Vol. III.] WESTERN UNION TELEGRAPH Co. v. CITY OF RICHMOND. [No. 4. We think it demonstrable that it does not." The rest of his opinion clearly shows that, by "those means employed by Congress," the chief justice refers to the governmental creations to which we have alluded. In the Bank Tax Case, 2 Wall. 200, the capital consisted of stocks of the federal government, and the decision in Mc Culloch v. Maryland ap plied. These views are further maintained in the case of National Bank v. Commonwealth, 9 Wall. 353, and especially to the opinion of the court, pp. 361-2. Directly to the point is the case of Thomson v. Pacific Rail road, 9 Wall. 579. In this latter case, the chief justice, in the opinion of the court, says: "We are not aware of any case in which the real estate, or other property of a corporation not organized under an act of Congress, has been held to be exempt in the absence of express legislation to that effect, to just contribution, in common with other property, to the general expenditure for the common benefit, because of the employment of the corporation in the service of the government. It is true that some of the reasoning in the case of McCulloch v. Maryland seems to favor the broader doctrine. But the decision itself is limited to the case of the bank, as a corporation created by a law of the United States, and responsible, in the use of its franchises, to the government of the United States." "We do not think ourselves warranted therefore in extending the exemption established by the case of Mc Culloch v. Maryland beyond its terms. We cannot apply it to the case of a corporation deriving its existence from state law, exercising its franchise under state law, and holding its property within state jurisdiction and under state protection." In Railroad Co. v. Peniston, 18 Wall. 5, a question arose whether a railroad company chartered and aided by Congress, - partly controlled by the government and subject to its future regulations, the charter of the company conditioned that if the terms are not complied with, or the loans not paid, the road shall come under the control and management of Con gress, and subject moreover to the use of the government at all times for transmission of mails, dispatches, troops, stores, &c.,— was subject to state taxation. It was decided to be so subject. "There are,' says the court in its opinion, "we admit, certain subjects of taxation which are withdrawn from the power of the states, not by any direct or express provision of the federal Constitution, but by what may be regarded as its necessary implications. They grow out of our complex system of government, and out of the fact that the authority of the national government is legitimately exercised within the states. While it is true that government cannot exercise its power of taxation so as to destroy the state governments, or embarrass their lawful action, it is equally true that the states may not levy taxes, the direct effect of which shall be to hinder the exercise of any powers which belong to the national government. The Constitution contemplates that none of those powers may be restrained by state legislation. But it is often a difficult question, whether a tax imposed by a state does, in fact, invade the. domain of the general government, or interfere with its operations to such an extent, or in such a manner, as to render it unwarranted. It cannot be that a state tax, which remotely affects the efficient exercise of a federal power, is for that reason alone inhibited by the Constitution. To hold that, would be Vol. III.] WESTERN UNION TELEGRAPH Co. v. CITY OF RICHMOND. [No. 4 to deny to the states all power to tax persons or property. Every tax levied by a state withdraws from the reach of federal taxation a portion of the property from which it is taken, and to that extent diminishes the subject upon which federal taxes may be laid. The states are, and they ever must be, coexistent with the national government. Neither may destroy the other. Hence the federal Constitution must receive a practical construction. Its limitations and its implied prohibitions must not be extended so far as to destroy the necessary powers of the states, or prevent their efficient exercise.' He then considers the case of Thomson v. Pacific Railroad. "It may therefore be considered as settled, that no constitutional implications prohibit a state tax upon the property of an agent of the government, merely because it is the property of such an agent. A contrary doctrine would greatly embarrass the states in the collection of their necessary revenue, without any corresponding advantage to the United States. A very large proportion of the property within the states is employed in execution of the powers of government. It belongs to governmental agents, and it is not only used, but it is necessary for their agencies. United States mails, troops, and munitions of war are carried upon almost every railroad. Telegraph lines are employed in the national service. So are steamboats, horses, stage-coaches, foundries, ship yards, and multitudes of manufacturing establishments. They are the property of natural persons, or of corporations, who are instruments or agents of the general government, and they are the hands by which the objects of the government are attained. Were they exempt from liability to contribute to the revenue of the states, it is manifest that the state governments would be paralyzed." He then refers to the cases relied on by the complainants in the case before him, and by the appellants in the present case, viz., Mc Culloch v. Maryland and Osborn v. Bank of U. S. In the former of these cases the tax "was not upon any property of the bank, but upon one of its operations; in fact, upon its right to exist as created. It was a direct impediment in the way of a governmental operation performed through the bank as an agent." "In Osborn v. The Bank, the tax held unconstitutional was a tax upon the existence of the bank, upon its right to transact business within the state of Ohio. It was, as it was intended to be, a direct impediment in the way of those acts which Congress for national purposes had authorized the bank to perform." This last decision of the supreme court, to our apprehension, is absolutely conclusive of all controversy upon the questions raised in the case at bar. If a private corporation, created by the laws of another state, for individual gain, unable to come into our midst and carry on its business, except by permission of the laws of Virginia, is not subject to the taxing power of the commonwealth and its governmental agencies, because, forsooth, this corporation is a contractor with the federal government, it would be difficult to say what persons or property are legitimate subjects of taxation. This monstrous proposition is, as we have seen, unsupported by authority, and is plainly repugnant to reason and justice. If maintained, it consummates the overthrow of all that is left of state government. Vol. III.] WESTERN UNION TELEGRAPH Co. v. CITY OF RICHMOND. [No. 4. STAPLES, J., delivered the opinion of the court. The charter of the city of Richmond authorizes the city council to raise annually, by taxes and assessments, such sums of money as they shall deem necessary to defray the expenses of the same, and in such manner as they shall deem expedient, in accordance with the laws of the state and of the United States. In the execution of the powers thus confided to them, the city council may grant licenses or refuse them. They may require taxes to be paid on such licenses to agents of insurance companies, and all business which cannot be reached by the ad valorem system. Acts of 1869-70, page 138, sects. 69 and 70. In the case of Ould & Carrington v. City of Richmond, 23 Gratt. 464 (S. C. 1 Am. L. T. R. 241), this court construed these provisions as conferring upon the city council the general power of taxation, except only as it may be limited by the laws of the state or of the United States, and including all persons and subjects of taxation. It was also further held, that the mode of assessment adopted by the city council with reference to attorneys at law was sustained by the charter and by the Constitution. The plan adopted by the city council in assessing telegraph companies is substantially the same as that pursued with reference to attorneys at law. They are divided into four classes, and required to pay a license tax graduated by the character of the business done by the company. The plaintiffs are placed in the third class, and are subjected to a license tax of one hundred and twenty-five dollars. The authority of the city council in the premises, and the validity of the assessment, must therefore be considered as adjudicated and settled by the decision of this court. It is said, however, that the ordinance of the city only applies to “ persons or firms" and not to chartered companies. It is very true that the twelfth section speaks of "persons or firms" only, but the eighth section expressly mentions "telegraph companies;" and it is very clear it was the intention to include all telegraph companies, whether incorporated or not. The sections construed together plainly show that, in using the words "persons or firms" in the city ordinance, the council designed to embrace chartered companies as well as individuals. And this is sanctioned by practice and the decisions of the courts. In Baltimore & Ohio R.R. Co. v. Gallahue's Adm'r, 12 Gratt. 655, 663, Judge Allen said: "Corporations are to be deemed and taken as persons, when the circumstances in which they are placed are identical with those of natural persons expressly included in a statute." Another ground taken by the plaintiffs is, that the Act of March 15, 1872, provides that but one license shall be required of a telegraph company, upon the issuing of which the company's messages may be transmitted through any county or corporation of the state; and that the city of Richmond has no power, in violation of this exclusive grant, to require another license and impose another tax upon the business of the company. It is very clear, however, that the Act of March 15, 1872, refers only to state taxation and revenue. The object of that act was, no doubt, to relieve telegraph companies from the payment of a tax for each office and place of business, and to authorize the transmission of messages throughout the state under one license, and upon the payment of a single tax. Vol. III.] WESTERN UNION TELEGRAPH Co. v. CITY OF RICHMOND. [No. 4. It was not intended to interfere with municipal corporations in the exercise of powers of taxation conferred by their charters, or to strip them of valuable revenues derived from companies and individuals carrying on business within the corporate limits, and under the protection of the corporate government. This subject was fully considered in the case of Humphreys, &c. v. Norfolk City, decided by this court at the spring term 1874; and to that case reference is made. 25 Gratt. 97. For these reasons the tax in this case must be held to be valid, so far as the Constitution and laws of the state are involved. The only question remaining for consideration is, whether the tax is in violation of any provision of the Constitution of the United States, or of any rights and privileges conferred upon plaintiffs by act of Congress. It is insisted that the action of the city council in requiring the license is repugnant to that clause of the Constitution of the United States, which gives to Congress the power to regulate commerce among the states. The argument of the learned counsel upon this point briefly stated is, that commerce is not merely traffic; it is something more, it is intercourse; and intercourse includes all the means by which commerce is carried on among the several states: that telegraph communication is an important branch of commercial intercourse; and if Virginia may impose a tax upon those companies, so may every other state penetrated by their lines; and thus the whole system of telegraph communication may be destroyed by oppressive burdens in the form of taxation. This proposition applies as well to states as to municipalities; and if the power of taxation is denied in one case it is in the other. The question is therefore a grave one, as well by reason of the principle as the amount involved. The power of taxation, as universally conceded, is inherent in every sovereignty, and no constitutional government can exist without it. It extends to every person, to every trade and occupation, and every species of property. It is as essential to the states as to the federal government. If it is important that the agencies of the federal government shall be excepted from the taxing power of the states, it is equally necessary that those of the latter shall be maintained in undiminished force and vigor. In Osborne v. Mobile, 16 Wall. 479, 481, Chief Justice Chase said: "It is as important to leave the rightful powers of taxation unimpaired in the states, as to maintain the powers of the federal government in their integrity." The difficulty of drawing the line between the commercial power of the Union, and the taxing power of the states, is universally conceded. Clearly no law of the states, much less the exercise of this taxing power, ought to be declared invalid upon any mere speculative, indirect, and contingent ground. The repugnancy to the Constitution of the United States ought to be immediate, direct, and beyond all question. If we assume that commerce means intercourse, as it clearly does, and that intercourse includes all the instrumentalities by which commerce is carried on between the states, there is scarce an avocation in the state engaged in foreign trade and traffic which may not be brought within the influence of the constitutional inhibition. It will be conceded that a state may tax a ship of one of its citizens engaged in the transportation of foreign merchandise, or passengers to and from the state; although it Vol. III.] WESTERN UNION TELEGRAPH Co. v. CITY OF RICHMOND. [No. 4. cannot tax the passengers or the merchandise. The reason is, that the ship is not commerce, but a mere instrument of commerce. Hays v. The Pacific Mail Steamship Co. 17 How. 596. And so it has been held, that a license tax upon persons engaged in buying and selling foreign bills of exchange is not repugnant to the Constitution of the United States. Nathan v. Louisiana, 8 How. 79. Such persons are not engaged in commerce, but simply in supplying an instrument of commerce. The court say: "They are less connected with it than the ship-builder, without whose labor foreign commerce cannot be carried on; and yet the business of ship-building may be taxed as the exercise of any other mechanical art. No one can claim an exemption from a general tax on his business within the state on the ground that the products sold may be used in commerce.' In Paul v. Virginia, 8 Wall. 168, it was decided that the issuing of a policy of insurance is not a transaction of commerce within the meaning of the Constitution, though the parties be domiciled in different states. The court say these contracts are not articles of commerce in any proper meaning of the word. They are not subjects of trade and barter offered in the market, as something having an existence and value independent of the parties to them. They are not commodities to be shipped or forwarded from one state to another, and then put up for sale. The learned counsel for the plaintiffs cites the case of Crandall v. Nevada, 6 Wall. 35, in which the supreme court held a statute of Nevada unconstitutional which imposed a tax upon every passenger leaving the state. This, however, was not upon the ground that such a tax is "a regulation of commerce, or even repugnant to any express provision of the Constitution, but upon the broad principle that the federal government had the right to call to the capital of the Union any and all of its citizens to aid in the military or civil service of the country; and every citizen from the most remote states or territories is entitled to free access to all the great departments of the government, executive, legislative, and judicial; and this right cannot be made dependent upon the pleasure of a state over whose territory they must pass in the exercise of such right. And if the principle should be admitted at all, it might be carried to the extent of an entire prohibition." An attempt was made by the counsel, who argued the case, to show that the tax was upon the business of the carrier who transports the passengers, graduated by the amount of the business done. The court say, however, it was plainly a tax upon the passenger, and the officers and agents of the companies were mere collectors of the tax. It was this feature, and this alone, which rendered the tax inconsistent with the rights belonging to citizens of the different states and with the objects the Union was intended to attain. The case of State Freight Tax, 15 Wall. 285, is much relied on by the counsel for the plaintiffs. There the supreme court held, that a statute imposing a tax upon freight taken up within the state and carried out of it, or taken up without and brought within the state, is repugnant to the clause of the Constitution giving to Congress the power to regulate commerce. The reason assigned is, that the tax was not upon the companies nor their franchises, property, or business, but upon the freight, or upon the consignor or consignee, and was so intended, and the company |