The government of the United States clearly has power to permit
limited commercial intercourse with an enemy in time of war and to
impose such conditions thereon as it sees fit; this power is
incident to the power to declare war and to carry it on to a
successful termination.
Page 88 U. S. 74
It seems that the President alone, who is
constitutionally invested with the entire charge of hostile
operations, may exercise this power, but whether so or not, there
is no doubt that with the concurrent authority of the Congress, he
may exercise it according to his discretion.
The Act of Congress of July 13, 1861, 12 Stat. at Large 257,
prohibiting commercial intercourse with the insurrectionary states
but providing that the President might, in his discretion, license
and permit it in such articles, for such time, and by such persons
as he might think most conducive to the public interest, to be
conducted and carried on only in pursuance of rules and regulations
prescribed by the Secretary of the Treasury, fully authorized the
rules and regulations adopted March 37 and September 11, 1863,
whereby, amongst other things, permission was given to purchase
cotton in the insurrectionary states and export the same to other
states upon condition of paying (besides other fees) a fee or bonus
of four cents per pound.
The Act of July 2, 1864, 13 Stat. at Large 375, respecting
commercial intercourse with the insurrectionary states recognized
and confirmed these regulations.
The charge of four cents per pound required by these regulations
was not a tax, nor was it imposed in the exercise of the taxing
power, but in the exercise of the war power of the government. It
was a condition which the government, and the President endued with
the powers thereof, in the exercise of supreme and absolute control
over the subject, had a perfect right to impose.
The condition thus imposed was entirely in the option of any
person to accept or not. if any did accept it and engage in the
trade, it was a voluntary act, and all payments made in consequence
were voluntary payments, and on that ground alone (if there were no
other), could not be recovered back.
The Internal Revenue Acts of 1862, 12 Stat. at Large 465, and
1864, 13
id. 15, in imposing specific duties by way of
excise on cotton, were not inconsistent with or repugnant to the
charge in question. The two charges were different things. One was
a payment as a condition of trading at all, required by the war
power; the other was an excise imposed by the taxing power.
Nashville, though within the National military lines in 1868 and
1864, was nevertheless hostile territory within the prohibition of
commercial intercourse, being within the terms of the President's
proclamation on that subject, which proclamation in that regard was
not inconsistent with the Act of July 13, 1861, properly
construed.
The civil war affected the status of the entire territory of the
states declared to be in insurrection except as modified by
declaratory acts of Congress or proclamations of the President.
Hamilton and others brought assumpsit in the court below
Page 88 U. S. 75
against Dillin, surveyor of the port at Nashville, Tennessee, to
recover a charge of four cents per pound paid by them to the said
defendant, from August, 1863, to July, 1864, for permits to
purchase and ship to the loyal states large quantities of cotton,
amounting to over seven millions of pounds. This payment was one of
the fees or charges required by the regulations of the Treasury
Department to be made as a condition of carrying on the said trade
between those portions of the insurrectionary states within the
lines of occupation of the Union forces and the loyal states.
The case was thus:
The Constitution ordains as follows:
"The Congress shall have power to lay and collect
taxes,
duties, imposts, and excises. [
Footnote 1]"
"The President shall be commander-in-chief of the army and navy
of the United States, and of the militia of the several states,
when called into actual service of the United States. [
Footnote 2]"
On the 13th of July, 1861, Congress passed an act [
Footnote 3] by which the President was
authorized, after certain preliminary measures for suppressing the
insurrection, to declare by proclamation what states and parts of
states were in a state of insurrection against the United States.
The act proceeds:
"And thereupon all commercial intercourse by and between the
same and the citizens thereof and the citizens of the rest of the
United States shall cease and be unlawful so long as such condition
of hostility shall continue, and all goods &c., coming from
said state or section into the other parts of the United States,
and all proceeding to such state or section by land or water,
shall, together with the vessel or vehicle &c., be forfeited to
the United States:
provided however that the President
may, in his discretion, license and permit commercial intercourse
with any such part of said state or section, the inhabitants of
which are so declared in a state of insurrection, in such articles,
and for such time, and by such persons as he, in his discretion,
may think most conducive to the public interest, and such
intercourse,
Page 88 U. S. 76
so far as by him licensed, shall be conducted and carried on
only in pursuance of rules and regulations prescribed by the
Secretary of the Treasury."
In pursuance of this act, the President, on the 16th of August,
1861, issued a proclamation [
Footnote 4] declaring that the inhabitants of certain
states, including Tennessee, were in a state of insurrection
against the United States, and that all commercial intercourse
between them and the citizens of other states was unlawful, and
that all goods &c., coming from said states without the special
license and permission of the President, through the Secretary of
the Treasury, or proceeding to any of said states &c., would be
forfeited &c. This proclamation excepted from its operation,
amongst other things, such parts of the enumerated states as might
maintain a loyal adhesion to the Union and Constitution or might be
from time to time occupied and controlled by forces of the United
States. A subsequent proclamation, issued April 2, 1863, [
Footnote 5] abrogated the exception as
embarrassing "to the due enforcement of said act of July 13, 1861,
and the proper regulation of the commercial intercourse authorized
by said act;" such abrogation, however, not extending to West
Virginia or the ports of New Orleans, Key West, Port Royal, or
Beaufort, in South Carolina.
On the 28th of February, 1862, the insurrection not making at
this time further headway, the President issued an executive order
thus:
"Considering that the existing circumstances of the country
allow a partial restoration of commercial intercourse between the
inhabitants of those parts of the United States heretofore declared
to be in insurrection and the citizens of the loyal states of the
Union, and exercising the authority and discretion confided to me
by the Act of Congress, approved July 13, 1861 &c., I hereby
license and permit such commercial intercourse, in all cases within
the rules and regulations which have been or may be prescribed by
the Secretary of the Treasury for the conducting and carrying on of
the same on the inland waters and ways of the United States. "
Page 88 U. S. 77
Under the authority of this and subsequent executive orders, the
Secretary of the Treasury from time to time -- that is to say on
the said 28th of February, 1862, on the 28th of August, 1862, on
the 31st of March, 1863, and finally on the 11th of September, 1863
-- prescribed rules and regulations for carrying on the trade
licensed by the President. Those last mentioned, and dated the 11th
of September, 1863, being revised rules and regulations.
These last-dated regulations prohibited the transportation of
goods or merchandise to or from any state or part of a state in
insurrection except under permits, certificates, and clearances as
provided therein, and the surveyors of the customs at Nashville and
other places were designated as the officers to grant such permits.
Authority to purchase and transport goods was to be granted only to
those who should make the prescribed affidavit, and enter into bond
to pay all fees required by the regulations, and no permit was to
be granted for such purchase and transportation except upon the
payment of such fees or the giving of a bond to secure the same.
The fees referred to, and appended to the regulations and making
part thereof, consisted of various items and charges to be paid,
and, amongst others,
"For each permit to purchase cotton in any insurrectionary
district, and to transport the same to a loyal state, per pound . .
. four cents."
Accompanying the rules and regulations, dated March 31, 1863,
was the following contemporary:
"
LICENSE OF TRADE BY THE PRESIDENT"
"WASHINGTON, EXECUTIVE MANSION, March 31st, 1863"
"Whereas, by the Act of Congress approved July 13, 1861,
entitled &c., all commercial intercourse between the
inhabitants of such states as should by proclamation be declared in
insurrection against the United States and the citizens of the rest
of the United States was prohibited so long as such condition of
hostility should continue, except as the same shall be licensed and
permitted by the President, to be conducted and carried on only in
pursuance of rules and regulations prescribed by the
Page 88 U. S. 78
Secretary of the Treasury; and whereas it appears that a partial
restoration of such intercourse between the inhabitants of sundry
places and sections heretofore declared in insurrection in
pursuance of said act and the citizens of the rest of the United
States will favorably affect the public interests,"
"Now, therefore, I, Abraham Lincoln, President of the United
States, exercising the authority and discretion confided to me by
the said act of Congress, do hereby license and permit such
commercial intercourse between the citizens of the loyal states and
the inhabitants of such insurrectionary states, in the cases and
under the restrictions described and expressed in the regulations
prescribed by the Secretary of the Treasury, bearing even date with
these presents, or in such other regulations as he may hereafter,
with my approval, prescribe."
"ABRAHAM LINCOLN"
These revised rules and regulations of September 11, 1863, were
also approved in form by the President.
It was under the authority of these licenses and regulations
that the four cents per pound, now sought by the plaintiffs to be
got back, was levied and collected.
This license (a public document, perhaps), was not put in
evidence.
By the bill of exceptions, it appeared that it was admitted on
the trial that the defendant was acting surveyor of customs at
Nashville during the period in question, and the only person that
could grant the necessary permits; that the plaintiffs had in their
possession, as owners or factors, various lots of cotton, specified
in the bill, which had been purchased in pursuance of the license
of the President and the regulations of the Secretary of the
Treasury in that regard; that they applied to the defendant for
permits to ship and transport said cotton from Nashville to a loyal
state, and that the defendant, in obedience to said regulations and
instructions, refused to grant such permits except on payment of
the four cents per pound. It was also admitted that the regulations
were well and publicly known at Nashville, and that they directed
seizure and confiscation of all cotton shipped without such payment
and permit, and that the
Page 88 U. S. 79
plaintiffs made no formal protest against the payment of the
tax, but paid the same, and that the same was paid by the defendant
into the Treasury of the United States before the commencement of
this action. It was also admitted that during said term of time,
Nashville was within the lines of military occupation of the United
States.
The plaintiffs then put in evidence the Treasury Regulations in
force at the time of the shipment of the cotton in question.
So far as to the main case. In order, however, fully to
understand things, it is necessary to advert to certain statutes
passed by Congress at different times, and which the plaintiffs and
defendants supposed bore much upon their respective positions.
On the plaintiffs' side of the case, as they argued, it
appeared that by a general internal revenue act of July 1, 1862, an
act of one hundred and nineteen sections, covering fifty-seven
pages of the statute book and comprehending an immense list of
articles taxed, Congress levied a tax of one-half cent per pound on
all cotton, to be paid before its removal from the place of
production. [
Footnote 6] And
again, that by an Act of March 7, 1864, it raised the tax to two
cents per pound in lieu of the one-half cent, where no duty had
already been paid, levied, or collected on the cotton. [
Footnote 7]
On the defendant's side, as he conceived, the President
having, on the 1st July, 1862, issued a proclamation declaring what
states and parts of states were in insurrection, with a view to the
provisions of an act imposing a land tax, and made no exception of
any fractions of states, except the counties constituting West
Virginia, Congress, on the 12th of March, 1863, passed what is
known as the Captured and Abandoned Property Act, an act "to
provide for the collection of abandoned property and for the
prevention of frauds in insurrectionary districts within the United
States."
The first section enacts:
"That it shall be lawful for the Secretary of the Treasury,
Page 88 U. S. 80
from and after the passage of this act, . . . to appoint a
special agent or agents to receive and collect all abandoned
property in any state or territory, or any portion of any state or
territory of the United States,
designated as in insurrection
&c., by the proclamation of the President of 1st July,
1862."
The fourth section enacted:
"That all property coming into any of the United States not
declared in insurrection as aforesaid, from any of the states
declared in insurrection, through or by any other person than any
agent duly appointed under the provisions of this act, or
under
a lawful clearance by the proper officer of the Treasury
Department, shall be confiscated."
So, on the 2d July, 1864, [
Footnote 8] Congress passed
"An act in addition to the several acts concerning commercial
intercourse between loyal and insurrectionary states, and to
provide for the collection of captured and abandoned property and
the prevention of frauds in states declared in insurrection."
Its third section enacts:
"That all moneys arising from the leasing of abandoned lands,
houses, and tenements, or from sales of captured and abandoned
property collected and sold in pursuance of said act, or of this
act,
or from fees collected under the rules and regulations
made by the Secretary of the Treasury, and approved by the
President, dated respectively the 28th of August, 1862, 31st
of March, and
11th of September, 1864, or under any
amendments or modifications thereof, which have been or shall be
made by the Secretary of the Treasury and approved by the
President, for conducting the commercial intercourse, which has
been or shall be licensed and permitted by the President, with and
in states declared in insurrection,
shall, after
satisfying therefrom all necessary expenses, to be approved by the
Secretary of the Treasury,
be paid into the Treasury of the
United States, and all accounts of moneys received or expended
in connection therewith shall be audited by the proper accounting
officers of the Treasury."
The counsel of the plaintiffs insisted and requested the court
to charge, that the exaction of the four cents per pound was
Page 88 U. S. 81
illegal and void; that it was essentially a tax and not
authorized by any act of Congress, which alone had the power to
impose taxes; that even if it were authorized by law, the law
itself was to that extent unconstitutional and void, and that under
the circumstances and state of facts agreed upon by the parties,
the payment was involuntary, and no protest was necessary to
entitle the plaintiffs to recover back the money thus illegally
exacted. The court refused to charge as requested by the
plaintiffs, but charged as follows:
First. That the Act of July 13, 1861, conferred power upon the
Secretary of the Treasury to authorize the exactions mentioned in
said plaintiffs' declaration.
Second. That whether the said act conferred such power or not,
the action of the Secretary of the Treasury in imposing, and of the
defendant in making, said exactions was ratified and made valid by
the Act of July 2, 1864, entitled
"An act in addition to the several acts concerning commercial
intercourse between loyal and insurrectionary states, and to
provide for the collection of captured and abandoned property, and
the prevention of frauds in states declared in insurrection."
Third. That the plaintiffs could not maintain an action to
recover back said exactions, even if they had been illegal, for
want of having protested against them at the time of payment.
To this charge exceptions were taken, and the correctness of
these propositions was the matter which this Court was now called
on to decide.
Page 88 U. S. 86
MR. JUSTICE BRADLEY delivered the opinion of the Court.
There can be no question that the condition requiring the
Page 88 U. S. 87
payment of four cents per pound for a permit to purchase cotton
in, and transport it from, the insurrectionary states during the
late civil war, was competent to the war power of the United States
government to impose. The war was a public one. The government in
prosecuting it had at least all the rights which any belligerent
power has when prosecuting a public war. That war was itself a
suspension of commercial intercourse between the opposing sections
of the country. No cotton or other merchandise could be lawfully
purchased in the insurrectionary states and transported to the
loyal states without the consent of the government. If such a
course of dealing were to be permitted at all, it would necessarily
be upon such conditions as the government chose to prescribe. The
war power vested in the government implied all this without any
specific mention of it in the Constitution.
In England, this power to remit the restrictions on commercial
intercourse with a hostile nation is exercised by the Crown. Lord
Stowell says:
"By the law and Constitution of this country, the sovereign
alone has the power of declaring war and peace. He alone,
therefore, who has the power of entirely removing a state of war
has the power of removing it in part by permitting, where he sees
proper, that commercial intercourse which is a partial suspension
of the war. [
Footnote 9]"
Bynhershoek says: "It is in all cases the Act of the sovereign."
[
Footnote 10] By the
Constitution of the United States the power to declare war is
confided to Congress. The executive power and the command of the
military and naval forces is vested in the President. Whether, in
the absence of Congressional action, the power of permitting
partial intercourse with a public enemy may or may not be exercised
by the President alone, who is constitutionally invested with the
entire charge of hostile operations, it is not now necessary to
decide, although it would seem that little doubt could be raised on
the subject. In the case of
Cross v. Harrison, [
Footnote 11] it was held that the
President, as commander-in-chief,
Page 88 U. S. 88
had power to form a temporary civil government for California as
a conquered country, and to impose duties on imports and tonnage
for the support of the government and for aiding to sustain the
burdens of the war, which were held valid until Congress saw fit to
supersede them; and an action brought to recover back duties paid
under such regulation was adjudged to be not maintainable. The same
views were held in
Leitensdorfer v. Webb, [
Footnote 12] in reference to the
establishment of a provisional government in New Mexico, in the war
with Mexico in 1846, and were reiterated by this Court in the case
of
The Grapeshot. [
Footnote 13]
But without pursuing this inquiry, and whatever view may be
taken as to the precise boundary between the legislative and
executive powers in reference to the question under consideration,
there is no doubt that a concurrence of both affords ample
foundation for any regulations on the subject.
Our first inquiry, therefore, will be whether the action of the
executive was authorized, or, if not originally authorized, was
confirmed by Congress.
By the Act of July 13, 1861, [
Footnote 14] the President was authorized, after certain
preliminary measures for suppressing the insurrection, to declare
by proclamation what states and parts of states were in a state of
insurrection against the United States; "and thereupon," the act
proceeds to say,
"all commercial intercourse by and between the same and the
citizens thereof and the citizens of the rest of the United States
shall cease and be unlawful so long as such condition of hostility
shall continue, and all goods &c., coming from said states or
section into the other parts of the United States, and all
proceeding to such states or section, by land or water, shall,
together with the vessel or vehicle &c., be forfeited to the
United States,
provided however that the President may, in
his discretion, license and permit commercial intercourse with any
such part of said states or section, the inhabitants of which are
so declared in a state of insurrection, in such
Page 88 U. S. 89
articles and for such time and by such persons as he in his
discretion may think most conducive to the public interest, and
such intercourse, so far as by him licensed, shall be conducted and
carried on only in pursuance of rules and regulations prescribed by
the Secretary of the Treasury."
In pursuance of this act, the President, on the 16th of August,
1861, issued a proclamation [
Footnote 15] declaring that the inhabitants of certain
states (including Tennessee) were in a state of insurrection
against the United States, and that all commercial intercourse
between them and the citizens of other states was unlawful, and
that all goods &c., coming from said states without the special
license and permission of the President, through the Secretary of
the Treasury, or proceeding to any of said states &c., would be
forfeited &c. This proclamation excepted from its operation,
amongst other things, such parts of the enumerated states as might
maintain a loyal adhesion to the Union and Constitution or might be
from time to time occupied and controlled by forces of the United
States. A subsequent proclamation, issued April 2, 1863, [
Footnote 16] abrogated the said
exception as embarrassing "to the due enforcement of said act of
July 13, 1861, and the proper regulation of the commercial
intercourse authorized by said act," such abrogation, however, not
extending to West Virginia or the ports of New Orleans, Key West,
Port Royal, or Beaufort, in South Carolina.
Under and in supposed pursuance of, this act and these
proclamations, the license of the President and the trade
regulations of the Secretary of the Treasury were made under which
the plaintiffs purchased and shipped the cotton in question. These
public acts of the executive department must be construed as one
system. The license of the President to hold commercial intercourse
cannot be separated, in determining this controversy, from the
Treasury regulations which were adopted for the government of that
intercourse. There is an evident effort on the part of the
plaintiffs to separate them, and it is worthy of passing
observation that
Page 88 U. S. 90
the actual license of the President was not put in evidence. But
a public act of the government of such importance may receive the
judicial notice of the court, and availing ourselves of that right,
we find that the regulations referred to as adopted September 11,
1863, are revised regulations, expressly approved by the President
and supplementary to previous regulations adopted March 31, 1863,
to which the President had attached the license of same date, under
which the entire authority to pursue the trade in this cotton
arose. This license, after reciting the Act of Congress of July 13,
1861, so far as relates to commercial intercourse, proceeds as
follows:
"And whereas it appears that a partial restoration of such
intercourse between the inhabitants of sundry places and sections
heretofore declared in insurrection, in pursuance of said act, and
the citizens of the rest of the United States, will favorably
affect the public interests, now, therefore, I, Abraham Lincoln,
President of the United States, exercising the authority and
discretion confided to me by the said act of Congress, do hereby
license and permit such commercial intercourse between the citizens
of loyal states and the inhabitants of such insurrectionary states
in the cases and under the restrictions described and expressed in
the regulations prescribed by the Secretary of the Treasury,
bearing even date with these presents, or in other such regulations
as he may hereafter, with my approval, prescribe."
It is clear, therefore, that the license to trade given by the
President was a conditional one, requiring a full compliance with
the regulations adopted by the Secretary of the Treasury, between
whom and the President, as would be supposed, there was entire
harmony and even unity of action.
The question then comes to this: under the supposed authority of
the Act of July 13, 1861, the President and Secretary of the
Treasury authorized and licensed cotton to be purchased in and
transported from insurrectionary districts on condition that the
parties availing themselves of the license should pay to the
government four cents per pound and all other fees. If we might
offer a conjecture as to the
Page 88 U. S. 91
motive for this regulation, it may have been this, namely that
such a bonus would help to counterbalance, in favor of our
government, any benefit which the enemy might derive from a sale of
the cotton instead of its destruction. But the actual motive is not
material. The government chose to impose this condition. It
supposed it had a right to do so. No one was bound to accept it. No
one was compelled to engage in the trade. Not the least compulsion
was exercised. The plaintiffs endeavor to put the case as if they
were obliged to pay this exaction to save their property. This is
not a true view of it. It is admitted that the property was
purchased under the license. If so, it was also purchased in view
of the regulations to which the license referred. The regulations
themselves show that the permit to purchase and the permit to
export were correlative to each other; that no one was permitted to
purchase who did not enter into bond to pay all fees required by
the regulations, amongst which the charge of four cents per pound
on cotton was expressly inserted. In short, the permit to purchase
and export constituted substantially one permit, and that was
granted only on the condition of paying the prescribed fees, as
before stated. The clearance of particular lots or cargoes required
afterwards, when the property was actually shipped, was necessary
to show that the stipulated conditions had been complied with and
that the particular articles specified were free for
transportation. The whole series of acts constituted, so far as the
right to trade and transport was concerned, but one transaction, a
conditional permission given on the part of the government and the
acceptance of and compliance with that condition on the part of the
trader.
The position in which the plaintiffs put themselves, therefore,
was an entirely voluntary one. They have no right now to say:
"It is true we purchased the cotton under a license which
required us to pay a certain bonus, but having purchased it, we
were entitled to repudiate the condition, although we had no right
to make the purchase except by virtue of the license."
Much less have they now a right to
Page 88 U. S. 92
say, after having complied with the condition without murmur or
objection, that the bonus was extorted from them by compulsion.
Whether, therefore, the President and Secretary of the Treasury
did or did not rightly judge as to their powers under the act, the
plaintiffs evidently agreed with them and voluntarily applied for
permission to engage in the trade on the conditions imposed, and
voluntarily paid the bonus which is now sought to be recovered
back. The case does not come within any class of cases on which the
plaintiffs rely to take it out of the rule as to voluntary
payments. In our judgment, therefore, the defense in this case
might have rested on this ground alone.
But we are also of opinion that the conditions imposed were
authorized by the Act of July 13, 1861. Its language has been
already quoted. The material part in reference to the question
under discussion in the proviso of section three, which is as
follows:
"The President may, in his discretion, license and permit
commercial intercourse . . . in such articles, and for such time,
and by such persons as he in his discretion may think most
conducive to the public interest, and such intercourse . . . shall
be conducted and carried on only in pursuance of rules and
regulations prescribed by the Secretary of the Treasury."
It is contended that the imposition of the bonus of four cents
per pound was not a
"rule" or a
"regulation"
within the fair meaning of the act, and it is conceded that in many
cases the power to make rules and regulations on a particular
subject is a limited power, having respect to mode and form and
time and circumstance, and not to substance. But it must also be
conceded that in other cases, the power is much more extensive and
substantial. Thus, in the Constitution, the several powers "to
regulate commerce," "to establish a uniform rule of
naturalization," "to make all needful rules and regulations
respecting the territory or other property belonging to the United
States" are understood to give plenary control over those subjects.
The power to regulate commerce has been held to include the power
to suspend
Page 88 U. S. 93
it, [
Footnote 17] and the
power to make rules and regulations respecting the territory of the
United States has been held to include the power to legislate for
and govern such territory and establish governments therein.
[
Footnote 18] The extensive
effect given to these clauses is undoubtedly largely due to the
character of the instrument and that of the donee of the powers,
to-wit, the legislature of the United States, to whom the grant of
a power means the grant of a branch of sovereignty. It shows,
however, that the rule of construction depends at least in some
sort upon the nature of the subject matter. In the case before us,
the power of the government to open and regulate trade with the
enemy was intended to be conferred upon the President and the
Secretary of the Treasury. The power of regulation in such a case
is to be taken in its broadest sense, and, in our judgment,
included the power to impose such conditions as the President and
Secretary should see fit.
The statutes relating to the internal revenue, passed July 1,
1862, and March 7, 1864, which have been referred to for the
purpose of showing that Congress imposed a special tax upon cotton,
and therefore could not have intended by the act of 1861 to
sanction the regulations of the Treasury now in question, do not in
our judgment have that effect. The act of 1862 imposed a tax of
half a cent per pound on all cotton, to be paid before its removal
from the place of production. The same act and section imposed
various taxes on a hundred other articles. The question is did
Congress intend, by the imposition of these taxes, to revoke by
implication any power given to the Executive Department of imposing
such regulations as it might see fit for the carrying on of trade
with insurrectionary districts? We answer certainly not. The two
subjects were entirely distinct. No conflict or repugnancy could
arise in relation thereto. When, in March, 1863, the President
issued his license to trade in cotton and other articles in the
insurrectionary districts, under and subject to the conditions
contained in the regulations
Page 88 U. S. 94
adopted by the Secretary of the Treasury, his action was not
inconsistent with or repugnant to the internal revenue law passed
the year before. It had nothing to do with that law or the subject
matter of it. The conditions exacted by him were not imposed in the
exercise of the taxing power, but of the war power of the
government. The exaction itself was not properly a tax, but a bonus
required as a condition precedent for engaging in the trade.
Whether, when the condition was fulfilled, the cotton became
subject to the internal revenue law is a question we are not called
upon to decide. There was no inconsistency between the regulations
and the law any more than there is between a license tax for
carrying on a particular trade and the excise imposed on the
products of that trade. The Act of March 7, 1864, raised the
internal revenue tax on cotton to two cents a pound where no duty
had already been levied, paid, or collected thereon. Neither does
this act present any inconsistency with the regulations in
question. If it refers to them at all (when speaking of duties
already paid), it contains an implied recognition of them. If it
does not refer to them, it does not contravene them.
The position that Nashville, being within the National lines,
was not hostile territory in 1863 and 1864, and therefore not
within the prohibition of commercial intercourse contained in the
Act of 1861 is not tenable. The State of Tennessee was named in the
President's proclamation as one of the states in insurrection, and
as we have seen, the exceptions made in his first proclamation in
favor of maintaining commercial intercourse with parts of such
states remaining loyal or occupied by the forces of the United
States were abrogated by the proclamation of April 2, 1863, except
as to West Virginia and certain specified ports. There was nothing
in this action of the President repugnant to or not in conformity
with the Act of 1861. "This revocation," as remarked by this Court
in the case of
The Venice, [
Footnote 19] "merely brought all parts of the insurgent
states under the
Page 88 U. S. 95
special licensing power of the President conferred by the Act of
July 13, 1861." The act gave the President power, where a state or
part of a state remained irreclaimable, to declare that the
inhabitants of such state, or any section or part thereof where
such insurrection existed, were in a state of insurrection. This
power clearly gave the President a discretion to declare an entire
state where the insurrection was persisted in, or only a hostile
district therein, in a state of insurrection. Finding the attempt
to discriminate between the different parts of a state (except in
peculiar cases) impracticable, he abandoned the attempt and
declared the entire state in a state of insurrection. He clearly
had authority so to do, more especially as the insurrection was
supported by state organizations and the actual state authorities.
Thenceforth the war became a well defined territorial war, and was
in great measure conducted as such. The further provision of the
act that all commercial intercourse with the insurrectionary
districts should cease "so long as such condition of hostility
shall continue" could not be construed as allowing such intercourse
to be resumed by individuals at will, as fast and as far as our
armies succeeded in occupying insurgent territory. The "condition
of hostility" remained impressed upon the insurrectionary districts
until it was authoritatively removed by the proclamation of the
President at the close of the war.
This view of the meaning of the Act of 1861 is corroborated by
the Act of March 12, 1863, respecting abandoned and captured
property.
On the 1st of July, 1862, the President had issued a
proclamation declaring what states and parts of states were in
insurrection, with a view to the provisions of the act imposing a
land tax, and made no exception of any fractions of states except
the counties constituting West Virginia. Expressly referring to
this proclamation, Congress, in the fourth section of the act
referred to, enacted
"That all property coming into any of the United States not
declared in insurrection as aforesaid from any of the states
declared in insurrection, through or by any other person than any
agent
Page 88 U. S. 96
duly appointed under the provisions of this act, or under a
lawful clearance by the proper officer of the Treasury Department,
shall be confiscated. [
Footnote
20]"
This is a clear recognition on the part of Congress of the
President's demarcation of insurrectionary territory. It is also a
recognition of the Treasury regulations as to intercourse with that
territory -- not, perhaps, of any specific regulations, but of the
applicability of such regulations to all portions of
insurrectionary territory, whether under occupation of the Union
forces or not.
But it is unnecessary to pursue this subject. We have frequently
held that the civil war affected the status of the entire territory
of the states declared to be in insurrection, except as modified by
declaratory acts of Congress or proclamations of the President, and
nothing but the apparent earnestness with which the point has been
urged would have led to a further discussion of the point.
[
Footnote 21]
We are also of opinion that the Act of July 2, 1864, [
Footnote 22] recognized and
confirmed the regulations in question. It is sufficient to quote a
portion of the third section to evince the correctness of this
conclusion. It enacts as follows:
"That all moneys arising from the leasing of abandoned lands,
houses, and tenements, or from sales of captured and abandoned
property collected and sold in pursuance of said act, or of this
act, or from fees collected under the rules and regulations made by
the Secretary of the Treasury and approved by the President, dated
respectively the 28th of August, 1862, 31st of March, and 11th of
September, 1863, or under any amendments or modifications thereof,
which have been or shall be made by the Secretary of the Treasury
and approved by the President, for conducting the commercial
intercourse, which has been or shall be licensed and permitted by
the President, with and in states declared in insurrection, shall,
after satisfying therefrom all necessary
Page 88 U. S. 97
expenses, to be approved by the Secretary of the Treasury, be
paid into the Treasury of the United States, and all accounts of
moneys received or expended in connection therewith shall be
audited by the proper accounting officers of the Treasury."
Here the regulations in question are referred to by name and
date, and the money accruing under their operation (the great bulk
of which was derived from the bonus on cotton) was directed to be
paid into the Treasury. It is designated by the term "fees," it is
true, but that was the designation used in the regulations
themselves. It will be observed that the law was prospective,
relating to moneys thereafter to be received as well as to those
already received. This was clearly an implied recognition and
ratification of the regulations, so far as any ratification on the
part of Congress may have been necessary to their validity.
It is hardly necessary, under the view we have taken of the
character of the regulations in question and of the charge or bonus
objected to by the plaintiffs, to discuss the question of the
constitutionality of the Act of July 13, 1861, regarded as
authorizing such regulations. As before stated, the power of the
government to impose such conditions upon commercial intercourse
with an enemy in time of war as it sees fit is undoubted. It is a
power which every other government in the world claims and
exercises, and which belongs to the government of the United States
as incident to the power to declare war and to carry it on to a
successful termination. We regard the regulations in question as
nothing more than the exercise of this power. It does not belong to
the same category as the power to levy and collect taxes, duties,
and excises. It belongs to the war powers of the government, just
as much so as the power to levy military contributions, or to
perform any other belligerent act.
We perceive no error in the record, and the judgment of the
circuit court must be
Affirmed.
[
Footnote 1]
Article I, § 8.
[
Footnote 2]
Article II, § 8.
[
Footnote 3]
Section 5, 12 Stat. at Large 257.
[
Footnote 4]
12 Stat. at Large 1262.
[
Footnote 5]
13
id. 731.
[
Footnote 6]
12 Stat. at Large 465, 466.
[
Footnote 7]
13
id. 15, 16.
[
Footnote 8]
13 Stat. at Large 375.
[
Footnote 9]
The Hoop, 1 Robinson, 199.
[
Footnote 10]
Questionum Juris Publici, bk. 1, c. 3.
[
Footnote 11]
57 U. S. 16 How.
164,
57 U. S.
190.
[
Footnote 12]
61 U. S. 20 How.
176.
[
Footnote 13]
76 U. S. 9 Wall.
129.
[
Footnote 14]
Section 5, 12 Stat. at Large 257.
[
Footnote 15]
12 Stat. at Large 1262.
[
Footnote 16]
13
id. 731.
[
Footnote 17]
1 Kent 432.
[
Footnote 18]
17 U. S. 4
Wheat. 422; Story on the Constitution § 1328.
[
Footnote 19]
69 U. S. 2
Wall. 278.
[
Footnote 20]
Act of March 12, 1863, 12 Stat. at Large 820, § 4.
[
Footnote 21]
See Mrs. Alexander's
Cotton, 2 Wall. 404;
Coppell v.
Hall, 7
id. 542;
McKee v.
United States, 8 Wall. 163; and numerous other
cases.
[
Footnote 22]
13 Stat. at Large 375.
