Daily Los Angeles herald. [microfilm reel] (Los Angeles [Calif.]) 1876-1884, 1882-04-23


der the laws of the State of Cali
lorna. are hereby authorized to
construct railroad and telegraph
line from the Pacific Coast at or
near San Francisco or the naviga.
gable waters of the Sacramento
river. to the eastern boundary OF
California, upon the same terms
and conditions in all respects as
are contained in this act for the
construction of said railioad and
telegraph line first mentioned, and
10 meet aud connect with the first
mentioned railroad and telegraph
me Oh the eastern boundary of
California. Each of said COM
panies shall file their acceptance Of
The conditions of this act In the
Department of the Interior within
six months after the passage OF
this act.n
The third section grants GER
tain sectieus of land to the
companies to secure the safe
aud speedy transportation of the
mails, troops, munitions OF war
aud public stores, etc. The fifth
section provides for the issue of
bonds to the companies, or a sub
sidy for the same purpose
AS the answer and the petition
refer to the acts of Congress grant
ing subsidies to the defendant, aud.
make them a part of the applica-
ton, the Court must regard them
in that light. The acts of Congress
refer to tue Southern Pacific Rail-
road as on existing corporation
under the laws OF California at the
time OF the grant to the railroad, 1t
must be held that 1t was regu-
larly organized corporation Of the
State at that time. 1t was not,
therefore, q corporation created by
the act of Congress, and was not,
In consequence, au instrument of
the Federal government. created
by Congress tor the execution OF
the purposes of the national gov
erumeut. TO hold that the State
government could create such an
instrument, would be to decide
that the Estate government had
power to add at pleasure to the
powers of the national government.
fhis question was presented aud
decided in the csse of Thompson
Va. Pacific Railroad to restrain the
collection of taxes imposed on q
railway organized by the Legisla-
ture of Kansas. The Court held
that the railroad, as a State corpo-
ration, was liable to state taxa
ton. The opinion was rendered
by Chief Justic Chase, 9th Wallace
$50. The Court distinctly decided
tnat, "Although, confessedly, Con-
gress may constitutionally make
or authorize contracts with indi-
viduals or corporations for services
To the government, may grant aid
by money or land in preparation
for and in the performance Of such
service; may make any stipuIa-
tiops and conditions in relation to
such aids not contrary to the Con-
stitution, aud may exempt, in its
discretion, the agencies employed
in such services from any State
taxation which will really prevent
or impede the performance of
them. yet in the absence Of all Leg
isiation on the part Of Congress to
indicate that such an exemption is
deemed by it essential to the full
performance of the party's Obliga.
tions to the government, the ex-
emption cannot be- applied to the
case of corporation deriving its
existence from State law, and hold
ing it's property within State juris-
dition and under State protection
only because of the employ ment of
the corporation in the service of
the government"
Upon the justice of the claim of
exemption from taxation by the
State, Judge Chase remarks: "The
nature of the claim TO exemption
which IL advanced in behalf of the
c0mplainants in the case before us
the very ground of the claim is
the bounties OF the general govern.
ment. The allegation Is that the
government has advanced large
sums to aid in the construction Of
the road; has contented itself with
the security OF u second mortgage;
has made large grants Of land
upon no condition of benefit to
itself, except thai the company
will perform certain services for
full compensation, independently
OF those grants; and will admit the
government to very limited and
wholly contingent interest in re-
mote net income"
Such are almost identically the
allegations in the petition and
answer of the case at bar.
In the case of the National Bank
We. Commonwealth claiming ex.
emption from taxation, 7 WAL
lace 352, the same court held:
" The doctrine which exempts
he inslrumentalities of the
Federal government from the in-
fueace Of State legislation, is
not founded on any express
provision OF the Constitution, but
ih lA7 III piicu ACoCooily lol tuC
use Of such instruments by the
Federal government. A State law
requiring the national banks to
pay the tax which Is rightfully
laid on the shares of its stock is
valid under this limitation of the
uoctrine.n
The case Of the Railroad Com.
pany VS.. Pensiston, Is Wallace Z,
presented the case of corporation
chartered by Congress by Act OF
July, 1862. The grants to the COM
pany by Congress were upon con-
dition that the company shall,
first, pay the bonds OF the United
States ut maturity; second, keep
their line and road in repair and
use; third, transmit dispatches over
said telegraph line, and transport
mails, troops and munitions OF
war, supplies and public stores,
upon said railroad for the govern
ment, and giving the government
the preference, at fair and reason.
able rates of compensation not ex.