus:
"The federal and state governments are in fact but different
agents and trustees of the people, constituted with different
powers and designated for different purposes."
Now, to the existence of the states, themselves necessary to the
existence of the United States, the power of taxation is
indispensable. It is an essential function of government. It was
exercised by the Colonies, and when the Colonies became state, both
before and after the formation of the Confederation, it was
exercised by the new governments. Under the Articles of
Confederation, the government of the United States was limited in
the exercise of this power to requisitions upon the states, while
the whole power of direct and indirect taxation of persons and
property, whether by taxes on polls, or duties on imports, or
duties on internal production, manufacture, or use, was
acknowledged to belong exclusively
Page 74 U. S. 77
to the states, without any other limitation than that of
noninterference with certain treaties made by Congress. The
Constitution, it is true, greatly changed this condition of things.
It gave the power to tax, both directly and indirectly, to the
national government, and, subject to the one prohibition of any tax
upon exports and to the conditions of uniformity in respect to
indirect and of proportion in respect to direct taxes, the power
was given without any express reservation. On the other hand, no
power to tax exports, or imports except for a single purpose and to
an insignificant extent, or to lay any duty on tonnage was
permitted to the states. In respect, however, to property,
business, and persons within their respective limits, their power
of taxation remained and remains entire. It is indeed a concurrent
power, and in the case of a tax on the same subject by both
governments, the claim of the United States, as the supreme
authority, must be preferred, but with this qualification it is
absolute. The extent to which it shall be exercised, the subjects
upon which it shall be exercised, and the mode in which it shall be
exercised are all equally within the discretion of the legislatures
to which the states commit the exercise of the power. That
discretion is restrained only by the will of the people expressed
in the state constitutions or through elections, and by the
condition that it must not be so used as to burden or embarrass the
operations of the national government. There is nothing in the
Constitution which contemplates or authorizes any direct abridgment
of this power by national legislation. To the extent just
indicated, it is an complete in the states as the like power,
within the limits of the Constitution, is complete in Congress. If,
therefore, the condition of any state, in the judgment of its
legislature, requires the collection of taxes in kind -- that is to
say by the delivery to the proper officers of a certain proportion
of products, or in gold and silver bullion, or in gold and silver
coin -- it is not easy to see upon what principle the national
legislature can interfere with the exercise, to that end, of this
power, original in the states and never as yet surrendered. If this
be so, it is certainly
Page 74 U. S. 78
a reasonable conclusion that Congress did not intend, by the
general terms of the currency acts, to restrain the exercise of
this power in the manner shown by the statutes of Oregon.
Other considerations strengthen this conclusion. It cannot not
escape observation that the provision intended to give currency to
the United States notes in the two acts of 1862 consists of two
quite distinguishable clauses. The first of these clauses makes
those notes receivable in payment of all dues to the Unites states
and payable in satisfaction of all demands against the United
States, with specified exceptions; the second makes them lawful
money, and a legal tender in payment of debts, public and private,
within the United States, with the same exceptions.
It seems quite probable that the first clause only was in the
original bill, and that the second was afterwards introduced during
its progress into an act. However this may be, the fact that both
clauses were made part of the act of February, and were retained in
the act of July, 1862, indicates clearly enough the intention of
Congress that both shall be construed together. Now in the first
clause, taxes are plainly distinguished, in enumeration, from
debts, and it is not an unreasonable inference that the word debts
in the other clause was not intended to include taxes.
It must be observed that the first clause, which may be called
the receivability and payability clause, imposes no restriction
whatever upon the states in the collection of taxes. It makes the
notes receivable for national taxes, but does not make them
receivable for state taxes. On the contrary, the express reference
to receivability by the national government, and the omission of
all reference to receivability by the state governments, excludes
the hypothesis of an intention on the part of Congress to compel
the states to receive them as revenue.
And it must also be observed that any construction of the
second, or, as it may well enough be called, legal tender clause,
that includes dues for taxes under the words debts, public and
private, must deprive the first clause of all effect whatever. For
if those words, rightly apprehended, include
Page 74 U. S. 79
state taxes, they certainly include national taxes also, and if
they include national taxes, the clause making them receivable for
such taxes was wholly unnecessary and superfluous.
It is also proper to be observed that a technical construction
of the words in question might defeat the main purpose of the act,
which doubtless was to provide a currency in which the receipts and
payments incident to the exigencies of the then existing civil war
might be made.
In his work on the Constitution, the late Mr. Justice Story
whose praise as a jurist is in all civilized lands, speaking of the
clause in the Constitution giving to Congress the power to lay and
collect taxes, says of the theory which would limit the power to
the object of paying the debts that, thus limited, it would be only
a power to provide for the payment of debts then existing.
] And certainly if a
narrow and limited interpretation would thus restrict the word
"debts" in the Constitution, the same sort of interpretation would
in like manner restrict the same word in the act. Such an
interpretation needs only to be mentioned to be rejected. We refer
to it only to show that a right construction must be sought through
larger and less technical views. We may, then, safely decline
either to limit the word "debts" to existing dues, or to extend its
meaning so as to embrace all dues of whatever origin and
What, then, is its true sense? The most obvious, and, as it
seems to us, the most rational answer to this question is that
Congress must have had in contemplation debts originating in
contract or demands carried into judgment, and only debts of this
character. This is the commonest and most natural use of the word.
Some strain is felt upon the understanding when an attempt is made
to extend it so as to include taxes imposed by legislative
authority, and there should be no such strain in the interpretation
of a law like this.
We are the more ready to adopt this view because the
Page 74 U. S. 80
greatest of English elementary writers upon law, when treating
of debts in their various descriptions, gives no hint that taxes
come within either, [Footnote
] while American state courts of the highest authority have
refused to treat liabilities for taxes as debts in the ordinary
sense of that word, for which actions of debt may be
The first of these cases was that of Pierce v. City of
in which the defendant attempted to set off against a demand of the
plaintiff certain taxes due to the city. The statute allowed mutual
debts to be set off, but the court disallowed the right to set off
taxes. This case went, indeed, upon the construction of the statute
of Massachusetts, and did not turn on the precise point before us,
but the language of the court shows that taxes were not regarded as
debts within the common understanding of the word.
The second case was that of Shaw v. Pickett,
] in which the Supreme Court
of Vermont said,
"The assessment of taxes does not create a debt that can be
enforced by suit, or upon which a promise to pay interest can be
implied. It is a proceeding in invitum.
The next case was that of the City of Camden v. Allen,
] 1857. That was an
action of debt brought to recover a tax by the municipality to
which it was due. The language of the Supreme Court of New Jersey
was still more explicit: "A tax, in its essential characteristics,"
said the court,
"is not a debt nor in the nature of a debt. A tax is an impost
levied by authority of government upon its citizens or subjects for
the support of the state. It is not founded on contract or
agreement. It operates in invitum.
A debt is a sum of
money due by certain and express agreement. It originates in and is
founded upon contracts express or implied."
These decisions were all made before the acts of 1862 were
passed, and they may have had some influence upon the choice of the
words used. Be this as it may, we all think that the interpretation
which they sanction is well warranted.
Page 74 U. S. 81
We cannot attribute to the legislature an intent to include
taxes under the term debts without something more than appears in
the acts to show that intention.
The Supreme Court of California, in 1862, had the construction
of these acts under consideration in the case of Perry v.
decisions which we have cited were referred to by Chief Justice
Field, now holding a seat on this bench, and the very question we
are now considering, "What did Congress intend by the act?" was
answered in these words:
"Upon this question, we are clear that it only intended by the
terms debts, public and private, such obligations for the payment
of money as are founded upon contract."
In whatever light, therefore, we consider this question, whether
in the light of the conflict between the legislation of Congress
and the taxing power of the states, to which the interpretation,
insisted on in behalf of the County of Lane, would give occasion,
or in the light of the language of the acts themselves, or in the
light of the decisions to which we have referred, we find ourselves
brought to the same conclusion, that the clause making the United
States notes a legal tender for debts has no reference to taxes
imposed by state authority, but relates only to debts in the
ordinary sense of the word, arising out of simple contracts or
contracts by specialty, which include judgments and recognizances.
Whether the word "debts," as used in the act, includes
obligations expressly made payable or adjudged to be paid in coin
has been argued in another case. We express at present, no opinion
on that question. [Footnote
The judgment of the Supreme Court of Oregon must be
Statutes of Oregon 438, § 32.
441, § 46.
12 Stat. at Large 592; ib.,
1 Story on the Constitution 639, § 921.
1 Blackstone's Comm. 475-476.
3 Metcalf 520.
26 Vt. 486.
2 Dutcher 398.
20 Cal. 350.
1 Parsons on Contracts 7.
pp. <|74 U.S. 229|>229, <|74 U.S.
258|>258, Bronson v. Rodes
and Butler v.