Gloucester Ferry Co v. Commonwealth of Pennsylvania

• Citation: 29 L.Ed. 158,114 U.S. 196,5 S.Ct. 826
• Parties: GLOUCESTER FERRY CO. v. COMMONWEALTH OF PENNSYLVANIA
• Decision Date: 13 April 1885
• Court: United States Supreme Court

114 U.S. 196

5 S.Ct. 826

29 L.Ed. 158

GLOUCESTER FERRY CO. v. COMMONWEALTH OF PENNSYLVANIA.

April 13, 1885.

In March, 1865, the Gloucester Ferry Company, the plaintiff in error here, was incorporated by the legislature of New Jersey to establish a steam-boat ferry from the town of Gloucester, in that state, to the city of Philadelphia, in Pennsylvania, with a capital stock of $50,000, divided into shares of $50 each. During that year it established, and has ever since maintained, a ferry between those places, across the river Delaware, leasing or owning steam ferry-boats for that purpose. At each place it has a slip or dock on which passengers and freight are received and landed; the one in Gloucester it owns, the one in Philadelphia it leases. Its entire business consists in ferrying passengers and freight across the river between those places. It has never transacted any other business. It does not own, and has never owned, any property, real or personal, in the city of Philadelphia other than the lease of the slip or dock mentioned. All its other property consists of certain real estate in the county of Camden, New Jersey, needed for its business, and steam-boats engaged in ferriage. These boats are registered at the port of Camden, New Jersey. It has never owned any boats registered at a port of Pennsylvania, and its boats are never allowed to remain in that state, except so long as may be necessary to discharge and receive passengers and freight. In Jury, 1880, the auditor general and the treasurer of the state of Pennsylvania stated an account against the company of taxes on its capital stock, based upon its appraised value, for the years 1865 to 1879, both inclusive, finding the amount of $2,593.96 to be due the commonwealth. From this finding an appeal was taken to the court of common pleas of Philadelphia, and was there heard upon a case stated, in which it was stipulated that if the court were of opinion that the company was liable for the tax, judgment against it in favor of the commonwealth should be entered for the above amount; but if the court were of opinion that the company was not liable, judgment should be entered in its favor.

A statute of Pennsylvania, passed June 7, 1879, 'to provide revenue by taxation,' in its fourth section enacted as follows: 'That every company or association whatever, now or hereafter incorporated by or under any law of this commonwealth, or now or hereafter incorporated by any other state or territory of the United States or foreign government, and doing business in this commonwealth, or having capita employed in this commonwealth in the name of any other company or corporation, association or associations, person or persons, or in any other manner, except foreign insurance companies, banks and savings institutions, shall be subject to and pay into the treasury of the commonwealth annually a tax to be computed as follows, namely: If the dividend or dividends made or declared by such company or association as aforesaid, during any year ending with the first Monday of November, amount to six or more than six per centum upon the par value of its capital stock, then the tax to be at the rate of one-half mill upon the capital stock for each one per centum of dividend so made or declared; if no dividend be made or declared, or if the dividend or dividends made or declared do not amount to six per centum upon the par value of said capital stock, then the tax to be at the rate of three mills upon each dollar of a valuation of the said capital stock,' made in accordance with the provisions of another section of the act. It was under the authority of this act that the taxes in question were stated against the company by the auditor general and the state treasurer.

The court of common pleas held that the taxes could not be lawfully levied, for there was no other business carried on by the company in Pennsylvania except the landing and receiving of passengers and freight, which is a part of the commerce of the country, and protected by the constitution from the imposition of burdens by state legislation. It therefore gave judgment in favor of the company. The case being carried on a writ of error to the supreme court of the state, the judgment was reversed, and judgment ordered in favor of the commonweath for the amount mentioned. To review this latter judgment, the case is brought here.

John G. Johnson, M. E. Olmsted, Sanil Dickson, and M. P. Henry, for plaintiff in error.

Robert Snodgrass, for defendant in error.

[Argument of Counsel from pages 199-202 intentionally omitted]

FIELD, J.

The supreme court of the state, in giving its decision, stated that the single question presented for consideration was whether the company did business within the state of Pennsylvania during the period for which the taxes were imposed; and it held that it did do business there, because it landed and received passengers and freight at its wharf in Philadelphia, observing that its whole income was derived from the transportation of freight and passengers from its wharf at Gloucester to its wharf at Philadelphia, and from its wharf at Philadelphia to its wharf at Gloucester; that at each of these points its main business, namely, the receipt and landing of freight and passengers, was transacted; that for such business it was dependent as much upon the one place as upon the other; that, as it could hold the wharf at Gloucester, which it owned in fee, only by purchase by virtue of the statutory will of the legislature of New Jersey, so it could hold by lease the one in Philadelphia only by the implied consent of the legislature of the commonwealth; and that, therefore, it 'was dependent equally, not only for its business, but its power to do that business, upon both states, and might therefore be taxed by both.' 98 Pa. St. 105, 116.

As to the first reason thus expressed, it may be answered that the business of landing and receiving passengers and freight at the wharf in Philadelphia is a necessary incident to, indeed is a part of, their transportation across the Delaware river from New Jersey. Without it that transportation would be impossible. Transportation implies the taking up of persons or property at some point and putting them down at another. A tax, therefore, upon such receiving and landing of passengers and freight is a tax upon their transportation; that is, upon the commerce between the two states involved in such transportation.

It matters not that the transportation is made in ferry-boats which pass between the states every hour of the day. The means of transportation of persons and freight between the states does not change the character of the business as one of commerce, nor does the time within which the distance between the states may be traversed. Commerce among the states consists of intercourse and traffic between their citizens, and includes the transportation of persons and property, and the navigation of public waters for that purpose, as well as the purchase, sale, and exchange of commodities. The power to regulate that commerce, as well as commerce with foreign nations, vested in congress, is the power to prescribe the rules by which it shall be governed, that is, the conditions upon which it shall be conducted; to determine when it shall be free and when subject to duties or other exactions. The power also embraces within its control all the instrumentalities by which that commerce may be carried on, and the means by which it may be aided and encouraged. The subjects, therefore, upon which the power may be exerted are of infinite variety. While with reference to some of them, which are local and limited in their nature or sphere of operation, the states may prescribe regulations until congress intervenes and assumes control of them, yet, when they are national in their character, and require uniformity of regulation affecting alike all the states, the power of congress is exclusive. Necessarily that power alone can prescribe regulations which are to govern the whole country. And it needs no argument to show that the commerce with foreign nations and between the states, which consists in the transportation of persons and property between them, is a subject of national character, and requires uniformity of regulation. Congress alone, therefore, can deal with such transportation; its non-action is a declaration that it shall remain free from burdens imposed by state legislation. Otherwise, there would be no protection against conflicting regulations of different states, each legislating in favor of its own citizens and products, and against those of other states. It was from apprehension of such conflicting and discriminating state legislation, and to secure uniformity of regulation, that the power to regulate commerce with foreign nations and among the states was vested in congress. Nor does it make any difference whether such commerce is carried on by individuals or by corporations. Welton v. State of Missouri, 91 U. S. 275; County of Mobile v. Kimball, 102 U.S. 691. As was said in Paul v. Virginia, at the time of the formation of the constitution, a large part of the commerce of the world was carried on by corporations; and the East India Company, the Hudson Bay Company, the Hamburgh Company, the Levant Company, and the Virginia Company were mentioned as among the corporations which, from the extent of their operations, had become celebrated throughout the commercial world. 8 Wall. 168. The grant of power is general in its terms, making no reference to the agencies by which commerce may be carried on.

It includes commerce by whomsoever conducted, whether by individuals or by corporations. At the present day nearly all enterprises of a commercial character, requiring for their successful management large expenditures of money, are conducted by corporations. The usual means of transportation on the public waters, where expedition is desired, are vessels...