In Murdock v. Ward47 it is held that a federal inheritance tax may be imposed on legacies or shares consisting of United States bonds, even when these bonds have been issued under a law expressly exempting them from taxation in any form, state or federal, direct or indirect.48

§ 275. Protective Tariffs.

The constitutionality of a protective tariff, that is, a system of customs duties levied on foreign imports so arranged as to furnish incidental protection to home industries, though questioned in earlier years, has now passed beyond the range of controversy. Such laws being on their face revenue measures, may not be questioned because their effect, and indeed the intent of the legis lature, is primarily to supply protection rather than revenue. The doctrine of the court in McCray v. United States 19 is conclusive as to this. But even if this were not so, a tariff avowedly levied primarily and solely for protection is constitutionally justified under the grant of authority to Congress "to regulate commerce with foreign nations." 50

§ 276. Bounties. 51

The constitutionality of bounties has never been squarely passed upon by the Supreme Court. Their validity was questioned in

47 178 U. S. 139; 20 Sup. Ct. Rep. 775; 44 L. ed. 1009.

48 The court say: "Whether the United States, in the exercise of the power of taxation, can be estopped by a contract that such power shall not be exercised, we need not consider, because the contract in this case does not, as we view it, mean that a State may not, or the United States may not, tax inheritances and legacies, regardless of the character of the property of which they are composed. That some of the holders of United States bonds may not have paid franchise taxes to the States, and others may have paid state or federal inheritance and legacy taxes, has nothing to do with the contract between the United States and the bondholders. The United States will have complied with their contract when they pay to the original holders of their bonds, or to their assigns, the interest, when due, in full, and the principal, when due, in full."

49 195 U. S. 27; 24 Sup. Ct. Rep. 769; 49 L. ed. 78.

50 For a summary of the arguments pro and contra as to the constitutionality of protective tariffs, see passim Stanwood, Tariff Controversies in the United States in the Nineteenth Century.

51 For the definition of bounties see Downs v. United States, 187 U. S. 496; 23 Sup. Ct. Rep. 222; 47 L. ed. 275.

Field v. Clark and United States v. Realty Co.,53 but in neither case did the court find itself obliged to decide the point. The ground upon which the constitutionality of bounties has been contested has been that their payment amounts to an appropriation of public moneys primarily for a private purpose. The courts have often held that an expenditure in the public interest is not invalidated by the fact that incidentally private interests are advanced thereby; but in general they have been held that an appropriation primarily and directly for the furtherance of private interests is not validated by the fact that incidentally public interests are in a measure promoted.*

§ 277. Export Duties.

Among the express limitations upon the powers of Congress, enumerated by the Constitution is that which provides that "no tax or duty shall be laid on articles exported from any State." 55 In another clause substantially the same prohibition is laid upon the States, it being declared that "no State shall, without the consent of Congress, lay any imposts or duties on imports or exports." 50

The term "exports" has been judicially limited to goods exported to foreign countries. In the earlier cases of Brown v. Maryland and Almy v. Californias it was taken for granted by the court that the term applied also to goods carried from one State to another State of the Union, but in Woodruff v. Parham59

52 143 U. S. 649; 12 Sup. Ct. Rep. 495; 36 L. ed. 294.

52 163 U. S. 427; 16 Sup. Ct. Rep. 1120; 41 L. ed. 215.

54 See Lowell v. Boston, 111 Mass. 454; and Loan Association v. Topeka, 20 Wall. 655; 22 L. ed. 455. Cf. Harvard Law Review, V, 320, article by C. F. Chamberlayne entitled "The Sugar Bounties."

55 Art. I, Sec. IX, Cl. 5.

56"Except what may be absolutely necessary for executing its inspection laws; and the net produce of all duties and imposts, laid by any State on imports or exports, shall be for the use of the treasury of the United States; and all such laws shall be subject to the revision and control of the Congress' (Art. I, Sec. X, Cl. 2). The state taxation of exports is considered in Chapter XLII.

57 12 Wh. 419; 6 L. ed. 678.

59 24 How. 169; 16 L. ed. 644.

59 8 Wall. 123; 19 L. ed. 382.

these dicta were overruled and the position taken which has not since been disturbed, that the prohibition has reference only to exportations to countries foreign to the United States. In this case, Justice Miller, after referring to the general power given to Congress to levy and collect taxes, duties, and imposts, says: "Is the word 'impost' here used, intended to confer upon Congress a distinct power to levy a tax upon all goods or merchandise carried from one State to another? Or is the power limited to duties on foreign imports? If the former be intended, then the power conferred is curiously rendered nugatory by the subsequent clause of section IX, which declares that no tax shall be laid on articles exported from any State, for no article can be imported from one State into another which is not at the same time exported from the former. But if we give to the word 'imposts' as used in the first-mentioned clause the definition of Chief Justice Marshall, and to the word 'export' the corresponding idea of something carried out of the United States, we have, in the power to lay duties on imports from abroad and the prohibition to lay such duties on exports to other countries, the power and its limitations concerning imposts. It is not too much to say that, so far as our research has extended, neither the word 'export,' 'import,' or 'impost' is to be found in the discussion on this subject, as they have come down to us from that time, in reference to any other than foreign commerce, without some special form of words to show that foreign commerce is not meant. Whether we look, then,

to the terms of the clause of the Constitution in question, or to its relation to the other parts of that instrument, or to the history of its formation and adoption, or to the comments of the eminent men who took part in those transactions, we are forced to the conclusion that no intention existed to prohibit by this clause [that no State shall, without the consent of Congress, levy any impost or duty upon any export or import] the right of one State to tax articles brought into it from another."

In Dooley v. United States,60 one of the "Insular Cases," it was argued that the Foraker Act of April 12, 1900, was uncon

co 183 U. S. 151; 22 Sup. Ct. Rep. 62; 43 L. ed. 128.

stitutional in so far as it provided for the payment of duties upon merchandise imported into Porto Rico from the United States. The court, however, held that Porto Rico, after cession to the United States, even though not "incorporated" into the United States was not foreign territory, and, therefore, that, under the definition laid down in Woodruff v. Parham, the tax in question was not a tax on goods exported from the United States. The court, moreover, go on to show from the circumstances of the case that the tax was to be construed rather as one on goods imported into Porto Rico, than upon goods exported from the State of New York. The court in its opinion, however, are careful to add: "It is not intended by this opinion to intimate that Congress may lay an export tax upon merchandise carried from one State to another. While this does not seem to be forbidden by the express words of the Constitution, it would be extremely difficult, if not impossible, to lay such a tax without a violation of the first paragraph of Article I, Section VIII, that all duties, imposts, and excises shall be uniform throughout the United States.' There is a wide difference between the full and paramount power of Congress in legislating for a territory in the condition of Porto Rico and its power with respect to the States, which is merely incidental to its right to regulate interstate commerce. The question, however, is not involved in this case, and we do not desire to express an opinion upon it." 61

61 In a dissenting opinion, concurred in by four justices, it was argued that, "The fact that the net proceeds of the duties are appropriated by the act for use in Porto Rico does not affect their character any more than if so appropriated by another and separate act. The taxation reaches the people of the States directly, and is national, and not local, even though the revenue derived therefrom is devoted to local purposes. The prohibition

that no tax or duty shall be laid on articles exported from any State' negatives the existence of any power in Congress to lay taxes or duties in any form on articles exported from a State, irrespective of their destination, and, this being so, the act in imposing the duties in question is invalid, whether Porto Rico after its passage was a foreign or reputed foreign ter ritory, a domestic territory or a territory subject to be dealt with at the will of Congress regardless of constitutional limitations. The prohibition on Congress is explicit, and noticeably different from the prohibition on the States. The State is forbidden to lay any imposts or duties:'

To come within the definition of an export tax, it has been held that the tax must be one levied upon the right to export, or upon goods because of the fact that they are being exported or are intended to be exported. The fact that certain goods are intended for export does not, however, exempt them from an ordinary property tax, for, as said, the tax is one on exports only when its. incidence or amount is determined by the fact that the goods are intended for export. This is the doctrine laid down in Coe v. Errol with reference to taxation by the States and in Turpin v. Burgess with reference to federal taxation.

63

Congress is forbidden to lay any tax or duty.' The State is forbidden from laying imposts or duties on imports or exports,' that is, articles coming into or going out of the United States. Congress is forbidden to tax articles exported from any State.' Congress may lay local taxes in the territories, affecting persons and property therein, or authorize territorial legislatures to do so, but it cannot lay tariff duties on articles exported from one State to another, or from any State to the territories, or from any State to foreign countries, or grant a power in that regard which it does not possess. But the decision now made recognizes such powers in Congress as will enable it, under the guise of taxation, to exclude the products of Porto Rico; and this, notwithstanding it was held in De Lima v. Bidwell (182 U. S. 1; 21 Sup. Ct. Rep. 743; 45 L. ed. 1041), that Porto Rico after the ratification of the treaty with Spain ceased to be foreign and became domestic territory."

62 116 U. S. 517; 6 Sup. Ct. Rep. 475; 29 L. ed. 715.

63 117 U. S. 504; 6 Sup. Ct. Rep. 835; 29 L. ed. 988.

64 In the latter case the court say: "There is another view of this subject, however, independent of the considerations which governed our former decision, which is equally decisive of this case. We have lately decided in Coe v. Errol that goods intended for exportation to another State are liable to taxation as part of the general mass of property of the State of their origin until actually started in course of transportation to the State of their destination, or delivered to a common carrier for that purpose, provided they are taxed in the usual way in which such property is taxed, and not taxed by reason or because of such exportation, or intended exportation, and that the carrying of them to and depositing them at a depot for the purpose of transportation is no part of that transportation. Now the constitutional provision against taxing exports is substantially the same when directed to the United States as when directed to a State. In the one case the words are, 'No tax or duty shall be laid on articles exported from any State.' Art. I, § 9, par. 2. In the other they are: No State shall, without the consent of Congress, lay any imposts or duties on imports or exports.' Art. I, § 10, par. 2. The prohibition in both cases has reference to the imposition of duties on goods by reason or because of their exportation, or intended exportation, or while they are