Page:Harvard Law Review Volume 32.djvu/687

651 INDIRECT ENCROACHMENT ON FEDERAL AUTHORITY 651 Here is a pretty plain implication that an excise measured by pre- miums which have no relation whatever to the taxing state would have gone beyond what the Constitution allows. The states, there- fore, have had a clear warning of the risks they run in seeking to levy on the extra-state income of any foreign corporation. Such taxation of extra-state income can be justified, if at all, only by the possession of some power over the recipient. The income, as such, is not taxable by a state which has no other rela- tion towards it than that of covetousness. It is at best exceed- ingly doubtful whether the requisite power exists over any foreign corporation. As to domestic corporations the case is not so clear. Such corporations, whatever their business, may be subjected to any demand exacted as a price for the privilege of coming into being.^"* Through control over the corporate entity en ventre sa mere, the state may accompUsh indirectly what it cannot attain directly. With reserved power to amend or repeal the corporate charter, this initial arbitrary power may possibly be transformed into a continuing one. But, if so, it must be exercised as an asser- tion of such arbitrary power, or else find adequate justification on independent grounds. This appears clearly from Mr. Justice Harlan's opinion in Louisville 6* Jefersonville Ferry Co. v. Ken- tucky,^ in which it was held a taking of property without due process of law to include in the valuation of the Kentucky fran- chise of an interstate ferry the value of the Indiana franchise of the same concern. After stating the conclusion that Kentucky cannot in effect tax the incorporeal hereditament which has its situs in another state, Mr. Justice Harlan continues: "This view is not met by the suggestion that Kentucky can make it a condition of the exercise of corporate powers under its authority that " Railroad Co. v. Maryland, 21 Wall. (U. S.) 456 (1874), 31 Harv. L. Rev. 578; Ashley v. Ryan, 153 U. S. 436, 14 Sup. Ct. Rep. 865 (1894), 31 Harv. L. Rev. 580; Kansas City, M. & B. R. Co. v. Stiles, 242 U. S. iii, 37 Sup. Ct. Rep, 58 (1916), 31 Harv. L. Rev. 599. The same rule is assumed to apply to charter requirements of a police nature. Louisville & N. R. R. Co. v. Kentucky, 161 U. S. 677, 16 Sup. Ct. Rep. 714 (1896). But intimations that some or all of the justices have doubts as to whether charter provisions may inevitably be enforced under all future circum- stances appear in Interstate Consolidated Street Railway Co. v. Massachusetts, 207 U. S. 79, 28 Sup. Ct. Rep. 26 (1907), International & G. N. Ry. Co. v. Anderson County, 246 U. S. 424, 38 Sup. Ct. Rep. 370 (1918), and Detroit United Ry. Co. v. Detroit, 39 Sup. Ct. Rep. 151 (1919). « 188 U. S. 385, 23 Sup. Ct. Rep. 463 (1903)-