Veazie Bank v. Fenno 8 Wallace 533 (1869)

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VEAZIE BANK v. FENNO 8 Wallace 533 (1869)

During the civil war, Congress introduced national bank notes, secured by United States bonds, as one form of currency. Congress then decided to make its money supreme by driving out of circulation bank notes issued by state banks, and to that end it imposed a prohibitory ten percent tax on those notes. Veazie Bank objected on the grounds that the tax was not levied for revenue purposes but to drive state notes out of existence by the device of a direct tax, which must be apportioned among the states on the basis of population. Chief Justice salmon p. chase, for a seven-member majority, upheld the constitutionality of the congressional tax statute. Chase declared that only taxes on land and capitation taxes were direct taxes. He found the constitutional authority for the statute in Congress's power to control the currency of the nation and for that purpose to restrain "the circulation as money of any notes not issued under its own authority." Without such a restraining power the attempt by Congress to secure a "sound and uniform currency for the country must be futile."

Leonard W. Levy