always easy to determine the situs of property so as to fix the jurisdiction for the purpose of taxation.

Real property is of course taxed only in the state in which it is situated. If land in one state is subject to an easement in favor of land in another state, it is nevertheless taxable at its full value in the state in which it is situated, and the easement is not subject to taxation in the state in which the dominant tenement is situated. If land in one state has an additional value by reason of its capacity for use in developing a water power for a mill in another state, it may be taxed upon such value, and such value can best be ascertained by finding the entire value of the water power as a unit and then determining what part of this value is imputable to the real estate in each state. So also a railroad, telegraph line or other similar system extending through two or more states may be valued as a unit, and the proportion of the total value which the mileage within one state bears to the total mileage may be used as a basis of taxation within that state, unless there are some peculiar circumstances which render such a method so unjust as to constitute it a mere subterfuge for taxing property outside the state. In determining the total value in such a case it is

7

Union Refrigerator Transit Co. v. Kentucky, 199 U. S. 194 (1905). It is interesting to note that the commissioners who prepared the Revised Statutes of Massachusetts (1836) inserted a clause taxing the real estate of residents of this state situated outside the state. This clause was however not enacted, but the recommendation of the commissioners shows how little the constitutional limitations upon the taxing power as they now exist were then understood.

5 Blackstone Mfg. Co. v. Blackstone, 200 Mass. 82 (1908). • Blackstone Mfg. Co. v. Blackstone, 211 Mass. 14 (1912).

7 Delaware Railroad Tax, 18 Wall. 206 (1873); State Railroad Tax Cases, 92 U. S. 575 (1875); Western Union Tel. Co. v. Attorney General, 125 U. S. 530 (1887); Pullman's Palace Car Co. v. Pennsylvania, 141 U. S. 26 (1891); Attorney General v. Western Union Tel. Co., 141 U. S. 40 (1891); Maine v. Grand Trunk Ry. Co., 142 U. S. 227 (1891); Columbus Southern R. R. Co. v. Wright, 151 U. S. 470 (1894); Pittsburgh, etc., R. R. Co. v. Backus, 154 U. S. 421 (1894); Cleveland, etc., R. R. Co. v. Backus, 154 U. S. 443 (1894); Western Union Tel. Co. v. Taggart, 163 U. S. 27 (1896); Western Union Telegraph Co. v. Missouri, 190 U. S. 412 (1903); Wisconsin, etc., R. R. Co. v. Powers, 191 U. S. 379 (1903); Michigan Central R. R. Co. v. Powers, 201 U. S. 245 (1906); Chicago etc., R. R. Co. v. Babcock, 204 U. S. 585 (1907); St. Louis etc., Ry. Co. v. Missouri,

U. S.

(1921).

8 Thus if a railroad company has very valuable terminals but a short line in one state and no valuable terminals and a long line in another state, the latter state could not tax the property of the company in proportion to the mileage within its limits. Pittsburgh, etc., R. R. Co. v. Backus, 154 U. S. 421, 431 (1894). See also Western Union Tel. Co. v. Taggart, 163 U. S. 1 (1896); Union Tank Line Co. v. Wright, 249 U. S. 275 (1919); Wallace v. Hines, 253 U. S. 66 (1920).

proper to include the value of the franchise of the company, and a reasonable method of determining the total value of the franchise and the other property employed in the system considered as a going concern is to take the total value of the capital stock, deducting property located in another state and not used in the business.10 An express company doing business in several states, although its property is not physically bound together like a railroad or telegraph line, may be taxed in accordance with the method described above.11

43. The Situs of Tangible Personal Property

The situs of personal property was formerly governed by the maxim mobilia sequuntur personam, and the statutes of many of the states provided that every resident of the state should be taxed for all his personal property, tangible and intangible, wherever situated,' although the propriety of taxing tangible personal property in the state in which it is permanently located regardless of the domicile of its owner has long been recognized. Thus tangible property kept by its owner in a state other than that in which he dwelt might have been and in

• Pullman's Palace Car Co. v. Pennsylvania, 141 U. S. 18 (1891); Pittsburgh etc. R. R. Co. v. Backus, 154 U. S. 421 (1894); Western Union Tel. Co. v Taggart, 163 U. S. 1 (1896); Adams Express Co. v. Ohio State Auditor, 165 U. S. 221 (1897); Chicago etc. R. R. Co. v. Babcock, 204 U. S. 585 (1907).

10 Fargo v. Hart, 193 U. S. 490 (1904); Wallace v. Hines, 253 U. S. 66 (1920). In taxing a proportionate part of the income of a railroad or an express company, income from investments outside the state cannot be included. Galveston, etc., Railway Co. v. Texas, 210 U. S. 217 (1908); Meyer v. Wells Fargo & Co., 224 U. S. 298 (1912).

11 Adams Express Co. Ohio State Auditor, 165 U. S. 194, 221 (1897); 166 U. S. 185 (1897); Adams Express Co. v. Kentucky, 166 U. S. 171 (1897); Fargo v. Hart, 193 U. S. 490 (1904); Wells Fargo & Co. v. Nevada, 248 U. S. 165 (1918).

1 Until 1909 the statutes of Massachusetts required in terms the taxation of all personal property of inhabitants of the commonwealth wherever situated. St. 1909. c. 490, Part I, Secs. 2, 4, cl. 1; Bemis v. Aldermen of Boston, 14 Allen 366 (1867); Spinney v. Lynn, 172 Mass. 464 (1899); but by St. 1909 c. 516, Sec. 1, it was provided that merchandise, machinery and animals owned by inhabitants of the commonwealth but situated in another state should be exempted from taxation here.

2 Leonard v. New Bedford, 16 Gray 292 (1860); Old Dominion Steamship Co. v. Virginia, 198 U. S. 299 (1905); Buck v. Beach, 206 U. S. 392 (1908). When personal property of a foreign corporation or a non-resident is permanently located within the state, the tax on the property can be constitutionally assessed to the owner and not merely against the particular articles of personal property upon which it is based. Scollard v. American Felt Co., 194 Mass. 127 (1907).

some instances doubtless actually was subjected to double taxation. A few years ago however the supreme court of the United States held that a state has no power to tax tangible personal property permanently located outside the limits of the state although owned by one of its own citizens or by a domestic corporation. A state does not however lose the power to tax the tangible personal property of a resident or of a domestic corporation to its full value by reason of the fact that it is frequently taken into other states. Thus vessels plying between different ports and having no permanent location in any one of them are taxable at the domicile of the owner although they have never been within the state in which he dwells. other words the rule mobilia sequuntur personam is still in force as the prima facie test of the situs of tangible personal property and prevails unless the property in question has acquired a definite location in another state.

In

Property regularly used in a state other than that of the domicile of the owner may be taxed in such state although the specific items are constantly changing, as in the case of the rolling stock of a railroad, and the valuation of the property may be based on the average amount of such property within the state. Such average may be determined by any reasonable method of apportionment; but a method of apportionment which results in a valuation greatly in excess of the actual value of the property of the taxpayer within the state is unconstitutional. Whether the regularity of use which would justify the taxation of property in a state other than that of the owner's domicile would preclude its taxation in the state of his domicile when it could not be shown that specific articles of property were permanently absent from the state has not yet been decided.s

3 Union Refrigerator Transit Co. v. Kentucky, 199 U. S. 194 (1905). When the capital stock of a domestic corporation is taxed, the value of the tangible property of the corporation definitely located outside the state must be deducted. Delaware, etc., R. R. Co. v. Pennsylvania, 198 U. S. 341 (1905).

4 New York Central R. R. Co. v. Miller, 202 U. S. 584 (1906); Ayer, etc..

Tie Company v. Kentucky, 202 U. S. 409 (1906).

5 Southern Pacific Co. v. Kentucky, 222 U. S. 63 (1912).

6 Marye v. Baltimore etc. R. R. Co., 127 U. S. 123 (1888); Pullman's

Palace Car Co. v. Pennsylvania, 141 U. S. 26 (1891).

7 Union Tank Line Co. v. Wright, 249 U. S. 275 (1918).

8 New York Central R. R. Co. v. Miller, 202 U. S. 584 (1906).

44. The Situs of Intangible Personal Property

The law in regard to the situs for purposes of taxation of intangible personal property, such as shares in corporations, bank deposits, bonds, notes and other securities and choses in action generally, is in a state of development and in its present situation. somewhat confusing, and requires careful analysis. Intangible personal property is of value only because it represents an interest in or a claim against tangible personal property; but not every interest in tangible property is intangible property for purposes of taxation, even though it is represented by or embodied in a paper writing by means of which the interest can be assigned. Thus clearly a deed or a lease of real estate is not intangible property taxable separately from the real estate to which it relates; and when tangible property is stored in a warehouse, negotiable warehouse receipts are not intangible property which can be separately taxed.' Money is generally considered to be tangible personal property for purposes of taxation.

The situs of intangible personal property may be based on four different grounds, and the same property might conceivably have a taxing situs in four different states at the same time and be subject to four different taxes upon its value as property; and while such a situation does not actually appear to have arisen in any instance that has come before the courts, it has never been held that the acquisition of a taxing situs in one state and the levy of a tax thereunder precludes the levy of a tax on the same property by authority of another state in which the property has a taxing situs in accordance with some other established principle. The principles by which the situs of intangible personal property is established are as follows:

(1) It is the general rule, in the absence of controlling circumstances to the contrary, that the situs of intangible personal property for the purposes of taxation is the domicile of the owner.3

1 Selliger v. Kentucky, 213 U. S. 200 (1909).

2 Kidd v. Alabama, 188 U. S. 730, 732 (1903); Fidelity etc. Trust Co. v. Louisville, 245 U. S. 54 (1917); Cream of Wheat Co. v. Grand Forks, 253 U. S. 325 (1920); Dwight v. Boston, 12 Allen 316 (1866); Bellows Falls Power Co. v. Commonwealth, 222 Mass. 51 (1915).

3 Kirtland v. Hotchkiss, 100 U. S. 491 (1879); Bonaparte v. Tax Court,

(2) When capital in the form of intangible property is regularly employed in business within a state, such property is subject to taxation by such state, although the owner is domiciled in another state and the securities representing the property are kept in another state.*

(3) When a certain form of paper writing has by commercial custom come to be treated as the symbol of or as actually constituting the tangible property which it represents, it may be taxed in the state in which it is permanently kept, regardless of the domicile of the owner.5

(4) When a certain form of intangible personal property is connected with or derives its value from tangible property within a certain state or depends for its validity upon the exercise of governmental power by a certain state it may under

104 U. S. 592 (1881); New Orleans v. Houston, 119 U. S. 265, 277 (1886); Kidd v. Alabama, 188 U. S. 731 (1903); Covington v. Covington etc. Bank, 198 U. S. 100 (1905); Union Refrigerator Transit Co. v. Kentucky, 199 U. S. 194 (1905); Buck v. Beach, 206 U. S. 392 (1908); Hawley v. Malden, 232 U. S. 1 (1914); Cream of Wheat Co. v. Grand Forks, 253 U. S. 325 (1920); Great Barrington v. Berkshire County Commissioners, 16 Pick. 572 (1835); Dwight v. Boston, 12 Allen 318 (1866); Hawley v. Malden, 204 Mass. 138 (1910); Welch v. Boston, 221 Mass. 155 (1915); Bellows Falls Power Co. v. Commonwealth, 222 Mass. 51 (1915).

4 New Orleans v. Stempel, 175 U. S. 309 (1899); Bristol v. Washington County, 177 U. S. 133 (1910); State Board of Assessors v. Comptoir Nationale D'Escompte, 191 U. S. 388 (1903); Metropolitan Life Insurance Co. v. New Orleans, 205 U. S. 395 (1907); De Ganay v. Lederer, 250 U. S. 376 (1919). This principle applies when securities are kept in a state for the business advantage of the owner, as when a foreign corporation is obliged to deposit them as a condition precedent to doing business, Scottish etc. Insurance Co. v. Bowland, 196 U. S. 611 (1905). In case of taxation on account of business situs it can make no difference that the intangible property invested in the state is not evidenced by written instruments, Liverpool etc. Insurance Co. v. Orleans Board of Assessors, 221 U. S. 346 (1911); or that the written instruments are actually kept in another state, Bristol v. Washington County, 177 U. S. 133 (1900); Metropolitan Life Insurance Co. v. New Orleans, 205 U. S. 395 (1911). 5 This principle has been applied to stock in corporations, Reardon v. New York, 204 U. S. 152 (1907), and to public securities, such as state and municipal bonds, and bank notes circulating as money, State Tax on Foreign Held Bonds, 15 Wall. 300 (1872); but it was formerly considered to be the law that promissory notes and, probably, bonds of private corporations, have no taxing situs based on mere physical location, State Tax on Foreign Held Bonds, 15 Wall. 300 (1872); Kirtland v. Hotchkiss, 100 U. S. 491 (1879); Buck v. Beach, 206 U. S. 392 (1908). In Wheeler v. Sohmer, 23 U. S. 434 (1914), it was held that promissory notes had a situs in the state in which they were physically present sufficient to support an inheritance tax and the reasoning of the court would extend this principle to a property tax. Four judges disagreed with this reasoning, so the law as to situs of notes for purposes of a property tax is uncertain.