the corporation or company is held and used for the purposes of its business, and the value of its capital stock and bonds is the value of only that property so held and used" and "assuming the proportion of capital employed in each of several states through which such a company conducts its operations has been fairly ascertained, while taxation thereon, or determined with reference thereto, may be said in some sense to fall on the business of the company, it is only indirectly. The taxation is essentially a property tax, and, as such, not an interference with interstate commerce. 1 Again, there is no reg 1 Adams Exp. Co. v. Ohio State Auditor, 165 U. S. 194, 41 L. Ed. 683. In this case, Chief Justice Fuller, speaking for the court, further said: "The principal contention is that the rule contravenes the commerce clause because the assessments, while purporting to be on the property of complainants within the state, are in fact levied on their business, which is largely interstate commerce. Although the transportation of the subjects of interstate commerce, or the receipts received therefrom, or the occupation or business of carrying it on, cannot be directly subjected to state taxation, yet property belonging to corporations or companies engaged in such commerce may be; and whatever the particular form of taxation, if it is essentially only property taxation, it will not be considered as falling within the inhibition of the Constitution. Corporations and companies engaged in interstate commerce should bear their proper proportion of the burdens of the governments under whose protection they conduce their operations, and taxation on property, collectible by the ordinary means, does not affect interstate commerce otherwise than incidentally as all business is affected by the necessity of contributing to the support of the government. Postal Teleg. Cable Co. Adams, 155 U. S. 688 (39:311, 5 Inters. Com. Rep. 1). As to railroad, telegraph, and sleeping-car companies engaged in interstate commerce, it has V. often been held by this court that their property in the several states through which their lines of business extended might be valued as a unit for the purposes of taxation, taking into consideration the uses to which it was put and all the elements making up aggregate value, and that a proportion of the whole fairly and properly ascertained might be taxed by the particular state, without violating any federal restriction. Western Union Teleg. Co. v. Massachusetts, 125 U. S. 530 (31:790); Massachusetts v. Western U. Teleg. Co., 141 U. S. 40 (35:628); Maine v. Grand Trunk R. Co., 142 U. S. 217 (35:994, 3 Inters. Com. Rep. 807); Pittsburg, C., C. & St. L. R. Co. v. Backus, 154 U. S. 421 (38:1031); Cleveland, C., C. & St. L. R. Co. v. Backus, 154 U. S. 439 (38: 1041, 4 Inters. Com. Rep. 671); Western U. Teleg. Co. v. Taggart, 163 U. S. 1 (41:49); Pullman's Palace Car Co. v. Pennsylvania, 141 U. S. 18 (35:613, 3 Inters. Com. Rep. 595). The valuation was, thus, not confined to the wires, poles, and instruments of the telegraph company; or to the roadbed, ties, rails, and spikes of the railroad company; or to the cars of the sleeping-car company; but included the proportionate part of the value resulting from the combination of the means by which the business was carried on, a value existing to an appreciable extent throughout the entire domain of operation. And it has been decided that a proper mode of ascer ulation of interstate commerce when a foreign corporation, engaged in the business of furnishing, upon the responsibility of the railroad companies and for a mileage compensation, refrigerator cars for the transportation of perishable products over the various lines of railroad in the United States, is required by the state to pay a tax on the average number of its cars within the borders of the state, and this is true notwithstanding the fact that the company has no office nor place of business nor property, other than such cars, in the state; taining the assessable value of so much of the whole property as is situated in a particular state is, in the case of railroads, to take that part of the value of the entire road which is measured by the proportion of its length therein to the length of the whole (Pittsburg, C., C. & St. L. R. Co. v. Backus, 154 U. S. 429 [38: 1037]); or taking as the basis of assessment such proportion of the capital stock of a sleeping-car company as the number of miles of railroad over which its cars are run in a particular state bears to the whole number of miles traversed by them in that and other states (Pullman's Palace Car Co. v. Pennsylvania, supra); or such a proportion of the whole value of the capital stock of a telegraph company as the length of its lines within a state bears to the length of all its lines everywhere, deducting a sum equal to the value of its real estate and machinery subject to local taxation within the state. Western U. Teleg. Co. v. Taggart, supra. Doubtless there is a distinction between the property of railroad and telegraph companies and that of express companies. The physical unity existing in the former is lacking in the latter; but there is the same unity in the use of the entire property for the specific purpose, and there are the same elements of value arising from such use. The cars of the Pullman company did not constitute a physical unity, and their value as separate cars did not bear a direct relation to the valuation which was sustained in that case. The cars were moved by railway carriages under contract, and the taxation of the corporation in Pennsylvania was sustained on the theory that the whole property of the company might be regarded as a unit value, a proportionate part of which value might be reached by the state authorities on the basis indicated. No more reason is perceived for limiting the valuation of the property of express companies to horses, wagons, and furniture, than that of railroad, telegraph, and sleeping-car companies to roadbeds, rails, and ties, poles and wires, or cars. The unit is a unit of use and management, and the horses, wagons, safes, pouches, and furniture, the contracts for transportation facilities, the capital necessary to carry on the business-whether represented in tangible or intangible property-in Ohio, possessed a value in combination and from use in connection with . the property and capital elsewhere, which could as rightfully be recognized in the assessment for taxation in the instance of these companies as the others. We repeat that while the unity which exists may not be a physical unity, it is something more than a mere unity of ownership. It is a unity of use, not simply for the convenience or pecuniary profit of the owner, but existing in the very necessities of the case-resulting from the very nature of the business." Adams Exp. Co. v. Ohio State Auditor, 165 U. S. 194, 41 L. Ed. 683. that none of such cars carry purely intrastate shipments, and that such cars are furnished, not under any contract of lease or allotment to any railroad company operating in the state, but as needed and upon the direct request of shippers or railroad companies, acting on behalf of shippers. Nor does the commerce clause invalidate a statute requiring each domestic railroad to pay to the state an annual tax on the actual cash value of such number of the shares of its capital stock as bears the same proportion to the whole number of such shares as its mileage within the state bears to its entire mileage.3 But the state of Pennsylvania cannot impose a tax upon the capital stock of a New Jersey corporation engaged in maintaining and operating a ferry across the Delaware river between New Jersey and Pennsylvania, transacting no business other than that of ferriage, owning no property in Pennsylvania other than a lease of a slip or dock, owning no boats excepting such as are registered in New Jersey, and allowing even those boats to remain in Pennsylvania only long enough to discharge and receive passengers and freight. On the other hand, a state tax on so much of the capital stock of a foreign sleeping-car company, operating its cars in the state under agreements with railroad companies operating trains therein, as bears the same proportion to the entire capital stock of the company as the number of miles of railroad within the state, over which its cars are run, bears to the entire number of miles of road, both within 3 Minot v. Philadelphia, W. & B. R. Co. (The Delaware Railroad Tax), 18 Wall. (U. S.) 206, 21 L. Ed. 888. 4 Gloucester Ferry Co. v. Pennsylvania, 114 U. S. 196, 29 L. Ed. 158. This case, of course, is not authority for the proposition that a state cannot tax interstate ferryboats having a situs within its boundaries nor, in the exercise of its police power, impose a license tax on the domestic corporation owning them. In Wiggins Ferry Co. v. East St. Louis, 107 U. S. 365, 27 L. Ed. 419 (distinguished in Pickard v. Pullman Southern Car Co., 117 U. S. 34, 29 L. Ed. 785), the court e 2 and without the state, over which its cars are operated, is not invalid as a regulation of interstate commerce, notwithstanding the fact that no particular cars are set apart to be operated exclusively within the state, although the number therein at different times is fairly constant, and that the cars run over the roads within the state are engaged in interstate commerce and are continuously passing from points without the state to points therein and vice versa.5 A domestic railroad company, compelled to pay an annual tax on its franchise of being a corporation, is not thereby required to pay a tax on interstate commerce even though its road extends into foreign states and notwithstanding the fact that the statute imposing the tax makes such tax computable on the basis of the company's paid-up capital stock when such statute further fixes a maximum charge of $2,500, which amount is to be paid by each corporation having a paidup capital of $5,000,000 or more, and such railroad company has a paid-up capital of $31,660,000. Again, a franchise tax on a domestic railroad company, computed on the basis of the amount of the company's capital stock employed within the state, is not invalidated by the fact that the only deduction from the amount of the capital stock for rolling stock which was used outside of the state was for such rolling stock as was exclusively so used during the whole of the tax year, and that there was no additional deduction for the proportional amount of rolling stock which was continuously absent from the state, when "the absences relied on [to sustain the claim of right to such additional deduction] were not in the course of travel upon fixed routes, but random excursions of casually chosen cars, determined by the varying orders of particular shippers and the arbitrary convenience of other roads."7 But a license fee or excise of a certain per cent of the entire authorized capital of a foreign corporation doing both a local and interstate business in different states, although declared by the state imposing it to be merely a charge for the privilege of conducting a local business within its boundaries, is 5 Pullman's Palace Car Co. v. Pennsylvania, 141 U. S. 18, 35 L. Ed. 613. 6 Kansas City, Ft. S. & M. R. Co. v. Botkin, 240 U. S. 227, 60 L. Ed. 617, aff'g 95 Kan. 261, 147 Pac. 791. "It has never been, and cannot be, maintained that an annual tax upon this privilege [of being a corporation] is in itself, and in all cases, repugnant to the federal power merely because it is measured by authorized or VII Priv. Corp.-44 paid-up capital stock. The selected. measure may appear to be simply a matter of convenience in computation, and may furnish no basis whatever for the conclusion that the effort is made to reach subjects withdrawn from the taxing authority." Kansas City, Ft. S. & M. R. Co. v. Botkin, 240 U. S. 227, 60 L. Ed. 617. 7 New York v. Miller, 202 U. S. 584, 50 L. Ed. 1155. essentially and for every practical purpose a tax on the entire business of the corporation, including that which is interstate, and on its entire property, including that in other states, the capital stock representing as it does all of the business of the corporation, of every class, and all of the corporation's property wherever located. "When tested, as it must be, by its substance-its essential and practical operation—rather than its form or local characterization, such a license fee or excise is unconstitutional and void as illegally burdening interstate commerce and also as wanting in due process because laying a tax on property beyond the jurisdiction of the state." So, the Texas statutes, under which a foreign corporation is required to pay a charge, based on the amount of its authorized capital stock, for a permit to do business in the state, and to pay an annual franchise tax based upon the amount of its capital stock, unless the amount thereof, issued and outstanding, plus the surplus and undivided profits of the corporation exceed its authorized capital stock, when and in which case the tax is to be based on the aggregate of such amounts, are invalid, as to a foreign corporation engaged in interstate commerce, under the commerce and due process clauses of the Constitution.9 § 4589. Double taxation-Validity. Although the proportionate distribution of the burdens of government is the desideratum in taxa 8 International Paper Co. v. Massachusetts, 246 U. S. 135, 142, 62 L. Ed. 624, Ann. Cas. 1918 C 617, recapitulating the holdings in Ludwig v. Western U. Tel. Co., 216 U. S. 146, 54 L. Ed. 423; Pullman Co. v. Kansas, 216 U. S. 56, 54 L. Ed. 378, and Western U. Tel. Co. v. Kansas, 216 U. S. 1, 54 L. Ed. 355. 9 Looney v. Crane Co., 245 U. S. 178, 62 L. Ed. 230, aff 'g 218 Fed. 260. To the same effect, see International Paper Co. v. Massachusetts, 246 U. S. 135, 62 L. Ed. 624, Ann. Cas. 1918 C 617 (rev'g 228 Mass. 101, 117 N. E. 246), and Locomobile Co. of America v. Massachusetts, 246 U. S. 146, 62 L. Ed. 631 (rev'g 228 Mass. 117, 117 N. E. 5), holding the Massachusetts excise tax unconstitutional; Ludwig v. Western U. Tel. Co., 216 U. S. 146, 54 L. Ed. 423, holding the Arkansas license fee invalid, and Pullman Co. v. Kansas, 216 U. S. 56, 54 L. Ed. 378 |