U.S. Supreme Court JAMES v. DRAVO CONTRACTING CO., 302 U.S. 134 (1937)

[Page 302 U.S. 134, 137]

Messrs. William S. Moorhead, of Pittsburgh, Pa., and W. Elliott Nefflen and W. Champan Revercomb, both of Charleston, W. Va., for appellee.

Mr. Stanley Reed, Sol. Gen., of Washington, D.C., for the United States as amicus curiae.

Mr. Chief Justice HUGHES delivered the opinion of the Court.

This case presents the question of the constitutional validity of a tax imposed by the state of West Virginia upon the gross receipts of respondent under contracts with the United States.

Respondent, the Dravo Contracting Company, is a Pennsylvania corporation engaged in the general contracting business, with its principal office and plant at Pittsburgh in that state, and is admitted to do business in the state of West Virginia. In the years 1932 and 1933, respondent entered into four contracts with the United States for the construction of locks and dams in the Kanawha river and locks in the Ohio river, both navigable streams. [Footnote 1] The State Tax Commissioner assessed respondent for the years 1933 and 1934 in the sum of $135,761.51 (taxes and penalties) upon the gross amounts received from the United States under these contracts.

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to restrain the collection of the tax. The case was heard by three judges ( 28 U.S.C. 380, 28 U.S.C.A. 380) and upon findings the court entered a final decree granting a permanent injunction. 16 F.Supp. 527. The case comes here on appeal.

The statute is known as the Gross Sales and Income Tax Law. Code of West Virginia 1931, c. 11, art. 13, 1 et seq., amended effective May 26, 1933. Acts 1933, 1st Ex.Sess., c. 33. It provides for 'annual privilege taxes' on account of 'business and other activities.' The clause in question here is as follows: 'Upon every person engaging or continuing within this state in the business of contracting, the tax shall be equal to two per cent. of the gross income of the business.' [Footnote 2] Acts W.Va.1933, 1st Ex.Sess., c. 33, 2(e).

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buildings" within clause 17. See, also, United States v. Wurtzbarger (D.C.) 276 F. 753, 755; Arlington Hotel v. Fant, supra. Locks and dams for the improvement of navigation, which are as clearly within the federal authority as post offices, have been regarded as 'needful buildings.' United States v. Tucker (D.C.) 122 F. 518, 522, We take that view. We construe the phrase 'other needful buildings' as embracing whatever structures are found to be necessary in the performance of the functions of the federal government.

The Legislature of West Virginia by general statute had given its consent to the acquisition by the United States, but questions are presented as to the construction and effect of the consent. The provision is found in section 3 of chapter 1, article 1, of the Code of West Virginia of 1931. The full text is set out in the margin. [Footnote 4] By the first paragraph the consent of the state is given 'to the

[Page 302 U.S. 134, 149]

or qualify cessions of jurisdiction when purchases have been made without consent, or property has been acquired by condemnation. In the present case, the reservation by West Virginia of concurrent jurisdiction did not operate to deprive the United States of the enjoyment of the property for the purposes for which it was acquired, and we are of the opinion that the reservation was applicable and effective.

[c] As to property leased by respondent and used for the accommodation of its equipment. There can be no question as to the jurisdiction of the state over this area.

[Page 302 U.S. 134, 162]

common-law exemption of the sovereign from regulation or taxation. It springs from the necessity of maintaining our dual system of government. 1 'The attempt to use it (the power of taxation) on the means employed by the government of the Union, in pursuance of the Constitution, is itself an abuse, because it is the usurpation of a power which the people of a single state cannot give. We find, then, on just theory, a total failure of this original right (of the states) to tax the means employed by the government of the Union, for the execution of its powers.' 2 'The immunity is derived from the Constitution in the same sense and upon the same principle that it would be if expressed in so many words.' [Footnote 3]

[Page 302 U.S. 134, 163]

I agree that the gross receipts tax laid by West Virginia upon the appellee's transactions with the United States is not upon the government as such, upon its property, or upon its officers.

The government need not perform all its functions by the use of its property and the activity of its officers, but may establish agencies to these ends. Such an agency, created not for private gain but wholly devoted to governmental purposes and wholly owned by the United States, is as free from state taxation on its property and its activities as the government itself; and the exemption extends to the salaries of its officers. [Footnote 6] In the exertion of the powers conferred upon it by the Constitution, the United States may, in its discretion, erect corporations for private gain and employ them as its instrumentalities. [Footnote 7] No tax can be laid upon their franchises or operations, 8 but their local property9 is subject to nondiscriminating state taxation. In contrast, the bestowal of benefits, rights, privileges, or immunities, or the imposition of duties by federal law upon a natural person or a corporation does not convert him or it into a federal agency exempt from uniform state excise or

[Page 302 U.S. 134, 164]

property taxes. [Footnote 10] Where the United States, by contract, constitutes a person or corporation its agent to fulfill a governmental obligation, a state tax upon such an agent is forbidden if it falls upon the avails of the operation in which the government has an interest, or is an excise or privilege tax upon the agent's operations;11 but a general and uniform state property tax which falls only upon the agent's property used in the performance of the contract is valid. [Footnote 12] The opinion of the court adverts to these distinctions, but, since admittedly the appellee is not an agency or instrumentality of the United States, a discussion of taxes laid upon the operations as contrasted with those imposed upon the property of such an agency or instrumentality is beside the point upon which the case turns. 13

[Page 302 U.S. 134, 165]

is an independent contractor, the tax is nondiscriminatory, or that it is not excessive in amount cannot serve to exculpate the statute from the charge that it transgresses the rule. These considerations, as repeatedly held, are irrelevant where the tax falls directly, immediately, and palpably upon an operation of the federal government or a means chosen for the exercise of its powers. Many illustrations are available of exactions which plainly burden and impede in some degree the lawful operations of the United States. As the opinion of the court indicates, a tax in terms laid upon the contract would do so; such as an excise for the privilege of making the contract or performing it,14 a stamp tax upon the documents evidencing the contract, or a requirement that the contract be recorded and a tax be paid upon its recordation. [Footnote 15]

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taxable. But that was not the basis of decision. The ground of immunity was that the tax was in effect on the government's transactions in the exertion of its lawful powers. Thus in Western Union Telegraph Co. v. Texas, 105 U.S. 460, at page 465, it was said 'The tax is the same on every message sent, and because it is sent. ... 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 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 ( 4 L.Ed. 579), and has never been doubted since.'

That the privileges granted telegraph companies by federal law, had no bearing upon the validity of the tax is shown by Western Union Telegraph Co. v. Massachusetts, 125 U.S. 530, 8 S.Ct. 961 and Attorney General of Massachusetts v. Western Telegraph Co., 141 U.S. 40, 11 S.Ct. 889, in which state taxes on the property and franchises of companies, operating under the same statute as the Telegraph Company in the Texas Case were sustained because not on the transactions between the carrier and the United States.

Stock issued by the United States evidencing indebtedness to the holder cannot be taxed ad valorem by a state. [Footnote 18] A tax upon the assets of a corporation is bad if obligations of the United States are included in the assessment. [Footnote 19] A gross income tax is invalid to the extent

[Page 302 U.S. 134, 167]

that it is laid on income from federal securities. [Footnote 20] The reason is that 'the tax ... is a tax upon the contract subsisting between the government and the individual. It bears directly upon that contract, while subsisting and in full force. The power operates upon the contract the instant it is framed and must imply a right to affect that contract.' The government's obligation is for the payment both of principal and interest, and an exaction which bears upon either of these features of the obligation is prohibited.

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tained. So, a franchise or privilege tax measured by assets or by income is not rendered void by the circumstance that the taxpayer's assets or income include federal securities or interest thereon. [Footnote 22] And a law which imposes an excise upon the privilege of transmission of property at death may include federal securities in the estate by which the tax is measured. 23 Upon the like reasoning a tax upon moneys and credits in the assessment of which uncollected government checks are included is valid. [Footnote 24]

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leased land before any sale or segregation of the equitable interests of the government as guardian, is void as burdening and impeding an operation of the government. [Footnote 26] A sales tax on commodities sold to the government, though laid upon the seller at a given rate per unit sold, is also bad as directly burdening the government's transactions. 27 A tax on storage or withdrawal from storage essential to the sale of a commodity contracted to be delivered to the United States is in the same class as a tax on sales to the government. [Footnote 28] On the other hand, a sales tax upon articles purchased by a government contractor,29 or a net income tax laid upon his income, is valid. [Footnote 30] The reason is that exactions of the latter sort do not impinge upon or directly affect the transaction between him and the government; do not affect the government's choice of means for executing its powers.

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the taxable net income was to be calculated. In accordance with all of this court's applicable decisions, the tax was held not to be upon the state or its contract with the taxpayer, not upon an instrumentality or means chosen by the state for executing its powers, not directly upon the amount of the taxpayer's compensation received from the state. The exaction was not as here, of a proportion of each dollar paid by the government. It was upon net income remaining after allowable deductions from gross.

The decision in Fidelity & Deposit Co. of Maryland v. Pennsylvania, 240 U.S. 319, 36 S.Ct. 298, relied on as sustaining the instant exaction, neither rules nor aids in the decision of the present cause. There a foreign surety company was required by law to pay an annual fee equal to 2 per cent. of its gross premiums, in order to be admitted to do business in Pennsylvania. Under a federal statute surety companies desiring to execute bonds running to the United States were required to obtain written authority from the Attorney General so to do. The Fidelity Company obtained such authority and became surety in Pennsylvania on a number of bonds insuring the faithful performance of official duties by federal employees. It challenged so much of the state tax as was laid upon the premiums received for writing these bonds. The challenge was not sustained. The claim that the company, by obtaining leave to execute bonds running to the United States, had become a federal instrumentality, was properly overruled. [Footnote 34] But it is said that, in sustaining the tax, the court held that an exaction on the gross receipts of government contracts is valid. A moment's reflection will show that this is incorrect. The premiums received by the surety company were received from its clients; those for whom it wrote the bonds. It received no compensation from the United States and its transactions in essence were with

[Page 302 U.S. 134, 174]

citizens of the state of Pennsylvania as such. They did not differ from transactions with federal officers and employees whereby the latter procured any other sort of goods or service. [Footnote 35] Of course, the mere fact that a contractual relation, that of suretyship, was created between the Fidelity Company and the United States, was not in and of itself sufficient to relieve the company of the burden of paying a local tax for the privilege of doing business with its customers.

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per pound 'to be paid by the manufacturer or importer thereof.' Upon analysis of the statute it was concluded that the tax was upon the manufacture, and that payment was merely postponed until removal or sale. The tax did not vary in amount with the price received for the tobacco, and was not in terms upon its sale. Upon this ground the Indian Motocycle Co. Case and the Panhandle Case were distinguished.

It may be conceded that often it is difficult to determine whether a tax is laid upon the local operations of a manufacturer or contractor or upon the actual sale of his product. But such distinctions must be made. Indeed, the court itself is required to make such a one in the instant case in determining that payment for what the appellee manufactured for the government in Pittsburgh, Pa., did not constitute a gross receipt in West Virginia under the contract. The court has repeatedly been confronted with the problem whether a tax was in fact on the sale of a commodity or upon some prior dealing with it by the producer or supplier. While the distinctions drawn may seem somewhat nice, examination of the facts carries conviction that the distinctions are substantial. [Footnote 36]

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tractor with the government. If the fact that the taxpayer is an independent contractor were significant, it would have validated every tax laid upon the ownership of government obligations or upon the interest received therefrom. [Footnote 37] It has been held that ores produced by an independent contractor for the government, though still in his possession, cannot be taxed by a state;38 and that a license tax upon an independent contractor cannot be measured by the gross receipts from his transactions with the government. [Footnote 39]

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Chief Justice Marshall denied the existence of the power. From that day to this the court has consistently held that the question is not one of quantum, not one of the weight of the burden, but one of power. The court has said that the attempt to tax the means employed by the government is 'the usurpation of a power which the people of a single state cannot give.' Referring to the decision in McCulloch v. Maryland, it was said: 'The decision in that case was not put upon any consideration of degree but upon the entire absence of power on the part of the States to touch, in that way at least, the instrumentalities of the United States; 4 Wheat. 429, 430; and that is the law today.' [Footnote 40]

Again the court has said: 'It is obvious that the same power which imposes a light duty can impose a very heavy one, one which amounts to a prohibition. Questions of power do not depend on the degree to which it may be exercised. If it may be exercised at all, it must be exercised at the will of those in whose hands it is placed. If the tax may be levied in this form by a state, it may be levied to an extent which will defeat the revenue by impost, so far as it is drawn from importations into the particular state.' [Footnote 41]

Again it was recently said: 'Where the principle applies it is not affected by the amount of the particular tax or the extent of the resulting interference, but is absolute. McCulloch v. Maryland, 4 Wheat. 316, 430; United States v. Baltimore & Ohio R. Co., 17 Wall. 322, 327; Johnson v. Maryland, 254 U.S. 51, 55, 56 S., 41 S.Ct. 16; Gillespie v. Oklahoma, 257 U.S. 501, 505, 42 S.Ct. 171; Crandall v. Nevada, 6 Wall. 35, 44-46.'42

No one denies the competence of the Congress to waive the immunity in whole or in part. [Footnote 43] But his is the

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taxpayer derived from interstate commerce has long been held to be an unconstitutional burden. ... 'But the difference is plain. Persons have a constitutional right to engage in interstate commerce free from burdens imposed by a state tax upon the business which constitutes such commerce or the privilege of engaging in it or the receipts as such derived from it.'

As has been pointed out, the doctrine of federal immunity from state taxation is based upon the right of the federal government to carry on its lawful operations free from burden or impediment imposed by a state upon the business which constitutes such operations or the privilege of engaging in them. The Constitution contains no clause forbidding the states to burden, impede, or interfere with the operations of the federal government. In express terms it confers upon that government power to conduct those operations. Nor does the Constitution contain any clause prohibiting the states from burdening or interfering with the conduct of interstate commerce. In express terms it confers upon Congress the power to regulate that commerce. In each case there is implied from the federal power delegated by the people an immunity from interference or burden by the states. The cases are entirely analogous. Comparing the immunity of interstate commerce from state taxation with the like immunity of the federal government, the court has said: 'The rule as to instrumentalities of the United States on the other hand is absolute in form and at least stricter in substance.' [Footnote 45]

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States, so in the case of a private corporation engaged in interstate commerce, the states are free to lay a uniform and nondiscriminatory tax upon the property employed in the business within their jurisdiction. [Footnote 46]

A tax upon the gross receipts of corporations derived both from intrastate and interstate commerce is bad because it burdens the latter. [Footnote 47] A franchise tax upon a corporation transacting an interstate business, measured by its interstate business or its property without the state, is void, on the same principle that a tax laid upon the franchise of a corporation which is a federal agency or instrumentality is void. [Footnote 48]

A sales tax on gasoline sold within a state is invalid as it affects gasoline purchased outside the state for use therein, for the same reason a sales tax upon sales to the United States in invalid. [Footnote 49] A tax upon the gross receipts of one engaged in interstate commerce is bad be-

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cause a direct burden on that commerce in the same sense that a tax on the gross receipts of business done with the United States is a direct burden on the transaction with the federal government. [Footnote 50] In contrast, a tax on the net income of one engaged in interstate commerce is not upon his transactions in that commerce, but so remote therefrom as not to burden it, just as a net income tax upon one who contracts with the federal government is inoffensive to the rule of federal immunity. [Footnote 51]

A state may not lay an occupation tax upon the act of engaging in interstate commerce, for the same reason that it may not lay a similar tax upon the employment of an officer of the United States. [Footnote 52] The same considerations of remoteness sustain taxes upon the mere purchase of articles intended for use in interstate commerce or for the fulfillment of government contracts. [Footnote 53]

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in McCulloch v. Maryland and ever since consistently applied in the decisions of the court. I think that the judgment should be affirmed.

These views with respect to the nature of the tax render it unnecessary to express any opinion as to the asserted exclusive federal jurisdiction over the area within which the appellee pursued the activities which are the subject of the exaction.

Mr. Justice McREYNOLDS, Mr. Justice SUTHERLAND and Mr. Justice BUTLER join in this opinion. Footnotes

Footnote 1 See Act of July 3, 1930, c. 847, 46 Stat. 928; H. Doc. No. 190, 70th Cong., 1st sess.; Act of August 30, 1935, c. 831, 49 Stat. 1035; H. Doc. No. 31, 73d Cong., 1st Sess.

Footnote 2 Prior to May 26, 1933, the tax was three-tenths of one per cent., and the assessment on receipts prior to that date was at that rate. Two of the contracts of respondent were made before the rates were changed.

Footnote 3 That provision is as follows:'The Congress shall have Power ...'To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings.'

Footnote 4 ' 3. Acquisition of Lands by United States; Jurisdiction.-The consent of this State is hereby given to the acquisition by the United States, or under its authority, by purchase, lease, condemnation, or otherwise, of any land acquired, or to be acquired in this State by the United States, from any individual, body politic or corporate, for sites for lighthouses, beacons, signal stations, post offices, customhouses, courthouses, arsenals, soldiers' homes, cemeteries, locks, dams, armor plate manufacturing plants, projectile factories or factories of any kind or character, or any needful buildings or structures or proving grounds, or works for the improvement of the navigation of any watercourse, or work of public improvement whatever, or for the conservation of the forests, or for any other purpose for which the same may be needed or required by the government of the United States. The evidence of title to such land shall be recorded as in other cases.'Any county, magisterial district or municipality, whether incorporated under general law or special act of the legislature, shall have power to pay for any such tract or parcel of land and present the same to the government of the United States free of cost, for any of the purposes aforesaid, and to issue bonds and levy taxes for the purpose of paying for the same; and, in the case of a municipal corporation, the land so purchased and presented may be within the corporate limits of such municipality or within five miles thereof: Provided, however, That no such county, magisterial district or municipality shall, by the issue and sale of such bonds, cause the aggregate of its debt to exceed the limit fixed by the Constitution of this State: Provided further, That the provisions of the Constitution and statutes of this State, or of the special act creating any municipality, relating to submitting the question of the issuing of bonds and all questions connected with the same to a vote of the people, shall, in all respects, be observed and complied with.'Concurrent jurisdiction with this State in and over any land so acquired by the United States shall be, and the same is hereby, ceded to the United States for all purposes; but the jurisdiction so ceded shall continue no longer than the United States shall be the owner of such lands, and if the purposes of any grant to the United States shall cease, or the United States shall for five consecutive years fail to use any such land for the purposes of the grant, the jurisdiction hereby ceded over the same shall cease and determine, and the right and title thereto shall reinvest in this State. The jurisdiction ceded shall not vest until the United States shall acquire title of record to such land. Jurisdiction heretofore ceded to the United States over any land within this State by any previous acts of the legislature shall continue according to the terms of the respective cessions.'

Footnote 5 'Sec. 4. Execution of Process and Other Jurisdiction as to Land Acquired by United States.-The State of West Virginia reserves the right to execute process, civil or criminal, within the limits of any lot or parcel of land heretofore or hereafter acquired by the United States as aforesaid, and such other jurisdiction and authority over the same as is not inconsistent with the jurisdiction ceded to the United States by virtue of such acquisition.'

Footnote 6 See note 5.

[Footnote 1] Indian Motocycle Co. v. United States, 283 U.S. 570, 575, 51 S.Ct. 601, 602; Board of Trustees of University of Illinois v. United States, 289 U.S. 48, 59, 53 S.Ct. 509, 510; Helvering v. Powers, 293 U.S. 214, 225, 55 S.Ct. 171, 173.

[Footnote 2] McCulloch v. Maryland, 4 Wheat. 316, 430; Weston v. Charleston, 2 Pet. 449, 467.

[Footnote 3] Clallam County v. United States, 263 U.S. 341, 344, 44 S.Ct. 121, 122.

[Footnote 4] McGoon v. Scales, 9 Wall. 23, 27; Tucker v. Ferguson, 22 Wall. 527, 572; Van Brocklin v. Tennessee, , 6 S.Ct. 670; Wisconsin Central R.R. Co. v. Price County, 133 U.S. 496, 504, 10 S.Ct. 341; Irwin v. Wright, 258 U.S. 219, 228, 42 S.Ct. 293, 296. But property acquired from the Government, upon its severance, loses the immunity in the hands of the transferee. Forbes v. Gracey, ; Group No. 1 Oil Corp. v. Bass, 283 U.S. 279, 51 S.Ct. 432; Indian Territory Illuminating Oil Co. v. Board, 288 U.S. 325, 53 S.Ct. 388.

[Footnote 5] Dobbins v. Erie County Commissioners, 16 Pet. 435; Collector v. Day, 11 Wall. 113. But the exemption does not extend to taxes laid upon his privately owned property or a sales tax on his personal purchases, even though they be of articles he uses in connection with his performance of his government work. Dyer v. City of Melrose, 215 U.S. 594, 30 S.Ct. 410; Tirrell v. Johnston, 293 U.S. 533, 55 S.Ct. 238; Id., 86 N.H. 530, 171 A. 641.

[Footnote 6] Clallam County v. United States, 263 U.S. 341, 44 S.Ct. 121; New Brunswick v. United States, 276 U.S. 547, 48 S.Ct. 371; People of New York ex rel. Rogers v. Graves, 299 U.S. 401, 57 S. Ct. 269. For the same reason a state tax which burdens the fiscal operations of a territory must fall: Farmers' & Mechanics' Savings Bank v. Minnesota, 232 U.S. 516, 34 S.Ct. 354.

Footnote 7 Interstate railroad: Union P. Railroad Company v. Peniston, 18 Wall. 5; National banks: McCulloch v. Maryland, 4 Wheat. 316; Smith v. Kansas City Title & Trust Co., 255 U.S. 180, 41 S.Ct. 243.

Footnote 8 Osborn v. Bank of U.S., 9 Wheat. 738; Union P. Railroad Company v. Peniston, 18 Wall. 5; Owensboro National Bank v. Owensboro, 173 U.S. 664, 19 S.Ct. 537.

Footnote 9 Union P. Railroad Company v. Peniston, 18 Wall. 5; Indian Territory Illuminating Oil Co. v. Board, 288 U.S. 325, 327, 328 S., 53 S.Ct. 388.

Footnote 10 Thomson v. Union Pacific Railroad, 9 Wall. 579; Western Union Tel. Co. v. Massachusetts, , 8 S.Ct. 961; Attorney General of Massachusetts v. Western Union Tel. Co., 141 U.S. 40, 11 S.Ct. 889; Baltimore Shipbuilding & Dry Dock Co. v. Baltimore, 195 U.S. 375, 25 S.Ct. 50; Fidelity & Deposit Co. of Maryland v. Pennsylvania, 240 U.S. 319, 36 S.Ct. 298; Choctaw, O. & G.R.R. Co. v. Mackey, 256 U.S. 531, 41 S.Ct. 582; Susquehanna Power Co. v. Tax Commission, 283 U.S. 291, 51 S.Ct. 434; Broad River Power Co. v. Query, 288 U.S. 178, 53 S.Ct. 326; Federal Compress & Warehouse Co. v. McLean, 291 U.S. 17, 54 S.Ct. 267.

Footnote 11 Choctaw, O. & Gulf R.R. Co. v. Harrison, 235 U.S. 292, 35 S.Ct. 27; Gillespie v. Oklahoma, 257 U.S. 501, 42 S.Ct. 171; Jaybird Mining Co. v. Weir, 271 U.S. 609, 46 S.Ct. 592.

Footnote 12 Indian Territory Illuminating Oil Co. v. Board, 288 U.S. 325, 53 S. Ct. 388; Taber v. Indian Territory Illuminating Oil Co., 300 U.S. 1, 57 S.Ct. 334.

Footnote 13 The Solicitor General's argument, noticed later, would, however, validate a tax of any description imposed upon federal instrumentalities, provided the exaction were non-discriminatory.

Footnote 14 Osborn v. Bank, 9 Wheat. 738, 867.

Footnote 15 Federal Land Bank v. Crosland, 261 U.S. 374, 43 S.Ct. 385, 29 A.L.R. 1.

Footnote 16 Western Union Telegraph Co. v. Texas, 105 U.S. 460.

Footnote 17 Leloup v. Port of Mobile, 127 U.S. 640, 8 S.Ct. 1380; Williams v. City of Talladega, 226 U.S. 404, 33 S.Ct. 116.

Footnote 18 Weston v. Charleston, 2 Pet. 449.

Footnote 19 New York ex rel. Bank of Commerce v. Com'rs of Taxes & Assessments New York City, 2 Black 620; Bank Tax Case, 2 Wall. 200; Bank of New York v. Supervisors, 7 Wall. 26; Home Savings Bank v. Des Moines, 205 U.S. 503, 27 S.Ct. 571; State of Missouri ex rel. Missouri Ins. Co. v. Gehner, 281 U.S. 313, 50 S. Ct. 326.

Footnote 20 Northwestern Ins. Co. v. Wisconsin, 275 U.S. 136, 48 S.Ct. 55; National Life Ins. Co. v. United States, 277 U.S. 508, 48 S.Ct. 591. And no form of words or subterfuge can save an act the intent of which is to reach the income from federal bonds. Miller v. Milwaukee, 272 U.S. 713, 47 S.Ct. 280; Macallen Co. v. Massachusetts, 279 U.S. 620, 629, 49 S.Ct. 432, 65 A.L.R. 866.

Footnote 21 Banks v. The Mayor, 7 Wall. 16, 25.

Footnote 22 Home Ins. Co. v. New York, , 8 S.Ct. 1385; Home Ins. Co. v. New York, 134 U.S. 594, 10 S.Ct. 593.

Footnote 23 Plummer v. Coler, 178 U.S. 115, 20 S.Ct. 829; Greiner v. Lewellyn, 258 U.S. 384, 42 S.Ct. 324.

Footnote 24 Hibernia Savings & Loan Society v. San Francisco, 200 U.S. 310, 26 S.Ct. 265, 4 Ann.Cas. 934.

Footnote 25 Weston v. Charleston, 2 Pet. 449, 465.

Footnote 26 Jaybird Mining Co. v. Weir, 271 U.S. 609, 46 S.Ct. 592.

Footnote 27 Indian Motocycle Co. v. United States, 283 U.S. 570, 51 S.Ct. 601; Panhandle Oil Co. v. Mississippi ex rel. Knox, 277 U.S. 218, 48 S.Ct. 451, 56 A.L.R. 583; Grayburg Oil Co. v. Texas, 278 U.S. 582, 49 S.Ct. 185; Id. (Tex.Com.App.) 3 S.W.2d 427. Compare Brown v. Maryland, 12 Wheat. 419, 440.

Footnote 28 Graves v. Texas Co., 298 U.S. 393, 56 S.Ct. 818.

Footnote 29 Trinityfarm Construction Co. v. Grosjean, 291 U.S. 466, 54 S.Ct. 469.

Footnote 30 General Construction Co. v. Fisher, 295 U.S. 715, 55 S.Ct. 646; Id., 149 Or. 84, 39 P.2d 358, 97 A.L.R. 1252; Burnet v. A. T. Jergins Trust, 288 U.S. 508, 53 S.Ct. 439.

Footnote 31 Alward v. Johnson, 282 U.S. 509, 51 S.Ct. 273, 75 A. L.R. 9.

Footnote 32 Osborn v. Bank, 9 Wheat. 738, 867.

Footnote 33 In this brief the Solicitor General stated that figured upon the estimated purchases of the Government for the then current fiscal year, state sales taxes on gasoline of 4 cents per gallon, imposed by all the states, would impose an added burden upon the United States of $4,479,661.

Footnote 34 See the cases cited in note 10, supra.

Footnote 35 See note 5, supra.

Footnote 36 Cornell v. Coyne, 192 U.S. 418, 24 S.Ct. 383; Hope Natural Gas Co. v. Hall, 274 U.S. 284, 47 S.Ct. 639; Wheeler Lumber Bridge & Supply Co. v. United States, 281 U.S. 572, 50 S.Ct. 419. The same problem arises in connection with taxation alleged to burden interstate commerce. See American Manufacturing Co. v. St. Louis, 250 U.S. 459, 39 S.Ct. 522.

Footnote 37 See the cases cited in notes 17, 18 and 19.

Footnote 38 Jaybird Mining Co. v. Weir, 271 U.S. 609, 46 S.Ct. 592.

Footnote 39 Western Union Tel. Co. v. Texas, 105 U.S. 460; Williams v. City of Talladega, 226 U.S. 404, 33 S.Ct. 116; Indian Motocycle Co. v. United States, 283 U.S. 570, 51 S.Ct. 601; Panhandle Oil Co. v. Mississippi ex rel. Knox, 277 U.S. 218, 48 S.Ct. 451, 56 A.L.R. 583; Graves v. Texas Co., 298 U.S. 393, 56 S. Ct. 818.

Footnote 40 Johnson v. Maryland, 254 U.S. 51, 55, 41 S.Ct. 16.

Footnote 41 Brown v. Maryland, 12 Wheat. 419, 439.

Footnote 42 Indian Motocycle Co. v. United States, 283 U.S. 570, 575, 51 S.Ct. 601, 603.

Footnote 43 Van Allen v. Assessors, 3 Wall. 573.

Footnote 44 Western Union Telegraph Co. v. Texas, , 465; Western Union Telegraph Co. v. Taggart, 163 U.S. 1, 14, 16 S.Ct. 1054; Western Union Telegraph Co. v. Kansas, 216 U.S. 1, 32, 30 S.Ct. 190; U.S. Express Co. v. Minnesota, 223 U.S. 335, 344, 32 S.Ct. 211; Choctaw, O. & G.R.R. Co. v. Harrison, 235 U.S. 292, 299, 35 S.Ct. 27; Kansas City, Ft. S. & M. Ry. Co. v. Botkin, 240 U.S. 227, 232, 36 S.Ct. 261; Gillespie v. Oklahoma, 257 U.S. 501, 504, 505 S., 42 S.Ct. 171, 172; Northwestern Mutual Life Ins. Co. v. Wisconsin, 275 U.S. 136, 140, 48 S.Ct. 55, 56; Macallen Co. v. Massachusetts, 279 U.S. 620, 627, 49 S.Ct. 432, 434, 65 A.L.R. 866; Indian Motocycle Co. v. United States, 283 U.S. 570, 575, 51 S.Ct. 601, 602; Eastern Air Transport, Inc. v. So. Carolina Tax Commission, 285 U.S. 147, 152, 52 S.Ct. 340, 341; Fox Film Corp. v. Doyal, 286 U.S. 123, 126, 52 S.Ct. 546; Liggett & Myers Tobacco Co. v. United States, 299 U.S. 383, 387, 57 S.Ct. 239, 241.

Footnote 45 Gillespie v. Oklahoma, 257 U.S. 501, 505, 42 S.Ct. 171, 172.

Footnote 46 Pullman's Palace-Car Co. v. Pennsylvania, , 11 S.Ct. 876; Western Union Tel. Co. v. Taggart, 163 U.S. 1, 16 S.Ct. 1054; Old Dominion S.S. Co. v. Virginia, 198 U.S. 299, 25 S. Ct. 686, 3 Ann.Cas. 1100; United States Express Co. v. Minnesota, 223 U.S. 335, 32 S.Ct. 211; Pullman Co. v. Richardson, 261 U.S. 330, 43 S.Ct. 366. And as in the case of agents of the federal government or contractors with it, a state may measure the value of the property within its borders by a receipts tax in lieu of all property taxes. Compare United States Express Co. v. Minnesota, 223 U.S. 335, 32 S.Ct. 211; Cudahy Packing Co. v. Minnesota, 246 U.S. 450, 38 S.Ct. 373; Pullman Co. v. Richardson, 261 U.S. 330, 43 S.Ct. 366, with Alward v. Johnson, 282 U.S. 509, 51 S.Ct. 273, 75 A.L.R. 9.

Footnote 47 Philadelphia & S.M. Steamship Co. v. Pennsylvania, 122 U.S. 326, 7 S.Ct. 1118; Galveston, H. & S.A. Ry. Co. v. Texas, 210 U.S. 217, 28 S.Ct. 638; Meyer, Auditor of Oklahoma, v. Wells, Fargo & Co., 223 U.S. 298, 32 S.Ct. 218.

Footnote 48 Compare Western Union Tel. Co. v. Kansas, 216 U.S. 1, 30 S.Ct. 190, and Ozark Pipe Line Corp. v. Monier, 266 U.S. 555, 45 S.Ct. 184, with State of California v. Central Pacific Railroad Company, 127 U.S. 1, 8 S.Ct. 1073; Owensboro National Bank v. Owensboro, 173 U.S. 664, 19 S.Ct. 537; Third National Bank v. Stone, 174 U.S. 432, 19 S.Ct. 759; and Louisville v. Third National Bank, 174 U.S. 435, 19 S.Ct. 874.

Footnote 49 Compare Cook v. Pennsylvania, 97 U.S. 566, and Bowman v. Continental Oil Co., 256 U.S. 642, 41 S.Ct. 606, with Panhandle Oil Co. v. Mississippi ex rel. Knox, 277 U.S. 218, 48 S.Ct. 451, 56 A.L.R. 583.

Footnote 50 Compare Cook v. Pennsylvania, 97 U.S. 566; Fargo v. Michigan (Fargo v. Stevens), 121 U.S. 230, 7 S.Ct. 857, Crew Levick Co. v. Pennsylvania, 245 U.S. 292, 38 S.Ct. 126; New Jersey Bell Tel. Co. v. State Board, 280 U.S. 338, 50 S.Ct. 111; Fisher's Blend Station v. Tax Commission, 297 U.S. 650, 56 S.Ct. 608; Puget Sound Stevedoring Co. v. Tax Commission, 302 U.S. 90, 58 S.Ct. 72, with Western Union Tel. Co. v. Texas, 105 U.S. 460.

Footnote 51 Compare Shaffer v. Carter, 252 U.S. 37, 40 S.Ct. 221; United States Glue Co. v. Oak Creek, 247 U.S. 321, 38 S.Ct. 499, Ann.Cas.1918E, 748, and Atlantic Coast Line R. Co. v. Daughton, 262 U.S. 413, 43 S.Ct. 620, with General Construction Co. v. Fisher, 295 U.S. 715, 55 S.Ct. 646; Id., 149 Or. 84, 39 P. 2d 358, 97 A.L.R. 1252, and Burnet v. A. T. Jergins Trust, 288 U.S. 508, 53 S.Ct. 439. But see Gillespie v. Oklahoma, 257 U.S. 501, 42 S.Ct. 171, and Burnet v. Coronado Oil & Gas Co., 285 U.S. 393, 52 S.Ct. 443.

Footnote 52 Compare East Ohio Gas Co. v. Tax Commission, 283 U.S. 465, 51 S.Ct. 499 with Dobbins v. Erie County Commissioners, 16 Pet. 435, and People of New York ex rel. Rogers v. Graves, 299 U.S. 401, 57 S.Ct. 269.

Footnote 53 Compare Eastern Air Transport, Inc. v. South Carolina Tax Commission, 285 U.S. 147, 52 S.Ct. 340, with Trinityfarm Construction Co. v. Grosjean, 291 U.S. 466, 54 S.Ct. 469, and Tirrell v. Johnston, 293 U.S. 533, 55 S.Ct. 238.