Page:Harvard Law Review Volume 32.djvu/295

INDIRECT ENCROACHMENT ON FEDERAL AUTHORITY 259 realized the fact. The point is introduced by saying that the argument on behalf of the companies that their horses, wagons, etc., constitute their only property in Ohio practically ignores the existence of intangible property, or at least denies its HabiHty for taxation." ^"^ "To ignore this intangible property," continues the opinion, "or to hold that it is not subject to taxation at its accepted value, is to eliminate from the reach of the taxing power a large portion of the wealth of the country." "^ The learned justice points out the existence of an excess of value over that of tangible property, and asks: "What gives this excess of value?" "^ The answer is that it is "obviously the franchises, the privileges the company possesses — its intangible property." ^°^ This is not to be quarreled with, but what perplexes is the task of reconciling this with the earlier statement that "no state can interfere with interstate commerce through the imposition of a tax, by whatever name called, which is in effect a tax for the privi- lege of transacting such commerce." ^°^ What Mr. Justice Brewer seems to regard as a resolution of the difficulty seems to the writer nothing but a contradiction of the earlier statement. That state- ment was given as the repeated affirmation of the court. It is followed by the sentence: "And it has as often been affirmed that such restriction on the power of a State to interfere with interstate commerce does not in the least abridge the right of a State to tax at of the intangible property thus ascertained . . . should be assessed on the basis of their lines within and without the State." (166 U. S. 150, 180.) y Henderson Bridge Co. v. Kentucky, 166 U. S. 150, 17 Sup. Ct. Rep. 532 (1897), sustained a similar tax on that part of the intangible property of a company owning an interstate bridge which was deemed to be within Kentucky. Chief Justice Fuller declared that the tax clearly was not on the interstate business carried on over the bridge, because the bridge company did not transact any such business, it being carried on by others who paid toUs for the use of the bridge, thus bringing the case within Erie Railroad v. Pennsylvania, note 71, supra. Mr. Justice White distin- guished the Erie case because the railroad there involved lay wholly within the limits of a single state. The pith of his dissent is as follows: "It being beyond dispute, therefore, that the sum of taxation in this case was fixed almost exclusively by the gross earnings from interstate commerce, who, may I ask, can point out the distinction between taxing the gross earnings derived from interstate commerce and taxing a valuation based on such earnings?" (166 U. S. 150, 165). The division of opinion in these two cases was the same as that in the Ohio cases. i<» 166 U. S. 185, 218, 17 Sup. Ct. Rep. 604 (1897.) '<» Ibid., 185, 219. »" Ibid., 185, 220. "8 ijnd. ^o' Ibid., 1S5, 21S.