"familiar to the profession, that recognize the possession by each State of the power, never surrendered to the government of the Union, of guarding and promoting the public interests by reasonable police regulations that do not violate the Constitution of the State or the Constitution of the United States." 3 So a State has the right to classify occupations and impose different taxes upon different occupations. The necessity for and the amount of the tax are exclusively within the control of the State legislature, and in the absence of discrimination against citizens of other States, its determination in regard thereto will not be criticised by the Federal Supreme Court. 4 § 83d. Established propositions governing taxation by States and municipalities. In another decision in the United States Supreme Court the following propositions governing the taxation by States and their municipalities of corporations engaged in carrying on interstate commerce are declared by Mr. Justice Brewer to "have been adjudicated so often as to be no longer open to discussion": (1) 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 only of one uniform system or plan of regulation.5 (2) No State can and it was claimed that said law was unconstitutional in undertaking to regulate interstate commerce and lay upon it a tax not within the power of local legislature to exact. It was also urged that it was a mere revenue law and in no just sense an inspection law and not within the police power of the Territory; and that the law was invalid because it imposed an unreasonable fee for inspection. 3 Chicago, Burlington & Q. R. Co. v. Drainage Commissioners, 200 U. S. 561, 584, 26 Sup. Ct. 341. This case is followed in West Chicago Street Rd. Co. v. Chicago, 201 U. S. 506, a case of a tunnel by a street railroad company under a navigable stream and the duty of a municipality to protect the unobstructed navigation of navigable waters under its jurisdiction; the construction of a city ordinance was also involved and considered. 4 Kehrer v. Stewart, 197 U. S. 60, 49 L. Ed. 663, 25 Sup. Ct. 403. 5 Quoting Mr. Justice Bradley in Robbins v. Shelby County Taxing District, 120 U. S. 489, 492, 30 L. Ed. 694, 696, 1 Inters. Com. Rep. 45, 46, 7 Sup. Ct. 592, 593, and citing in addition the following Fargo v. Michigan, 121 U. cases: 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 S. 230, 246, sub nom. Fargo v. Stevens, 30 L. Ed. 888, 894, 1 Inters. Com. Rep. 51, 7 Sup. Ct. 857; Philadelphia & S. Mail SS. Co. v. Pennsylvania, 122 U. S. 326, 336, 346, 30 L. Ed. 1200, 1201, 1205, 1 Inters. Com. Rep. 308, 7 Sup. Ct. 1118; W. U. T. Co. v. Pendleton, 122 U. S. 347, 357, 30 L. Ed. 1187, 1189, 1 Inters. Com. Rep. 306, 7 Sup. Ct. 1126; Bowman v. Chicago & N. W. R. Co., 125 U. S. 465, 497, 31 L. Ed. 700, 711, 1 Inters. Com. Rep. 823, 8 Sup. Ct. 689, 1062; Leloup v. Port of Mobile, 127 U. S. 640, 648, 32 L. Ed. 311, 314, 2 Inters. Com. Rep. 134, 8 Sup. Ct. 1380; Asher v. Texas, 128 U. S. 129, 131, 32 L. Ed. 368, 369, 2 Inters. Com. Rep. 241, 9 Sup. Ct. 1; Stoutenburgh v. Hennick, 129 U. S. 141, 148, 32 L. Ed. 637, 639, 9 Sup. Ct. 256; Leisy v. Hardin, 135 U. S. 100, 110, 34 L. Ed. 128, 132, 3 Inters. Com. Rep. 36, 10 Sup. Ct. 681; Lyng v. Michigan, 135 U. S. 161, 34 L. Ed. 150, 10 Sup. Ct. 725, 3 Inters. Com. Rep. 143; McCall v. California, 136 U. S. 104, 109, 34 L. Ed. 391, 392, 3 Inters. Com. Rep. 181, 10 Sup. Ct. 881; Re Rahrer, 140 U. S. 545, 555, sub nom; Wilkerson v. Rahrer, 35 L. Ed. 572, 574, 11 Sup. Ct. 865; Crutcher v. Kentucky, 141 U. S. 47, 58, 35 L. Ed. 649, 652, 11 Sup. Ct. 851; Brennan v. Titusville, 153 U. S. 289, 304, 38 L. Ed. 719, 723, 4 Inters. Com. Rep. 658, 14 Sup. Ct. 829; Interstate Commerce Commission v. Brimson, 154 U. S. 447, 471, 38 L. Ed. 1047, 1055, 4 Inters. Com. Rep. 545, 14 Sup. St. 1125; United States v. E. C. Knight Co., 156 U. S. 1, 21, 39 L. Ed. 325, 332, 15 Sup. Ct. 249; Schollenberger v. Pennsylvania, 171 U. S. 1, 43 L. Ed. 49, 18 Sup. Ct. 757; Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, 44 L. Ed. 136, 20 Sup. Ct. 96; Stockard v. Morgan, 185 U. S. 27, 46 L. Ed. 785, 22 Sup. Ct. 576. 6 The court cites to this proposition: Gloucester Ferry Co. V. Pennsylvania, 114 U. S. 196, 211, 29 L. Ed. 158, 164, 1 Inters. Com. Rep. 382, 5 Sup. Ct. 826; Pickard v. Pullman Southern Car Co., 117 U. S. 34, 29 L. Ed. 785, 6 Sup. Ct. 635; Robbins v. Shelby County Taxing District, 120 U. S. 489, 30 L. Ed. 694, 1 Inters. Com. Rep. 45, 7 Sup. Ct. 592; Fargo v. Michigan, 121 U. S. 230, 245, sub nom. Fargo v. Stevens, 30 L. Ed. 888, 894, 1 Inters. Com. Rep. 51, 7 Sup. Ct. 857; Philadelphia & S. Mail SS. Co. v. Pennsylvania, 122 U. S. 326, 336, 30 L. Ed. 1200, 1201, 3 Inters. Com. Rep. 308, 7 Sup. Ct. 1118; Leloup v. Port of Mobile, 127 U. S. 640, 645, 32 L. Ed. 311, 313, 2 Inters. Com. Rep. 134, 8 Sup. Ct. 1380, 2 Amer. Elec. Cas. 79; Asher v. Texas, 128 U. S. 129, 32 L. Ed. 368, 2 Inters. Com. Rep. 241, 9 Sup. Ct. 1; Lyng v. Michigan, 135 U. S. 161, 166, 34 L. Ed. 150, 153, 3 Inters. Com. Rep. 143, 10 Sup. Ct. 725; McCall v. California, 136 U. S. 104, 113, 34 L. Ed. 391, 394, 10 Sup. Ct. 881; Crutcher v. Kentucky, 141 U. S. 47, 58, 35 L. Ed. 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, provided, at least, the franchise is not derived from the United States.8 (5) No corporation, even though engaged in interstate commerce, can appropriate to its own use property, public or private, without liability to charge therefor. 649, 652, 11 Sup. Ct. 851; Adams Express Co. v. Ohio State Auditor, 165 U. S. 194, 220, 41 L. Ed. 683, 695, 17 Sup. Ct. 305. 7 The court cites to this proposition: State tax on Railway gross receipts, 15 Wall. (U. S.) 284, 293, sub nom. Philadelphia & R. R. Co. v. Pennsylvania, 21 L. Ed. 164, 167; Delaware Railroad Tax, 18 Wall. (U. S.) 206, 232, Sub nom. Minot v. Philadelphia W. & B. R. Co., 21 L. Ed. 888, 896; W. U. T. v. Texas, 105 U. S. 460, 464, 26 L. Ed. 1067, 1068, 1 Amer. Elec. Cas. 373; Gloucester Ferry Co. v. Pennsylvania, 114 U. S. 196, 211, 29 L. Ed. 158, 164, 1 Inters. Com. Rep. 382, 5 Sup. Ct. 826; W. U. T. Co. v. The Atty. Gen'l, 125 U. S. 530, 311 L. Ed. 790, 8 Sup. Ct. 961, 2 Amer. Elec. Cas. 57; Marye v. Baltimore & O. R. Co., 127 U. S. 117, 123, 32 L. Ed. 94, 96, 8 Sup. Ct. 1037; Leloup v. Port of Mobile, 127 U. S. 640, 649, 8 Sup. Ct. 1380, 32 L. Ed. 311, 314, 2 Amer. Elec. Cas. 79, 2 Inters. Com. Rep. 134; Pullman Palace Car Co. v. Pennsylvania, 141 U. S. 18, 35 L. Ed. 613, 3 Inters. Com. Rep. 595, 11 Sup. Ct. 876; Attorney-General v. W. U. T. Co., 141 U. S. 40, 35 L. Ed. 6, 28, 11 Sup. Ct. 889, 3 Amer. Elec. Cas. 20; Pittsburg, C. C. & St. L. R. Co. v. Backus, 154 U. S. 421, 38 L. Ed. 1031, 14 Sup. Ct. 1114; W. U. T. Co. v. Taggart, 163 U. S. 1, 41 L. Ed. 49, 16 Sup. Ct. 1054, 6 Amer. Elec. Cas. 621; Adams Express Co. v. Ohio State Auditor, 165 U. S. 194, 220, 41 L. Ed. 683, 695, 17 Sup. Ct. 305. 8 The court cites to this proposition: Delaware Railroad Tax, 18 Wall. (U. S.) 206, 232, Sub nom. Minot v. Philadelphia W. & B. R. Co., 21 L. Ed. 888, 896; Postal Telegraph Cable Co. v. Adams, 155 U. S. 688, 696, 15 Sup. Ct. 268, 360, 5 Inters. Com. Rep. 1, 39 L. Ed. 311, 316, 5 Amer. Elec. Cas. 636; New York, L. E. & W. R. Co. v. Pennsylvania, 158 U. S. 431, 437, 39 L. Ed. 1043, 1045, 15 Sup. Ct. 896; Central Pacific R. Co. v. California, 162 U. S. 91, 40 L. Ed. 903, 16 Sup. Ct. 766; Western U. T. Co. v. Taggart, 163 U. S. 18, 16 Sup. Ct. 1054, 41 L. Ed. 49, 55; Western Un. Teleg. Co. v. Missouri ex rel. Gottlieb, 190 U. S. 412, 23 Sup. Ct. 730, 47 L. Ed. 1116. The court cites to this proposition: Western Union Packet Co. v. St. Louis, 100 U. S. 423, 25 L. Ed. 688; Cincinnati P. B. S. & P. Co. v. Catlettsburg, 105 U. S. 559, 26 L. Ed. 1169; Parkersburgh & 0. River Transp. Co. v. Parkersburgh, 107 U. S. 691, 2 Sup. Ct. 732, 27 L. Ed. 584; Huse v. Glover, 119 U. S. 543, 30 L. Ed. 487, 7 Sup. Ct. 313; Ouachita & M. River Packet Co. v. Aiken, 121 U. S. 444, 30 L. Ed. 976, 7 Sup. Ct. 907, 1 Inters. And where telegraph companies, engaged in interstate commerce, carry on their business so as to justify police supervision, the municipality is not obliged to furnish such supervision for nothing, but it may, in addition to ordinary property taxation, subject the corporations to reasonable charges for the expense thereof, 10 Com. Rep. 379; St. Louis v. Western Un. Teleg. Co., 148 U. S. 92, 37 L. Ed. 380, 13 Sup. Ct. 485, 4 Amer. Elec. Cas. 102, 149 U. S. 465, 37 L. Ed. 810, 13 Sup. Ct. 990; Postal Teleg. Cable Co. v. Baltimore, 156 U. S. 210, 39 L. Ed. 399, 15 Sup. Ct. 356; Richmond v. Southern Bell Teleph. & Teleg. Co., 174 U. S. 761, 771, 43 L. Ed. 1162, 1167, 19 Sup. Ct. 778, 7 Am. Elec. Cas. 788. 10 Atlantic & Pacific Teleg. Co. v. Philadelphia, 190 U. S. 160, 23 Sup. Ct. 817, 47 L. Ed. 995, 8 Amer. Elec. Cas. 369 (see Philadelphia v. Atlantic & Pacific Teleg. Co., 127 Fed. 370), reversing judg ment and remanding case with instructions to set aside the verdict and grant a new trial. The following is a statement of the case by Mr. Justice Brewer: "This action was commenced in the Common Pleas Court of Philadelphia on December 31, 1891, to recover the sum of $3,715 as license fees alleged to be due the city for the six preceding years. The case was removed by the defendant to the Circuit Court of the United States for the Eastern District of Pennsylvania. A trial was had before the court and a jury, which resulted in a verdict and judgment for the plaintiff for a part of the sum claimed, which judgment was thereafter reversed by the Circuit Court of Appeals. A second trial was had in April, 1901, before the court and a jury, which resulted in a verdict and judgment for the full amount claimed, with interest. From such judgment the case was brought to this court directly on writ of error, on the ground that it involved the construction and application of the Constitution of the United States; that the action was brought to recover from the telegraph company certain license charges imposed by the city which the company claimed the city had no right or power to impose, for the reason that it was a regulation of commerce between the States." See Philadelphia v. Atlantic & Pacific Teleg. Co., 102 Fed. 254, 89 Fed. 454, 32 C. C. A. 253. It was declared in the principal case that the tax sought to be collected was not a tax upon the property or franchise of the company nor in the nature of rental for occupying certain portions of the street nor a charge for the privilege of engaging in the business of interstate commerce, but one for the enforcement of local governmental supervision, such as was presented in Western Union Teleg. Co. v. Newhope, 187 U. S. 419, 23 Sup. Ct. 204, and it was held, following this decision, that the city had power to pass an ordinance requiring the company to pay a reasonable license fee for the enforcement of local governmental supervision, but that it did not follow that the municipality was not subject to restraint in the Commerce § 84. - Federal Constitution Taxation Generally. Interstate commerce cannot be taxed in any form by a State either on the receipts from that business, or on that occupation or business itself. A State tax cannot be imposed on telegraphic messages sent in the service of the Government, nor on those sent by any person from one State to another, nor can such tax be lawfully imposed upon the entire operation of a telegraph company having lines extending into other States. Such a corporation having accepted the benefits of the Post Roads Act 11 cannot be excluded from doing business within a State, because of nonpayment of taxes. The same principles as to the exclusive power of Congress to regulate commerce, and the invalidity of State legislation, which materially regulates, hinders or interferes with interstate commerce, apply to taxation by the State, equally as in other cases. This exemption of interstate and foreign commerce from State legislative action does not, however, prevent its taxation of the property of those engaged in commerce, located within the State as the property of other citizens is taxed, nor from regulating matters of local concern, which may incidentally affect amount of charge which it so exacted, although the municipality was at liberty to make the charge large enough to cover any reasonable anticipated expenses and had authority to fix such charge in advance without waiting for the expiration of the period for which the license is granted." It may not act arbitrarily or unreasonably, but the risk may rightfully be cast upon the licensee, and the charge cannot be avoided because it subsequently appears that it was somewhat in excess of the actual expense of the supervision, nor can the licensee then recover the difference between the amount of the license and such cost." The court further declared that the license was confessedly not for the purpose of raising revenue. "Indeed, if it were, as it appears by the affidavit of defense that the company had paid all taxes charged upon its property as property, it might be obnoxious to a complaint of double taxation." If a corporation, although engaged in the business of interstate commerce, so carries on its business as to justify at the hands of a municipality a police supervision of the property and instrumentalities used thereon, the municipality is not bound to furnish such supervision for nothing, and may in addition to ordinary property taxation subject the corporation to a charge by way of a license tax for the expense of the supervision. Norwood Borough v. Western Union Teleg. Co., 25 Pa. Super. Ct. 406. 11 Act of Congress, July 24, 1866, noted throughout this chapter. |