1. The transportation of freight, or of the subjects of
commerce, is a constituent part of commerce itself.
2. A tax upon freight transported from state to state is a
regulation of commerce among the states.
3. Whenever the subjects in regard to which a power to regulate
commerce is asserted are in their nature national or admit of one
uniform system or plan of regulation, they are exclusively within
the regulating control of Congress.
4. Transportation of passengers or merchandise through a state
or from one state to another is of this nature.
5. Hence, a statute of a state imposing a tax upon freight taken
up within the state and carried out of it or taken up without the
state and brought within it is repugnant to that provision of the
Constitution of the United States which ordains that "Congress
shall have power to regulate commerce with foreign nations and
among the several states and with the Indian tribes."
On the 25th of August, 1864, the Legislature of Pennsylvania
passed an act entitled "An act to provide additional revenue for
the use of the Commonwealth." It enacted:
"SECTION 1. That the president, treasurer, cashier, or other
financial officer of every railroad company, steamboat company,
canal company, and slack water navigation company, and all other
companies now or hereafter doing business within this state and
upon whose works freight may be transported, whether by such
company or by individuals and whether such company shall receive
compensation for transportation, for transportation and toll, or
shall receive tolls only, except turnpike companies, plank road
companies, and bridge companies, shall, within thirty days after
the first days of January, April, July, and October of every year,
make return in writing to the auditor-general, under oath or
affirmation, stating fully and particularly the number of tons of
freight carried over through or upon the works of said company for
the three months immediately preceding each of
Page 82 U. S. 233
the above-mentioned days, and each of the companies, except as
aforesaid, shall at the time of making such return pay to the state
treasurer, for the use of the Commonwealth, on each two thousand
pounds of freight so carried, tax at the following rates,
viz.:"
"First, on the product of mines, quarries, and clay beds, in the
condition in which said products may be taken therefrom, 2
cents."
"Second, on hewn timber, animal food, including livestock; also,
on the products of the forest, vegetable, and other agricultural
products, the value of which has not been increased by labor, 3
cents."
"Third, on all other articles, 5 cents."
"Where the same freight shall be carried over and upon
different but continuous lines, said freight shall be
chargeable with tax as if it had been carried but upon one line,
and the whole tax shall be paid by such one of said companies as
the state treasurer may select and notify thereof.
Corporations whose lines of improvements are used by others for the
transportation of freight and whose only earnings arise from tolls
charged for such use
are authorized to add the tax hereby
imposed to said tolls and collect the same therewith, but in
no case shall tax be twice charged on the same freight carried on
or over the same line of improvements,
provided that every
company now or hereafter incorporated by this Commonwealth whose
line extends into any other state, and every corporation, company,
or individual of any other state holding and enjoying any
franchises, property, or privileges whatever in this state by
virtue of the laws thereof shall make returns of freight and pay
for the freight carried over, through, and upon that portion of
their lines within this state as if the whole of their respective
lines were in this state."
[It is a fact that is referred to in the argument, and which may
therefore well enough be here noted, that the roads of some
railroad companies in Pennsylvania traverse the whole of that great
state. That is the case with the railroad of the Pennsylvania
Railroad Company (the great "Pennsylvania Central"); also of the
Philadelphia & Erie. Other roads are very short -- hardly
Pennsylvania roads at all. This is the case with the Lake Shore
Road in what is known in Pennsylvania as "the Triangle" -- the
small part of the state which borders on Lake Erie. The east
terminus of the road
Page 82 U. S. 234
receives converging roads from the whole State of New York, from
New Jersey, and from all New England, and from its western end
roads diverge again over the whole West. So the New York & Erie
Railroad, whose line for its main great extent runs along the south
line of New York but which, from a necessity of the soil in New
York, had to make a small curvature which brings it for a few miles
into Pennsylvania. So the Philadelphia, Wilmington & Baltimore,
in its chief length in Maryland and Delaware, its northern terminus
only in Pennsylvania. So other roads.]
On the 25th of October, 1866, the accounting officers of
Pennsylvania stated an account under the statute already quoted
between the Commonwealth and the Reading Railroad Company "for tax
on tonnage for the quarters ending December 31, 1865, and March 31
and June 30, 1866." The company named is a corporation created
under the laws of Pennsylvania, and is engaged in the sole business
of transporting freights for hire, and carrying no commodities of
its own. An important part of its business is carrying coal from
the mountains of Pennsylvania to a place called Port Richmond, near
Philadelphia, a distance of about one hundred miles, the whole road
being in Pennsylvania. A portion of the coal transported to Port
Richmond is sold there to consumers, but by far the larger portion
is intended for exportation to points beyond the limits of
Pennsylvania, and is transferred at Port Richmond into vessels
destined for such points. A considerable quantity of coal is also
transported by the railroad company to a point on the Schuylkill
Canal, where it is loaded in barges and exported beyond the state.
The company was charged by the state:
For freight transported to points within the State of
Pennsylvania . . . . . . . . . . . . . . . . . . . . $38,361
For that exported to points without the state. . . . .
46,520
-------
$84,881
The latter sum the railroad company refused to pay. It set up
that the statute of 1864, to the extent that it imposed a tax on
freight other than that both received and delivered
Page 82 U. S. 235
within the State of Pennsylvania, was unconstitutional and void
because, among other reasons, it was in conflict with the
Constitution of the United States, which ordains that "Congress
shall have power to regulate commerce with foreign nations, and
among the several states."
Suit being brought in the Common Pleas of Dauphin County, the
jury found that the freight in question was originally destined for
exportation beyond the boundaries of Pennsylvania, and that it was
actually exported, in a continuous course of transportation, in the
cars of the defendants to points on the River Delaware or the
Schuylkill Canal, and thence in vessels. Being instructed by the
court (Pearson, J.) that such a finding should be followed by a
verdict for the defendants, verdict and judgment so went.
The charge of the judge was but a reiteration of the opinion
which he had previously expressed in other cases on the
constitutional point in question, and which appeared to have been
acquiesced in by the Commonwealth of Pennsylvania, since, although
writs of error were taken to the judgments in those cases, he
observed that they were never argued, "as they were considered
correctly decided by the then Attorney General of Pennsylvania, the
Honorable W. M. Meredith." However a writ of error was taken from
the Supreme Court of Pennsylvania to the judgment entered on the
verdict in the present cause, and it resulted in the judgment of
the court of common pleas' being reversed by the higher tribunal,
[
Footnote 1] that court
admitting the force of the argument that could be made against
their view, but conceiving that "a case of simple doubt should be
resolved favorably to the state act, leaving the correction of the
error, if there was any, to the federal judiciary."
To understand the full force of the argument in the opinion of
that court, the reader must refer to the opinion itself. Among
other grounds on which it rested the reversal were these:
That the products carried from points within the state to
Page 82 U. S. 236
points without, or from points without to points within, were
not discriminated against and required to pay more than other
products carried wholly within the state, all paid the same exact
freight -- a charge for transportation simply.
That this tax was not imposed as or intended to be a regulation
of commerce -- in other words, a rule by which commerce was to be
governed -- but was a tax to raise money for the support of
government, and made therefore in the exercise of an authority
which flowed from the power to tax for revenue. Adverting to the
case of
Brown v. Maryland, [
Footnote 2] and to the question put there by Chief Justice
Marshall, as about a thing plainly unconstitutional --
"What restrains a state from taxing any article passing through
it from one state to another for the purpose of traffic? Or from
taxing the transportation of articles passing from the state itself
to another state for commercial purposes?"
the Supreme Court of Pennsylvania said:
"The Chief Justice had reference to
specific burdens.
These subjects must not be singled out and taxed, for this would be
discrimination affecting intercourse, invidious and inviting
retaliation from other states or foreign powers. But he did not
mean by these illustrations that those who use the artificial works
constructed by the state or under their franchise might so do
without compensation because they transported their goods on them
for such purposes, or that they are not bound to share with our
citizens the equal burdens, which is the price they must pay for
availing themselves of these facilities."
That in virtue of her unquestioned power to improve her own
resources and to regulate her internal affairs, the state had built
up a network of railways and canals and had improved natural
channels, and that in virtue of her right of eminent domain and her
power to legislate on her internal affairs and the creations of her
own sovereignty, she had a right to exact tolls, charges, and fares
for their use, and that whether this was done by a direct charge on
the tonnage or
Page 82 U. S. 237
by a tax on the corporations who used the franchise was
unimportant.
The court stated that it would not rest the case on the
debatable ground of state power to regulate interstate commerce in
the absence of Congressional legislation on the same subject. The
case, having been brought here, was twice argued.
Page 82 U. S. 271
MR. JUSTICE STRONG delivered the opinion of the Court.
We are called upon in this case to review a judgment of the
Supreme Court of Pennsylvania affirming the validity of a statute
of the state which the plaintiffs in error allege to be repugnant
to the federal Constitution.
The case presents the question whether the statute in question
-- so far as it imposes a tax upon freight taken up within the
state and carried out of it or taken up outside the state and
delivered within it, or, in different words, upon all freight other
than that taken up and delivered within the state -- is not
repugnant to the provision of the Constitution of the United States
which ordains "That Congress shall have power to regulate commerce
with foreign nations and among the several states," or in conflict
with the provision that
"No state shall, without the consent of Congress, lay any
imposts or duties on imports or exports, except what may be
absolutely necessary for executing its inspection laws."
The question is a grave one. It calls upon us to trace the
Page 82 U. S. 272
line, always difficult to be traced, between the limits of state
sovereignty in imposing taxation and the power and duty of the
federal government to protect and regulate interstate commerce.
While upon the one hand it is of the utmost importance that the
states should possess the power to raise revenue for all the
purposes of a state government, by any means and in any manner not
inconsistent with the powers which the people of the states have
conferred upon the general government, it is equally important that
the domain of the latter should be preserved free from invasion and
that no state legislation should be sustained which defeats the
avowed purposes of the federal Constitution or which assumes to
regulate or control subjects committed by that Constitution
exclusively to the regulation of Congress.
Before proceeding, however, to a consideration of the direct
question whether the statute is in direct conflict with any
provision of the Constitution of the United States, it is necessary
to have a clear apprehension of the subject and the nature of the
tax imposed by it. It has repeatedly been held that the
constitutionality, or unconstitutionality of a state tax is to be
determined, not by the form or agency through which it is to be
collected, but by the subject upon which the burden is laid. This
was decided in the cases of
Bank of Commerce v. New York
City, [
Footnote 3] in
The Bank Tax Case, [
Footnote 4]
Society for Savings v. Coite,
[
Footnote 5] and
Provident
Bank v. Massachusetts. [
Footnote 6] In all these cases, it appeared that the bank
was required by the statute to pay the tax, but the decisions
turned upon the question what was the subject of the tax -- upon
what did the burden really rest -- not upon the question from whom
the state exacted payment into its Treasury. Hence, where it
appeared that the ultimate burden rested upon the property of the
bank invested in United States securities, it was held
unconstitutional, but where it rested upon the franchise of the
bank, it was sustained.
Upon what, then, is the tax imposed by the act of August 25,
1864, to be considered as laid? Where does the substantial
Page 82 U. S. 273
burden rest? Very plainly it was not intended to be, nor is it
in fact, a tax upon the franchise of the carrying companies, or
upon their property, or upon their business measured by the number
of tons of freight carried. On the contrary, it is expressly laid
upon the freight carried. The companies are required to pay to the
state treasurer for the use of the Commonwealth, "on each two
thousand pounds of freight so carried," a tax at the specified
rates. And this tax is not proportioned to the business done in
transportation. It is the same whether the freight be moved one
mill or three hundred. If freight be put upon a road and carried at
all, tax is to be paid upon it, the amount of the tax being
determined by the character of the freight. And when it is observed
that the act provides
"where the same freight shall be carried over and upon different
but continuous lines, said freight shall be chargeable with tax as
if it had been carried upon one line, and the whole tax shall be
paid by such one of said companies as the state treasurer may
select and notify thereof,"
no room is left for doubt. This provision demonstrates that the
tax has no reference to the business of the companies. In the case
of connected lines thousands of tons may be carried over the line
of one company without any liability of that company to pay the
tax. The state treasurer is to decide which of several shall pay
the whole. There is still another provision in the act which shows
that the burden of the tax was not intended to be imposed upon the
companies designated by it, neither upon their franchises, their
property, or their business. The provision is as follows:
"Corporations whose lines of improvements are used by others for
the transportation of freight, and whose only earnings arise from
tolls charged for such use, are authorized to add the tax hereby
imposed to said tolls, and to collect the same therewith."
Evidently this contemplates a liability for the tax beyond that
of the company required to pay it into the Treasury, and it
authorizes the burden to be laid upon the freight carried, in
exemption of the corporation owning the roadway. It carries the tax
over and beyond the carrier to the thing carried. Improvement
Page 82 U. S. 274
companies, not themselves authorized to act as carriers but
having only power to construct and maintain roadways, charging
tolls for the use thereof, are generally limited by their charters
in the rates of toll they are allowed to charge. Hence the right to
increase the tolls to the extent of the tax was given them in order
that the tax might come from the freight transported, and not from
the treasury of the companies. It required no such grant to
companies which not only own their roadway but have the right to
transport thereon. Though the tolls they may exact are limited,
their charges for carriage are not. They can therefore add the tax
to the charge for transportation without further authority.
[
Footnote 7] In view of these
provisions of the statute, it is impossible to escape from the
conviction that the burden of the tax rests upon the freight
transported or upon the consignor or consignee of the freight
(imposed because the freight is transported), and that the company
authorized to collect the tax and required to pay it into the state
treasury is in effect only a tax gatherer. The practical operation
of the law has been well illustrated by another [
Footnote 8] when commenting upon a statute of
the State of Delaware very similar to the one now under
consideration. He said,
"The position of the carrier under this law is substantially
that of one to whom public taxes are farmed out -- who undertakes
by contract to advance to the government a required revenue with
power by suit or distress to collect a like amount out of those
upon whom the tax is laid. The only imaginable difference is that
in the case of taxes farmed out, the obligation to account to the
government is voluntarily assumed by contract and not imposed by
law, as upon the carrier under this act; also that different means
are provided for raising the tax out of those ultimately chargeable
with it."
Considering it, then, as manifest that the tax demanded by the
act is imposed not upon the company, but upon the
Page 82 U. S. 275
freight carried, and because carried, we proceed to inquire
whether, so far as it affects commodities transported through the
state or from points without the state to points within it, or from
points within the state to points without it, the act is a
regulation of interstate commerce. Beyond all question, the
transportation of freight, or of the subjects of commerce, for the
purpose of exchange or sale, is a constituent of commerce itself.
This has never been doubted, and probably the transportation of
articles of trade from one state to another was the prominent idea
in the minds of the framers of the Constitution, when to Congress
was committed the power to regulate commerce among the several
states. A power to prevent embarrassing restrictions by any state
was the thing desired. The power was given by the same words and in
the same clause by which was conferred power to regulate commerce
with foreign nations. It would be absurd to suppose that the
transmission of the subjects of trade from the state to the buyer,
or from the place of production to the market, was not
contemplated, for without that there could be no consummated trade
either with foreign nations or among the states. In his work on the
Constitution, [
Footnote 9]
Judge Story asserts that the sense in which the word commerce is
used in that instrument includes not only traffic, but intercourse
and navigation. And in the
Passenger Cases, [
Footnote 10] it was said:
"Commerce consists in selling the superfluity, in purchasing
articles of necessity, as well productions as manufactures, in
buying from one nation and selling to another, or in transporting
the merchandise from the seller to the buyer to gain the
freight."
Nor does it make any difference whether this interchange of
commodities is by land or by water. In either case, the bringing of
the goods from the seller to the buyer is commerce. Among the
states, it must have been principally by land when the Constitution
was adopted.
Then why is not a tax upon freight transported from state to
state a regulation of interstate transportation, and
Page 82 U. S. 276
therefore a regulation of commerce among the states? Is it not
prescribing a rule for the transporter by which he is to be
controlled in bringing the subjects of commerce into the state and
in taking them out? The present case is the best possible
illustration. The Legislature of Pennsylvania has in effect
declared that every ton of freight taken up within the state and
carried out, or taken up in other states and brought within her
limits, shall pay a specified tax. The payment of that tax is a
condition upon which is made dependent the prosecution of this
branch of commerce. And as there is no limit to the rate of
taxation she may impose, if she can tax at all, it is obvious the
condition may be made so onerous that an interchange of commodities
with other states would be rendered impossible. The same power that
may impose a tax of two cents per ton upon coal carried out of the
state may impose one of five dollars. Such an imposition, whether
large or small, is a restraint of the privilege or right to have
the subjects of commerce pass freely from one state to another
without being obstructed by the intervention of state lines. It
would hardly be maintained, we think, that had the state
established custom houses on her borders wherever a railroad or
canal comes to the state line and demanded at these houses a duty
for allowing merchandise to enter or to leave the state upon one of
those railroads or canals, such an imposition would not have been a
regulation of commerce with her sister states. Yet it is difficult
to see any substantial difference between the supposed case and the
one we have in hand. The goods of no citizen of New York, New
Jersey, Ohio, or of any other state may be placed upon a canal,
railroad, or steamboat within the state for transportation any
distance, either into or out of the state, without being subjected
to the burden. Nor can it make any difference that the legislative
purpose was to raise money for the support of the state government,
and not to regulate transportation. It is not the purpose of the
law but its effect which we are now considering. Nor is it at all
material that the tax is levied upon all freight, as well that
which is wholly
Page 82 U. S. 277
internal as that embarked in interstate trade. We are not at
this moment inquiring further than whether taxing goods carried
because they are carried is a regulation of carriage. The state may
tax its internal commerce, but if an act to tax interstate or
foreign commerce is unconstitutional, it is not cured by including
in its provisions subjects within the domain of the state. Nor is a
rule prescribed for carriage of goods through, out of, or into a
state any the less a regulation of transportation because the same
rule may be applied to carriage which is wholly internal. Doubtless
a state may regulate its internal commerce as it pleases. If a
state chooses to exact conditions for allowing the passage or
carriage of persons or freight through it into another state, the
nature of the exaction is not changed by adding to it similar
conditions for allowing transportation wholly within the state.
We may notice here a position taken by the defendants in error,
and stoutly defended in the argument, that the tax levied, instead
of being a regulation of commerce, is compensation for the use of
the works of internal improvement constructed under the authority
of the state and by virtue of franchises granted by the state -- in
other words, that it is a toll for the use of the highways, a part
of which, in right of her eminent domain, the state may order to be
paid into her treasury. We are asked, if the works were in her own
hands, if she were the owner of them, what provision in the federal
Constitution would forbid her to increase her revenue by an
increase of the charge of transportation over them? When in the
hands of creatures exercising her franchises, what clause in any
instrument forbids her to tax the franchises, and to authorize the
tax to be added to existing tolls and franchises?
That this argument rests upon a misconception of the statute is
to our minds very evident. We concede the right and power of the
state to tax the franchises of its corporations, and the right of
the owners of artificial highways, whether such owners be the state
or grantees of franchises from the state, to exact what they please
for the use of their ways.
Page 82 U. S. 278
That right is an attribute of ownership. But this tax is not
laid upon the franchises of the corporation, nor upon those who
hold a part of the state's eminent domain. It is laid upon those
who deal with the owners of the highways or means of conveyance. T
he state is not herself the owner of the roadways, nor of the
motive power. The tax is not compensation for services rendered by
her or by her agents. It is something beyond the cost of
transportation or the ordinary charges therefor. Having no
ownership in the railroads or canals, the state has no title to
their income except so far as she reserved it in the charters of
the companies. Tolls and freights are a compensation for services
rendered or facilities furnished to a passenger or transporter.
These are not rendered or furnished by the state. A tax is a demand
of sovereignty; a toll is a demand of proprietorship. The tax
levied by this act is therefore not a toll. It is not exacted in
compensation for the use of the roadway; and if it were, the right
to make terms for the use of the roadway is in the grantee of the
franchises, not in the grantor. But, in truth, the state has no
more right to demand a portion of the tolls which the grantees of
her franchises may exact than she would have to demand a portion of
the rents of land which she had sold. She may tax by virtue of her
sovereignty and measure the tax by income, but the income itself is
beyond her reach. All this, however, is abstract and apart from the
case before us. That the act of 1864 was not intended to assert a
claim for the use of the public works or a claim for a part of the
tolls is too apparent to escape observation. The tax was imposed
upon freight carried by steamboat companies, whether incorporated
by the state or not and whether exercising privileges granted by
the state or not. It reaches freight passing up and down the
Delaware and the Ohio Rivers carried by companies who derive no
rights from grants of Pennsylvania, who are exercising no part of
her eminent domain; and, as we have noticed heretofore, the tax is
not proportioned to services rendered or to the use made of canals
or railways. It is the same whether the transportation be long or
short. It must therefore
Page 82 U. S. 279
be considered an exaction, in right of alleged sovereignty, from
freight transported or the right of transportation out of or into
or through the state -- a burden upon interstate intercourse.
If, then, this is a tax upon freight carried between states and
a tax because of its transportation, and if such a tax is in effect
a regulation of interstate commerce, the conclusion seems to be
inevitable that it is in conflict with the Constitution of the
United States. It is not necessary to the present case to go at
large into the much-debated question whether the power given to
Congress by the Constitution to regulate commerce among the states
is exclusive. In the earlier decisions of this Court, it was said
to have been so entirely vested in Congress that no part of it can
be exercised by a state. [
Footnote 11] It has indeed often been argued and
sometimes intimated by the Court that so far as Congress has not
legislated on the subject, the states may legislate respecting
interstate commerce. Yet if they can, why may they not add
regulations to commerce with foreign nations beyond those made by
Congress, if not inconsistent with them, for the power over both
foreign and interstate commerce is conferred upon the federal
legislature by the same words. And certainly it has never yet been
decided by this Court that the power to regulate interstate as well
as foreign commerce is not exclusively in Congress. Cases that have
sustained state laws, alleged to be regulations of commerce among
the states, have been such as related to bridges or dams across
streams wholly within a state, police or health laws, or subjects
of a kindred nature, not strictly commercial regulations. The
subjects were such as in
Gilman v. Philadelphia [
Footnote 12] it was said
"can be best regulated by rules and provisions suggested by the
varying circumstances of different localities, and limited in their
operation to such localities respectively."
However this may be, the rule has been asserted with great
clearness that whenever the subjects over which a power to regulate
commerce is asserted are in their
Page 82 U. S. 280
nature national, or admit of one uniform system or plan of
regulation, they may justly be said to be of such a nature as to
require exclusive legislation by Congress. [
Footnote 13] Surely transportation of passengers
or merchandise through a state or from one state to another is of
this nature. It is of national importance that over that subject
there should be but one regulating power, for if one state can
directly tax persons or property passing through it or tax them
indirectly by levying a tax upon their transportation, every other
may, and thus commercial intercourse between states remote from
each other may be destroyed. The produce of Western states may thus
be effectually excluded from Eastern markets, for though it might
bear the imposition of a single tax, it would be crushed under the
load of many. It was to guard against the possibility of such
commercial embarrassments, no doubt, that the power of regulating
commerce among the states was conferred upon the federal
government.
In
Almy v. State of California, [
Footnote 14] it was held by this Court that a
law of the state imposing a tax upon bills of lading for gold or
silver transported from that state to any port or place without the
state was substantially a tax upon the transportation itself, and
was therefore unconstitutional. True, the decision was rested on
the ground that it was a tax upon exports, and subsequently, in
Woodruff v. Parham, [
Footnote 15] the Court denied the correctness of the
reasons given for the decision; but they said at the same time the
case was well decided for another reason,
viz., that such
a tax was a regulation of commerce -- a tax imposed upon the
transportation of goods from one state to another over the high
seas in conflict with that freedom of transit of goods and persons
between one state and another, which is within the rule laid down
in
Crandall v. Nevada, [
Footnote 16] and with the authority of Congress to
regulate commerce among the states.
Page 82 U. S. 281
In Crandall v. State of Nevada, where it appeared that
the legislature of the state had enacted 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 or employed in the business of transporting
passengers for hire,"
and required the proprietors, owners, and corporations so
engaged to make monthly reports of the number of persons carried,
and to pay the tax, it was ruled that, though required to be paid
by the carriers, the tax was a tax upon passengers for the
privilege of being carried out of the state, and not a tax on the
business of the carriers. For that reason, it was held that the law
imposing it was invalid as in conflict with the Constitution of the
United States. A majority of the Court, it is true, declined to
rest the decision upon the ground that the tax was a regulation of
interstate commerce, and therefore beyond the power of the state to
impose, but all the judges agreed that the state law was
unconstitutional and void. THE CHIEF JUSTICE and MR. JUSTICE
CLIFFORD thought the judgment should have been placed exclusively
on the ground that the act of the state legislature was
inconsistent with the power conferred upon Congress to regulate
commerce among the several states, and it does not appear that the
other judges held that it was not thus inconsistent. In any view of
the case, however, it decides that a state cannot tax persons for
passing through or out of it. Interstate transportation of
passengers is beyond the reach of a state legislature. And if state
taxation of persons passing from one state to another, or a state
tax upon interstate transportation of passengers is
unconstitutional,
a fortiori, if possible, is a state tax
upon the carriage of merchandise from state to state in conflict
with the federal Constitution. Merchandise is the subject of
commerce. Transportation is essential to commerce, and every burden
laid upon it is
pro tanto a restriction. Whatever,
therefore, may be the true doctrine respecting the exclusiveness of
the power vested in Congress to regulate commerce among the states,
we regard it as established that no state can impose a tax upon
freight transported from
Page 82 U. S. 282
state to state, or upon the transporter because of such
transportation.
But while holding this, we recognize fully the power of each
state to tax at its discretion its own internal commerce and the
franchises, property, or business of its own corporations, so that
interstate intercourse, trade, or commerce be not embarrassed or
restricted. That must remain free.
The conclusion of the whole is that, in our opinion, the act of
the Legislature of Pennsylvania of August 25, 1864, so far as it
applies to articles carried through the state or articles taken up
in the state and carried out of it or articles taken up without the
state and brought into it is unconstitutional and void.
Judgment reversed and the record is remitted for further
proceedings in accordance with this opinion.
[
Footnote 1]
See 62 Pa.St. 286.
[
Footnote 2]
25 U. S. 12 Wheat.
419.
[
Footnote 3]
67 U. S. 2 Black
620.
[
Footnote 4]
69 U. S. 2 Wall.
200.
[
Footnote 5]
73 U. S. 6 Wall.
594.
[
Footnote 6]
73 U. S. 6 Wall.
611.
[
Footnote 7]
Vide Boyle v. Reading Railroad Company, 54 Pa.St. 310;
Cumberland Valley Railroad Co.'s Appeal, 62
id.
218.
[
Footnote 8]
Chancellor Bates in
Clarke v. Philadelphia, Wilmington &
Baltimore Railroad Co.
[
Footnote 9]
ยง 1057.
[
Footnote 10]
48 U. S. 7 How.
416
[
Footnote 11]
Gibbons v.
Ogden, 9 Wheat. 1;
Passenger
Cases, 7 How. 283.
[
Footnote 12]
70 U. S. 3 Wall.
713.
[
Footnote 13]
Cooley v. Port
Wardens, 12 How. 299;
Gilman v. Philadelphia,
supra; 73 U. S. State of
Nevada, 6 Wall. 42.
[
Footnote 14]
65 U. S. 24 How.
169.
[
Footnote 15]
75 U. S. 8 Wall.
123.
[
Footnote 16]
73 U. S. 6 Wall.
35.
MR. JUSTICE SWAYNE (with whom concurred MR. JUSTICE DAVIS),
dissenting.
I dissent from the opinion just read. In my judgment, the tax is
imposed upon the business of those required to pay it. The tonnage
is only the mode of ascertaining the extent of the business. That
no discrimination is made between freight carried wholly within the
state, and that brought into or carried through or out of it, sets
this, as I think, in a clear light, and is conclusive on the
subject.
NOTE
AT the same time with the preceding case was adjudged another,
that of
ERIE RAILWAY COMPANY v. PENNSYLVANIA
A case, like the preceding one, in error to the Supreme Court of
Pennsylvania. The plaintiff in error, in the present case, was a
corporation created by the state of New York, which by acts
Page 82 U. S. 283
of the Pennsylvania Legislature of February 16, 1841, and March
26, 1846, was authorized to construct its railroad through a
portion of Pennsylvania, paying for the privilege the annual sum of
$10,000, and being subjected to taxation on so much of its stock as
equaled the cost of construction of that part of its road situate
in Pennsylvania, in the same manner and at the same rate as other
similar property was or might be subject.
Under an Act of Assembly of the state of August 25, 1864, a tax
was levied upon freight carried upon that portion of the road
situate in Pennsylvania, either taken up within the state and
carried out or received by the company in another state for the
sole purpose of being brought within it, and actually so brought.
The question now was whether that act, so far as it taxed such
freight, was constitutional. The Supreme Court of Pennsylvania had
held that it was. The case, being brought here, was elaborately and
ably argued by Messrs. W. W. McFarland and J. W. Simonton, for the
plaintiff in error and by Mr. Wayne McVeigh,
contra, for
the Commonwealth of Pennsylvania. Of necessity the arguments were
to some extent similar to those meant to be reported in the
preceding case, but on both sides they were presented with fresh
aspects and with varied illustrations.
MR. JUSTICE STRONG gave the judgment of the court.
He stated briefly that the question presented in the case was
the same which the Court had considered and answered in the
preceding one, and that for the reasons given in the opinion of the
Court there, the act, so far as it taxed the sort of freight above
mentioned, was to be held unconstitutional. As in the preceding
case, therefore, the judgment of the Supreme Court of Pennsylvania
was reversed and the record remitted for further proceedings in
conformity with the opinion of this Court.
