Case of the State Freight Tax Reading Railroad Company v. Pennsylvania
Citation | 21 L.Ed. 146,82 U.S. 232,15 Wall. 232 |
Parties | CASE OF THE STATE FREIGHT TAX. READING RAILROAD COMPANY v. PENNSYLVANIA |
Decision Date | 01 December 1872 |
Court | United States Supreme Court |
ERROR to the Supreme Court of Pennsylvania; the case being thus:
On the 25th of August, 1864, the Legislature of Pennsylvania passed an act entitled 'An act to provide additional revenue for the use of the Commonwealth.' It enacted——
'First, on the product of mines, quarries, and clay-beds, in the condition in which said products may be taken therefrom, 2 cents.
'Second, on hewn timber, animal food, including live stock; also, on the products of the forest, vegetable, and other agricultural products, the value of which has not been increased by labor, 3 cents.
'Third, on all other articles, 5 cents.
On the 25th of October, 1866, the accounting officers of Pennsylvania stated an account under the statute already quoted between the Commonwealth and the Reading Railroad Company, 'for tax on tonnage for the quarters ending December 31st, 1865, and March 31st, and June 30th, 1866.' The company named is a corporation created under the laws of Pennsylvania, and is engaged in the sole business of transporting freights for hire, and carrying no commodities of its own. An important part of its business is carrying coal from the mountains of Pennsylvania to a place called Port Richmond, near Philadelphia, a distance of about one hundred miles; the whole road being in Pennsylvania. A portion of the coal transported to Port Richmond is sold there to consumers, but by far the larger portion is intended for exportation to points beyond the limits of Pennsylvania, and is transferred at Port Richmond into vessels destined for such points. A considerable quantity of coal is also transported by the railroad company to a point on the Schuylkill Canal, where it is loaded in barges and exported beyond the State. The company was charged by the State:
For freight transported to points within the State of
Pennsylvania,.................... $38,361
For that exported to points without the State,. 46,520
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The latter sum the railroad company refused to pay. It set up that the statute of 1864, to the extent that it imposed a tax on freight other than that both received and delivered within the State of Pennsylvania, was unconstitutional and void, because, among other reasons, it was in conflict with the Constitution of the United States, which ordains that 'Congress shall have power to regulate commerce with foreign nations, and among the several States.'
Suit being brought in the Common Pleas of Dauphin County, the jury found that the freight in question was originally destined for exportation beyond the boundaries of Pennsylvania, and that it was actually exported, in a continuous course of transportation, in the cars of the defendants, to points on the river Delaware, or the Schuylkill Canal, and thence in vessels. Being instructed by the court (PEARSON, J.) that such a finding should be followed by a verdict for the defendants, verdict and judgment so went.
The charge of the judge was but a reiteration of the opinion which he had previously expressed in other cases on the constitutional point in question, and which appeared to have been acquiesced in by the Commonwealth of Pennsylvania, since, although writs of error were taken to the judgments in those cases, he observed that they were never argued, 'as they were considered correctly decided by the then Attorney-General of Pennsylvania, the Honorable W. M. Meredith.' However, a writ of error was taken from the Supreme Court of Pennsylvania to the judgment entered on the verdict in the present cause, and it resulted in the judgment of the Court of Common Pleas being reversed by the higher tribunal;1 that court admitting the force of the argument that could be made against their view, but conceiving that 'a case of simple doubt should be resolved favorably to the State act, leaving the correction of the error, if there was any, to the Federal judiciary.'
To understand the full force of the argument in the opinion of that court, the reader must refer to the opinion itself. Among other grounds on which it rested the reversal, were these:
That the products carried from points within the State to points without, or from points without to points within, were not discriminated against and required to pay more than other products carried wholly within the State, all paid the same exact freight; a charge for transportation simply.
That this tax was not imposed as, or intended to be, a regulation of commerce, in other words a rule by which commerce was to be governed; but was a tax to raise money for the support of government, and made, therefore, in the exercise of an authority which flowed from the power to tax for revenue. Adverting to the case of Brown v. Margland,2 and to the question put there by Chief Justice Marshall, as about a thing plainly unconstitutional,——
——
the Supreme Court of Pennsylvania said:
That in virtue of her unquestioned power to improve her own resources and to regulate her internal affairs, the State had built up a network of railways and canals, and had improved natural channels, and that in virtue of her right of eminent domain and her power to legislate on her internal affairs and the creations of her own sovereignty, she had a right to exact tolls, charges, and fares for their use, and that whether this was done by a direct charge on the tonnage or by a tax on the corporations who used the franchise was unimportant.
The court stated that it would not rest the case on the debatable ground of State power to regulate interstate commerce in the absence of...
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