commercial interest, of encouraging and advancing worthy and wellqualified commanders and other officers of vessels in the merchant service, of ascertaining and certifying the qualifications of such persons as shall apply to be recognized as such commanders and officers, and of promoting the security of life and property on the seas.”

There are a finance and auditing committee and a committee of record, and in addition an advisory council of engineering and marine architecture and a consulting committee of shipowners, as well as a council, shipmasters' department. Finally, there are a classification committee and surveyors at New York, as well as agents and surveyors at various other ports of the United States and of foreign countries. The list of members in 1905, according to the Record, contained 40

names.

Vessels built under the supervision of the association or classed under special survey have a number prefixed to their name. It is one of the rules of the Bureau of Shipping that no vessel will be classed or rated unless surveyed and "opened" according to rule. Besides rules for the construction and classification of steam vessels and of oil-tank vessels, there are also rules for the construction, survey, and classification of machinery and boilers, refrigerator apparatus, and electrical installation of steam vessels. Other information set forth includes vessel names which have been changed, owners of vessels classed in the Record, and the names of representatives of marine underwriters in ports and places throughout the world, representing various important boards or organizations of marine underwriters. Great Lakes Register.-The Great Lakes Register is an incorporated society for the classification and registration of vessels built on or navigating the Great Lakes. Its main office is at Cleveland, Ohio, and the organization is managed by a board of control composed of five members. The rules and tables regulating the construction and surveys of vessels are compiled and established by a technical committee, whose members are appointed by the board of control. The classification of a vessel is based upon these rules, taken in conjunction with the report of inspection by an established surveyor of the society. The class so determined is entered upon the classification certificate and is inserted in the Register, which is published annually about March 1 and sent to each member. In addition to the Register, another annual publication issued under the auspices of the Great Lakes Register is entitled "Rules and Regulations for the Classification and Building of Metal and Wooden Vessels." The Great Lakes Register rules and tables for the construction and classification of steel, iron, and wooden vessels navigating the Great Lakes have the approval of Bureau Veritas, of France, and it is stated that "the existing alliance of Bureau Veritas with Great Lakes Register enables the committee to issue certificates of classification for over

sea navigation to Lake-built vessels whose construction and equipment are suitable for ocean navigation, and are approved and accepted by the committee." a

The Great Lakes Register society was established in 1896. Its annual publications are combined and issued in connection with Bureau Veritas International Register of Shipping. The Great Lakes Register publishes a list of Lake steam and sailing vessels, alphabetically arranged, separate columns indicating the official number of such vessels, their type, flag, material, dimensions, owners, etc., including a symbol column indicating that a given vessel has been built under the supervision of a surveyor of the Register. The same publication also contains the rules and conditions established by Great Lakes Register for the stowage of grain cargoes in bulk.

Other American registers.—In addition to the Record of American and Foreign Shipping (American Lloyds) and the Great Lakes Register, two less important registers, relating more especially to American vessels engaged in domestic commerce, are the United States Standard Register of Shipping, issued at irregular intervals by the United States Standard Steamship Owners', Builders' and Underwriters' Association (Limited), and the Inland Lloyds, an annual publication devoted to the classification and listing of vessels operating on the Great Lakes. A copy of the Inland Lloyds rules of classification will be found in Exhibit XVI.

Vessels operating on western rivers appear as a rule to be omitted from any of the foregoing registers. The Tariff Sheet of River Premiums adopted by the Board of Underwriters of New Orleans states that no risk will be covered on any steam vessel that does not hold a proper certificate from an authorized inspector of hulls for the Board of Underwriters of Galveston or New Orleans in certain cases, which would appear to indicate that such local boards take the place of larger organizations which supervise vessels engaged in Lake, coastwise, or foreign commerce.

It was stated by a witness before the Industrial Commission that American vessels are built according to American rules and insurance rates based on such rules. The same witness added: "Our ships do not come under Lloyd's rules at all, but under the American standard, which is accepted by the foreign companies." He explained, however, that if one of his ships was loaded for offshore the foreign insurance company would not accept the. American standard."

a Great Lakes Register, 1899; also, Rules and Regulations, 1908, "Introductory statement," p. 6.

bW. L. Guillaudeu, President Old Dominion Steamship Company, Testimony, Report of Industrial Commission, Vol. IX, pp. 449–450.

CHAPTER VI.

THE TAXATION OF VESSEL PROPERTY AND OF NAVIGATION

COMPANIES.

I. TAXING POWER OF THE STATES OVER NAVIGATION
COMPANIES AND VESSELS.

Section 1. General principles governing State taxation.

The taxation of vessels and navigation companies engaged in interstate commerce is so directly related to the regulation of interstate commerce that the taxing powers of the States over such vessels and companies is necessarily limited not only by the specific prohibitions of the Constitution against State tonnage or customs duties without the consent of Congress, but also by the necessity of not interfering with the paramount control over interstate and foreign commerce vested in Congress.

Commerce among the States consists of intercourse and traffic between their citizens, and includes the transportation of persons and property, and the navigation of public waters for that purpose, as well as the purchase, sale and exchange of commodities. The power to regulate that commerce, as well as commerce with foreign nations, vested in Congress, is the power to prescribe the rules by which it shall be governed, that is, the conditions upon which it shall be conducted; to determine when it shall be free and when subject to duties or other exactions. The power also embraces within its control all the instrumentalities by which that commerce may be carried on, and the means by which it may be aided and encouraged.

*

** It is true that the property of corporations engaged in foreign or interstate commerce, as well as the property of corporations engaged in other business, is subject to State taxation, provided always it be within the jurisdiction of the State."

It has been repeatedly decided by the Supreme Court that when a State statute imposes a tax under such circumstances and with such effect as to constitute a regulation of either foreign or interstate commerce, it is void on that account."

It can make no difference that the legislative purpose was to raise money for the support of the State government, and not to regulate

a Gloucester Ferry Company u. Pennsylvania, 114 U. S., pp. 196, 203, 204, 206 (1885). b Telegraph Company 2. Texas, 105 U. S., p. 460 (1881), and cases there cited: Moran . New Orleans, 112 U. S., pp. 69, 73 (1884).

transportation; for it is not the purpose of the act, but its effect, that is to be considered."

The taxing power of the States has been affirmatively defined in an opinion of the Supreme Court by eliminating unconstitutional impositions as follows:

The exercise of the authority which every State possesses to tax its corporations and all their property, real and personal, and their franchises, and to graduate the tax upon the corporations according to their business or income, or the value of their property, when this is not done by discriminating against rights

in other States, and the tax is not on imports, exports, or tonnage, or transportation to other States, can not be regarded as conflicting with any constitutional power of Congress.

The decisions of the Supreme Court limiting the taxing power of the States with reference to commerce are based largely upon a number of early decisions denying to the States powers of regulation over interstate commerce.

In the leading case of Gibbons v. Ogden (9 Wheat., p. 1), the statutes of New York giving to Livingston and Fulton, for a term of years, the exclusive right to steam navigation on all waters within the jurisdiction of that State were declared unconstitutional and void as an obstruction to commerce between the States, and as in conflict with the acts of Congress respecting the coasting trade. From this it follows that any State tax on the navigation of public waters would also be void. The similarity between a tax and any other regulation has been suggested by the Supreme Court in the following comment upon the Gibbons case:

Making the navigation of those waters subject to a license of the grantees of the State, that is, to such a tax or other burden as they might levy, was an obstruction to commerce between the States and in conflict with the laws of Congress respecting the coasting trade.c

In a case decided by the Supreme Court in 1903, after stating that few questions are more important or have been more embarrassing than those arising from the efforts of a State or its municipalities to increase their revenues from corporations engaged in carrying interstate commerce, the court laid down the following propositions as having been adjudicated so often as to be no longer open to discussion:

1. The Constitution of the United. States having given Congress the power to regulate commerce, not only with foreign nations, but among the several States, that power is necessarily exclusive whenever the subjects are national in their character, or

a State Freight Tax Cases, 15 Wall., pp. 273, 276 (1872).

b Delaware Railroad Tax, 18 Wall., p. 232 (1873).

c Gloucester Ferry Company v. Pennsylvania, 114 U. S., pp. 196, 211 (1885). 56849-PT 1-09-25

admit only of one uniform system or plan of regulation.
bins v. Shelby Taxing District, 120 U. S., pp. 489, 492.)

(Rob

2. No State can compel a party, individual or corporation, to pay for the privilege of engaging in interstate commerce.

3. This immunity does not prevent a State from imposing ordinary property taxes upon property having a situs within its territory and employed in interstate commerce.

4. 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, providing at least the franchise is not derived from the United States.

5. No corporation, even though engaged in interstate commerce, can appropriate to its own use property, public or private, without liability to a charge therefor.

Section 2. Effect of Federal control over interstate commerce.

PASSENGER TAXES.-In the Passenger Cases, which involved State charges on the bringing in of alien passengers, the Supreme Court said:

A tax or duty upon tonnage, merchandise, or passengers is a regulation of commerce, and can not be laid by a State, except under the sanction of Congress and for purposes specified in the Constitution."

An act of the State of Nevada imposing a so-called capitation tax of $1 upon every person leaving the State by any railroad, stage coach, or other vehicle engaged in the business of transporting passengers for hire was declared unconstitutional by the Supreme Court, not on the ground, however, that it was a regulation of commerce among the States, but upon the broader grounds that the citizens have the right to go to the seat of government, and the right of free access to the seaports of the country, the courts of justice, etc., and that the Federal Government may demand the military or civil services of its citizens and is entitled to bring them to the seat of government or to its offices of secondary importance, or its ports of entry; but, assuming the right of a State to levy taxes on passengers passing through it, one or more States covering the only practicable routes of travel might totally prevent or seriously burden the transportation of passengers from one part of the country to another.

TAX ON INTERSTATE FREIGHT VOID.-An act of the legislature of Pennsylvania imposing upon all railroads, steamboat companies, canal companies, slack-water navigation companies, etc., doing business within the State a tax of from 2 to 5 cents on each 2,000 pounds of freight carried was held unconstitutional, in so far as it affected interstate freight, as a tax on the freight transported and hence a burden

a Atlantic and Pacific Telegraph Company v. Philadelphia, 190 U. S., p. 160 (1903). b 7 Howard, pp. 282, 408 (1849).

c Crandall v. Nevada, 6 Wall., pp. 35, 44, 46 (1867).