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tion from state taxation of the means employed by the federal government for carrying on its functions was first declared in 1819, in McCulloch v. Maryland,' and the principle was later extended in 1827, in Brown v. Maryland, to the limitation of the state taxing authority by reason of the national control over foreign commerce.
Under the rule declared by the supreme court for the first time in 1886,3 which has since been consistently adhered to by the court, the business of carrying on interstate commerce cannot be taxed at all, and as the right to bring goods from other states includes the right to sell them and to solicit sales therefor, as well as to deliver the property sold, the state cannot tax the right to sell or deliver, or to solicit sales, whether in the form of license tax or otherwise. It is immaterial that the tax is without discrimination, as between domestic and foreign drummers, as interstate commerce cannot be taxed at all.*
§ 21 (19). But a state can tax the property employed in interstate commerce.—While a state cannot tax interstate commerce, that is, the privilege, of carrying on such commerce, it can tax the property in its jurisdiction empolyed in carrying on such commerce. The difficulty of defining the line where the state and federal powers meet in such cases is illustrated by the not infrequent dissents of members of the supreme court in cases involving these questions of conflict between the state and federal power. No question is made as to the power of a state to tax the tangible property within its jurisdiction of a railroad, telegraph or other company engaged in interstate commerce, but the difficulty has been found in determining what portion of the intangible property of such corporations can be located within a state so as to be subject to its taxing power. Thus, has been formulated the so-called "unit rule" whereunder the entire value of an interstate railroad,
1 Supra, § 5.
2 Supra, § 17.
3 Robbins v. Shelby County Taxing District, 120 U. S. 489 (1887), 30 L. Ed. 694.
4 Asher v. Texas, 128 U. S. 129 (1888), 32 L. Ed. 368; Brennan v. Titusville, 153 U. S. 289 (1894), 38 L. Ed. 719; Stockard v. Morgan,
185 U. S. 27 (1902), 46 L. Ed. 795; Caldwell v. North Car., 187 U. S. 622 (1902), 47 L. Ed. 336: N. & W. R. R. Co. v. Sims, 191 U. S. 441 (1902), 48 L. Ed. 254.
5 Erie R. Co. v. Pennsylvania, 158 U. S. 431, 1. c. 437 (1895), 39 L. Ed. 1043.
tangible as well as intangible, may be apportioned upon a mileage basis as a means, prima facie, of arriving at the value of the property within the state, that is, the state's proportionate part of the value of the entire property.1
The rule of the "average habitual use" has also been formulated in the taxation of railroad cars, so that a state may tax its proportionate part of the property actually employed in its jurisdiction."
Thus also while the receipts from interstate commerce cannot be taxed as such, the tax may be levied upon the corporation, as an excise or franchise tax, which may be apportioned on the basis of the proportion of the mileage within the state to the total mileage.3
These rules, however, are only admissible in determining the actual value of the property in the state for the purpose of taxation, and will not authorize the taxing by a state of the privilege of carrying on interstate commerce among the states, nor the taxation of property permanently outside of its jurisdiction.*
1 State Railroad Tax Cases, 92 U. S. 575 (1875), 23 L. Ed. 663; Kentucky Railroad Tax Cases, 115 U. S. 321 (1885), 29 L. Ed. 414; Pittsburgh etc. R. Co. v. Backus, 154 U. S. 421 (1894), 38 L. Ed. 1031; C. C. C. & St. L. R. Co. v. Backus, 154 U. S. 439 (1894), 38 L. Ed. 1041; Western Union Tel. Co. v. Massachusetts, 125 U. S. 530 (1888), 31 L. Ed. 790; Massachusetts v. Telegraph Co., 141 U. S. 40 (1891), 35 L. Ed. 628; Western Union Tel. Co. v. Taggard, 163 U. S. 1 (1896), 41 L. Ed. 49; Adams v. Ohio, 165 U. S. 194 (1897), 41 L. Ed. 683; Adams Express Co. v. Kentucky, 166 U. S. 171 (1897), 41 L. Ed. 960; Henderson Bridge Co. v. Kentucky, 166 U. S. 150 (1897), 41 L. Ed. 953; W. U. Tel. Co. v. Gottlieb, 190 U. S. 412 (1903), 47 L. Ed. 1116.
2 Pullman Palace Car Co. Y. Pennsylvania, 141 U. S. 18 (1891),
35 L. Ed. 613; Marye v. B. & O. R. Co., 127 U. S. 117 (1888), 32 L. Ed. 94; American Refrigerator Transit Co. v. Hall, 174 U. S. 70 (1899), 43 L. Ed. 899; Union Refrigerator Transit Co. v. Lynch, 177 U. S. 149 (1900), 44 L. Ed. 708; Wisconsin & M. R. Co. v. Powers, 191 U. S. 379 (1903), 48 L. Ed. 229.
The State Freight Tax Cases, 15 Wall. 232 (1872), 21 L. Ed. 146; Maine v. Grand Trunk R. Co., 142 U. S. 217 (1891), 35 L. Ed. 994 Four judges dissenting.
4 Fargo v. Hart, 193 U. S. 490 (1904), 48 L. Ed. 761; Galveston etc. Co. v. Texas, 210 U. S. 217, 52 L. Ed. 1131 (1908). For consideration of the many questions arising in the adjustment of the taxing power of the state to the paramount authority of congress in interstate commerce, see author's "Power of Taxation," chapters III and VIII.
§ 22 (20). State power of taxation of corporations engaged in interstate commerce summarized.-The supreme court,' in holding that a city could recover from an interstate telegraph company a reasonable license fee for the occupation of its streets by telegraph poles, subject however to the determination by a jury of the reasonableness of the charge, said that there were few questions more important or more embarrassing than those arising from the efforts of the states or municipalities to increase their revenues by collections from corporations engaged in interstate commerce, but that the following propositions had been so often adjudicated as to be no longer open to discussion: First. The constitution of the United States having given to congress the power to regulate commerce not only with foreign nations but among the several states, that power is necessarily exclusive whenever the subjects of it are national in their character or admit of only one uniform system or plan of regulation. Second. No state can compel a party, individual or corporation, to pay for the privilege of engaging in interstate commerce. Third. This immunity does not prevent a state from imposing ordinary property taxes upon property having a situs in its territory and employed in interstate commerce. Fourth. The franchise of a corporation, although that franchise is the business of interstate commerce, is, as a part of its property, subject to state taxation, provided the franchise is not derived from the United States. Fifth. No corporation, even though engaged in interstate commerce, can appropriate to its own use property, public or private, without liability to charge therefor.
1 Atlantic, etc. Tel. Co. v. Philadelphia, 190 U. S. 160 (1896), 47 L. Ed. 995.
2 The soliciting of traffic for an interstate railroad is exempt from taxation. McCall v. Cal., 136 U. S. 104 (1890), 34 L. Ed. 391. In 1868 before the adoption of the fourteenth amendment it was held in Crandall v. Nevada, 6 Wall. 35, 18 L. Ed. 745, that a state tax upon through passengers was void as inconsistent with the rights of cit
izens of the United States, in free travel through the states, and not merely as an attempted regulation of commerce among the states. The opinion of Justice Miller quotes from the dissenting opinion of Chief Justice Taney in the Passenger Cases, Infra, § 23, where he concedes that the state tax imposed on foreigners would be invalid, if imposed on citizens.
8 N. Y. ex rel. v. Miller, 202 U. S. 584, 50 L. Ed. 1155.
THE CONCURRENT AND EXCLUSIVE POWERS.
§ 23. The concurrent and exclusive powers distinguished.
23. The state power as to interstate telegraph companies.
29. State laws as to qualifications of employes and safety of public. State laws concerning separation of races in interstate traffic. Limitation of state power in stoppage of through trains.
32. State regulation of contractual relations of interstate railroad
33. State regulation under rules of common law in state courts. 34. The concurrent jurisdiction in live stock inspection laws.
35. Effect of congressional legislation upon concurrent power of
38. Congressional inaction in foreign and interstate commerce dis
Attachment of foreign railroad cars.
40. Rulings of the state courts on the commerce clause.
§ 23 (21). The concurrent and exclusive powers distinguished. The supremacy of the federal power in interstate commerce was declared in 1824, in Gibbons v. Ogden (supra, § 6), in a case wherein congress had exercised its power by authorizing the granting of coasting licenses, and the decision of the court therefore was based upon the claim of an exclusive grant by the state as against this right, under authority of congress, in the navigation of the public waters of the state. The question of the power of the state to legislate affecting interstate commerce, when congress had not legislated upon the subject, was not directly involved or decided; and this remained a vexata quæstio, and widely different views were expressed by members of the court, until a definite rule was declared in 1851. Thus it was contended on the one hand that the power
1 Wilson v. Black Bird Creek Marsh Co., 2 Peters, 245 (1829), 7
L. Ed. 412; New York v. Miln, 11
to regulate interstate commerce was itself a unit, and the grant to congress was necessarily exclusive, and no part of this regulation could be exercised by a state; and on the other hand that the grant to congress was not itself a prohibition to the states, and that this authority of the states in the exercise of their sovereign police powers was complete and exclusive.1
The uncertainty produced by these differing opinions was shown in sustaining a New York statute requiring masters of passenger vessels to report to the state authorities as to arriving passengers; while a few years later statutes of New York and Massachusetts imposing a tax upon passengers arriving from other states or foreign countries, for defraying expenses. of police laws excluding paupers and convicts, the surplus to be applied to state purposes, were held void.3
In 1846 the laws of certain of the New England states, prohibiting or restraining the introduction of spirituous liquors were sustained, all the six judges filing opinions, and concurring in the judgment, though on different grounds.
Finally, in 1851, the rule was declared, which has been the basis of subsequent adjudications, that the power to regulate commerce is one which includes many subjects, various and quite unlike in their nature, and that whenever these subjects are in their nature national, or admit only of one uniform system or plan of regulation, they may be justly held to belong to that class over which congress has exclusive power of regulation; but that local and limited matters, not national in their nature, may be regulated by the states during the non-action of congress. The action of congress however renders void such regulations of the states as conflict with it."
1 See opinions in the Passenger and License Cases, supra.
2 New York v. Miln, supra. 8 Passenger Cases, supra, four justices dissenting.
License Cases, supra. This decision was overruled in 1890; Leisy v. Harding, supra, § 17.
5 Cooley v. Board of Wardens, 12 How. 299 (1851), 13 L. Ed. 996.
The rule has been stated in subsequent opinions without the qualification of the word "only," so as to read "admit of one uniform system or plan of regula tion." See State Freight Tax, 15 Wall. 232, 21 L. Ed. 146; Welton v. Missouri, 91 U. S. 1. c. 280 (1875), 23 L. Ed. 349; Henderson V. Mayor, 92 U. S. 1. c. 259 (1875), 23 L. Ed. 543.