But as a general rule the property owned by a corporation or individual employed by the United States situated in a state is subject to taxation in like manner and to the same extent as other property of its class, though it be either occasionally or constantly used in the service of the United States.1

§ 1106. Interstate interests of corporations.-Business operations sufficiently extensive or profitable to require the occupation or use of territory extending beyond the limits of a single state generally necessitate the investment of larger capital than a single individual can command or is willing to devote to a single enterprise. Consequently, a large proportion of the controversies which have called for a construction of the constitutional provision and laws of congress where the taxing powers of states were involved under it on the subject of interstate commerce have involved corporations. Especially is this true of railroad and other companies

panies had been conferred upon them by the U. S. in order to secure the transportation and delivery of its mails and the rapid and easy conveyance of troops and supplies in carrying on its military operations. It was held that such franchises were exempt from state taxation, Justice BRADLEY, delivering the opinion said: "In view of this description of the nature of a franchise granted by congress, can it be subject to taxation by a state without the consent of congress? Taxation is a burden and may be laid so heavily as to destroy the thing taxed or render it valueless. . . . . Recollecting the fundamental principle that the constitution laws and treatises of the United States are the supreme law of the land, it seems to us absurd to contend that a power given to a person or corporation by the United States may be subjected to taxation by a state. The power conferred emanates from, and is a portion of the power of the government that con fers it. To tax it is not only derogative to the dignity but subversive of the powers of the government and repugnant to its paramount sovereignty." See also, McCulloch v. Md., 4 Wheat. 316; Osborne v. B'k of U. S., 9 Wheat. 738; Van Allen v. Assessors, 3 Wall. 573; Austin v. Boston, 14 Allen, 359; Flint v. Boston, 99 Mass. 141; State v. Newark, 39 N. J. 380; Nat. B'k v. Mobile, 62 Ala. 284; Sumpet Co. v. Nat. B'k, 62 Ala. 464. In Cal. v. Pac. R. R. the court distinguished that case from Thompson v. Pac. R. R. Co. where the tax was upon the property of the companies and not upon franchises and operations.

1 Thompson v. Pac. R. R. Co., 9 Wall. 579.

doing business as common carriers. Any tax upon a common carrier whose line of transportation extends beyond the limits of the state imposing the tax, measured or proportioned according to the volume of the business continually done beyond the borders of the taxing state, whether upon freight or passenger traffic, is within the prohibition of the constitutional provision.1

§ 1107. The form which the tax assumes immaterial.In determining the question whether a state law interferes with interstate commerce, regard will be had not to the form of the act but to its effect.2

1 Erie R. R. Co. v. State, 51 N. J. 531; Fargo v. Stevens, 7 S. Ct. 857, and where the tax was imposed upon the transportation of a single commodity, whether its removal from the place of production was to points within or without the state, the law imposing it was held to be an interference with interstate commerce so far as it applied to shipments by whatever means of conveyance beyond the state. State v. Cumberland, etc., Pa. R. R. Co., 40 Md. 22.

2 In Almy v. Cal., 24 How. 169, the state had enacted a law imposing stamp tax upon bills of lading for gold and silver transported to any point without the state. It was held to be substantially a tax upon transportation of the commodity and unconstitutional. In this case, Chief Justice TANEY said: “If the tax was laid on the gold and silver exported every one would see that it was repugnant to the constitution of the United States. .. But a tax or duty on a bill of lading, although differing in form from a duty on the article shipped, is in substance the same thing, for a bill of lading or some written instrument of the same import is necessarily associated with every shipment of articles of commerce from the ports of one country to those of another," Gross receipts of a railroad company from transportation between terminal points, one or both of which are without the state, by route lying partly within or wholly without the state, though the company's franchises were derived from it. Commonwealth v. Lehigh Val. R. Co. (Pa.), 17 A. 179. See also, State v. Chicago, St. P. M. & O. Ry. Co., 40 (Minn.), 267; 41 N. W. 1047. And it was held in Del. & H. Canal Co. v. Com. (Pa.), 17 A. 175, to be immaterial that goods destined for points without the state were temporarily detained in the state after transportation had actually begun. On the other hand, transportation of property from one point to another in the same state does not become interstate commerce by reason of the fact that in the course of such transportation the property passes outside the state. Com. v. R. R. Co., 17 A. 179, followed. Lehigh Val. R. Co. v. Com. (Pa.), 18 A. 125. The rule applied to telegraph companies, City of St. Louis v. Western Union Tel. Co., 39 F. 59. See also, Western Union Tel. Co. v. Com., 128 U. S. 39; U. S. Express Co. v. Hemmingway, 39 F. 60; U. S. Exp. Co. v. Allen, 39 F. 712.

Nor will it alter the case that the tax is imposed upon a corporation in the form of ad valorem tax as the place where it has other property subject to local taxation if the valuation upon which it is based is measured by or adjusted in proportion to the volume of business done beyond the state.1

Act Ky., March, 1860, as amended by act 1866, which requires the agents of foreign express companies doing business in that state to take out a license, and to pay a fee of five dollars for issuing the license, was held not unconstitutional as placing a burden upon interstate commerce. Woodward v. Com. (Ky.), 7 S. W. 613, followed; Cruther v. Com. (Ky.), 12 S. W. 141.

Order No. 1589 of the board of supervisors of the city and county of San Francisco, which imposes a license tax of $25 per quarter on every railroad agency, is a regulation of interstate commerce, in so far as it applies to an agent who solicits passenger traffic in S. F. over a railroad operated between Chicago and New York, but who sells no tickets, and neither receives nor pays out any money or other valuable consideration on account thereof. Mining Co. v. Penn. 8 S. Ct. 737, distinguished. McCall v. People of the State of Cal., 10 S. Ct. 881; 136 U. S. 104.

The fact that the road represented by the agent is wholly outside the state of California does not justify the order imposing a tax on its traffic. The limitation on the power of a state to tax interstate commerce extends to all such commerce, though it may not actually pass through its territory. McCall v. People of the State of Cal., 10 S. Ct. 881; 136 U. S. 104. Under Const. U. S. art. 1, sec. 8, par. 3, authorizing Congress to regulate commerce among the several states, the rolling stock of a foreign railroad company which is used in interstate commerce is not subject to taxation in North Carolina. Bain v. Richmond & D. R. Co., 11 S. E. 311; 105 N. C. 363.

A tax assessed against a railroad company which is a link in a through line of road, and carries freight and passengers in and out of the state, by the state through which the line passes, as a condition precedent to its keeping an office in such state for the use of its officers, agents and employes, is a tax on the means by which the company is able to carry on its business of interstate commerce, and is therefore in violation of Const. U. S., art. 1, sec. 8, giving the power to regulate interstate commerce to Congress. Reversing, 6 A. 45; Norfolk & W. R. Co. v. Com., 10 S. Ct. 958; 136 U. S. 114.

1 An act of the Nevada legislature which provided that there should be levied and collected a capitation tax of one dollar upon every person leaving the state by any railroad, stage coach or other vehicle engaged in the transportation of passengers for hire, and required the carriers to pay the same according to the number carried of which they were also to be required to make monthly reports, was held to be a tax upon the passengers themselves for the privilege of being carried out of the state and therefore an interference of interstate commerce and unconstitutional. Crandall v. Nevada, 6 Wall. 35; Clarke v. Phil., etc., R. R. Co., 4 Houst. Del. 158.

§ 1108. Property stored at place of shipment.-In order to exempt property which has been stored or deposited at a place of shipment from a state tax, there must be an intention to ship at as early a date as the means of transportation can be conveniently furnished and actual shipment within a reasonable time.1

But the source whence taxable property has been derived is immaterial as respects the right of a state to tax it. And the fact that funds in the form of money are the gross earnings derived from the business of transporting passengers and freights beyond the state in whole or in part does not entitle them to exemption from taxation.2

Telegraph companies, like railroads, are deemed to be common carriers and instruments of interstate commerce as regards messages and the business of conveying messages beyond state lines.3 Hence a state tax levied upon messages sent out of the state is an interference with interstate commerce and invalid, whether they be sent by private individuals or the United States government.*

§ 1109. Traffic and property distinguished.-But there is a well defined distinction between the traffic or business itself and the capital or property employed in the trans

1 Ogilvie v. Crawford County, 2 McCrary, 148.

2 State Tax on Ry. Gross Receipts, 15 Wall. 284; State v. Balt. & Ohio R. R. Co., 34 Md. 344; R. R. Co. v. Md., 21 Wall. 456. See also, Southern Express Co. v. Hood, 15 Rich. 66; Walcott v. People, 17 Mich. 68; Osborne v. Mobile, 16 Wall. 479; West. Un. Tel. Co. v. Mayer, 28 Ohio St. 52.

3 Pensacola Tel. Co. v. West. Un. Tel. Co., 96 U. S. 1. It was held in Coast L. R. Co. v. Savannah, 30 F. 646, that where a tax levied by a state upon a telegraph company consists of taxes on messages between points within the state and on messages between points out of the state and points in the state, and on messages between points in different states, but passing through the state, and the record discloses the amount assessed on each class, no recovery can be had, except in respect to messages transmitted wholly within the state. Telegraph Co. v. Texas, 105 U. S. 460.

action of that business. When the taxation of the latter would not have the direct and unavoidable effect of crippling or impeding the operations of the federal government, as where the property was conferred or its value created by it to more effectually transact the public business or administer the laws, the property and capital of such agencies may be taxed as other property.

§ 1110. Franchises granted by the states subject to taxation. A tax upon the franchises granted by a state to a corporation is not double taxation in a legal sense, and is valid and enforceable provided it is plainly imposed upon the corporate privilege, even though it in effect duplicates the burden on the corporate body. But where measured by a standard which suggests the question whether in fact the taxes are on corporate property, they would be inadmissible unless imposed in lieu of property tax to be paid by the corporation. And yet statute neither imposes double taxation nor violates the constitutional mandate that "all property shall be taxed according to value," which requires corporations to pay tax upon the value of their property and their stockholders upon the value of their shares.'

§ 1111. Need not be measured by its property value.—But the mere fact that the amount of the franchise tax is measured or graduated according to the whole amount or a part of the corporate property or the volume of business done does not constitute it a property tax. The legislature has full discretion to either fix the tax upon the franchise by no standard at all, just as a poll tax is assessed upon individuals, or it may levy a certain sum upon the franchise in lieu of a tax upon capital stock,

1 Street Railroad Co. v. Morrow, 87. Tenn. 406.