does not impinge upon federal rights. So long as that situation exists, the determination of the State cannot be challenged here. The possibility of repossession by the United States is not enough to block a tax sale in which the paramount rights of the United States are protected. Baltimore Shipbuilding Co. v. Baltimore, 195 U. S. 375, 381-82; New Brunswick v. United States, 276 U. S. 547, 556; United States v. Alabama, 313 U. S. 274, 282.1 Petitioner's argument goes beyond the question of the enforcement of the assessed tax. It is bottomed on the implied constitutional immunity from state taxation of property for which the United States holds title subject to unfulfilled conditions. In Van Brocklin v. Tennessee, 117 U. S. 151, that State sought to tax realty of the United States which was not held for the purposes or under the authority of the Cession Clause. Certain lots had been purchased by and conveyed to the United States pursuant to a federal tax sale. 12 Stat. 423, § 7. These lots were later transferred by deed or certificate of release to private owners. 17 Stat. 330; 18 Stat. 313. Tennessee assessed its own taxes upon the entire property for the years during which title to the lots was in the United States and attempted to collect them from the private owners after the transfer. Tennessee's claim was founded on the absence of state cession. This Court refused to permit the State's action, saying at page 179: "While the United States owned the land struck off to them for the amount of the taxes because no one would pay more for it, and until it was sold by the United States for a greater price, or was redeemed by 14 As the case was tried below on the theory of direct or implied immunity because the fee was in the United States, we neither consider nor decide the effect of a tax sale of petitioner's rights on its contract with the United States. See Wilson v. Cook, 327 U. S. 474, 483. Compare 41 U.S. C. § 15 with Freedman's Saving Co. v. Shepherd, 127 U. S. 494. 558 Opinion of the Court. the former owner, the United States held the entire title as security for the payment of the taxes; and it could not be known how much, if anything, beyond the amount of the taxes the land was worth. To allow land, lawfully held by the United States as security for the payment of taxes assessed by and due to them, to be assessed and sold for State taxes would tend to create a conflict between the officers of the two governments, to deprive the United States of a title lawfully acquired under express acts of Congress, and to defeat the exercise of the constitutional power to lay and collect taxes, to pay the debts and provide for the common defence and general welfare of the United States." The posture of the land sought to be taxed in the Van Brocklin case differentiates it from that presently under consideration. The United States there held complete title upon the assessment dates as a purchaser at a tax sale. The entire bundle of rights in the property was assessed by Tennessee. As a matter of grace, the United States had granted a right to the taxpayer to redeem. It was like an option to purchase. The statute might have authorized the sale of the land to any purchaser without consideration for the former owner. The United States, here, as we have demonstrated above, had transferred at the time of the assessment equitable ownership to the purchaser and has only a legal title as security for the unpaid purchase price. See United States v. Allegheny County, 322 U. S. 174, 188. Petitioner presses various land grant cases upon us as announcing the controlling rule.15 The principle which petitioner extracts from these cases is that alienation of United States property does not pass an interest to the vendee taxable by a State until all conditions precedent for 15 Railway Co. v. Prescott, 16 Wall. 603; Railway Co. v. McShane, 22 Wall. 444; Northern Pacific R. Co. v. Traill County, 115 U. S. 600; Irwin v. Wright, 258 U. S. 219. the delivery of the deed have been complied with. In the present case, petitioner asserts, the full amount of the purchase price must be paid before the State can tax. Such a rule can be extracted by the literal reading of certain phrases in the land grant cases.16 The reason for the rule was said, in the earlier cases, to be that a state tax sale would defeat the government lien for surveying or other costs because the state sale would pass a title free from lien of the United States." As heretofore shown, ante, p. 565, this ground for refusing power to Minnesota to tax is not present in this case, since Minnesota holds that the lien of the United States will remain paramount. Irwin v. Wright involved the taxability by a State of property occupied by an entryman under the Reclamation and Homestead Acts who had not received his required final certificate of land clearance, pages 227, 228, 232. The reason for the rule against state taxation until the equitable title passes from the United States to the entryman was there placed upon the policy of the Government to require those who sought government land to perform the required conditions of residence or improvement before beneficial title, subject to state taxation, passes from the United States to the locator. This transfer was said not to take 16 Irwin v. Wright, supra, 228, 229, 232, 233; Northern Pacific R. Co. v. Traill County, supra, at 609; Railway Co. v. McShane, supra, at 462. 17 16 Wall. at 608; 22 Wall. at 462; 115 U. S. at 610. See also Colorado Co. v. Commissioners, 95 U. S. 259. In the McShane case, itself, which clearly set out the above reason for non-taxability, it was recognized that the federal right of pre-emption for the benefit of settlers would not be affected by a state tax sale. This Court therefore reversed its former judgment in the Prescott case that land held by the railroads subject to this pre-emption could not be taxed by a State. 22 Wall. at 461. Congress promptly terminated the land tax exemption after the Traill County decision by subjecting railroad land grants to state taxation before payment of conveyancing costs. 43 U.S. C. § 882. 558 Opinion of the Court. place until the certificate was issued. Page 232. The prohibition of state taxation until the certificate was issued was one of the means by which the Government furthered its public policy of land settlement. After compliance with the condition and before patent, the State could tax.18 We think the public policy of national development and federal tax collection justify the limitation on state taxing power announced by the foregoing decisions. We do not, however, conclude that their rationale leads to an exemption from state taxation of all lands in which the United States holds legal title as security for the purchase price. To say that the payment of the purchase price is a necessary condition precedent to the loss of federal immunity is to make the rule too mechanical. It should be sufficiently flexible to subject real private rights, disentangled from federal policies, to state taxation. This has been the holding in mining claims.19 Where beneficial interest has passed to a vendee, the retention of legal title does not give a significant difference from the situation of a deed with a lien retained or a mortgage back to secure the purchase money. That was the interpretation given the facts in New Brunswick v. United States, 276 U. S. 547.20 The City of New Brunswick, under authority of New Jersey, sought to tax lots in the possession of purchasers from the Housing Corporation, a corporation wholly owned by the United States and therefore treated as the United States. These purchasers had paid enough of the purchase price-ten per cent to entitle them to deeds under their contracts but had not paid the entire purchase price. The deeds had not been delivered nor the mortgages executed for the balance as required by the purchase agreement. This 18 Bothwell v. Bingham County, 237 U. S. 642, 647. 19 Elder v. Wood, 208 U. S. 226. 20 But see ABR Corp. v. Newark, 133 N. J. L. 34. STONE, C. J., concurring. 327 U.S. Court said: "In equity the situation was then the same as if the Corporation had conveyed title to the purchasers, as owners, and they had mortgaged the lots to the Corporation to secure the unpaid purchase money." Page 555. The Court sustained the tax subject to the paramount lien of the United States. We think the petitioner's Minnesota property is in a similar position. Ownership of the beneficial interest has passed to the petitioner with legal title retained by the United States for security purposes. This should not put this private property in an exempt class. There is a suggestion that to hold United States property subject to state taxation pending the completion of payment will injuriously affect its salability and therefore interfere with the Government's handling of its affairs. Our recent cases have disposed of this economic argument in a way which is contrary to petitioner's contention. Alabama v. King & Boozer, 314 U. S. 1, and cases cited. The only other contention of petitioner which we need mention is that the State has included the interest of the United States in the valuation of the land, and has therefore subjected that interest to taxation. But no deduction need be made for the interest of the Government since that interest is for security purposes only and is not beneficial in nature. The whole equitable ownership is in the petitioner and the value of that ownership may be ascertained on the basis of the full value of the land. New Brunswick v. United States, supra, at 555–56. Affirmed. MR. JUSTICE JACKSON took no part in the consideration or decision of these cases. MR. CHIEF JUSTICE STONE, with whom MR. JUSTICE FRANKFURTER joins, concurring. I concur in the result, but I do not join in so much of the opinion of the Court as undertakes to discuss the ter |