The successful maintenance of a federal government, under any circumstances a most difficult task, is an especially difficult one in the United States where federal functions are exclusively performed by federal agents and organs, and state functions by state agents and organs.1 This has necessitated the maintenance of a complete machinery of government for the United States, and, similarly, a complete political organization for each of the member States of the Union. This arrangement carries with it the general doctrine that the States may not in any wise interfere with the operation of a federal organ or with the exercise by a federal agent of his official functions; and that, conversely, the Federal Government may not interfere with the operation of a state agency or the official actions of state officials when acting within the constitutional limits reserved to the States. Illustrations of these general principles will appear throughout this treatise. Their scope and significance may, however, be best exhibited in their application to the federal and state taxing power, and to a discussion of this especial phase of the subject this and the next succeeding paragraphs will be devoted.

That a State may not, in the exercise of its reserved powers, interfere with a federal governmental agency was settled once for all by the decision of the Supreme Court in McCulloch v.

1 It has indeed been held that the United States may permit or even request a state official to perform a federal service, but there is no constitutional means by which such state official may, without the consent of his State, be compelled to do so. The same is true as to the performance by a federal official of a state duty. The reason for this rule is the obvious one that otherwise it would be possible for one government to so burden with its nwn duties the officials of the other government as seriously to interfere with the performance by those officials of the duties laid upon them by their own governments.

Maryland. This case was all the stronger in that the federal agency, with whose activity it was alleged that Maryland had attempted to interfere by taxing it, was an agency neither essential to the National Government nor expressly provided for by the Constitution. The power to establish a National Bank was at most only an implied one, and, in fact, its constitutionality was very widely denied, and, years after this, a bill providing for the establishment by the National Government of a similar institution was vetoed by President Jackson upon the ground of its unconstitutionality. But in this case Maryland had not only denied the constitutionality of the bank but took the position that, even were it constitutional, she had, under the general power reserved to her of taxing all occupations carried on within her territorial limits, the right to tax such branches of the bank as might be located within her borders. Thus, in this case, the State of Maryland did not claim that she might directly and deliberately interfere with the operation of a federal law, but that the exercise by her of an otherwise legitimate authority could not be declared unconstitutional simply upon the ground that, indirectly, or by remote possibility, its effect was, or might be, to interfere with the exercise of a legitimate federal power. In other words, the State took the ground that, while acting within their reserved spheres of authority, the States were as independent and sovereign as was the Union while operating within its constitutional sphere; and that, therefore, their direct interests, within such spheres, might not properly be subordinated to the merely indirect interests of the Union. This position the Supreme Court declared an invalid one. The reasoning of Marshall, who rendered the opinion, was as follows: "The sovereignty of a State,'" he declared, "extends to everything which exists by its own authority, or is introduced by its permission; but does it extend to those means which are employed by Congress to carry into execution powers conferred on that body by the people of the United States? We think it demonstrable that it does not. These powers are not given by the people of a single State. They are given by the people of the United States to a government whose laws, made in pursuance of the Constitution, are declared to be supreme." Then, after referring to the fact that the power to tax might be used to destroy, he continued: "That there is a plain repugnance in conferring on one government power to control the constitutional measures of another, which other with respect to those very measures is declared supreme over that which exerts the control ... [is a] proposition not to be denied. ... If the States may tax one instrument employed by the government in the execution of its powers, they may tax any and every instrument. They may tax the mail; they may tax the mint; they may tax patent rights; they may tax the papers of the custom-house; they may tax judicial processes; they may tax all the means employed by the government to an excess which would defeat all the ends of government. This was not intended by the American people. They did not design to make their government dependent on the American States. . . . The Court has bestowed on this subject its most deliberate consideration. The result is a conviction that the States have no power by taxation, or otherwise, to retard, impede, burden, or in any manner control the operations of the constitutional laws enacted by Congress to carry into execution the powers vested in the General Government. This is, we think, the unavoidable consequences of that supremacy which the Constitution has declared."

In Osborn v. Bank of the United States,2 decided in 1824, the question of the power of a State to tax the Bank of the United States was reopened by the State of Ohio, and a strenuous attempt made to have the Supreme Court of the United States modify the views it had expressed in McCulloeh v. Maryland. The argument was urged that a distinction should be made between the bank as a fiscal agent of the government and as a private company trading with individuals for its own advantage; and that so far as it existed and operated in this latter capacity it might be taxed and otherwise regulated by the States. The Supreme Court held, however, that in practice the distinction had no existence. "To tax its faculties, its trade, and occupation," it declared, "is to tax the bank itself. To destroy or preserve the one is to destroy or preserve the other." The opinion continues: "The bank is not considered as a private corporation, whose principal object is individual trade and individual profit, but as a public corporation, created for public and national purposes. That the mere business of banking is, in its own nature, a private business, and may be carried on by individuals or companies having no political connection with the government, is admitted; but the bank is not such an individual or company. It was not created for its own sake, or for private purposes. It has never been supposed that Congress could create such a corporation. . . . The operations of the bank are believed not only to yield the compensation for its services to the government, but to be essential to the performance of those services. Those operations give its value to the currency in which all the transactions of the government are conducted. They are, therefore, inseparably connected with those transactions. They enable the bank to render those services to the nation for which it was created, and are, therefore, of the very essence of its character, as national instruments. The business of the bank constitutes its capacity to perform its functions, as a machine for the money transactions of the government. Its corporate character is merely an incident, which enables it to transact the business more beneficially. . . . Considering the capacity of carrying on the trade of banking, as an important feature in the character of this corporation, which was necessary to make it a fit instrument for the objects for which it was created, the court adheres to its decision in the case of McCulloch v. The State of Maryland, and is of opinion that the act of the State of Ohio, which is certainly much more objectionable than that of the State of Maryland, is repugnant to a law of the United States made in pursuance of the Constitution, and, therefore, void."

2 9 Wh. 738; 6 L. ed. 204.