Source: https://supreme.justia.com/cases/federal/us/303/573/
Timestamp: 2019-04-22 16:01:55+00:00

Document:
1 Since carriers or other utilities with the right of eminent domain, the use of public property, special franchises, or public contracts, have many points of distinction from other businesses, including relative freedom from competition, they may for purposes of taxation be classed separately. P. 303 U. S. 578.
2. Utilities subject to supervision by the New York Department of Public Service, including those engaged in transportation of persons or property and those furnishing gas, electricity, steam, water, communication by telegraph or telephone, were subjected by local laws of the City of New York to privilege taxes of 3% of their gross incomes. The laws were enacted for short periods under authority from the state legislature, and the proceeds were earmarked for use exclusively in relieving the unemployed in the City. Transit companies operating in the City assailed the levies under the due process and equal protection clauses of the Fourteenth Amendment, and the contract clause of the Federal Constitution.
(1) It is not a valid objection that the taxpayers are defined by reference to the classification previously established by the New York Public Service Law, rather than by specific reference in the taxing law itself to the character of their businesses. P. 303 U. S. 579.
(2) Separate classification of the utilities taxed is justifiable, upon the grounds that they enjoy a special measure of statutory protection from competition; that they are required to make financial reports to public authority which are of administrative convenience in ascertaining and collecting such taxes, and that the revenues of such utilities, furnishing indispensable services, may be subject to relatively little fluctuation, even in times of depression. P. 303 U. S. 580.
discriminatory against them as compared with the other utilities or with business in general. P. 303 U. S. 581.
The legislature is not required to make meticulous adjustments in an effort to avoid incidental hardships.
(4) Taxes on gross receipts, rather than on net income, are justified upon the ground of convenience in administration and because of the close relation of the volume of transactions in a business to cost of its supervision and protection by government. Stewart Dry Goods Co. v. Lewis, 294 U. S. 550, distinguished. P. 303 U. S. 582.
(5) The fact that the tax is levied for the specific purpose of relieving conditions (unemployment) to which the utilities taxed bear no special relation does not render it unconstitutional. P. 303 U. S. 584.
(6) Within the meaning of the rule that classification must rest upon some ground of difference having a fair and substantial relation to the object of the legislation, the "object" in this case is the raising of the revenue. That an appropriation of the funds for relief is part of the same legislation is not significant; it is not constitutionally necessary that the classification for the tax be related to the appropriation of the proceeds. P. 303 U. S. 585.
(7) The laws under consideration do not violate the due process clause of the Fourteenth Amendment. P. 303 U. S. 587.
3. To sustain a claim of contractual tax exemption, the language must be clear and express. P. 303 U. S. 593.
4. In deciding a case under the contract clause, this Court determines for itself the existence and meaning of the contract, but, in so doing, it leans toward agreement with the courts of the State and accepts their judgment unless manifestly wrong. P. 303 U. S. 593.
assessed or which may hereafter be assessed against the Lessee in connection with . . . the operation of the . . . Railroad."
At the time of making the contract, the taxing power of the City was confined to special assessments for public improvements and ad valorem taxes on real estate and on special franchises granted by the City. Later, under new power acquired from the legislature, the City levied a privilege tax of 3% of the gross receipts.
(1) That the collection of such tax was not in violation of the contract, but in accordance with its express terms. Pp. 303 U. S. 588, 303 U. S. 591.
(2) The contract may not be construed as limiting the taxes deductible from gross receipts to those which the City was authorized to impose when the contract was made. P. 303 U. S. 591.
275 N.Y. 258, 454; 9 N.E.2d 858; 11 id. 293, affirmed.
Appeals from judgments of the Supreme Court of New York, entered on remittitur from the Court of Appeals. These were actions to recover from the City large sums exacted as taxes. The Special Term of the Supreme Court held the taxes void; the Appellate Division affirmed, 251 App.Div. 710; 296 N.Y.S. 1006, 1012; the Court of Appeals upheld the taxes and reversed the judgments.
the City of New York," an excise tax shall be paid by every "utility" doing business in the City of New York during 1935 and the first six months of 1936.
"shall be deposited in a separate bank account or accounts, and shall be available and used solely and exclusively for the purpose of relieving the people of the City of New York from the hardships and suffering caused by unemployment."
raised by it is conclusive of those advanced by the Brooklyn and Queens Transit Corporation.
The New York Rapid Transit Corporation operates rapid transit railroads in the City of New York under a contract known as contract No. 4, dated March 19, 1913, made pursuant to the New York Rapid Transit Act Laws 1891, c. 4, as amended, between its predecessor (New York Municipal Railway Corporation) and the City. As a common carrier engaged in the operation of rapid transit railroads, the corporation is under the supervision of the transit commission, the head of the metropolitan division of the state department of public service. Accordingly, but under protest, it paid the taxes imposed by the Local Laws set out above for the months January, 1935, to June, 1936, inclusive. It brought this action against the City of New York to recover the amounts paid, § 1,408,697, with interest, on the ground that the Local Laws are unconstitutional. The case arises on the City's motion to dismiss the complaint.
The Supreme Court of New York, Special Term, denied the motion to dismiss the complaint, and found that the Local Laws denied equal protection because of gross inequality of burden in comparison with other utilities. This order was affirmed by the Appellate Division of the Supreme Court, without opinion, on a 3-2 vote (251 App.Div. 710, 296 N.Y.S. 1006). The Court of Appeals reversed (275 N.Y. 258, 9 N.E.2d 858), upheld the Local Laws against all attacks, and ruled that the complaint did not state a cause of action. Appeal was taken to this Court under § 237(a) of the Judicial Code, 28 U.S.C. § 344(a).
The corporation challenges the Local Laws as violative of the equal protection and due process clauses of the Fourteenth Amendment and the contracts clause of article 1, § 10, of the Constitution.
I. Classification. No question is or could be made by the corporation as to the right of a state, or a municipality with properly delegated powers, to enact laws or ordinances based on reasonable classification of the objects of the legislation or of the persons whom it affects. "Equal protection" does not prohibit this. Although the wide discretion as to classification retained by a Legislature often results in narrow distinctions, these distinctions, if reasonably related to the object of the legislation, are sufficient to justify the classification. German Alliance Ins. Co. v. Lewis, 233 U. S. 389, 233 U. S. 418; Atchison, T., S. & F. R. Co v. Matthews, 174 U. S. 96, 174 U. S. 105; Giozza v. Tiernan, 148 U. S. 657. Indeed, it has long been the law under the Fourteenth Amendment that "a distinction in legislation is not arbitrary if any state of facts reasonably can be conceived that would sustain it." Rast v. Van Deman & Lewis Co., 240 U. S. 342, 240 U. S. 357; Borden's Co. v. Baldwin, 293 U. S. 194, 293 U. S. 209; Metropolitan Casualty Co. v. Brownell, 294 U. S. 580, 294 U. S. 584. "The rule of equality permits many practical inequalities." Magoun v. Illinois Trust & Savings Bank, 170 U. S. 283, 170 U. S. 296; Breedlove v. Suttles, 302 U. S. 277, 302 U. S. 281; Carmichael v. Southern Coal & Coke Co., 301 U. S. 495, 301 U. S. 509. "What satisfies this equality has not been, and probably never can be, precisely defined." Magoun v. Illinois Trust & Savings Bank, supra, 170 U. S. 293.
as respects occupation taxes." Oliver Iron Mining Co. v. Lord, 262 U. S. 172, 262 U. S. 179; Brown-Forman Co. v. Kentucky, 217 U. S. 563, 217 U. S. 573; Southwestern Oil Co. v. Texas, 217 U. S. 114, 217 U. S. 121, 217 U. S. 126; see Ohio Oil Co. v. Conway, 281 U. S. 146, 281 U. S. 159.
Since carriers or other utilities with the right of eminent domain, the use of public property, special franchises, or public contracts, have many points of distinction from other business, including relative freedom from competition, especially significant with increasing density of population and municipal expansion, these public service organizations have no valid ground by virtue of the equal protection clause to object to separate treatment related to such distinctions. Carriers may be treated as a separate class (compare Seaboard Air Line v. Seegers, 207 U. S. 73) and, as such, taxed differently or additionally. Southern R. Co. v. Watts, 260 U. S. 519, 260 U. S. 530. This Court has approved the adoption of modes and methods of assessment and administration peculiar to railroads (Kentucky Railroad Tax cases, 115 U. S. 321, 115 U. S. 337), and upheld tax rates for railroads differing from those on other property, and as between railroad taxpayers, Michigan Central R. Co. v. Powers, 201 U. S. 245, 201 U. S. 300; Ohio Tax cases, 232 U. S. 576, 232 U. S. 590; Columbus & G. Ry. Co. v. Miller, 283 U. S. 96. Similarly, we have explicitly recognized that a state may subject public service corporations to a special or higher income tax than individuals or other corporations. Atlantic Coast Line R. Co. v. Daughton, 262 U. S. 413, 262 U. S. 424. The corporation concedes this general right to set apart the utilities in New York for taxation.
excise tax, however, should be made by specific reference to the character of the business to be taxed, and that it is arbitrary to make taxability depend on whether a person is subject to the supervision of a commission. Valid reason for the definition utilized appears from the fact that the Local Laws merely adopted the classification previously established in the New York Public Service Law (N.Y.Laws 1910, c. 480, as amended), which had selected those offering several kinds of public services, including the transportation of persons and property (§ 25), [Footnote 3] and made them subject to the supervision of the department of public service.
tax [Footnote 5] which might properly have been taken into account by the City's Legislature. See Carmichael v. Southern Coal & Coke Co., 301 U. S. 495, 301 U. S. 511, and cases cited. The Legislature may reasonably have conceived that the revenues of utilities furnishing indispensable services are subject to relatively little fluctuation, even in depression times, and reasonably have shaped its tax system accordingly.
gross income yields a higher percentage of profit, that the operation and maintenance expenses of these corporations are higher in relation to gross receipts than those of other utilities, the ratio of net income to gross receipts, lower. It is said to be highly discriminatory to classify these railroads apart from other businesses, or in the same group as other utilities. The differences from business are not enough, and from other utilities too great, to justify this attempted classification, which sets them apart from business as a whole and yokes them with other utilities.
The disadvantages complained of as to fare limitations are applicable only to the corporation, a single member of a class of utilities. It is quite fortuitous that this particular corporation must seek adjustments in fare in a peculiar way. "The legislature is not required to make meticulous adjustments in an effort to avoid incidental hardships." See Great Atlantic & Pac. Tea Co. v. Grosjean, 301 U. S. 412, 301 U. S. 424.
"If the accidents of trade lead to inequality or hardship, the consequences must be accepted as inherent in government by law, instead of government by edict."
Fox v. Standard Oil Co., 294 U. S. 87, 294 U. S. 102.
with disputes about permissible deductions, it has greater certitude and facility of administration than the net income tax, an important consideration to taxpayer and tax gatherer alike. And the volume of transactions indicated on the taxpayer's books may bear a closer relation to the cost of governmental supervision and protection than the annual profit and loss statement. In Clark v. Titusville, 184 U. S. 329, we rejected an equal protection objection to a license tax on merchants, which we said was "a tax on the privilege of doing business, regulated by the amount of sales, and . . . not repugnant to the Constitution of the United States." And we have heretofore had occasion to remark that gross receipts from an occupation constitutes an "appropriate measure of the value of the privilege" of engaging in that occupation. Western Live Stock v. Bingaman, 303 U. S. 250; American Manufacturing Co. v. St. Louis, 250 U. S. 459, 250 U. S. 463; Maine v. Grand Trunk Ry. Co., 142 U. S. 217, 142 U. S. 228.
of sales," the graduated tax under consideration exacted not only a larger gross amount, but one "larger in proportion to sales" (p. 294 U. S. 564).
upon one particular class of business, even though that class is in no different position in relation to the object sought to be accomplished than business in general."
"that there is a distinction between the ordinary excise tax with no specific purpose attached thereto, and a tax which is a part of a plan for the accomplishment of a specified object."
The "object of the legislation," to the taxpayer, is apparently the relief of unemployment.
"such a relationship between the subject of the tax (the exercise of the right to employ) and the evil to be met by the appropriation of the proceeds (unemployment)."
P. 301 U. S. 522. See also Cincinnati Soap Co. v. United States, 301 U. S. 308, 301 U. S. 313. The corporation suggests that, in the Carmichael case, there was a special relationship between the class taxed and the purpose for which the proceeds were spent, but the Court expressly said that this was something "the Constitution does not require." Page 301 U. S. 523. There need be no relation between the class of taxpayers and the purpose of the appropriation.
was said that "the object of the act . . . simply is to secure revenue." In Stebbins v. Riley, 268 U. S. 137, Royster Guano Co. v. Virginia, 253 U. S. 412, and Air Way Electric Appliance Corp. v. Day, 266 U. S. 71, the rule contended for by the corporation was recognized, but with no intimation that the "object" was considered to be the purpose for which the proceeds of the tax were spent. The "object" of the Local Laws under consideration, as in the case with most tax statutes, was obviously to secure revenue. In some cases, a classification of taxpayers may be upheld as having a fair and substantial relation to a constitutional nonfiscal object (Alaska Fish Salting & By-Products Co. v. Smith, 255 U. S. 44, 255 U. S. 48; Quong Wing v. Kirkendall, 223 U. S. 59, 223 U. S. 62-63; Aero Mayflower Transit Co. v. Georgia Public Service Commission, 295 U. S. 285, 295 U. S. 291), but it is not constitutionally necessary that the classification be related to the appropriation. In United States v. Butler, 297 U. S. 1, also relied upon by the corporation, the attack on the federal statute was successful because the tax was said to be a part of an unconstitutional scheme to regulate production through expenditures. It was not held invalid because there was no relation between the taxpayer and the appropriation. See Cincinnati Soap Co. v. United States, supra. We conclude, therefore that the provisions of the legislation earmarking the funds collected are not of importance in determining whether or not the classification of the challenged acts is discriminatory.
What we have said in showing that the Local Laws do not deny the equal protection of the laws also disposes of the corporation's contention that the Local Laws constitute a deprivation of due process, as being measured without regard to the net income of or ruinous effect on the taxpayers, and as laying on a particular class a burden which should be borne by all.
IV. Contracts Clause. [Footnote 8] The corporation contends that, in contravention of the Constitution, Article 1, § 10, the Local Laws impair the obligation of the contract known as contract No. 4, entered into March 19, 1913, between its predecessor and the City, under which it operates its owned and leased properties in New York.
"1. Rentals actually paid by Lessee under leases approved by the Commission;"
"2. Taxes [the full provision as to 'taxes' is set forth later];"
"3. Operating expenses exclusive of maintenance;"
"4. Charges for maintenance of both the Railroad and the Existing Railroads [Railroad refers to the system to be constructed by the City; Existing Railroads refers to the company-owned lines as they existed at the time of execution of the contract];"
"5. Charges for depreciation of the Railroad, the equipment, and the Existing Railroads;"
"6. To be retained by the Lessee: 1/4th of $3,500,000, representing the average income from operation of the Existing Railroads;"
"7. To be retained by the Lessee: 1/4th of 6% per annum on (a) the Lessee's contribution to cost of construction of the Railroad, (b) cost of equipment furnished by the Lessee, (c) cost of extensions and additional tracks constructed by the Lessee, and (d) cost of reconstruction of Existing Railroads (out of which quarterly payments the Lessee is required to amortize such costs);"
"8. To be retained by the Lessee: 1/4th of the actual annual interest payable by Lessee upon the cost of additional equipment, plus an amortization charge;"
"9. To be paid to the City: 1/4th of the annual interest payable by it upon its share of the cost of construction of the Railroad plus an amortization charge;"
"10. To be paid to the City: 1/4th of the annual interest payable by the City upon cost of construction of additions to the Railroad plus an amortization charge;"
"11. 1% of the gross receipts, to be paid into a contingent reserve fund. "
"In connection with the above allocation provisions, Contract No. 4 provided (Art. LI, p. 66) that if in any quarter the gross receipts should be insufficient to meet the various obligations and deductions above recited, the deficits should be cumulative, and payment thereof should be made in the order of priority above set forth."
"may not, in the exercise of its governmental power, subject appellant to the payment of a tax on or measured by the gross receipts of the combined system of railroads,"
"by providing in specific terms for the disposition and allocation of the entire gross receipts, the parties necessarily precluded any kind of tax or charge by the City which would directly and specifically alter such disposition and allocation, to appellant's prejudice, except insofar as any such tax or charge may clearly be said to have been provided for in the contract provisions as to the disposition of gross receipts."
The corporation further complains that the tax payments deprive it of "a substantial part of the interest and sinking fund allowance to which it was entitled" under deductions Nos. 7 and 8 set out above. The loss thus suffered was alleged to total more than $600,000.
"We must look for the exemption in the language of the instrument, and if we do not find it there, it would be going very far to insert it by construction."
is made must be clear and unmistakable." At the present term, the Court has reiterated that contracts of tax exemption are "to be read narrowly and strictly." Hale v. State Board, 302 U. S. 95, 302 U. S. 109. See also Pacific Co. v. Johnson, 285 U. S. 480, 285 U. S. 491; Puget Sound Power & Light Co. v. Seattle, 291 U. S. 619, 291 U. S. 627.
"all taxes . . . of every description (whether on physical property, stock or securities, corporate or other franchises, or otherwise) assessed or which may hereafter be assessed against the Lessee in connection with . . . the operation of the . . . Railroads."
The taxes under discussion clearly come within its terms.
provision limited to taxes of the type which the City could have imposed in 1913.
There is no reason to limit the ordinary meaning of words used in a contract by men prepared to invest under its terms.
"A business proposition involving the outlay of very large sums cannot be and is not taken by the parties concerned according to offhand impressions; it is scrutinized phrase by phrase and word by word."
New York ex rel. Interborough Rapid Transit Co. v. Sohmer, 237 U. S. 276, 237 U. S. 284; cf. 57 U. S. Co. v. Debolt, 16 How. 416, 57 U. S. 435.
"any new form of tax or additional charge that may be imposed by any ordinance of the City or resolution of the Board upon or in respect of the franchise . . . shall be deducted from the compensation payable to the City hereunder."
which were a part of the land. Where one relies upon an exemption from taxation, both the power to exempt and the contract of exemption must be clear. Any doubt or ambiguity must be resolved in favor of the public."
Admitting that, with respect to a franchise contract silent as to taxes, the City may validly impose a license tax on the privilege of doing business, since "surrender of the state's power to tax the privilege is not to be implied from the grant of it," Puget Sound Power & Light Co. v. Seattle, 291 U. S. 619, 291 U. S. 627, it is urged by the corporation that here the City is violating the affirmative covenants of a contract -- namely, the provisions for allocation of revenue. The contention is made that these provisions preclude an "alteration" by virtue of a gross receipts tax.
This Court, in construing a contract to determine whether or not legislation is violative of its provisions within the meaning of the contract clause of the Constitution, will examine for itself the existence and meaning of the contract, as well as the relation of the parties and the circumstances of its execution. Appleby v. City of New York, 271 U. S. 364, 271 U. S. 379-380; Funkhouser v. J. B. Preston Co., 290 U. S. 163, 290 U. S. 167; Violet Trapping Co. v. Grace, 297 U. S. 119, 297 U. S. 120. But, of course, in so doing, we "lean toward agreement with the courts of the state, and accept their judgment as to such matters unless manifestly wrong." Hale v. State Board, 302 U. S. 95, 302 U. S. 101; Tampa Waterworks v. Tampa, 199 U. S. 241, 199 U. S. 243-244; Southern Wisconsin Ry. Co. v. Madison, 240 U. S. 457, 240 U. S. 461. In this case, the Court of Appeals of New York, 275 N.Y. 258, 268, 9 N.E.2d 858, 861, has determined that "the right to tax cannot be lost by such tenuous implication" -- i.e., on the theory that the tax enables the City to secure a portion of the gross income in contravention of the contract.
We see no reason for disagreeing with the conclusion of the Court of Appeals of New York upon this point.
In effect the corporation is urging that a constructive condition restricting the City's power of taxation should be incorporated in the contract, by speculation as to what the parties must necessarily have intended, despite the longstanding rule that exemptions must be "clear and unmistakable." Erie R. Co. v. Pennsylvania, 21 Wall. 492, and other cases, all cited supra.
The corporation professes to dread an interpretation of the contract and the legislation which will put it "wholly at the mercy" of the City, under which the corporation's "gross receipts would be disposed of not as Contract No. 4 provides, but as the City may from time to time in its wisdom determine." The corporation is not deprived of its right to resist on constitutional or legal grounds whatever tax or assessment may be imposed upon it or its property. The City cannot lay a gross receipts tax on the corporation unless it selects a class of taxpayers which meets the requirement of the equal protection to the laws. The provisions of the contract as to taxes are certainly not sufficiently explicit to justify us in denying to the City the right to collect such taxes as those involved in this litigation. The danger which the corporation sees from what it considers to be a violation by legislation of its contract rights is a danger which every utility, with a franchise which does not protect its property from additional taxation, must endure.
does in the present case. The act established a "fund commissioner" and provided that the railroad company should pay over to this commissioner "all the gross earnings and daily receipts." It was provided that the commissioner should first pay amounts required for "actual current expenditures;" should then make other specified deductions, and lastly, should apply any excess to certain first mortgage bonds and then against the railroad's debt to the state.
Subsequently, the State Constitution was amended to provide that an annual tax of 10 percent of the gross receipts should be levied on the North Missouri Railroad Company and two other named corporations. The state court held that the earlier statute constituted a contract, but considered the payment of taxes to fall within "current expenditures in carrying on the ordinary business." In this Court, the company argued that the tax constituted a violation of this contract, since it overturned the allocation of receipts and had the effect of converting the state from a junior creditor to a first mortgagee.
"Further examination of those provisions is certainly unnecessary, as it is too plain for argument that they do not afford the slightest support to the views of the plaintiffs. On the contrary, they are entirely silent upon the subject of taxation, and fully justify the remarks of the State court when they say that the subject of taxation forms no part of the contract contained in the act under consideration. "
"Nothing is said about taxation, and it does not seem to have entered into the contract between the parties, but was obviously left where the law had placed it before the act was passed, nor was any provision made for the payment of taxes unless it may be held that the disbursements for that purpose may fairly be included in such as are required to pay the current expenditures in carrying on the ordinary business of the corporation."
* Together with No. 436, Brooklyn & Queens Transit Corp. v. City of New York, also on appeal from the Supreme Court of New York.
Utilities subject to the supervision of the department of public service pay three percent. of their "gross income," as defined by § 1(c); the other utilities pay three percent. of their "gross operating income," as defined by § 1(d).
N.Y.Laws 1934, c. 873, authorized any city of a million inhabitants to impose for purposes of unemployment relief any tax within the powers of the state Legislature, including a tax on gross income or gross receipts of those doing business in the city. The act specifically provided (§ 2) that the revenues shall be deposited in a separate bank account and used solely for the relief purposes. The authority granted by this statute expired December 31, 1935, but was extended, with certain restrictions not material here, until July 1, 1936, by N.Y.Laws 1935, c. 601.
Others are the production and/or furnishing of gas, electricity, steam, and water, communication by telegraph or telephone, omnibus transportation. New York Public Service Law, §§ 64, 78, 89-a, 90, 60.
New York Public Service Law, Laws 1910, c. 480, as amended: § 53 (railroad; street railroad); § 63-d (omnibus); § 68 (gas; electricity); § 81 (steam); § 89-e (water); § 99(1) (telephone and telegraph).
Operating revenues are reported by railroads. See, e.g., Transit Commission, Summary of Reports of Rapid Transit, Street Surface Railway and Bus Companies operating in the City of New York for the Quarter April-June, 1935, and for the Fiscal Year Ended June 30, 1935; id., Quarter, April-June, 1936, and for the Fiscal Year Ended June 30, 1936.
City of New York, Local Law No. 16, p. 106, of 1925.
The argument is applicable in No. 436. There, the limitation on fare exists in a franchise, alleged in the complaint to be beyond the regulatory power of the transit commission.
"An Act to enable, temporarily, any city of the state having a population of one million inhabitants or more to adopt and amend local laws, imposing in any such city any tax and/or taxes which the legislature has or would have power and authority to impose to relieve the people of any such city from the hardships and suffering caused by unemployment and to limit the application of such local laws. . . ."
"§ 2. Revenues resulting from the imposition of taxes authorized by this act shall be paid into the treasury of any such city and shall not be credited or deposited in the general fund of any such city, but shall be deposited in a separate bank account or accounts and shall be available and used solely and exclusively for paying the principal amount of any installment of principal and of interest due during the aforesaid period on account of the ten-year serial bonds sold to obtain moneys to pay for home relief and work relief in any such city in the month of November, nineteen hundred thirty-three, and for the relief purposes for which the said taxes have been imposed under the provisions of this act."
"A local law to relieve the people of the city of New York from the hardships and suffering caused by unemployment and the effects thereof on the public health and welfare, by imposing an excise tax on the gross income of every person doing business within such city and subject to supervision of either division of the department of public service, and of any and all other utilities doing business within such city to enable such city to defray the cost of granting unemployment work and home relief"
"§ 14. Disposition of revenues. -- All revenues and monies resulting from the imposition of the taxes imposed by this local law shall be paid into the treasury of the city of New York and shall not be credited or deposited in the general fund of the city of New York, but shall be deposited in a separate bank account or accounts, and shall be available and used solely and exclusively for the purpose of relieving the people of the city of New York from the hardships and suffering caused by unemployment including the repayment of moneys borrowed for such purpose."
In No. 436, the legislation is not challenged as an impairment of an obligation of contract. The Brooklyn and Queens Transit Corporation "does not operate under Contract 4, but under street railroad franchise from the City."
"Taxes, if any, upon property actually and necessarily used by the Lessee in the operation of the Railroad and the Existing Railroads, together with all taxes or other governmental charges of every description (whether on physical property, stock or securities, corporate or other franchises, or otherwise) assessed or which may hereafter be assessed against the Lessee in connection with or incident to the operation of the Railroad and the Existing Railroads. Also such assessments for benefits as are not properly chargeable to cost of construction or cost of equipment."

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