Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/497

 CHAP. Vni.] CORPORATION AND STATE. [§ 477. viewing the cases on the subject, that the cases established these principles : " 1. That the charter of a railroad corporation is a contract within the meaning of the contract clause in the Fed- eral constitution. 2. That such corporation may be protected by its charter against absolute legislative control in the matter of rates for the carriage of passengers and freight. 3. That when the charter is granted subject to such regulations as the legislature from time to time may provide, or subject to the authority of the legislature to alter or repeal it, in either of such cases the legislature has the same power over rates or tolls that it had when the charter was granted. 4. In the absence of statutory regulations upon the subject, it is necessarily implied from the occupation of a railroad corporation that it shall exact only reasonable compensation for carriage." 1 § 477. Another power necessary to the existence of the state, which, while it may perhaps be regarded as incidental to the police power, is important enough Jower** 1118 for detailed discussion, is the power to tax, that is to take the property of individuals for a public use, 2 without making compensation. 3 Perplexing questions arise in the con- struction of statutes imposing taxes on corporate property, because of the equivocal use of such phrases as " capital stock," " shares of stock," " stock," " franchises," " earnings," 4 etc. Yery likely no one has a clear understanding of all these phrases. At all events their meaning, as they are used in tax statutes, is so ambiguous that it can only be determined from the context, and accordingly a decision construing any of these terms is apt to be of doubtful application in any other case than that in which it was rendered. Said Chief Justice Waite, giving the opinion of the Federal Supreme Court in Tennessee v. Whitworth : 5 "In corporations four elements of taxable value are sometimes found : 1, fran- chises ; 2, capital stock in the hands of the corporation ; 3, cor- 1 108 U. S. 537. 2 There can be no lawful tax which is not levied for a public purpose. Loan Association v. Topeka, 20 Wall. 655; Parkersburg v. Brown, 106 U. S. 487. 3 See Gilman v. City of Sheboygan, 2 Black, 510; and § 469a. 4 As to earnings and profits, see § 565. Also Memphis and C. R. R. Co. v. United States, 108 U. S. 228. s 117 U. S. 129. 477