ts relied "greatly on the distinction between the bank and the
public institutions, such as the mint or the post-office. The agents in
those offices are, it is said, officers of government, * * * Not so the
directors of the bank. The connection of the government with the bank,
is likened to that with contractors."[45] Marshall accepted this
analogy, but not to the advantage of the appellants. He simply indicated
that all contractors who dealt with the Government were entitled to
immunity from taxation upon such transactions.[46] Thus not only was the
decision of McCulloch _v._ Maryland reaffirmed but the foundation was
laid for the vast expansion of the principle of immunity that was to
follow in the succeeding decades.

APPLICABILITY OF DOCTRINE _IN RE_ FEDERAL SECURITIES, ETC.

The first significant extension of the doctrine of the immunity of
federal instrumentalities from State taxation came in Weston _v._
Charleston,[47] where Chief Justice Marshall also found in the supremacy
clause a bar to State taxation of obligations of the United States.
During the Civil War, when Congress authorized the issuance of legal
tender notes, it explicitly declared that such notes, as well as United
States bonds and other securities, should be exempt from State
taxation.[48] A modified version of this section remains on the statute
books today.[49] The right of Congress to exempt legal tender notes to
the same extent as bonds was sustained in People _v._ Board of
Supervisors[50] over the objection that such notes circulated as money
and should be taxable in the same way as coin. But a State tax on checks
issued by the Treasurer of the United States for interest accrued upon
government bonds was sustained since it did not in any wise affect the
credit of the National Government.[51] Similarly, the assessment for an
_ad valorem_ property tax of an open account for money due under a
federal contract,[52] and the inclusion of the value of United States
bonds owned by a decedent, in measuring an inheritance tax,[53] were
held valid, since neither tax would substantially embarrass the power of
the United States to secure credit.

Income from federal securities is also beyond the reach of the State
taxing power as the cases now stand.[54] Nor can such a tax be imposed
indirectly upon the stockholders on such part of the corporate dividends
as corresponds to the part of the corporation's income which is not
assessed, i.e., income from t