INDIRECT ENCROACHMENT ON FEDERAL AUTHORITY 385 Reference has already been made ^^ to the difference of opinion among the judges as to the Texas gross-receipts tax on railroads that came before the court in Galveston, H.b° S.A. Ry. Co. v. Texas^^ in 1907 . The tax was imposed on all railroads whose lines lay wholly within the state, and the amount demanded by the law was a sum "equal to one per cent of their gross receipts." This included re- ceipts from interstate commerce, since roads whose termini were both within the state nevertheless carried passengers and goods destined for extra-state points over connecting lines. Mr. Justice Harlan for the minority took a position which is in substance in flat contra- diction to the one he elaborated in his solitary dissent in the Ficklen case. In seeking to distinguish the Pennsylvania gross-receipts tax declared unconstitutional in Philadelphia b° Southern Mail S. S. Co. V. Pennsylvania ^^ from the Texas gross-receipts tax before the court, he says: "Here there is no levying upon receipts as such from interstate com- merce. The State only measures the occupation tax by looking at the entire amount of the business done within its limits without reference to the source from which the business comes. It does not tax any part of the business because of its being interstate. It has reference equally to all kinds of business done by the corporation in the State. Suppose the State as, under its Constitution it might do, should impose an income tax upon railroad corporations of its own creation, doing business within the State, equal to a given per cent of all income received by the corpora- tion from its business, would the corporation be entitled to have excluded from computation such of its income as was derived from interstate commerce? Such would be its right under the principles announced in the present case. In the case supposed the income tax would, under the principles or rules now announced, be regarded as a direct burden upon interstate commerce. I cannot assent to this view." ^^ The learned dissentient cites no authority for his contention. He argues that the operation of the tax "on interstate commerce is only incidental, not direct," ^ and points out that the state con- stitution authorizes the imposition of occupation taxes on corpora- tions and natural persons, and that "the plaintiff in error is a Texas " 31 Harv. L. Rev. 583. " 210 U. S. 217, 28 Sup. Ct. Rep. 638 (1908). "•^ Note 19, supra.
- 2 210 U. S. 217, 229, 28 Sup. Ct. Rep. 638 (1908).
" Ibid., 229.
