Thurgood Marshall

“ The principal checking accounts of the Government are carried today, not by national banks, but by the Federal Reserve banks. When a new issue of government securities is offered, the Federal Reserve banks receive the applications of purchasers. When government securities are to be redeemed or exchanged, the transactions are handled by the Federal Reserve banks. Those banks administer for the Treasury the tax and loan deposit accounts of the banks in their respective districts. See The Federal Reserve System: Purposes and Functions, supra, at 225-234, 274-277 ”

“ Virtually all of the later cases in which national banks have been held to be federal instrumentalities immune from state taxation depend upon these three cases. One could, and perhaps should, read M'Culloch and Osborn simply for the principle that the Constitution prohibits a State from taxing discriminatorily a federally established instrumentality. On that view, Chief Justice Marshall's statement that 'the power to tax involves the power to destroy,' M'Culloch v. ”

“ A. The starting point of the constitutional inquiry is, of course, M'Culloch v. Maryland, 4 Wheat. 316, 4 L.Ed. 579 (1819) . That case involved a state statute applicable to any bank established in Maryland 'without authority from the State,' i.e., the Second Bank of the United States, chartered by Congress in 1816. It prohibited the circulation of notes (currency) by such a bank except on payment of a 2% stamp tax, or, alternatively, upon the payment annually to the State of $15,000. ”

“ Johnson, 316 U.S. 481, 485, 62 S.Ct. 1168, 1170, 86 L.Ed. 1611 (1942) (Army post-exchanges immune) ; whether they have been so 'assimilated by the Government as to become one of its constituent parts,' United States v. Township of Muskegon, 355 U.S. 484, 486, 78 S.Ct. 483, 485, 2 L.Ed.2d 436 (1958) ; and whether the institution is regarded 'virtually as an arm of the Government,' Department of Employment v. ”