The present case has no close parallel in former decisions, but in some of its aspects it bears a resemblance to the case of a tax imposed upon a resident citizen engaged in a general business that happens to include a considerable share of interstate business; Ficklen v. Shelby County, 145 U. S. 1. Or the business of the live stock exchange that was under consideration in Hopkins v. United States, 171 U. S. 578, 592. Or the business of a cotton broker dealing in futures or options. Ware v. Mobile County, 209 U. S. 405.

To warrant interference with the exercise of the taxing power of a State on the ground that it obstructs or hampers interstate commerce, it must appear that the burden is direct and substantial. We do not think the present is such a case.

No. 457. Argued October 21, 1913.-Decided December 1, 1913.

The Corporation Tax Law of August 5, 1909, c. 6, 36 Stat. 11, 112, applies to mining corporations.

Income, within the meaning of the Corporation Tax Law of 1909, includes the proceeds of ores mined by a corporation from its own premises.

A corporation mining ores from its own premises is not entitled to deduct from the proceeds of the ores mined, by way of depreciation under the Corporation Tax Law of 1909, the difference between the gross proceeds of the sales of ores during the year and the moneys expended in extracting, mining, and marketing the ores.

Argument for Stratton's Independence.

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The Corporation Tax Law of 1909, having been enacted before the ratification of the Sixteenth Amendment, was not in any proper sense an income tax law; but was an excise tax upon the conduct of business in a corporate capacity, measured by the income, with certain qualifications prescribed by the act itself.

The process of mining ores is, in a sense, equivalent in its results to a manufacturing process, and is "business" within the Corporation Tax Law of 1909.

Income may be defined as the gain derived from capital, from labor, or from both combined.

In fixing the income by which the excise on conducting business should be measured, Congress has power to fix the gross income even though such income involved a wasting of the capital as in mining ores. The Corporation Tax Law deals with corporations engaged in actual business transactions and presumably conducted according to business principles.

Whatever may be the proper method of computing depreciation under the Corporation Tax Law by reason of taking ore from the premises of a mining corporation, the rules applicable to liability of trespassers for taking ore have only a modified application thereto.

Where the case is here under § 239, Judicial Code, and the whole record has not been sent up, this court, under Rule 37, deals with the facts as certified and not otherwise; under such circumstances it answers only the questions of law certified and does not go into questions of fact or of mixed law and fact.

THE facts, which involve the construction of the Corporation Tax Act of August 5, 1909, c. 6, 36 Stat. 11, 112, and its application to mining corporations are stated in the opinion.

Mr. William V. Hodges, with whom Mr. A. A. Hoehling, Jr., and Mr. John R. Van Derlip were on the brief, for Stratton's Independence, Limited:

Mining corporations are not included in general classifications of corporations, as such classifications are used in legislation. The fact that the natural enjoyment of a mining estate results in the waste of the estate, and the fact that the true value thereof is impossible of determination, have caused such properties to be considered as anomalous, and to be so treated in the general incorpora

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Argument for Stratton's Independence.

tion laws of the mining States, and the decisions of the courts relating thereto, in the laws establishing systems of taxation in the mining States, and by the decisions under the Federal Bankruptcy Act of 1898.

Special provision for the taxation of mining claims has been made in the following instances: Colorado Rev. Stat., 1908, §§ 5617-5627, as amended, Laws 1913, pp. 565-567; Montana Rev. Pol. Code, 1907, §§ 2500, 2563-2571; Nevada Rev. Laws, 1912, §§ 3687-3709; Idaho Rev. Codes, §§ 1863-1872; Utah Comp. Laws, 1907, §§ 2504, 2566-2573; Washington Laws, 1897, p. 155; New Mexico Comp. Laws, 1897, §§ 1560, 1756; Wyoming Comp. Stat. 1910, §§ 2449-2454; Oklahoma Laws, 19071908, c. 71, Art. 2; Laws 1909, c. 38; Art. 2, Comp. Laws, §§ 7702, 7703, 7706.

The courts recognize the same necessity for special treatment of this class of properties. Taxation of Mining Claims, 9 Colorado, 635; Pilgrim Mining Co. v. Teller County, 32 Colorado, 334; Iron Silver Co. v. Henderson, 12 Colorado, 369; Foster v. Hart Mining Co., 52 Colorado, 459.

In a number of mining States the statutes make express exceptions, applicable to mining corporations, in relation to the conveyance of mining properties in exchange for capital stock, regardless of the true value thereof, and for disposition of the same on liquidation. Colorado Rev. Stat., 1908, §§ 975-983; Montana Rev. Civ. Code, 1907, §§ 3824, 3860, 3896, 4403-4412; North Dakota Rev. Code, 1899, §§ 3154-3161; Nevada Rev. Laws, 1912, §§ 1200-1202, 1216-1218, 1330-1340; Kerr's California Civ. Code, §§ 586-590; Lord's Oregon Laws, §§ 67136715; Washington, Ballinger's Ann. Code, 1897, §§ 42804284; and see decisions demonstrating the necessity of special treatment of mining premises. Leschen Rope Co. v. Allen, 187 Fed. Rep. 977; In re South Mountain Mining Co., 14 Fed. Rep. 347; Ross v. Mining Co., 36 Minnesota, VOL. CCXXXI-26

Argument for Stratton's Independence.

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38; In re Elk Park Mining Co., 101 Fed. Rep. 422; In re Rollins Mining Co., 102 Fed. Rep. 982; In re Keystone Coal Co., 109 Fed. Rep. 872; In re Woodside Coal Co., 105 Fed. Rep. 56.

In the administration of the Corporation Tax Law the Commissioner of Internal Revenue at first recognized that the provisions thereof do not fit the conditions of a mining corporation, and attempted to make over the act of Congress by administrative legislation. T. D. 1742, December 15, 1911.

Mining corporations are not engaged in carrying on business within the meaning of the act. Flint v. Stone Tracy Co., 220 U. S. 107.

Merely existing as a corporation and exercising corporate franchises does not necessarily amount to the "carrying on of business," within the intent of the act. McCoach v. Minehill Ry. Co., 228 U. S. 295; Zonne v. Minneapolis Syndicate, 220 U. S. 187; see also Clark v. Sidway, 142 U. S. 682; Farrand v. Gleason, 56 Vermont, 633; Jordan v. Soule, 79 Maine, 590; Harris v. de Raismes, 38 Atl. Rep. (N. J.) 637; Nash v. Mitchell, 71 N. Y. 199; Childers v. Neely, 47 W. Va. 70; Judge v. Braswell, 13 Bush (Ky.), 67.

The application of the act to mining corporations results in a tax upon the capital itself, while, as applied to corporations having an income, as distinguished from capital, it does not result in a tax upon capital. This inequality of operation is inherently unjust. Laying aside all questions of constitutional limitations, the act should not be so construed as to accomplish this unjust result, if there be a fair and reasonable construction to be given the act which would avoid such an unjust result. Washington &c. R. R. Co. v. Coeur d'Alene Ry. Co., 160 U. S. 77, 101; Bate Refrigerator Co. v. Sulzberger, 157 U. S. 1.

The proceeds of mining operations do not represent values created by, or incident to, the business activities

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Argument for Stratton's Independence.

of such a corporation, and cannot be a bona fide measure of a tax leveled at such corporate business activities.

The measurement of the tax by the excess of the receipts for ore marketed over the cost of mining, extracting and marketing the same is equivalent to a tax upon the usual and ordinary incidents of ownership of such propertysuch a direct tax as is prohibited by the Constitution— and, further, is such a tax as Congress, by the provisions for the deduction of depreciation provided in the act, expressly intended to avoid. Knowlton v. Moore, 178 U. S. 41, 81-82.

The proceeds of mining operations result from a conversion of the capital represented by real estate into capital represented by cash, and are in no true sense income. The act cannot apply to a corporation which has no income.

The act ought not to be construed to include mining corporations unless it clearly appears that Congress intended to include them. Duties are never imposed on the citizen upon vague or doubtful interpretations. Hartranft v. Wiegemann, 121 U. S. 609, 616; Pennsylvania Steel Co. v. New York City Rys. Co., 198 Fed. Rep. 774; Taylor v. Treat, 153 Fed. Rep. 656; Parkview Building Assn. v. Herold, 203 Fed. Rep. 876, 880.

The fact that mining corporations come within the letter of the act, if true, does not conclude the argument; for, if mining corporations be not within the spirit of the act, it is not applicable to them. Brewer v. Blougher, 14 Pet. 178; United States v. Kirby, 7 Wall. 482; Heydenfeldt v. Daney Mining Co., 93 U. S. 634, 638; Holy Trinity Church v. United States, 143 U. S. 457.

The proceeds of ores mined by a corporation from its own premises are not income within the meaning of the aforementioned act of Congress. T. D. 1742.

For a correct definition of income, see Cornell University v. Davenport, 30 Hun, 177, 180; Thorne v. de Breteuil, 86 App. Div. 405, 416; Wilcox v. County Commissioners,