State officers from seizing the liquors was reversed and the injunction vacated. (May, 1898). Vance v. Vandercook, 170 U. S. 438, citing Scott v. Donald, 165 U. S. 58.

Grain Elevators - Power of State to Regulate.-The Legislature of a State has power to control the business of elevating and storing grain, within its borders, when carried on by individuals or associations. And the exercise of such a power is not a regulation of interstate commerce. Munn v. Illinois, 94 U. S. 113; Budd v. New York, 143 U. S. 517; Brass v. Stoeser, 153 U. S. 391. The State of North Dakota passed a law (Laws 1891, chap. 126), entitled "An Act to regulate public warehouses and warehousing and inspection of grain and to give effect to Article 13 of the Constitution of the State fixing charges and fees." One Brass owned and operated a grain elevator at Grand Harbor, N. D., for the purpose of buying, selling, storing, and shipping grain for profit. He refused to receive grain from Stoeser, unless the latter paid him therefor compensation in excess of the rate prescribed by the Dakota statute. The court issued an alternative writ of mandamus on Stoeser's petition to which Brass made return claiming that he used the elevator for his own grain, and that he stored and shipped grain for others, for profit and gain, as a mere incident to his business. Stoeser demurred to the return, the demurrer was sustained, and the court issued thereon a peremptory writ. The Supreme Court sustained the judgment and held that the statute of North Dakota was valid, and was not a regulation of interstate commerce. That when Brass entered into the business of storing grain for others, for gain and profit, he was bound by the

TAXATION · STATE AND FEDERAL.

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statute, and could not escape its provisions by claiming that he also elevates and stores his own grain in the same warehouse. "As well might a person accused of selling liquor without a license," observes the court, urge that the larger part of his liquors were designed for his own consumption, and that he only sold the surplus as a mere incident." Brass v. Stoeser, 153 U. S. 391.

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Taxation. One of the most important questions which constantly arises involving the limitation of State and Federal authority, relates to taxation. The States never surrendered to Congress the power of direct taxation on property within the borders of a State. From the exercise of this power, the States derive their principal source of income. While the States retained the power to levy direct taxes within their borders, they gave Congress power" to lay and collect taxes, duties, "to imports, and excises." These are indirect taxes enforced by Congress in its various tariff laws. The States also gave Congress power to levy and collect direct or capitation taxes, according to the number of inhabitants in the respective States, counting the whole number of persons in each State, excluding Indians not taxed. All taxes levied by the Federal government must be uniform. The States also delegated to Congress the power to regulate" commerce with foreign nations and among the several States. This latter grant of power precluded the States from taxing interstate commerce. The mode in which Congress could levy and collect a direct tax was discussed in the "income tax cases." (Pollock v. Farmers Loan and Trust Co., 157 U. S. 429; April, 1895); s. c., denying reargument (May, 1895) 158 U. S. 601. See infra. The

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other branch of the discussion, upon which the authorities are not entirely harmonious, relates to taxation upon interstate commerce, or rather upon instrumentalities engaged in interstate commerce.

Taxation of Commerce States Have No Power to Tax.. The power granted to Congress by the Constitution to regulate commerce among the several States is an exclusive power which Congress alone can exercise. Any State regulation therefore, which may in any wise affect interstate commerce, will be construed as an assumption on the part of the State to regulate comInerce, and will be declared unconstitutional and void. While a State may tax all property and commodities within its borders and may regulate commerce which is conducted exclusively within its confines, it cannot levy a tax upon traffic or commerce when the conduct of such traffic extends beyond the State line. When traffic is conducted in such a manner as of necessity to extend in its operations from points in one State to points in one or more other States, it becomes interstate and can be regulated only by Congress, and it alone has power to occupy by legislation the whole field of interstate

commerce.

Accordingly it has been held that for a State to pass any law imposing a tax upon "the transit of passengers from foreign countries, or between the States, is to regulate commerce." Pickard v. Pullman Car Co., 117 U. S. 34.

Interstate commerce includes not only the exchange and transportation of commodities or visible tangible things, but the carriage of persons, and the transmission by telegraph of ideas, wishes, orders, and intelligence. Western Union Tel. Co. v. Pendelton, 122 U. S.

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INTERSTATE COMMERCE.

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347; Rattan v. Tel. Co., 127 U. S. 411; Leloup v. Port of Mobile, 127 U. S. 640.

The Legislature of Kentucky passed an act to regulate tolls to be charged or received from passengers over a bridge spanning the Ohio river extending from the Ohio shore to the Kentucky shore, between the cities of Cincinnati and Covington. The bridge was controlled by the Covington and Cincinnati Bridge Company, a corporation existing under the laws of both States. The Kentucky statute was held to be unconstitutional, as an assumption of the power to regulate commerce. The court observed that commerce embraced also intercourse" and the thousands of people who daily pass and repass over this bridge may be truly said to be engaged in commerce as if they were shipping cargoes of merchandise from New York to Liverpool. While the bridge company is not itself a common carrier it affords a highway for such carriage, and a toll upon such bridge is as much a tax upon commerce as toll upon a turnpike is a tax upon the traffic of such turnpike, or the charges upon a ferry, a tax upon the commerce across a river." Covington Bridge Co. v. Kentucky, 154 U. S. 204.

The Legislature of Wyoming passed an act taxing all live stock brought into the State" for the purpose of being grazed." Plaintiff owned a flock of sheep, which he designed to ship by rail from Pine Bluffs Station in the State of Nebraska. He drove the sheep from a point in Utah 500 miles across the State of Wyoming en route to Pine Bluffs. While the sheep were being driven through Laramie county, Wyoming, a tax of $250 was imposed upon them under the Wyoming statute. Plaintiff sued to recover back the tax upon the

ground that it was imposed upon property engaged in interstate commerce, and the law authorizing it was unconstitutional. Held, that the sheep were not brought into Wyoming for the purpose of being grazed there permanently, but for the purpose of taking them to market in another State. That although the sheep were maintained by grazing along the route of travel and could have been shipped by rail directly from Utah, yet the owner had a right to avail himself of such means of transportation as he preferred. That his sheep were property engaged in interstate commerce which the State of Wyoming had no power to tax. Kelley v. Rhoads, 188 U. S. 1.

Taxation Federal Corporation.- A State may create a transportation corporation. A railroad may be organized under the laws of a State, and may also receive aid from Congress, and may receive franchises pursuant to an act of Congress. If it appears that it was not the purpose of the Federal statutes in conferring franchises upon a State corporation to sever the allegiance which the corporation owes to the State, or to transfer the powers and privileges conferred by the State, the State has power to tax the property of the corporation within its borders; but the State cannot tax its franchises derived from Congress, nor include such franchises in the assessment on which the State tax is based. Central Pacific Railroad v. California, 162 U. S. 92.

The court in its opinion in the above case cited and commented on the authorities in Santa Clara County v. Southern Pacific Railroad, 118 U. S. 394; California v. Central Pacific Railroad, 127 U. S. 1; Railroad Co. v.