Page:Harvard Law Review Volume 32.djvu/273

INDIRECT ENCROACHMENT ON FEDERAL AUTHORITY 237 tion that the tax was on property, there would be great difficulty in sustaining it. The tax was therefore regarded as one "upon the corporation itself," which seems to mean upon the right to exist as a corpora- tion. It was sustained on the theory that the state has absolute power over its own corporate creatures. After saying that "the State may impose taxes upon the corporation as an entity existing under its laws, as well upon the capital stock of the corporation or its separate corporate property," " Mr. Justice Field added that "the manner in which its value shall be assessed and the rate of taxation, however arbitrary or capricious, are mere matters of legislative discretion." ^^ In view of the previous indication that the caprice of the state would have been curbed, had the tax been one on property, this imputation to the state of arbitrary power must be confined to the assessment of the franchise. But the sug- gested limitation on the power to tax property is predicated, not on the commerce clause, but on the position that the state must confine its exactions to property within the jurisdiction. The two closing paragraphs of the opinion dismiss the objections under the commerce clause. That the conclusion is not confined to taxes on the franchise is manifest from the final sentence: " The exercise of the authority which every State possesses to tax its cor- porations and all their property, real and personal, and their franchises, and to graduate the tax upon the corporations according to their business or income, or the value of their property, when this is not done by dis- criminating against rights held in other States, and the tax is not on im- ports, exports, or tonnage or transportation to other States, cannot be regarded as conflicting with any constitutional power of Congress." ^^ The tax in question was said to affect commerce among the states "just in the same way, and in no other, that taxation of any kind necessarily increases the expenses attendant upon the use or possession of the thing taxed." " And Mr. Justice Field, though he had dissented in State Tax on Railway Gross Receipts,^^ decided twelve months earlier, quotes with approval from the opinion in that case to the effect that "it is not everything that affects com- " 18 Wall. (U. S.) 231 (1873). « Tbid. ^' Ibid., 232. Italics are author's. " Ibid. " 15 Wall. (U. S.) 284 (1872). See 31 Harv. L. Rev. 576-77.