In a constitutional sense, "imports" embrace only goods brought
from a foreign country, and do not include merchandise shipped from
one state to another. The several states are not, therefore,
controlled as to such merchandise by constitutional prohibitions
against the taxation of imports, and goods brought from another
state, and not from a foreign country, are subject to state
taxation after reaching their destination and whilst held in the
state for sale.
Woodruff v.
Parham, 8 Wall. 123,
Brown v. Houston,
114 U. S. 622,
have never been overruled directly or indirectly by
Leisy v.
Hardin, 135 U. S. 100;
Lyng v. Michigan, 135 U. S. 161, or
other cases resting on the rule expounded in those cases.
Goods brought in original packages from another state, after
they have arrived at their destination and are at rest within the
state, and are enjoying the protection which the laws of the state
afford, may, without violating the commerce clause of the
Constitution, be taxed without discrimination like other property
within the state, although at the time they are stored at a
distributing point from which they are subsequently
Page 192 U. S. 501
to be delivered in the same packages, through the storage
company to purchasers in various states.
Where the levy of a merchant's privilege tax violates no federal
right, the mere determination of who are merchants within the state
law involves no federal question. The construction of the state law
is conclusive, and
if it embraces all persons doing a like business there is no
discrimination.
The facts are stated in the opinion of court.
Page 192 U. S. 508
MR. JUSTICE WHITE delivered the opinion of the Court.
Whether the plaintiff in error is entitled to recover the sum of
certain taxes which were paid under protest, on the ground that the
taxes were repugnant to the Constitution of the United States, is
the question for decision on this record.
Section 28, Article II, of the Constitution of the State of
Tennessee, so far as pertinent to the issue to be decided, is as
follows:
"All property, real, personal, or mixed, shall be taxed. . . .
All property shall be taxed according to its value, that value to
be ascertained in such manner as the legislature shall direct, so
that taxes shall be equal and uniform throughout the state. No one
species of property from which a tax may be collected shall be
taxed higher than any other species of property at the same value.
But the legislature shall have power to tax merchants, peddlers,
and privileges, in such manner as they may from time to time
direct. The portion of a merchant's capital used in the purchase of
merchandise sold by him to nonresidents and sent beyond the state
shall not be taxed at a higher rate than the
ad valorem
tax on property."
Section 30, Article II, of the same constitution, provides:
"No article manufactured of the produce of this state shall be
taxed otherwise than to pay inspection fees."
The assessing and taxing laws of the State of Tennessee in force
at the time the taxes in controversy were levied provided, first,
for a general
ad valorem tax upon all property; second,
for
Page 192 U. S. 509
a merchants' tax separate from the general
ad valorem
levy, this latter tax being of two classes: a tax upon the average
capital invested in business and a privilege tax, which was at a
different rate, and in other respects distinct from the merchants'
tax just referred to. Moreover at the time the tax assessments in
question were made, the statutes of the State of Tennessee
concerning the merchants' tax contained the following:
"The term 'merchants,' as used in this act, includes all
persons, co-partnerships, or corporations engaged in trade or
dealing in any kind of goods, wares, merchandise, either on land or
in steamboats, wharf boats, or other craft stationed or plying in
the waters of this state, and confectioners, whether such goods,
wares, or merchandise be kept on hand for sale or the same be
purchased and delivered for profit as ordered."
Moreover, the assessment laws, whilst providing that all
"persons, copartners, and joint stock companies engaged in the
manufacture of any goods, wares, merchandise, or other articles of
value shall pay an
ad valorem tax upon the actual cash
value of their property, real, personal, or mixed, . . ."
made the following exception:
"
Provided, the value of articles manufactured from the
produce of the state in the hands of the manufacturer shall be
deducted in assessing the property."
And a like exception qualified a provision imposing an
ad
valorem tax upon the capital and franchises of manufacturing
corporations. Besides, the assessing statutes contained a general
provision exempting
"all growing crops of whatever nature or kind -- the direct
product of the soil of this state -- in the hands of the producer
or his immediate vendee, and manufactured articles from the produce
of this state in the hands of the manufacturer."
Whilst these laws were in force, the officer whose duty it was
to list the merchant tax assessed against the American Steel &
Wire Company, which we shall hereafter call the steel company, both
the general merchants' tax and a merchants' privilege tax. The
company resisted the assessment, and,
Page 192 U. S. 510
after unsuccessfully pressing, through the administrative
channels provided by the law of Tennessee, its objections, paid the
tax under protest, and thereupon, as authorized by the law of
Tennessee, commenced this suit to recover the amount paid.
Without going into detail, it suffices to say that the bill
filed in the action to recover substantially alleged as follows:
that the company was a New Jersey corporation, having a place of
business in the City of Chicago, and owning and operating the
various plants for the manufacture of wire, nails, etc., in states
other than the State of Tennessee. And, for the purpose of
facilitating the sale and delivery of the goods by it manufactured,
it had selected Memphis, Tennessee, as a distributing point, and
had made an arrangement in that city with the Patterson Transfer
Company, a corporation engaged at Memphis in the transfer of
merchandise. By this arrangement, the Patterson Transfer Company
was to take charge of the products when shipped to Memphis,
consigned to the steel company, store them in a warehouse there,
assort them and make delivery to the persons to whom the goods were
sold by the steel company. It was averred that the Patterson
Transfer Company, in fulfilling its obligations under the contract,
was in no sense a merchant, but only a carrier, and that the steel
company, in storing and delivering its goods at Memphis, was not a
merchant in Memphis, but was simply a manufacturer, delivering in
the original packages goods made in other states to the persons who
had bought them. In substance, besides, it was alleged that the
goods in the warehouse in Memphis were merely in transit from the
point of manufacture outside of the State of Tennessee to the
persons to whom they had been previously sold. The levy of the tax
was charged to be repugnant to the commerce clause of the
Constitution of the United States, first, because the goods in the
warehouse in Memphis were in the original packages as shipped from
other states and had not been sold in Tennessee, and hence had not
been commingled with the property of that state, and because, in
any event, they had acquired no situs in Tennessee, as they
Page 192 U. S. 511
were moving in the channels of interstate commerce from the
place where the goods were manufactured, for delivery to the
persons to whom in effect they had been sold. Second. Because, as
the State of Tennessee exempted from taxation articles manufactured
from the produce of that state, no tax could be imposed by
Tennessee upon articles manufactured from the produce of other
states without operating a discrimination against articles
manufactured from the produce of other states. Issue was joined on
the complaint. The trial court, deducing from the proof conclusions
of ultimate fact in favor of the complainant, entered a decree in
favor of the steel company. The case was taken to the supreme court
of the state. In that court, the validity of the tax was upheld and
the judgment below was reversed. The questions raised concerning
the repugnancy of the tax to the Constitution of the United States
were expressly considered, and decided adversely to the steel
company. This writ of error was thereupon prosecuted.
The Supreme Court of Tennessee stated the facts as follows:
"Complainant is a corporation created under the laws of New
Jersey. Its situs is in the State of New Jersey, and its principal
business office is situated at Chicago, Ill. It is engaged in the
manufacture of nails, staples, barbed and smooth wire at different
points north of the Ohio River. None of its manufactories are
situated in Tennessee, and all of its products consigned to Memphis
are shipped from points beyond the limits of this state."
"Prior to the first of February, 1900, its manufactured products
were sold and distributed throughout the southwest from Louisville,
Kentucky; Memphis, Tennessee; Greenville, Vicksburg, and Natchez,
Mississippi, and New Orleans, Louisiana. About that time, the
Patterson Transfer Company, a corporation created under the laws of
Tennessee, having its situs at Memphis and doing business at
Memphis, represented to appellee that Memphis was the most
available point in the southwest at which to mass and distribute
its manufactured products to its customers in that section. At this
time, and for many years prior thereto,
Page 192 U. S. 512
the Patterson Transfer Company had been engaged in the business
of transferring passengers and freights to and from the various
depots at Memphis, and from the landings on the Mississippi River.
Appellee entered into an arrangement with the Patterson Transfer
Company whereby said company was to receive its manufactured
products at Memphis, assort them so as to separate the different
kinds of nails, staples, and wire, and then to deliver them either
to the jobbers at Memphis or to the jobbers beyond the limits of
Tennessee, over the various lines of railroads and steamboats
running into Memphis, as directed by complainant."
"None of complainant's products are ever sold to the Patterson
Transfer Company, or are by it sold to others, and neither its
officers nor employees have any knowledge whatever of the price at
which goods are sold by complainant. Under the arrangement between
them, the business of the Patterson Transfer Company in connection
with complainant's products is confined to their transfer to the
warehouses, their assortment in the warehouses, the keeping of them
in storage, and their subsequent delivery to the customers of the
complainant under its general or special orders, as below
indicated."
"The goods of complainant are manufactured at different points,
and it is convenient and useful, from a business point of view, to
mass them at some place at which they can be assorted, and from
which they can be distributed to complainant's customers. It is
impracticable to assort the goods either at the river landing or at
the railroad depots when they reach Memphis, and, in order to
facilitate the work, the Patterson Transfer Company has rented
three warehouses in which the goods are stored for the purpose of
assortment and distribution, and for other purposes below
indicated. These warehouses are rented exclusively for this
purpose, and the manufactured products of complainant, and no other
goods, are stored therein."
"The evidence further shows that, as a general rule, prior to
the time the goods are shipped to Memphis, sales agents of the
complainant canvass the southwestern country and make
Page 192 U. S. 513
contracts exclusively with jobbers, and in each instance where a
contract is made, it is embodied in writing, on a form prepared by
complainant, in which is set down the amount of goods which
constitutes the subject of the contract and the time agreed upon
within which they are to be delivered. The goods so contracted for
are described as so many kegs of nails, so many kegs of staples, so
many reels of barbed wire, or so many coils of smooth wire,
according to the terms of the contract, in respect of the quantity
agreed upon. But the contract does not specify the grade and
quality of the goods desired. The grade and quality are left open,
to be subsequently specified when the customer desires a delivery,
as below stated. The customer can, when he makes his specification,
select any grade of goods he desires, and, upon so selecting, they
will be delivered to him, up to the quantity contracted for, within
the time agreed upon at prices contracted for applicable to the
several grades. In fixing the price of its goods, the complainant
always, except when necessary to lower prices in order to meet
competition, figures in the freight on the goods."
"As above indicated, it is shown in the evidence that there are
many different kinds of nails, as well as different kinds of barbed
and smooth wire, and it is expressly stipulated in the contract
that the customer shall have the privilege of specifying, during
the life of the contract the kind of wire or kind of nails or
staples he desires delivered to him under the contract. These
contracts also specify from sixty to ninety days as the time within
which the products are to be delivered, and at any time during the
period prescribed in the contract, the customer may designate the
kind of goods he desires delivered under it."
"These contracts are made usually before the goods arrive at
Memphis, their point of destination, and generally the contracts
are made in advance of the production of the goods at the
complainant's factory. Usually the sales agents of the complainant,
not only in advance of the shipment of the goods, but in advance of
their production, canvass the southwestern country in the manner
above stated, visiting the various
Page 192 U. S. 514
jobbers, ascertaining the amount of goods they will require
within sixty or ninety days, and the contract is prepared to the
purport above indicated, in which the complainant obligates itself
to deliver at the prices stated, as above mentioned, the amount of
goods contracted for therein, and the customer agrees to receive
and pay for that quantity upon the goods' being delivered to him
after he shall have made, and according to, his specification,
which he may make during the life of the contract, the customer
reserving the right, in the face of the contract, to specify the
exact grade or quality of goods he desires delivered under it. He
does this after the making of the contract and at any time he
desires to do so within the life of the contract by writing out his
specification showing precisely what grade of goods he desires, and
forwards this specification to the office of complainant in
Chicago, and then the goods, under an order from the Chicago
office, addressed to the Patterson Transfer Company at Memphis, are
selected by the latter out of the mass of goods belonging to the
complainant in the aforesaid warehouses in Memphis, and are shipped
by the said Patterson Transfer Company to the customer who has
signed the specification. This order from the complainant to the
Patterson Transfer Company is effected through the agency of a copy
of the specification, which is forwarded to the latter from the
complainant's central office at Chicago, it being understood,
according to the course of business between the two companies, that
the Patterson Transfer Company will select out of the mass of goods
those set out in the specification, and will ship them to the
customer whose name is signed to the specification, upon receiving
such copy of the specification from the central office at
Chicago."
"This method of transacting the business is modified in practice
insofar as the fulfillment of the contracts made with the jobbers
at Memphis is concerned. For the convenience of the Memphis trade,
complainant advises the Patterson Transfer Company of the names of
its customers at Memphis, and that company is instructed to deliver
the goods embraced in the
Page 192 U. S. 515
contracts with the Memphis jobbers, in the following manner: the
Memphis jobber makes out his specification in duplicate, and
addresses a letter to complainant, as in any other case; but,
instead of forwarding this letter and his specification directly to
complainant, he delivers the letter to the Patterson Transfer
Company, and the Patterson Transfer Company at once delivers the
goods so specified, attaching the dray receipt to a copy of the
specification, and forwards the specification, letter, and dray
receipt to the office of complainant in Chicago, and that office
makes out an invoice and sends it directly to the jobber. Another
variation is made in the course of the business, in favor of the
Memphis jobbers, to the following effect: any jobber in Memphis who
is a recognized customer of the complainant can, without any
previous written contract, or other special agreement, make out a
specification of the goods he desires and hand this, in duplicate
form, to the Patterson Transfer Company. Upon this being done, it
is the duty of the Patterson Transfer Company, under its general
instructions from the complainant, to select out of the mass of
goods in the warehouses goods corresponding to those contained in
the specification, and deliver them to such jobber, this delivery
being usually made by the next day, or, at most, within two or
three days. Other deliveries on specifications sent direct to the
Chicago office are not usually made within less than six or eight
days, and sometimes a longer period is required. When the Patterson
Transfer Company receives from Memphis jobbers the specifications
which are the special subject of this paragraph, one copy is kept
by it and the other copy is forwarded to the office at Chicago,
where, upon its arrival and reception, the customer is charged with
the goods specified at current prices."
"The testimony shows that of the mass of goods kept on hand in
Memphis, in the above-mentioned warehouses, about ninety percent
ultimately goes to jobbers who reside outside of Memphis and beyond
the limits of this state. The remaining ten percent goes to the
Memphis jobbers in fulfillment of the
Page 192 U. S. 516
general contracts previously referred to, pursuant to
specifications thereunder made and under specifications made
without previous written contracts, the latter covering about two
and one-half percent of all the goods kept on hand."
"No one but an agreed or recognized customer of the complainant
can make out a specification or have goods delivered from the
storehouses of the Patterson Transfer Company, and no goods are
ever delivered or distributed to anyone by the Patterson Transfer
Company except under the express directions of complainant or under
general directions given by complainant to the said Patterson
Transfer Company in favor of recognized and approved customers of
the complainant whose names are furnished by it to the Patterson
Transfer Company."
"The testimony further shows that the quantity of goods which
the complainant keeps on hand at Memphis fluctuates considerably
owing to the State of trade from time to time. Sometimes the stock
is as low in value as $30,000, and sometimes the complainant has on
hand a stock of the value of more than $100,000."
"Some of the goods -- a very small amount -- are shipped to
Memphis by rail. Nearly all of these goods which come to the hands
of the Patterson Transfer Company from this complainant are
transported to Memphis on barges belonging to transportation
companies in which complainant has no interest, and which are
engaged in the carrying trade. As a general rule, while the
complainant endeavors to secure contracts covering its output
before the goods are manufactured, yet it does not always do so,
but, taking advantage of the seasons when there is a goods stage of
water in the rivers, which must be used in floating its products
from its mills to Memphis, it masses its goods at the latter point
in anticipation of future sales."
"The testimony shows that, when goods are shipped from
complainant's mills, consigned to Memphis, the Patterson Transfer
Company is notified by the Chicago office that a certain quantity
of complainant's products were shipped at
Page 192 U. S. 517
a certain time on barges to the port of Memphis. These barges
are met at the river landing by the Patterson Transfer Company,
which receives the goods, transfers them to its warehouses, and
assorts them. Then from time to time it ships the goods on
specifications as before explained. On receiving the goods, they
are credited to the complainant on the books of the Patterson
Transfer Company, and, on being shipped out, they are charged on
the same books to the complainant. When the goods reach Memphis,
they are always consigned to the complainant in care of the
Patterson Transfer Company."
"All the goods forwarded to Memphis are products of the
factories of complainant. No part of them is ever purchased by it.
Its sales agents are exclusively engaged in selling these products.
They are produced by complainant beyond the limits of this state,
and are made the subject of contracts by its sales agents
throughout the southwest in the manner before explained. These
sales agents report all contracts effected by them directly to the
office in Chicago, whether made with the jobbers at Memphis or
elsewhere beyond the limits of this state. All invoices for goods,
when sold by specifications in the manner above stated, are made
out at the office at Chicago and forwarded directly to the customer
in the manner and under the circumstances previously stated."
"Some of the complainant's goods are produced at one factory and
some at another, and, consequently, when a purchaser contracts for
the delivery to him within sixty to ninety days of a certain number
of packages, it frequently turns out that some of the goods desired
are the product of one factory and some of another, and it is
accordingly most convenient in the conduct of complainant's
business that goods from complainant's various factories should be
massed at some point where they can be dealt with in the manner
before explained."
"Complainant's goods are put up in the following original
packages: the nails and staples are put up in kegs, each keg
weighing 100 pounds; the smooth wire in coils tied by wires,
Page 192 U. S. 518
and each coil weighing 100 pounds; the barbed wire on reels, the
wire on each reel weighing 100 pounds. Each package is separately
and distinctly made up at the factories for convenience of
transportation, and is in this form delivered to the common
carriers. In this form they are delivered at the initial point of
transportation. In this form they are transported in barges, or by
railroads, to Memphis, and received by the Patterson Transfer
Company. In this form they are assorted at the warehouses by the
Patterson Transfer Company, and delivered by it to the
complainant's customers at Memphis under the circumstances
previously stated, or to the various lines of steamboats and
railroads running out of Memphis, consigned, under circumstances
previously stated, to customers beyond the limits of Tennessee, and
in this form they ultimately come to the hands of complainant's
customers in such foreign state. Each package is separate and
distinct in itself, and while no particular package is consigned to
any special customer, each keg of nails and staples is marked so as
to show exactly what the package contains, and each coil and reel
of wire is marked with a tag showing what the coil or reel
contains, and no package is ever changed in any particular from the
time it leaves the factory until it ultimately reaches the hands of
the customer."
"The testimony shows that Memphis has, within recent years,
become, by reason of its accessibility to railway and river
transportation, a great distributing point, and it was selected as
the basis of the operations which are the subject of the present
controversy by reason of these exceptional advantages."
"Other facts proven by the complainant are as follows: the
testimony of Mr. Young, the tax assessor, shows that none of the
cotton shipped into Memphis from the surrounding states pays any
tax whatever, and that the manufacturers of lumber in Memphis pay
no tax on lumber made from logs which are produced from the soil of
this state."
With these facts in hand, we are of opinion that the court
Page 192 U. S. 519
below was right in deciding that the goods were not in transit,
but, on the contrary, had reached their destination at Memphis and
were there held in store at the risk of the steel company, to be
sold and delivered as contracts for that purpose were completely
consummated. All question, therefore, as to the power of the state
to levy the merchants' tax based on the contrary contention, being
without merit, may be put out of view. The other propositions
pressed upon our attention require consideration. They relate to
two subjects: first, the asserted want of power of the State of
Tennessee to tax because the goods were imported from another
state, and were yet, it is contended, in the original packages, and
second because of the alleged discrimination asserted to result
from the provision of the state constitution exempting goods
manufactured from the produce of the state.
1. Since
Brown v.
Maryland, 12 Wheat. 436, it has not been open to
question that taxation imposed by the states upon imported goods,
whether levied directly on the goods imported or indirectly by
burdening the right to dispose of them, is repugnant to that
provision of the Constitution providing that "No state shall,
without the consent of the Congress, lay any imposts or duties on
imports or exports." Article I, Section 10, paragraph 3. And
Brown v. Maryland also settled that, where goods were
imported, they preserved their character as imports, and were
therefore not subject to either direct or indirect state taxation
as long as they were unsold in the original packages in which they
were imported. A recent case referring to the authorities and
restating this elementary doctrine is
May v. New Orleans,
178 U. S. 496.
Assuming that the goods concerning which the state taxes in this
case were levied were in the original packages and had not been
sold, if the bringing of the goods into Tennessee from another
state constituted an importation in the constitutional
signification of that word, it is clear they could not be directly
or indirectly taxed. But, the goods not having been brought from
abroad, they were not imported in the legal sense, and
Page 192 U. S. 520
were subject to state taxation after they had reached their
destination and whilst held in the state for sale. This is as
conclusively foreclosed by the decisions of this Court as is the
doctrine resting upon the decision in
Brown v. Maryland.
Woodruff v.
Parham, 8 Wall. 123;
Brown v. Houston,
114 U. S. 622. The
doctrine upon which the cases rest was this -- that imports, in the
constitutional sense, embrace only goods brought from a foreign
country, and consequently do not include merchandise shipped from
one state to another. The several states therefore not being
controlled as to such merchandise by the prohibition against the
taxation of imports, it was held that the states had the power,
after the goods had reached their destination and were held for
sale, to tax them, without discrimination, like other property
situated within the state.
Those two cases decided, the one more than thirty-five and the
other more than eighteen years ago, are decisive of every
contention urged on this record depending on the import and the
commerce clause of the Constitution of the United States. The
doctrine which the two cases announced has never since been
questioned. It has become the basis of taxing power exerted for
years by all the states of the Union. The cases themselves have
been approvingly referred to in decisions in this Court too
numerous to be cited, and we therefore content ourselves by
mentioning two of the cases where the doctrine was restated.
Ement v. Missouri, 156 U. S. 296;
Kelley v. Rhoads, 188 U. S. 1. But it
is strenuously insisted that the principle of the cases referred
to, reiterated again and again and uniformly followed for so long a
period of time, has been by inevitable implication overruled by the
cases of
Leisy v. Hardin, 135 U.
S. 100;
Lying v. Michigan, 135 U.
S. 161, and other cases resting on the rule expounded in
those cases.
We might well leave the unsoundness of the proposition to be
demonstrated by what we have previously said and also by the fact
that, in
Leisy v. Hardin and
Lyng v. Michigan,
and most of the similar cases relied on, the decisions in
Woodruff
Page 192 U. S. 521
v. Parham and
Brown v. Houston were referred
to without even an intimation that those cases were deemed to be
overruled or even qualified. The earnestness with which the
contention is pressed induces us, however, briefly to point out the
misconception upon which it rests. It results from assuming that
the rule which governs in a case where there is an absolute
prohibition is applicable where no such prohibition obtains.
Brown v. Maryland illustrates the first of these cases,
while
Woodruff v. Parham, Brown v. Houston, Leisy v. Hardin,
Lyng v. Michigan are examples of the other. Thus, in
Brown
v. Maryland, there was an absolute want of power to tax
imports, and it was held that a state enactment which operated to
tax imports, whether directly or indirectly, was within the
positive prohibition. In other words, that imports could not be
taxed at all until they had completely lost their character as
such.
Woodruff v. Parham and
Brown v. Houston, on
the other hand, so far as interstate commerce was concerned, dealt
with no positive and absolute inhibition against the exercise of
the taxing power, but determined whether a particular exertion of
that power by a state so operated upon interstate commerce as to
amount to a regulation thereof, in conflict with the paramount
authority conferred upon Congress. In order to fix the period when
interstate commerce terminated, the criterion announced in
Brown v. Maryland -- that is, sale in the original
packages at the point of destination -- was applied. The Court
therefore conceded that the goods which were taxed had not
completely lost their character as interstate commerce, since they
had not been sold in the original packages. As, however, they had
arrived at their destination, were at rest in the state, were
enjoying the protection which the laws of the state afforded, and
were taxed without discrimination, like all other property, it was
held that the tax did not amount to a regulation in the sense of
the Constitution, although its levy might remotely and indirectly
affect interstate commerce. In
Leisy v. Hardin and
Lyng v. Michigan, the same question in a different aspect
was presented. The goods had reached their
Page 192 U. S. 522
destination, and the question was not the power of the state to
tax them, but its authority to treat the goods as not the subjects
of interstate commerce, and to prohibit their introduction or sale.
This was held to be a regulation within the constitutional sense,
and therefore void. The cases therefore did not decide that
interstate commerce was to be considered as having completely
terminated at one time for the purposes of import taxation, and at
a different period for the purposes of interstate commerce. But
both cases, whilst conceding that interstate commerce was
completely terminated only after the sale at the point of
destination in the original packages, were rested upon the nature
and operation of the particular exertion of state authority
considered in the respective cases.
2. The discrimination is asserted to have arisen from the
provision of the state constitution saying that "no article
manufactured of the produce of this state shall be taxed otherwise
than to pay inspection fees." But in
Kurth v. State,
(1887) 86 Tenn. 134, it was decided that this provision of the
constitution referred only to a direct levy of taxation on articles
manufactured of the produce of the state, and did not apply to
taxes levied by virtue of the grant conferred by the constitution
to tax "merchants, peddlers, and privileges, in such manner as they
[the legislature] may from time to time direct." The two
provisions, it was held, should be construed together, so that the
one would not limit the other. We have been referred to no case
decided by the Supreme Court of Tennessee modifying this
interpretation of the state constitution, and its correctness is in
effect directly affirmed by the ruling made by the court in this
case. Now the tax complained of on this record is not the general
ad valorem tax levied on property as such, but is a
merchants' tax, and is therefore not within the purview of the
exemption clause from which it is asserted the discrimination
arises. Construing the taxing statutes of the state, the court
below decided in this case that they equally apply to all
merchants, and hence did not discriminate as against any member of
the merchants' class. The argument
Page 192 U. S. 523
is made that, under the facts found by the court below, it was
erroneously held that the steel company, because of the business
which it carried on in the State of Tennessee, was a merchant
within the statutes, and the power to review this question, it is
insisted, should be exerted because the question is federal in its
nature. The contention is without merit. As the levy of the
merchants' tax violated no federal right, the mere determination of
who were merchants within the state law involved no federal
question. The construction of the state law being conclusive and
embracing all persons doing a like business with the steel company,
it follows that there was no discrimination. Conceding it to be
true, as argued, that in the past there would seem to have been
conflict of opinion in the court of Tennessee in interpreting
various statutes concerning the merchants' tax, this contrariety
does not concern the meaning of the statute construed in this case.
As that statute has been construed by the state court as applying
to all merchants and as embracing alike all persons engaged in the
character of business which the steel company was carrying on, it
follows that there is no ground upon which to predicate the
complaint of undue discrimination. Nor do we think that the opinion
of the Supreme Court of Tennessee in
Benedict v. Davidson
County, not yet officially reported, 67 S.W. 806, conflicts
with the views just expressed. That case involved not a merchants'
tax, but the validity of a general
ad valorem levy on
property as such, and therefore affords no ground for the
contention that manufacturers in Tennessee who shipped the goods by
them made from the products of the state to a depot for sale, and
there sold them under conditions and circumstances identical with
those presented here, could not be taxed as merchants under the law
of Tennessee.
Affirmed.