914 HARVARD LAW REVIEW which followed Bank of Commerce v. New York City^^ Mr. Justice Nelson remarked wisely: " It is not easy to separate the property in which the capital is invested from the capital itself. It requires some refinement to separate the two thus intimately blended together. The capital is not an ideal, fictitious, arbitrary sum of money set down in the articles of association, but, in the theory and practical operation of the system, is composed of sub- stantial property, and which gives value and solidity to the stock of the institution." ^ If it is conceived that any and all taxes on federal securities are unconstitutional obstructions to the federal borrowing power, the state should not be allowed to escape from the restriction by calling the securities some book-keeping name. It is clear that in Bank Tax Case ^^ and Bank of Commerce v. New York City,^ the Supreme Court meant to protect federal securities from state taxation in any form. A court could hardly be expected to do otherwise while the Civil War was raging and the government at Washington needed all the support to its credit that was available. It was no time for nice discriminations between burdens and denial of bounties. A few years later, however, when the conflict between the states had ended, a majority of the Supreme Court allowed a state to impose a tax on the privilege of being a corporation and measure the amount by assets which included United States bonds.^^ Then followed decisions allowing inheritance taxes on bequests of federal securities'^ and permitting the economic value contributed by United States bonds owned by a corporation to be included in the assessment of the shares of stock owned by individuals.'^ So far as appears, federal securities may be a source of state revenue both through a tax on the franchise of a corporation and a tax on the shares owned by individuals. The difference between a tax on ^ Note 25, supra. ^ 2 Wall. (U. S.) 200, 208-09 (1865). ^ Note 31, supra. ^ Note 25, supra. ^ Society for Savings z;. Coite, 6 Wall. (U. S.) 594 (1868); Provident Savings Insti- tution V. Massachusetts, 6 Wall. (U. S.) 611 (1868); Hamilton Co. v. Massachusetts, 6 Wall. (U. S.) 632 (1868) ; Home Insurance Co. v. New York, 134 U. S. 594, 10 Sup. Ct. Rep. 593 (1890); 31 Harv. L. Rev. 331-35. " Plummer v. Coler, 178 U. S. 115, 20 Sup. Ct. Rep. 829 (1900), 31 Harv. L. Rev. 336. " Van Allen v. Assessors, 3 Wall. (U. S.) 573 (1866); Cleveland Trust Co. v. Lander, 184 U. S. Ill, 22 Sup. Ct. Rep. 394 (1902); 31 Harv. L. Rev. 339-41-
