Source: https://www.law.cornell.edu/supremecourt/text/216/1
Timestamp: 2019-04-24 20:29:05+00:00

Document:
Argued: March 17, 18, 1909.
The reasons given by the telegraph company for its refusal to pay the required fee are set forth in its answer, to which a demurrer was sustained, and may be summarized as follows: 1. That the company had the right to transact both interstate and local business in Kansas without paying the fee of $20,100. 2. That by the laws of Kansas, enacted while it was a territory and after it became a state telegraph companies were invited to come into it and do both domestic and interstate business there, and in consequence of such invitation the company had established between eight hundred and nine hundred offices in Kansas at great expense, all of which was done in the full faith that it would receive the equal protection of the laws under the Constitution of the United States. 3. That it had been doing a general telegraph business in Kansas ever since its organization as a territory. 4. That on the 7th day of June, 1867, it duly accepted the conditions of the act of Congress of July 24th, 1866 14 Stat. at L. 221, chap. 230, entitled, 'An Act to Aid in the Construction of Telegraph Lines, and to Secure to the Government the Use of the Same for Postal, Military, and Other Purposes' (Rev. Stat. §§ 5263 et seq., U. S. Comp. Stat. 1901, p. 3580), whereby it became and is now an instrument of interstate commerce and an agency of the United States for the transaction of public business, and subject to all the duties imposed, and entitled to all the rights, benefits, and privileges conferred, by said act of Congress. 5. That its lines were originally constructed in the territory of Kansas by the authority of an arrangement made with the Secretary of the Treasury in conformity with certain acts of Congress, one of which was enacted June 16th, 1860, and was entitled, 'An Act to Facilitate Communication between the Atlantic and Pacific States by Electric Telegraph' 12 Stat. at L. 41, chap. 137, the other, enacted July 2d, 1864, entitled, 'An Act for Increased Facilities of Telegraph Communication between the Atlantic and Pacific States and the Territory of Idaho' 13 Stat. at L. 373, chap. 220; and the telegraph company, therefore, 'has always been in the state of Kansas rightfully for the purpose of the transaction of governmental business and for the public generally, and that it cannot be now excluded therefrom.' 6. That the company's lines of telegraph within Kansas are upon the public domain and upon military and post roads of the United States, and are part of the postal system of the United States, and that the defendant has, therefore, under the Constitution and laws of the United States, the power, and is under the duty and obligation, to transmit all messages for the government and for the public generally just as much and as fully with respect to messages between points within Kansas as to interstate messages. 7. That the enforcement of the statute of Kansas would seriously affect and cripple the company's efficiency as an instrument of interstate commerce and as an agency of the government for transacting both interstate and domestic business in that state, because the receipts derived from interstate and governmental business alone would, in many offices in Kansas, not be equal to the expense of keeping such offices open, and that the closing of them on that account would be detrimental to the governmental service, as well as to interstate commerce. 8. That by the statutes in question 'any corporation, including telegraph companies, organized in the state, is authorized to do business in Kansas upon paying a charter fee based on the actual capital of such corporation employed in the state of Kansas, whereas, in respect to the defendant company, the charter board requires and is attempting to exact from the defendant company, by this proceeding, a charter fee based upon the defendant's entire capitalization, to wit, $100,000,000 which $100,000,000 represents the property and lines of telegraph of the defendant company in the forty-five states of the American Union, in the Dominion of Canada, and lines under the Atlantic and Pacific oceans and in foreign countries.' 9. That such tax is upon property and rights outside of Kansas, and, therefore, beyond its jurisdiction for purposes of taxation. 10. That 'by laws passed relating to private corporations, and especially by laws having reference to telegraph companies, some enacted by the legislature of the territory of Kansas and many since the creation and organization of the state of Kansas, telegraph companies, including the Western Union, were invited to come into the state of Kansas, and build and construct their lines therein, and to connect said lines with other telegraph liens then or thereafter constructed, and to do a general telegraph business, both domestic and interstate, throughout the state of Kansas, and to thereby place the citizens of the state of Kansas, wherever the lines reached, in direct telegraphic communication with all parts of the United States; that said telegraph companies, including the Western Union Telegraph Company, were, by the laws of the state of Kansas, authorized to go upon the public highways of the state, and thereon place their poles and wires; that, in pursuance of such invitation, and before the admission of the state of Kansas to the Union, the Western Union Telegraph Company entered the state of Kansas and extended its lines to all points where the same might be needed, and subsequent to the admission of the state, by construction and purchase, lines of the Western Union Telegraph Company were extended to all parts of the state of Kansas, and between eight hundred and nine hundred offices established for the use and convenience of the public; that there had been expended by the defendant at the time of the enactment of the so-called Bush corporation act, under which the present proceeding is brought, many thousands of dollars in the construction of lines and wires and in the other appurtenances of the telegraphic business and in the establishment of offices; that all of this money was expended in full faith and confidence in the laws already enacted by the state of Kansas for the furtherance and encouragement of telegraphic business, and also in the full faith that said company would have the equal protection of the laws of the state of Kansas, and the fair equitable, and equal treatment required by the Constitution of the state of Kansas in the matter of taxes and other public charges imposed upon it.' 11. That the statute in question, so far as it prevents the company from using its property in the state for all purposes of its business, would operate as a taking of such property without due process of law. 12. That the statute is in contravention of the power of Congress to regulate commerce among the several states and with foreign countries, with its power to establish postoffices and post roads, and with its authority to pass all laws necessary and proper to carry into execution the powers vested in the government of the United States.
The contentions of the company, to which particular attention will be directed, are, in substance, that the requirement that it pay, for the benefit of the permanent school fund of the state, a given per cent of its authorized capital, wherever and however employed, as a condition of its right to continue to do domestic business in Kansas, is a regulation which, by its necessary operation, directly burdens or embarrasses interstate commerce, and therefore is illegal under the commerce clause of the Constitution; further, that such a requirement involves the taxation not only of the company's interstate business everywhere, but equally the property employed by it beyond the limits of the state,a thing which could not be done consistently with the due process of law enjoined by the 14th Amendment.
In Western U. Teleg. Co. v. Atty. Gen. 125 U. S. 549, 550, 552, 31 L. ed. 793-795, 8 Sup. Ct. Rep. 961, a tax nominally upon the shares of the capital stock of the company was held to be in effect a tax only on property owned and used by the company in Massachusetts, because, and only because, the basis established for the ascertainment of the value of such property was the proportion of the company's lines in the state to their entire length throughout the whole country. Such a tax was held not to be forbidden by the Constitution, because based on the company's stock representing only its business and its property inside the state. In Ratterman v. Western U. Teleg. Co. 127 U. S. 411, 32 L. ed. 229, 2 Inters. Com. Rep. 59, 8 Sup. Ct. Rep. 1127, it was held that a single tax on the receipts of a telegraph company, some of which were derived from interstate commerce and some from intrastate commerce, but capable of separation, was invalid to the extent that the receipts were derived from interstate commerce. The court was confronted with the same situation in Leloup v. Mobile, 127 U. S. 640, 647, 32 L. ed. 311, 314, 2 Inters. Com. Rep. 134, 8 Sup. Ct. Rep. 1380, which case involved the validity of a city ordinance imposing, generally, a specified license tax, 'on telegraph companies.' The ordinance was held invalid because the tax had reference to the entire business of the telegraph company, interstate and domestic, without any distinction being made between the different kinds of business. It was urged in that case that a portion of the telegraph company's business was wholly internal to the state, and therefore was taxable by the state. To this view the response of the court was: 'But that fact does not remove the difficulty. The tax affects the whole business without discrimination. There are sufficient modes in which the internal business, if not already taxed in some other way, may be subjected to taxation, without the imposition of a tax which covers the entire operations of the company.' So, in the case now before us, the exaction, as a condition of the privilege of continuing to do or doing local business in Kansas, that the telegraph company shall pay a given per cent of its authorized capital stock, is, for every practical purpose, a tax both on the company's local business in Kansas, and on its interstate business, or on the privilege of doing interstate business; for the statute, by its necessary operation, will accomplish precisely the result that would have been accomplished had it been made, in express words, a condition of doing local business, that the telegraph company should submit to taxation upon both its interstate and intrastate business and upon its interests and property everywhere, as represented by its capital stock. The exaction made by the Kansas statute is as much a tax on the interstate business of the company and on its property outside of the state as a fee or tax on the sale of an article imported only for sale, or as a tax on the occupation of an importer would be a tax on the property imported (Brown v. Maryland, 12 Wheat. 419, 444, 6 L. ed. 678, 687); or that a tax on the stock of the United States is a tax on the contract under which it was issued, and a tax on the power to borrow money on the credit of the United States (Weston v. Charleston, 2 Pet. 449, 467, 468, 7 L. ed. 481, 487, 488); or that a tax on the salary of an officer of the United States would be a tax on the means employed by the government of the Union to execute its constitutional powers (Dobbins v. Erie County, 16 Pet. 435, 449, 10 L. ed. 1022, 1027); or that a tax on an ordinary bill of lading for property taken out of a state would be a tax on the property covered by that instrument (Almy v. California, 24 How. 169, 16 L. ed. 644); or that a tax on the amount of sales made by an auctioneer would be a tax on the goods sold (Cook v. Pennsylvania, 97 U. S. 566, 573, 24 L. ed. 1015, 1017). But, as already said, what part of the fee exacted by Kansas is to be attributed to intrastate business and what part to interstate business the state has not chosen to ascertain and declare. It has seen proper to exact a specified per cent of the authorized capital of the telegraph company, representing, necessarily, all its business, interstate and intrastate, and all its property interests in and out of the state. It is important here to observeindeed, the contrary could not be assertedthat the telegraph company lawfully entered Kansas, with the consent of both the territory and state, for the purposes of its business of every kind, long before, and was legally there when, the Bush act was passed. The state concedes its right to continue in such business in Kansas, if it will comply with the statute in question, and pay the fee demanded; and only because of such refusal it seeks the aid of the court to oust the company from the state, so far as local business is concerned, unless it shall, by paying such fee, contributethat is the proper worda given per cent of all its capital for the support of the schools of the state. The state knows that the telegraph company, in order to accommodate the general public and make its telegraphic system effective, must do all kinds of telegraphic business. Yet, it seeks to enforce a regulation requiring the company by paying the 'fee' in question to assent to its interstate business being burdened and its property outside of Kansas being taxed in order that it may continue to conduct a business concededly beneficial to the public,a right lawfully acquired from the United States when Kansas was a territory, and exercised consistently with the statutes of the state for many years after Kansas was admitted as a state of the Union.
Whatever may be the extent of the state's authority over intrastate business, was it competent for the state to require that the telegraph company,which surely had the right to enter and remain in the state for interstate business,as a condition of its right to continue doing domestic business in Kansas, should pay, in the form of a fee, a specified per cent of its capital stock representing the interests, property, and operations of the company not only in Kansas, but throughout the United States and foreign countries? Is such a regulation consistent with the power of Congress to regulate commerce among the states, or with rights growing out of such commerce, and secured by the Constitution of the United States? Can the state, in this way, relieve its own treasury from the burden of supporting its public schools, and put that burden, in whole or in part, upon the interstate business and property of foreign corporations? Can such a regulation be deemed constitutional any more than one requiring the company, as a condition of its doing intrastate business, that it should surrender its right, for instance, to invoke the protection of the Constitution when it is proposed to deprive it of its property without due process of law, or to deny it the equal protection of the laws? In Lafayette Ins. Co. v. French, 18 How. 404, 407, 15 L. ed. 451, 452, the court, speaking by Mr. Justice Curtis, said: 'A corporation created by Indiana can transact business in Ohio only with the consent, express or implied, of the latter state (Bank of Augusta v. Earle, 13 Pet. 519, 40 L. ed. 274). This consent may be accompanied by such conditions as Ohio may think fit to impose; and these conditions must be deemed valid and effectual by other states and by this court, provided they are not repugnant to the Constitution or laws of the United States.' In Southern P. Co. v. Denton, 146 U. S. 202, 207, 36 L. ed. 942, 945, 13 Sup. Ct. Rep. 44, the court considered the question of the validity of a Texas statute relating to foreign corporations desiring to transact business in that state. That statute provided that the application of the corporation to do business in the state should contain a stipulation that the permit be subject to certain provisions of the statute, one of which was that the permit shall become null and void if the corporation, being sued in a state court, should remove the case into a court of the United States upon the ground of the diverse citizenship of the parties or of local prejudice against such corporation. Dealing with that point, this court, speaking by Mr. Justice Gray, said: 'But that statute, requiring the corporation, as a condition precedent to obtaining a permit to do business within the state, to surrender a right and privilege secured to it by the Constitution and laws of the United States, was unconstitutional and void, and could give no validity or effect to any agreement or action of the corporation in obedience to its provisions,'citing Home Ins. Co. v. Morse, 20 Wall. 445, 22 L. ed. 365; Barron v. Burnside, 121 U. S. 186, 30 L. ed. 915, 1 Inters. Com. Rep. 295, 7 Sup. Ct. Rep. 931; Texas Land & Mortg. Co. v. Worsham, 76 Tex. 556, 13 S. W. 384. See also to the same effect, Martin v. Baltimore & O. R. Co. (Gerling v. Baltimore & O. R. Co.) 151 U. S. 673, 684, 38 L. ed. 311, 315, 14 Sup. Ct. Rep. 533; St. Clair v. Cox, 106 U. S. 350, 356, 27 L. ed. 222, 225, 1 Sup. Ct. Rep. 354; Barrow S. S. Co. v. Kane, 170 U. S. 100, 110, 111, 42 L. ed. 964, 968, 18 Sup. Ct. Rep. 526. In the above case of Barron v. Burnside (which was cited with approval in the Denton Case), this court, speaking by Mr. Justice Blatchford, unanimously held: 'As the Iowa statute makes the right to a permit dependent upon the surrender by the foreign corporation of a privilege secured to it by the Constitution and laws of the United States, the statute requiring the permit must to held to be void. . . . In all the cases in which this court has considered the subject of the granting by a state to a foreign corporation of its consent to the transaction of business in the state, it has uniformly asserted that no conditions can be imposed by the state which are repugnant to the Constitution and laws of the United States,' So, in Barrow S. S. Co. v. Kane, above cited, Mr. Justice Gray, delivering the unanimous judgment of the court, said: 'Statutes requiring foreign corporations, as a condition of being permitted to do business within the state, to stipulate not to remove into the courts of the United States suits brought against them in the courts of the state have been adjudged to be unconstitutional and void.' If a domestic corporation engaged in the business of soliciting orders for goods manufactured, sold, and delivered in a state should, in addition, solicit orders for goods manufactured in and to be brought from another state for delivery, could the former state make it a condition of the right to engage in local business within its limits that the corporation pay a given per cent of all fees or commissions received by it in its business, interstate and domestic? There can be but one answer to this question, namely, that such a condition would operate as a direct burden on interstate commerce, and therefore would be unconstitutional and void. Consistently with the Constitution no court could, by any form of decree, recognize or give effect to or enforce such a condition.
As to Pullman Co. v. Adams, 189 U. S. 420, 421, 47 L. ed. 877, 878, 23 Sup. Ct. Rep. 494, we perceive nothing in the judgment in that case that conflicts with what is herein said. That case involved the validity of a tax of a certain amount imposed by Mississippi on each sleeping and palacecar company carrying passengers 'from one point to another within the state,' and so many cents per mile 'for each mile of railroad track over which the company runs its cars in this state.' It was contended that this tax was an interference with commerce among the states. It is stated in the opinion that the sleeping cars of the Pullman Company, an Illinois corporation, 'were carried by various railroad companies, and all of them were carried into the state from another state, or out of the state to another state, or both. But such cars in their passage also carried passengers from point to point within the state, and a specific fare was collected by the servants of the Pullman Company.' It was contended by the company that the state Constitution made it a common carrier, and, in effect, compelled it to assume the burden of carrying local passengers, although its receipts from purely local business were less than the expense incurred in carrying it on. But the state supreme court held that view of the state Constitution to be fallacious. And this court said: 'If the clause of the state Constitution referred to were held to impose the obligation supposed and to be valid, we assume, without discussion, that the tax would be invalid. For then it would seem to be true that the state Constitution and the statute combined would impose a burden on commerce between the states analogous to that which was held bad in U. S. 47, 35 L. ed. 649, 11 Sup. Ct. Rep. 851. On the other hand, if the Pullman Company, whether called a common carrier or not, had the right to choose between what points it would carry, and therefore to give up the carriage of passengers from one point to another within the state, the case is governed by Osborne v. Florida, supra. The company cannot complain of being taxed for the privilege of doing local business which it is free to renounce. Both parties agree that the tax is a privilege tax. As the validity of the tax is thus bound up with the effect of the section of the state Constitution, we think that the Pullman Company was entitled to know how it stood under the latter, and that a judgment against it could not be justified by reasoning which leaves that point obscure. We are somewhat embarrassed in dealing with the case, because we are not quite certain whether we rightly interpret the intimations upon the subject in the judgment under review. If the Constitution of Mississippi should be read as imposing an obligation to take local passengers, the question for us might be which, if not both, the clause of the Constitution or the tax act, is invalid. But we assume that the opinion of the supreme court of Mississippi intends to meet the difficulty frankly, and when it says that the argument against the tax drawn from the above interpretation of the Constitution is fallacious, we take it as meaning that no such interpretation will be attempted in the future, and we take it so the more readily that we can see no ground for a different view. If we are right in our understanding, the judgment of the supreme court was correct for the reason sufficiently stated above.' So that what was actually decided in the Adams Case was that the company was under no obligation to take local passengers, but, if it chose to do that kind of business, the privilege for doing it could be taxed by the state. The court did not hold that the state could, in any form, directly burden interstate commerce. It really held to the contrary. The Adams Case differs from the present one in this: that while the Mississippi Code imposed no other condition upon the Pullman Company doing local business in that state than that it should pay a certain license tax on that account,which tax, it may be observed, is not at all disproportioned to such local business, and therefore not to be regarded as a mere device to reach or burden the interstate commerce of the company,the statute of Kansas forbids the doing of local business within its limits by a corporation of another state or foreign country, except subject to the condition that such corporation first pay to the state a given per cent of its entire capitalization representing the value of all its business, property, and interests within and without the state, thereby placing a direct burden on the privilege or franchise of transacting interstate commerce and taxing property rights beyond the jurisdiction of the state for purposes of taxation. That the Western Union Telegraph Company is engaged in both interstate and intrastate commerce is no reason, in itself, why Kansas may not, in good faith, require it to pay a license tax strictly on account of local business done by it in that state. But it is altogether a different thing for Kansas to deny it the privilege of doing such local business, beneficial to the public, except on condition that it shall first pay to the state a given per cent of all its capital stock, representing all of its property, wherever situated, and all its business in and outside of the state.
Nor is there any conflict between the views we have expressed and the decision in Allen v. Pullman's Palace Car Co. 191 U. S. 171, 178, 179, 48 L. ed. 134, 138, 24 Sup. Ct. Rep. 39. One of the questions in that case was as to the constitutional validity of a Tennessee statute, passed in 1887, which required every company operating sleeping cars and doing business in that state to pay, as a privilege tax, 'on each car, per annum, $500.' The Pullman Car Company operated sleeping cars in Tennessee under a contract with railroad companies traversing the state. The gross receipts of the companies from lines running into the state were, annually, about $500,000, and only about $25,000 annually from passengers carried locally in Tennessee. The cars actually used on these lines during each year numbered over one hundred. The court in that case referred to Pickard v. Pullman Southern Car Co. 117 U. S. 34, 29 L. ed. 785, 6 Sup. Ct. Rep. 635, which involved the validity of a Tennessee act of 1877, imposing a license tax privilege of $50 annually, for each sleeping car or coach used on railroads in the state, and said: 'It was held in the Pickard Case that the tax was a burden upon interstate commerce, and void because of the exclusive power of Congress to regulate commerce between the states. Unless the statute now under consideration can be distinguished from the one then construed, the Pickard Case is decisive of the present case. Both taxes were imposed under the power granted by the Constitution of Tennessee to lay a privilege tax. This power is held by the supreme court of the state to give a wide range of legislative discretion. Any occupation, business, employment, or the like, affecting the public, may be classed and taxed as a privilege. Knoxville & O. R. Co. v. Harris, 99 Tenn. 684, 53 L.R.A. 921, 43 S. W. 115. In the act of 1877, the running and using of sleeping cars on railroads in the state, when the cars are not owned by the railroads upon which they are run, is declared to be a privilege. Under the act of 1887, the tax is specifically imposed upon a privilege. Under the act of 1877, the tax imposed was $50 for each car or coach used or run over the road. Under the act of 1887, each company doing business in the state is required to pay $500 per annum for the same privilege. The distinction, except in the amount of annual tax exacted, is without substantial difference. Under the earlier act the tax is required for the privilege of running and using sleeping cars on railroads not owning the cars. In the later act it is exacted for the privilege of doing business in the state. This business consists of running sleeping cars upon railroads not owning the cars, and is precisely the privilege to be paid for under the first act, neither more nor less. In neither act is any distinction attempted between local or through cars of carriers of passengers. The railroads upon which the cars are run are lines traversing the state, but not confined to its limits. The cars of the Pullman Company run into and beyond the state as well as between points within the state. The act in its terms applies to cars running through the state as well as those whose operation is wholly intrastate. It applies to all alike, and requires payment for the privilege of running the cars of the company, regardless of the fact whether used in interstate traffic or in that which is wholly within the borders of the state. . . . The statute now under consideration requires payment of the sum exacted for the privilege of doing any business, when the principal thing to be done is interstate traffic. We are not at liberty to read into the statute terms not found therein or necessarily implied, with a view to limiting the tax to local business, which the legislature, in the terms of the act, impose upon the entire business of the company. We are of opinion that taxes exacted under the act of 1887 are void as an attempt by the state to impose a burden upon interstate commerce.' Again, in the same case, the court sustained the validity of a Tennessee act of 1889, which applied 'strictly to business done by sleeping-car companies in the transportation of passengers taken up at one point in the state and transported wholly within the state to another point therein.' This court, while recognizing, as former cases had done, the exclusive right of Congress to regulate interstate traffic, said that 'the corresponding right of the state to tax and control the internal business of the state, although thereby foreign or interstate commerce may be indirectly affected, has been recognized with equal clearness,'citing Osborne v. Florida, 164 U. S. 650, 41 L. ed. 586, 17 Sup. Ct. Rep. 214. It would seem to be too clear to admit of doubt that the principles in the Allen Case are substantially those herein announced. Indeed, we could not hold otherwise than we do in the present case without overruling or materially modifying the principles announced in the Allen Case. In the Allen Case the license tax there in question under the Tennessee act of 1887 was imposed generally on account of each sleeping car used on railroads traversing the state, without any discrimination being made be- tween cars transporting interstate passengers and those transporting local passengers be void. In the present case, the state of Kansas demands, in the form of a fee, a given per cent of all the capital of the foreign corporation, without any discrimination between the capital representing the business and property of the telegraph company outside of the state and the capital representing such of its business and property as are wholly local to the state. And it seeks the aid of the court to oust the telegraph company from continuing to do business in the state, so far as local business is concerned, because, and only because, it will not surrender its immunity from state taxation in reference to its interstate business and its property outside of Kansas.
We come now to the case of Security Mut. L. Ins. Co. v. Prewitt, 202 U. S. 246, 257, 50 L. ed. 1013, 1018, 26 Sup. Ct. Rep. 619, 6 A. & E. Ann. Cas. 317, which case, it is contended, necessarily determines the present question in favor of the state of Kansas. In the Prewitt Case this court sustained the constitutional validity of a Kentucky statute providing, among other things, that if a foreign insurance company should bring a suit in a Federal court against a citizen of Kentucky, or, being itself sued in a state court, should remove the suit to the Federal court, without the consent of the other party, any permit previously granted by it to do business in Kentucky should be forthwith revoked by the state insurance commissioner, and the fact of such revocation published in some newspaper of general circulation in the state. No other question was determined. The court regarded the question as concluded in favor of the state by the decision in Home Ins. Co. v. Morse, 20 Wall. 445, 22 L. ed. 365. It said: 'As a state has power to refuse permission to a foreign insurance company to do business at all within its confines, and as it has power to withdraw that permission when once given, without stating any reason for its action, the fact that it may give what some may think a poor reason or none for a valid act is immaterial.' The vital difference between the Prewitt Case and the one now before us is that the business of the insurance company, involved in the former case, was not, as this court has often adjudged, interstate commerce, while the business of the telegraph company was primarily and mainly that of interstate commerce. A decision, such as was rendered in the Prewitt Case, that a state could, with or without reason, and without violating the Constitution, revoke its permit to a foreign insurance company to do business of a domestic character within its limits, cannot be cited as authority for the proposition, upon which the Kansas statute rests, that a state may prescribe such regulations as to corporations of other states engaged in both interstate and local business, as will require them, as a condition of their doing local business, that they shall contribute a given amount, out of their capital stock, representing all their business, interstate and domestic, whereever done, and all their property, whereever located, in or outside of the state, for the support of the state's schools. The Prewitt Case by no means recognized any uncontrollable power in a state to prohibit all foreign corporations, in whatever business engaged, from doing business within its limits. On the contrary, this court said in that very case that 'a state has the right to prohibit a foreign corporation from doing business within its borders, unless such prohibition is so conditioned as to violate some provision of the Federal Constitution,'citing various adjudged authorities, among them the case of Hooper v. California, 155 U. S. 648, 652, 653, 39 L. ed. 297, 298, 300, 5 Inters. Com. Rep. 610, 15 Sup. Ct. Rep. 207. In the latter case the court recognized, as long settled, the general principle that the right of a foreign corporation to engage in business within the state depended solely on the will of such state. But it took especial care to say that the interstate business of a foreign corporation was a business of an exceptional character, and was protected by the Constitution against interference by state authority. The cases referred to in support of that view are the same as those hereinbefore cited in this opinion. If it be true that the statute of Kansas, by its necessary operation, imposes a burden on the interstate business of the telegraph company, and subjects its property and business outside of that state to taxation, then the constitutional validity of the statute, in the particulars adverted to, may be here adjudged without any reference whatever to the judgment in the Prewitt Case, and without re-examining the grounds upon which that judgment rested. The court did not intend by its judgment in the Prewitt Case to recognize the right of Kentucky, by any regulation as to foreign insurance companies, to burden interstate commerce or to tax property located and used without its limits. It could not have done so without overruling numerous decisions of this court on that subject. On the contrary, as we have seen, the court in that case distinctly recognized the principle that a state could not make any prohibition whatever as to a corporation doing business within its limits that would be in violation of the Federal Constitution. In respect of the point actually decided in it, we leave the Prewitt Case and the objections urged against the doctrine it announces wholly on one side, and go no further now than is indicated in this opinion.
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