Source: https://supreme.justia.com/cases/federal/us/105/460/
Timestamp: 2019-04-23 01:59:13+00:00

Document:
1. In respect to its foreign and interstate business, a telegraph company is, as an instrument of commerce, subject to the regulating power of Congress, and, if it accepts the provisions of Title 66 of the Revised Statutes, it becomes an agent of the United States so far as the business of the government is concerned.
2. Where it has accepted those provisions, state laws, so far as they impose upon it a specific tax on each message which it transmits beyond the state, or which an officer of the United States sends over its lines on public business, are unconstitutional.
By sec. 1 of art. 8 of the Constitution of Texas, the legislature is authorized to "impose occupation taxes, both upon natural persons and upon corporations, other than municipal, doing business in the state," and by art. 4655 of the Revised Statutes, enacted under that provision, every chartered telegraph company doing business in the state is required to pay a tax of one cent for every full-rate message sent, and one-half cent for every message less than full rate. This tax is to be paid quarterly to the comptroller of the state on sworn statements made by an officer of the company. In addition to this, taxes must be paid on the real and personal property of the company in the state.
100,408 less than full rate messages. A large portion of them were sent to places outside of the state, and by the officers of the government of the United States on public business. The company neglected to pay the tax imposed, and a suit was brought in one of the courts of the state for its recovery. In defense it was insisted that the law imposing the tax was in conflict with the Constitution and laws of the United States, and therefore void. The supreme court of the state, on appeal, sustained the law and directed a judgment against the company for the full amount claimed, allowing no deductions for messages sent out of the state or by government officers on government business. To reverse that judgment this writ of error was sued out.
The act of Congress "to aid in the construction of telegraph lines" confers the right to construct them over the public domain and along the military or post roads of the United States, and for this purpose authorizes the companies to use stone, lumber, and other materials found on the public land. It then provides that as to the companies acting under the provisions of the act, the messages sent by the government "shall have priority over all other business, at such rates as the Postmaster General shall annually fix," the government reserving the right to purchase their lines.
This company, by accepting the act, was therefore bound to give the messages of the government priority over all other business at such rates as such be determined by the Postmaster General, but it incurred no other obligation. The act contains no provision inconsistent with the exercise of the taxing power of the states, and if Texas has the right to impose the tax in question on a company that had not accepted the act, this company cannot by accepting it elude that power.
United States, 9 Wheat. 738; Thomson v. Pacific Railroad, 9 Wall. 579; Railroad Company v. Peniston, 18 Wall. 5.
A state, while it cannot regulate either foreign or interstate commerce, may do many things which more or less affect it. It may tax a vessel used in commerce, and the stages employed in the transportation of the mail. But this does not regulate commerce or the conveyance of the mail. And yet in both instances the tax on the property in some degree affects its use. This tax may enhance the cost of messages, many of which are transmitted beyond the state, but the statute imposing it is not an attempted regulation of commerce.
We then have a question touching the relation of the states to the general government involving the vital power of taxation reduced to an inquiry into the mere phraseology of the act levying the tax.
come into the company's hands. Then it has lost its distinctive character as freight by having become incorporated into the general mass of the company's property."
If the tax in this case had been confined to messages between points within the state, no argument could be made to invalidate the act. This being so, as the act makes no discrimination, its legality cannot be impeached on the ground that a portion of the messages were sent through and beyond the limits of the state.
Osborne v. Mobile, 16 Wall. 479, is decisive of this case. It was tried on an agreed statement of facts, from which it appears that the express company was engaged in a business extending beyond the limits of the state in carrying merchandise of every kind, including articles of commerce, between different states, as well as goods and merchandise from foreign countries, and articles imported in the original packages; that the company was at times employed by the officials of the United States in transporting the funds of the government; that the company, which was incorporated by the State of Georgia, was subject to and had paid city and county taxes on its property, and the tax levied by the United States.
"Every express company, or railroad company who shall do business in the City of Mobile and whose business extends beyond the limits of the state shall pay an annual license of $500, if within the limits of the state $100, and if within the limits of the city $50."
beyond the limits of the state, or rather the making of contracts within the state for such transportation beyond it. It was in reference to this feature of the business that the tax was in part imposed, but it was no more a tax upon interstate commerce than a general tax on drayage would be because the licensed drayman might sometimes be employed in hauling goods to vessels to be transported beyond the limits of the state."
In Pensacola Telegraph Co. v. Western Union Telegraph Co., 96 U. S. 1, this Court held that the telegraph was an instrument of commerce and that telegraph companies were subject to the regulating power of Congress in respect to their foreign and interstate business. A telegraph company occupies the same relation to commerce as a carrier of messages that a railroad company does as a carrier of goods. Both companies are instruments of commerce, and their business is commerce itself. They do their transportation in different ways and their liabilities are in some respects different, but they are both indispensable to those engaged to any considerable extent in commercial pursuits.
Congress, to facilitate the erection of telegraph lines, has by statute authorized the use of the public domain and the military and post roads, and the crossing of the navigable streams and waters of the United States for that purpose. As a return for this privilege, those who avail themselves of it are bound to give the United States precedence in the use of their lines for public business at rates to be fixed by the Postmaster General. Thus, as to government business, companies of this class become government agencies.
occupation and its business. The precise question now presented it whether the power to tax its occupation can be exercised by placing a specific tax on each message sent out of the state or sent by public officers on the business of the United States.
In Case of the State Freight Tax, 15 Wall. 232, this Court decided that a law of Pennsylvania requiring transportation companies doing business in that state to pay a fixed sum as a tax "on each two thousand pounds of freight carried," without regard to the distance moved or charge made, was unconstitutional so far as it related to goods taken through the state, or from points without the state to points within, or from points within to points without, because to that extent, it was a regulation of foreign and interstate commerce. In this the Court but applied the rule, announced in Brown v. Maryland, 12 Wheat. 419, that where the burden of a tax falls on a thing which is the subject of taxation, the tax is to be considered as laid on the thing rather than on him who is charged with the duty of paying it into the treasury. In that case, it was said, a tax on the sale of an article, imported only for sale, was a tax on the article itself. To the same general effect are Welton v. State of Missouri, 91 U. S. 275; Cook v. Pennsylvania, 97 U. S. 566; and Webber v. Virginia, 103 U. S. 344. Taxes upon passenger carriers of a specific amount for each passenger carried were held to be taxes on the passengers, in Passenger Cases, 7 How. 283; Crandall v. State of Nevada, 6 Wall. 35; and Henderson v. The Mayor, 92 U. S. 259. Taxes on vessels according to measurement, without any reference to value, were declared to be taxes on tonnage. State Tonnage Cases, 12 Wall. 204; Peete v. Morgan, 19 Wall. 581; Cannon v. New Orleans, 20 Wall. 577; and Inman Steamship Co. v. Tinker, 94 U. S. 238.
full rate, one-half cent. Clearly if a fixed tax for every two thousand pounds of freight carried is a tax on the freight, or for every measured ton of a vessel a tax on tonnage, or for every passenger carried a tax on the passenger, or for the sale of goods a tax on the goods, this must be a tax on the messages. As such, so far as it operates on private messages sent out of the state, it is a regulation of foreign and interstate commerce and beyond the power of the state. That is fully established by the cases already cited. As to the government messages, it is a tax by the state on the means employed by the government of the United States to execute its constitutional powers, and therefore void. It was so decided in McCulloch v. Maryland, 4 Wheat. 316, and has never been doubted since.
It follows that the judgment, so far as it includes the tax on messages sent out of the state or for the government on public business, is erroneous. The rule that the regulation of commerce which is confined exclusively within the jurisdiction and territory of a state, and does not affect other nations or states or the Indian tribes -- that is to say, the purely internal commerce of a state -- belongs exclusively to the state is as well settled as that the regulation of commerce which does affect other nations or states or the Indian tribes belongs to Congress. Any tax, therefore, which the state may put on messages sent by private parties, and not by the agents of the government of the United States, from one place to another exclusively within its own jurisdiction will not be repugnant to the Constitution of the United States. Whether the law of Texas in its present form can be used to enforce the collection of such a tax is a question entirely within the jurisdiction of the courts of the state, and as to which we have no power of review.

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