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uniform operation;" the latter, “taxation shall be equal and uniform throughout the State.” For a clear exposition of the construction of the former see the language of Justice Sanderson in Ex Parte Smith vs. Keating, 38 Cal., p. 710. The case of the C. P. R. R. Co. vs. Bd. Sup. Placer Co., decided April 10th, 1872, was an effort by certiorari to compel a reduction of the assessed valuation of petitioner's property made by the Assessor for revenue purposes. The Board refused to make the reduction asked, and the Supreme Court sustained the action of the Board and dismissed the writ. At the same (April) term of the Supreme Court there was decided the case of The People vs. The C. P. R. R. Co. (No. 2,806), which was an action brought to recover the taxes levied and which were in the case last supra attempted to be reduced. The questions disposed of in this case are of the utmost importance, and the decision will be found to give a 'clear exposition of the relations of the State and Federal Governments on the subject of governmental revenue and their respective powers over the same. After disposing of some comparatively unimportant matters, the Court, through Wallace, C. J., proceeds as follows:

First-It is claimed that the railroad and telegraph line in question are not subject to taxation under State laws. An elaborate argument has been submitted on the part of the railroad company, in which it is urged that the road and telegraph were established by the Federal Government in the exercise of its constitutional powers to establish Post Offices and post roads;' 'to provide for the common defense and general welfare of the United States;' 'to suppress insurrections and repel invasion,' and to raise and support armies.'. That the taxing power of the State Government, otherwise extending generally to all subjects found within the borders of the State, is to some degree qualified and restrained by the provisions of the Federal Constitution and by the Acts of Congress passed in pursuance thereof, is undeniable. The question in this respect has always been as to the mere degree or extent of the restraint imposed. When the Federal Constitution was before the States for ratification, the question of the respective powers of taxation to be thereafter exercised by the individual States upon the one hand and the Federal Government upon the other, in the event of the proposed ratification, was a subject of the most anxious consideration. The opponents of the proposed system, which was to be established under the Federal Constitution, held this language: 'Revenue is as

requisite to the purposes of the local administration as to those of the Union, and the former are at least of equal importance with the latter, to the happiness of the people. It is, therefore, as necessary that the State. Governments should be able to command the means of supplying their wants as that the National Government should possess the like faculty in respect to the wants of the Union. But an indefinite power of taxation in the latter might, and probably would in time, deprive the former of the means of providing for their own necessities, and would subject them entirely to the mercy of the National Legislature.'

"To this objection, Mr. Hamilton, the recognized champion of the proposed new system, and who lent the force of his unrivaled abilities, and the weight of his high personal character to its adoption, replied."

Here the Court quotes at length from the Federalist, No. 33, in opposition. The Court then proceeds at length to consider the cases of the Bank of the United States, chartered in 1816; the case of McCullough vs. Maryland, 4 Wheat., p. 316, wherein Chief Justice Marshall repudiated the views in the Federalist, quoted. Says the Court: “That decision declared in effect that the State power to tax had been taken away." The cases subsequently arising known as the Ohio Bank Cases, Osborn vs. The Bank of the U.S., 9 Wheat., p. 738, and others where the case in 4 Wheat., supra, is reviewed, and the case of Weston vs. The City Council of Charleston, 2 Peters, p. 449, also referred to by Justice Wallace. He then proceeds as follows:

“But we are of opinion that the case under consideration does not fall within the principle announced in any of these cases, for several reasons.

“The corporation here was not, in the first instance, created by the Government of the United States, but by the State; and even if it be cunceded that the corporation thus created under State law has been subsequently adopted by the Federal Government, and availed of by that Government as a means of carrying into effect its constitutional powers, such adoption would not, upon the principles adverted to, exempt it from the operation of the State revenue laws. But there is another reason which we think conclusive upon this point, and that is, that the tax in question is not a tax imposed upon the business of the corporation defendant, but only upon its real property situate within the State. The principle upon which mere created by the Federal Government as agencies in the execution of its powers are to be exempted from State

means

taxation bas never been applied to the exemption of real property within the State, even when occupied or used exclusively in connection with the business which is itself exempted. Hence, in McCulloch vs. The State of Maryland, supra, the Chief Justice observed: *This opinion does not deprive the States of any resources which they originally possessed. It does not extend to a tax paid by the real property of the bank, in common with the other real property within the State,' etc. It is said, however, by the counsel for the railroad corporation, that this was a mere dictum of the Chief Justice; that the only question before the Court in that case was as to the authority of the State to tax the business of the bank, and that its authority to tax the real estate belonging to the bank was not a point in judgment. But the Court having announced a principle, by the application of which the extent of the State authority to impose taxes was to be measured and defined, it of course became necessary to indicate the limits of the operation of that principle-to point out the general subjects to which it did not as well as those to which it did apply. The counsel for the State of Maryland had urged that the principle itself was purely arbitrary, and one which, if sanctioned by the Court, was utterly incapable of limitation. We have not been told,' he said, 'whether the banking houses of this corporation and any other real estate it may acquire for the accommodation of its affairs, are also of this privileged order of property. In principle it must be the same; for the privilege, if it exists, belongs to the corporation, and must cover equally all its property.' These views had been urged upon the attention of the Court in the discussion at the bara discussion characterized, as the Chief Justice declared, by a splendor of eloquence and strength of argument seldom, if ever, surpassed. It was in response to this position, and in answer to the reasoning by which it had been supported, that the opinion of the Court undertook to expound and apply the principle which it had asserted; and we think that, when in order to distinctly define the scope of its operation, the Court declared that the principle of exemption did not extend to real property within the State, it was the authoritative determination of a question of surpassing importance in itself-one which had been distinctly presented, elaborately argued by counsel, and deliberately considered by the Court.

" But whether the case of McCulloch vs. The State of Maryland is to be considered as an authoritative adjudication upon this precise point or not becomes unimportant in view of the much later case of Thomson vs. Pacific Railroad, 9 Wallace, p. 579, determined by the Supreme Court of the United States in the year 1869. In that case certain stockholders in that railroad corporation filed a bill in the Circuit Court of the United States for the district of Kansas to enjoin the collection of taxes assessed upon the railroad and telegraph property of the company under the revenue laws of the State of Kansas. It was there distinctly claimed that the principle of exemption from State taxation was applicable to that property; and this was the principal issue, indeed the sole question presented. The argument by which the claim was supported was much the same, in its general scope, as that submitted for our consideration. The Court was unanimously of the opinion that such a claim was without support. After a review of the authorities, it expressed its views as follows: ‘But 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.' Further speaking of the principle upon which such exemption is rested, it said: “We cannot apply it to the case of a corporation deriving its existence from State law, and holding its property within State jurisdiction and under State protection.'

“We have not overlooked the argument of the counsel for the defendant here, in which it is asserted that there is a distinction to be taken between the case of Thomson vs. Pacific Railroad and the one now under consideration. It is said that in the former case it was admitted in the pleadings that the corporation was 'a local or State corporation;' but we have already had occasion to observe that it is also admitted by the pleadings in this case that the said defendant, the Central Pacific Railroad Company of California, is a corporation duly organized and acting under the laws of the State of California. In this respect, therefore, the two cases are identical. It is also urged that in the former case there had been no legislation on the part of Kansas by which that State could be said to have relinquished any of its sovereign rights over the

4-VOL. II.

railroad company;' while it is insisted that, upon the part of the State of California, such laws have been enacted as amount to a renunciation of State power in the premises. Without pausing at this point to consider whether, under our constitutional system of government, it is or would be competent to either the State or Federal Government to abdicate in favor of the other its rightful authority, constitutionally vested in it, over such a subject as this, so as to destroy the uniformity of the relations existing between the several States upor. the one hand, and the Federal Government upon the other, we are of opinion that there is nothing to be found in the legislative enactments of this State which imports a renunciation upon its part of the sovereign power of taxation over the railroad and telegraph line in question. On the contrary, we find that in the statute of April 4, 1864 (Statutes 1863-4, p. 471), enacted for the purpose of enabling the railroad company to comply with and perform the provisions and conditions of the Act of Congress of July 1, 1862, it is distinctly provided as follows: "Said company to be subject to all the laws of this State concerning railroad and telegraph lines, except that messages and property of the United States, of this State, and of the said company, shall have priority of transportation and transmission over said line of railroad and telegraph.' The exception points out, and was obviously intended to point out, the only particulars in which the assent of the State there accorded to the provisions of the Act of Congress should change in any respect the conditions theretofore existing between the railroad corporation upon the one hand, and the State of California upon the other, and the liability to State taxation was not one of these. For these and many other reasons, which we need not here stop to enumerate, we are of opioion that the authority of the State to impose taxation upon the railroad and telegraph line, in common with all other subjects of taxation within its limits, is clear and unquestionable, and the objection of the defendant in that respect must be overruled.

Second-It is next objected that the revenue laws of the State are unconstitutional-null and void-as not being uniform in their operation, and in this connection Article I, Section 11, of the State Constitution, is cited in the following words: 'All laws of a general nature shall have a uniform operation.'

“It is not denied that the mere taxation imposed by the revenue laws is equal and uniform, nor is it pretended that property is taxed otherwise than in pro

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