Statement of the Case.

tinuous carriage from points in other States to points in Pennsylvania..... 5. Total receipts from transportation by continuous carriage from points in Pennsylvania to points in other States 6. Total receipts from transportation by continuous carriage from points in a foreign State, passing through Pennsylvania, and ending in a third State..

.....

7. Total receipts from transportation from points in foreign States to other points in foreign States not touching Pennsylvania ..

Total receipts

292,422 00

2,569,514 58

267,868 59

57,532 19 $4,798,933 53"

In another affidavit, under date January 20, 1888, the same official stated: "Wherever in the said statement of November tenth, 1887, I used the term 'continuous transportation' or 'continuous carriage,' the freight or passengers, from the transportation of which the receipts were derived were carried between the points mentioned for a single sum or charge and upon a single way-bill or ticket, and were, when taken upon the cars of this company, destined to be carried and were actually carried from point to point as in said statement set forth. The Lehigh Valley Railroad Company has no railroad of its own reaching the city of Philadelphia, but transports coal and other merchandise, and sometimes passengers, from Mauch Chunk and other points in Pennsylvania over its own line to Phillipsburg, in the State of New Jersey, from which point it is carried upon the Belvidere and Delaware Railroad to Trenton, and thence by the Pennsylvania Railroad lines to the city of Philadelphia. So far as the Lehigh Valley Railroad line is concerned the transportation is from Mauch Chunk, or the other points in Pennsylvania, to Phillipsburg, in New Jersey; but by arrangements between this company and the corporations owning the other roads the transportation is continuous from Mauch Chunk and the other points in Pennsylvania to Philadelphia. The receipts

Statement of the Case.

The

mentioned in my statement of November tenth in the second paragraph in each instance under the respective heads of 'coal,' freight other than coal,' and 'passenger, express and mail,' and also in the second item in the summary, were derived in the manner above explained. Some of the trains, and in many instances the same cars, which carried the freight and passengers indicated between the points in Pennsylvania and the city of Philadelphia carried also freight and passengers destined and carried from points in Pennsylvania to points in New Jersey and New York, and vice versa. various items of receipts shown in my statement of November tenth and classified in the third paragraph of the summary as "receipts from transportation by continuous carriage from points in a foreign State to other points in the same State, passing through the State of Pennsylvania,' were derived from transportation of freight and passengers billed or ticketed from the city of New York to other points in the State of New York, and vice versa. The same trains and the same cars which carried the said freight and passengers carried also freight and passengers destined and carried from points in Pennsylvania to points in other States and from points in other States to points in Pennsylvania."

It was admitted that the Lehigh Company was originally incorporated by the State of Pennsylvania, and that it owned and operated as part of its main line about sixty-six miles of railroad in New Jersey.

The fraction of the entire gross receipts given in the settlement represented the Lehigh Company's mileage within the State.

The Court of Common Pleas found the facts, and held, for the reasons given in Commonwealth v. Delaware & Hudson Canal Co., 21 Weekly Notes of Cases (Penn.) 406, and Commonwealth v. New York, Lake Erie & Western Railroad Company, Ib. 410, that the Commonwealth could only recover taxes upon the two items of $1,353,441.50 and $207,660.42, (classes one and two,) being the amount received for transportation between points both of which were in the State; and directed judgment accordingly, which, exceptions thereto having been over

Argument for Plaintiff in Error.

ruled, was thereupon entered. The case was carried by writ of error to the Supreme Court of Pennsylvania and the judg ment affirmed upon the opinion of the court below. A writ of error was then sued out from this court.

The company, conceding its liability to taxation in respect of the receipts contained in class one, questions by its assignment of errors the validity of the tax as to the receipts in class two.

Mr. M. E. Olmstead for plaintiff in error.

The seventh section of the Pennsylvania revenue statute of June 7, 1879, which has since been repealed, was twice before this court, and, in each instance, condemned as unconstitutional in so far as it imposed a tax upon receipts derived from inter-state commerce. Philadelphia & Southern Steamship Co. v. Pennsylvania, 122 U S. 326; Western Union Telegraph Co. v. Pennsylvania, 128 U. S. 39.

The state court concedes the invalidity of the tax in question in this case, as applied to receipts from interstate commerce; but it holds that the receipts of the Lehigh Valley Railroad Company for transportation from Mauch Chunk, Pennsylvania, to Phillipsburg, New Jersey, of freight and passengers, which, at Phillipsburg, were taken upon the system of the Pennsylvania Railroad Company and by it transported more than fifty miles through the State of New Jersey to Trenton, and from there back again into Pennsylvania for ultimate delivery at Philadelphia, to which point the transportation from Mauch Chunk was, by agreement between the companies, continuous, is not interstate commerce. The company contends that it is, and that is the only question in dispute.

Was this transportation intra-State or was it inter-State? If, as the company contends, it was interstate transportation, it was interstate commerce; for this court has often decided that transportation is not merely an aid to, or an instrument of, commerce, but is itself commerce. The Passenger Cases, 7 How. 283-416; State Freight Tax, 15 Wall. 232, 275; State Tax on Railway Gross Receipts, 15 Wall. 284, 299; Fargo v. Michi

Argument for Plaintiff in Error.

gan, 121 U. S. 230, 247; Wabash Railway Co. v. Illinois, 118 U. S. 557.

In short, in a very long line of cases, which are too familiar to require citation, this court has always and invariably proceeded upon the theory that transportation is commerce; and, wherever the transportation involved has been of an interstate or international character, its regulation by the States has been invariably prohibited; and the only transportation which the States have been permitted to control or regulate is that which is completely internal, and does not in any way affect or concern any other State.

In the article on interstate commerce in 11 Am. & Eng. Encyclopedia of Law, 539, the following is given as the definition of that term, viz.: "Interstate commerce, or commerce among the several States' of the American Union, is commerce which concerns more States than one;" and numerous decisions of this court are there cited sustaining that definition. And this declaration is in entire harmony with the rulings of this court. Gibbons v. Ogden, 9 Wheat. 1, 189, 193, 194; State Tonnage Tax Cases, 12 Wall. 204, 214; Hall v. De Cuir, 95 U. S. 485, 491; Fargo v. Michigan, 121 U. S. 230.

It is clear that under these decisions, the State of New Jersey could not interfere with this transportation in any way, because it is interstate commerce as to that State. But if so as to New Jersey, why is it not so also as to Pennsylvania?

In Coe v. Errol, 116 U. S. 517, a quantity of logs had been cut in the State of Maine and put into the Androscoggin River for the purpose of floating them down to Lewiston, in the same State. The Androscoggin River starts in Maine, but, after running a distance through that State, crosses the line and runs a distance through the State of New Hampshire, and then back again into the State of Maine. It was customary to leave the logs at the town of Errol, in New Hampshire, for one year. Other logs were cut in New Hampshire and drawn down to Errol to be floated also to the State of Maine. The taxing authorities taxed all these

Argument for Plaintiff in Error.

logs at Errol. But this court said that goods on their way through a State from a place outside thereof to another place outside thereof, are in course of interstate or foreign transportation, and are subjects of interstate or foreign commerce, and not taxable by the State through which they are passing, even though detained within that State by low water or other temporary cause. Such goods are already in the course of commercial transportation, and are under the protection of the Constitution. Thus we see that transportation from one State to another point in the same State, passing through another State in the course of the transportation, has been already held by this court to be interstate transportation.

In Lord v. Steamship Company, 102 U. S. 541, the steamship Ventura was employed in navigation between San Francisco and San Diego, both in the State of California, touching also at intermediate ports on the coast in said State. She neither took on nor put off goods outside of the State of California, but in making her voyage passed out upon the Pacific Ocean, out of the State of California and in again. As stated by Mr. Chief Justice Waite, who delivered the opinion (p. 543): “The single question presented by the assignment of errors is whether Congress has power to regulate the liability of the owners of vessels navigating the high seas, but engaged only in the transportation of goods and passengers between ports and places in the same State. It is conceded that while the Ventura carried goods from place to place in California, her voyages were always ocean voyages.”

That question was decided in the affirmative, and it was held that the Ventura on her voyage "entered on a navigation which was necessarily connected with other nations," and that, although she was not trading with them, "she was navigating with them, and consequently with them was engaged in commerce. In every just sense, therefore, she was, while on the ocean, engaged in commerce with foreign nations, and as such she and the business in which she was engaged were subject to the regulating power of Congress."