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THE GREEN BAG

ciple of law can hardly be doubted. It was also accepted that personalty might be taxed where it was actually located. "A tendency was visible in judicial decisions and in legislation to enlarge the concep tion of the actual situs of tangible move ables so as to expand the power of taxation. In 1888 it was held that Pennsylvania could tax an Illinois corporation on its capital stock, taking as the basis such proportion of the capital stock as the number of miles of rail road over which cars were run by the com pany in Pennsylvania bore to the whole number of miles everywhere over which its cars were run. ' It was obviously not de cided that tangible movables, either tempo rarily or permanently outside the state of the owner's domicil, were not taxable in such state, but, in extending the conception of actual situs, the decision tended to weaken the claims of domiciliary situs, and, by in creasing the liability to double taxation, to render more general the existence of condi tions requiring remedial action.' ' In 1903 the Fourteenth Amendment, for bidding any state to ' deprive any person of life, liberty or property, without due pro cess of law,' was held by Louisville, etc. Ferry Company v. Kentucky, to prevent the imposition by one state of taxes on realty in another. In 1905 in Delaware, etc. Company v. Pennsylvania, it was held on the strength of the Kentucky case that a state could not tax movable property of one of its corpora tions having a permanent situs outside of its limits. The authority of the case, as affect ing the power to tax foreign movables, is qualified by the admission made by counsel for Pennsylvania, that the statute under which the tax was levied did not authorize the taxation of such property. "No such qualification existed in the case of Union Refrigerator Transit Company v. Kentucky, which was soon afterward decided, in 1905. A Kentucky corporation owned two thousand cars which were rented to shippers, who took possession of them from time to time at Milwaukee, in Wisconsin, and used them in the United States, Canada and Mexico, the com pany being paid by the railroads in proportion to the mileage made over their lines. Kentucky sought to tax the company on all its cars,

the laws of the state authorizing the taxing of its corporations on all their movable prop erty within or outside the state. Counsel for the company admitted that it was impossible to ascertain how many of the cars, which were constantly moving, were in any state on any named day, and that the state had the right to devise a fair method of ascertaining the average number, without regard to particular cars, and to tax such number, but they chal lenged the claim to tax all the cars, on the ground that it involved the denial of due process of law. The Supreme Court sustained this contention. The decision was not unani mous, and Mr. Justice Holmes, conceding that the result was probably desirable, said he could ' hardly understand how it can be de duced from the Fourteenth Amendment.' "The court did not omit respectfully to inter the rule Mobilia personam sequuntur, so far as it relates to tangible property. There doubtless were, said the court, cases in the state reports announcing that this ' ancient maxim ' still applied to ' personal prop erty,' but upon examination ' all or nearly all ' would be found to relate to ' intangible property, such as stocks, bonds, notes and other choses in action.' "If the principle that property can be taxed only by the government that protects ' ' should be carried to its logical conclusion the results would be far reaching. The court expressly confined its decision to tangible property. ' There is,' declared the opinion, ' an obvious distinction between tangible and intangible property, in the fact that the latter is held secretly: that there is no method by which its existence or ownership can be ascertained in the state of its situs, except perhaps in the case of mortgages or shares of stock.' The exception here suggested is as palpable as it is important. A citizen of New York, let us suppose, owns shares of stock in a foreign corporation which owns and operates a rail way in another state. The value of the shares consists in the right of way, the tracks and the rolling stock. The property is tangible in the fullest sense. It receives no protec tion whatever from the state of New York; nor does the owner of the shares receive in respect of his certificate any protection other than he would enjoy in respect of a bill of