The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1870-01-10

by them IL that tax imposed on tonnage OF
on the gross receipts derived therefrom is in
effect, a tax on the eonsignees; and that whore
these parties are residents of another State
the tax is void as a duty on imports or ex-
ports, or tonnage duty, and is aregulation OF
commerce between the States, which, 1t is
contended by them, can only be done by
Congress- The Commonwealth officers
answered these objections by saying,
in test case se-Commonwealth vs.. Philadel-
phia and Reading Railroad Company-that
the tax in question is neither regulation of
commerce, nor an impost or duty on imports
or exports, nor is it a duty on tonnage, within
the meaning of the Constitution Of the United
States, but it is simply tax on the profits of
the company arising from their entire freight
business, without discriminating between that
both received and delivered within the State
and that tran sported without the State by
other companies, after this company had
both received and delivered the same within
the State; and that, even assuming this act to
be, in some measure, a regulation of COM
merce, yet it is local in its operations, and
inasmuch rs Congress has not exercised its
power in the premises, and has enacted no
law with which this act conflicts, the same is
constitutional. Further, that the companys
road was not highway of nature, but an
artificial one, and the State might have re-
fused to allow the same to cross its territory.
Having permitted it to be built, its power of
taxation over it is unlimited, except 80 far as
controlled by the terms of her grant to the
company.
rha cd in fau prNf tha
corporations and against the State on the
ground assumed, that the tax was really paid
by the consignees of the goods transported.
1t was considered that if small tax could be
imposed, SO might a large one; and il the
power was conceded to the State at all, no
limit could be put upon its exercise and the
State might then support itself at the ex-
pense of its neighbors by tax which would
in effect discriminate against non-residents.
One of the main objects in forming Federal
Government being to prevent the States
legislating to the disadvantage of their neigh
bors and harassing commerce, it was decided
that public policy required that the States
should be denied power the abuse of which
would produce this result.
In this particular case it was decided that
coal mined in Schuylkill county, and thence
transported TO this city by the Reading Rail
road-although it was both taken up and de-
livered within the State was not liable to
the tonnage tax, because it was consigned to
dealers in New York. The Supreme Court,
while paying merited compliment to the
great learning and ability displayed in the
opinion delivered in the Court below (Pear-
son, p. j.. wisely declined settling delicate
question of public policy by judicial action,
and observed that "a case of simple doubt
should be resolved favorably to the State law,
leaving the correction of the error, if it be
one, to the Federal judiciary" They decided
these corporations and their works to be the
creatures of the State, and subject to her will
Doubtless these cases will finally be disposed
of in the Supreme Court OF the United States.
They illustrate what might be called the ''con-
stitutional complaint" of all great corpora
tions and moneyed institutions, that of OBJ
tanning their franchises from the Common
wealth as an act of grace, aad then, when
become wealthy through the monopoly thus
bestowed on them, on the fiimsiest pretexts
endeavoring to deprive the State of its
revenue, which must be collected either from
them or from the people. The idea
of a corporation declining to pay
tax because it is against ''public policy
is as dangerous as it is novel, as it puts the
company in the light of an agent protecting
the consignee in another State. The true
solution of the question of public policy as
connected with the tonnage tax is this:-At
present, being small and imposed on all ton
mage, and there being no discrimination
against our Ohio and New York neighbors, it
is in no sense regulation of commerce or q
tax on imports or exports, but is merely tax
on the companies, regulated by the amount OF
their business. If, however, the State is evel
foolish enough to discriminate in favor oi
local and against inter State transportation
and thus show design to either impede com
merce or make our neighbors support oul
State government, then the proper remedy
''to regulate commerce between the States,
and prevent such unfair discrimination. 1t il
very nice point to draw the line in case
of this kind between tax on tonnage which
is fair tax on the business of company
and one which amounts to an attempt to in
terfere with commerce between the States
and to tax New York and Ohio for our benefit
AS this is question of dollars and cents, it il
impossible for a court Of law to fix any arbi
trary amount beyond which State shall no
lay tonnage tax, and obviously the Who'll,
question is one of public policy which is en-