Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1888-05-17
RAILROAD TAX CASES.
Effect and Extent of the Recent Supreme
Court Deci Jon


Court Deci-ion.
The recent decision of the United States
Supreme Court in the California tax cases
not only forever settles a question that mas
caused both this State and the Central and
Southern Pacific Railroad Companies great
trouble and untold expense, but it knocks
the last prop from under the "State rights
doctrine, and completely demolishes that
once popular fallacy. The Court holds
that the Central and Southern Pacific roads
are invested with franchises derived from
the Government of the United States; that
congress, under the power to regulate COM
merce among the several States. as well as
to provide for postal accommodations and
military exigencies, had authority TO grant
these franchises that the power to con-
struct, or authorize individuals or corpora
tons to construct, national highways and
bridges from State to State is essential tc
the complete control and regulation of
interstate commerce; and that, without
authority in Congress to establish such
highways and bridges, it would be with
out authority to regulate one of the
most important adjuncts of commerce.
In former times, however, this power
was operated TO a very limited extent,
the old National road being the most nota-
Bile instance; but then commerce was
mostly conducted by water, and many of
our statesmen entertained serious doubts as
to the existence of the power to establish
ways of communicating by land. Since,
in consequence of the expansion of the
country, the multiplication of its products
and the invention of locomotion by steam,
land transportation has so vastly increased,
sounder consideration of the subject
has prevailed, and led to the almost uni
uarcal rlrciar, ~ / Il
power over the whole matter. The Court
further holds that the Central and South
ern Pacific Railroad Companies having re.
ceived the important franchises referred TO
by grant of the United States, and that they
were granted to the companies for national
purposes and to subserve national ends, il
is clear that the State of California can
neither take them away nor destroy nor
abridge them, nor cripple them by onerous
burdens; nor can it tax them, but its NAV
tax the outside visible property. After de-
scnbIng the nature of franchise the Court
says:
"Recollecting the fundamental principles
that the Constitution, laws and treaties of
the United States are the supreme law of
the land, it seems to us almost absurd to
contend that a power given to a person or
corporation by the United States NAV be
subjected to taxation by a State. The
power conferred emanated from and is a
portion of the power of the Government
that confers it. To lax it is not only derog.
atOry to the dignity but subversive of the
power OF the Government, and repugnant
TO its paramount sovereignty. The
taxation OF corporate franchise, merely
as such, unless pursuant 10 a stipulation in
the original charter of the company. is the
exercise of an authority somewhat arbi-
trary IN its character. 1t has no Limitation
but The discretion Of the taxing power
The value of the franchise is not measured
like that of property, but may be ten thou.
sand or ten hundred thousand dollars. as
the Legislature may choose. Or. without
any valuation of the franchise at all. the
tax may be arbitrarily laid. II is not an idle
objection, therefore, made by the compa-
MES against the tax imposed in the present
case"
And now arises another and very i'm
portant question. The highest judicial
tribunal in the land having decided that
the Central and Southern Pacific Railroad
Companies are invested with franchises de-
rived from the Government of the United
States; that these franchises were granted
Tor national purposes, and to subserve ma
tlonal ends; and that the State of Califor-
MA can neither take them away, nor de-
suof HoI dprluSe lneln, For cripple them
by onerous burdens, nor tax them, is it not
a logical sequence that the State is also de-
prlved of its power to regulate the charges
of these roads for freight or fares, or in any
other way interfere with their management?
The language of the Court is plain. The
roads having been created by the Govern
ment, can only be controlled by the power
giving them life, and therefore any inter-
ference with their business by the State is
illegal unless with the consent OF Congress
S. Il. Argus.