tem. As to the Fourteenth Amendment in relation to these fundamental principles, the Supreme Court has said 1 that due process of law refers to that law of the land in each State which derives its authority from the inherent and reserve powers of the State, exerted within the limits of those fundamental principles of liberty and justice, which lie at the basis of all our civil and political institutions, and the greatest security for which rests in the right of the people to make their own laws and alter them at pleasure. But it is not to be supposed that these legislative powers are absolute and despotic, and that the amendment prescribing due process of law is to be too vague and indefinite to act as a practical restraint. It is not every act legislative in form that is law. Law is something more than mere will exerted as an active power. Arbitrary power enforcing its edicts to the injury of the persons and property of its subjects is not law.

As taxation belongs to the legislative power, the determination of the public purpose for which taxes shall be levied is primarily a matter for the legislature, but this power is not unlimited. The fundamental principle that taxes can be levied only for public purposes had been declared in the State courts long before the adoption of the Fourteenth Amendment and irrespective of any express constitutional declaration. The constitutions of some of the States provide in express terms that taxes shall be levied for a public purpose only, but such declaration is unnecessary, as a public purpose is implied in the conception of a tax.2

That a public purpose is inherent in a tax is further illustrated by the fact that the leading case in the Supreme Court, and indeed in our jurisprudence, on the subject of the public purpose essential in taxation, to wit, that of Loan Association v. Topeka,1 was not considered or decided with reference to the Fourteenth Amendment, but on principles of general constitutional law. That decision was rendered by the court in the exercise of its appellate jurisdiction over the Circuit Courts, in a suit brought before the Circuit Court for the District of Kansas on bonds issued to an iron works company by the city of Topeka to aid in their establishing bridge shops in that city.

§ 341. Loan Association v. Topeka.

The bonds were issued under authority of an act of the legislature, authorizing certain cities "to encourage the establishment of manufactures and such other enterprises as may tend to develop or improve the city, either by direct appropriation from the general funds, or by the issuance of the bonds of such city." A majority vote at an election was required. It seems that all the steps were taken, including the election, the bonds were issued and the first interest coupon paid. In a suit upon the coupons in the United States Circuit Court of Kansas, the defense demurred on the grounds, first, that the statute violated the constitution of Kansas, and second, that the act authorized the towns to take the property of the citizens under the guise of taxation, in aid of enterprises which were not of a public nature. The Circuit Court sustained the demurrer, and the judgment was affirmed by the Supreme Court, in a notable opinion by Justice Miller.

The court declined to pass upon the first point, as to whether the statute was authorized by the constitution of the State, saying that, as it found ample ground to sustain the demurrer on the second, it preferred to base its decision upon that. As the contract could only be fulfilled by resorting to taxation, its validity necessarily depended on the power to levy the tax. The court referred to the judicial conflict over railroad aid bonds, and said that such bonds had been sustained on the ground that the purpose was in effect a public one. A law authorizing a tax for a purely private purpose is an unauthorized invasion of private rights. The opinion continued, page 662:

" It must be conceded that there are such rights in every free government beyond the control of the State. A government which recognized no such rights, which held the lives, the liberty and the property of its citizens subject at all times to the absolute disposition and unlimited control of even the most democratic depository of power, is after all but a despotism. It is true it is a despotism of the many, of the majority, if you choose to call it so, but it is none the less a despotism. It may well be doubted if a man is to hold all that he is accustomed to call his own, all in which he has placed his happiness, and the security of which is essential to that happiness, under the unlimited dominion of others, whether it is not wiser that this power should be exercised by one man than by many.

"The theory of our governments, State and national, is opposed to the deposit of unlimited power anywhere. The executive, the legislative, and the judicial branches of these governments are all of limited and defined powers.

"There are limitations on such power which grow out of the essential nature of all free governments. Implied reservation of individual rights, without which the social compact could not exist, and which are respected by all governments entitled to the name. No court, for instance, would hesitate to declare void a statute which enacted that A. and B. who were husband wife to each other should be so no longer, but that A. should thereafter be the husband of C., and B. the wife of D. Or which should enact that the homestead now owned by A. should no longer be his, but should henceforth be the property of B.

"Of all the powers conferred upon government that of taxation is most liable to abuse. Given a purpose or object for which taxation may be lawfully used, and the extent of its exercise is in its very nature unlimited. It is true that express limitation on the amount of tax to be levied or the things to be taxed may be imposed by constitution or statute, but in most instances for which taxes are levied, as the support of government, the prosecution of war, the National defense, any limitation is unsafe. The entire resources of the people should in some instances be at the disposal of the government.

"The power to tax is, therefore, the strongest, the most pervading of all the powers of government, reaching directly or indirectly to all classes of people. It was said by Chief Justice Marshall, in the case of McCulloch v. The State of Maryland, that the power to tax is the power to destroy. A striking instance of the truth of the proposition is seen in the fact that the existing tax of ten per cent imposed by the United States on the circulation of all other banks than the National banks, drove out of existence every State bank of circulation within a year or two after its passage. This power can as readily be employed against one class of individuals and in favor of another, so as to ruin the one class and give unlimited wealth and prosperity to the other, if there is no implied limitation of the uses for which the power may be exercised.

"To lay with one hand the power of the government on the property of the citizen, and with the other to bestow it upon favored individuals to aid private enterprises and build up private fortunes, is none the less a robbery because it is done under the forms of law and is called taxation. This is not legislation. It is a decree under legislative forms.

"Nor is it taxation. A tax,' says Webster's dictionary, is a rate or sum of money assessed on the person or property of a citizen by government for the use of the nation or State.' Taxes are burdens or charges imposed by the legislature upon persons or property, to raise money for public purposes.'"

After conceding that it is not easy to decide in all cases what is a public purpose, and that the courts are justified in interposing only where the case is clear, it was said, page 665:

" In deciding whether, in the given case, the object for which the taxes were assessed falls upon the one side or the other of this line, they must be governed mainly by the course and usage of the government, the objects for which taxes have been customarily and by long course of legislation levied, what objects or purposes have been considered necessary to the support and for the proper use of the government, whether State or municipal. Whatever lawfully pertains to this and is sanctioned by time and the acquiescence of the people may well be held to belong to the public use, and proper for the maintenance of good government, though this may not be the only criterion of rightful taxation."

But it was said that, in the case at bar, no line could be drawn in favor of the manufacturer, which would not open the coffers of the public treasury to the importunities of two-thirds of the business men of the city or town.1