Page:Harvard Law Review Volume 32.djvu/439

INDIRECT ENCROACHMENT ON FEDERAL AUTHORITY 403 payments for the use of the cars from their "gross earnings" used as the measure of another tax not before the court. This was referred to as disclosing "a purpose to avoid taxing the same property twice or at more than its value, measured by what it earns." "® The Cudahy people contended that the cars were taxed twice because the railroad paid on their earnings to them less the one cent a mile paid as rental, but Mr. Justice Van Devanter answered : "The contention apparently assumes that the receipts from such ship- ments arise solely from the use of these cars, whereas they arise in part from the use of the tracks, locomotives, fuel, labor and the like pro- vided by the railroads. Not improbably only a minor part is fairly attributable to the use of cars. In any event, the company has an in- terest in the car line which yields it a rental of one cent for each mile of travel. This interest is taxable and the State values it for that pur- pose by the rental received." ^^^ It is obvious that a gross-receipts tax on selected kinds of prop- erty may be used as a device to tax property employed in interstate commerce more heavily than the great bulk of property which is assessed by the ad valorem method. Unless some curb is set to the rate of assessment on the gross receipts, a state may easily extract from interstate commerce more than its proportional contribution to the public revenues. The court has appreciated this danger. In the United States Express case Mr. Justice Day quotes from the opinion in Postal Telegraph Cable Co. v. Adams "^"^^ as follows: "Doubtless, no State could add to the taxation of property according to the rule of ordinary property taxation, the burden of a license tax on the privilege of using, constructing, or operating an instrumentality of interstate or international commerce, or for the carrying on of such commerce; but the value of property results from the use to which it is put, and varies with the profitableness of that use, and by whatever name the exaction may be called, if it amounts to no more than the or- dinary tax upon property or a just equivalent therefor, ascertained by reference thereto, it is not open to attack as inconsistent with the Constitution." "^ "« 246 U. S. 450, 456, 38 Sup. Ct. Rep. 373 (1918). "7 /&^.,456. "* Note 69, supra. "9 155 U. S. 688, 697-98, 15 Sup. Ct. Rep. 268 (1895); quoted in 223 U. S. 335, 347-48, 32 Sup. Ct. Rep. 211 (1912). Italics are writer's. Another portion of Chief Justice Fuller's opinion in the Postal Telegraph case (not referred to ty Mr. Justice