*86

are claimed to constitute it are open to our | We repeat, it is the judicial duty to ascerreview; and, also, all of that which is tain if doubt exists.

be so universal, as to make indubitably Litchfield, 23 How. 66, 88, 16 L. ed. 500, clear the meaning of legislation? Has fore509; St. Louis, I. M. & S. R. Co. v. Loftin, cast of events ever been so sure, or will it 98 U. S. 559-564, 25 L. ed. 222ever be so sure, as to make inevitably cer- 224; Yazoo and M. Valley R. Co. v. Thomas, tain all the objects contemplated by a stat- 132 U. S. 174-185, 33 L. ed. 302-306, 10 Sup. ute? We think not, and there never will be Ct. Rep. 68; Wilmington & W. R. Co. v. Alsa time in which judicial interpretation of brook, 146 U. S. 279-295, 36 L. ed. 972laws will not be invoked, and it cannot be 978, 13 Sup. Ct. Rep. 72; Illinois C. R. Co. omitted because a doubt may be asserted v. Decatur, 147 U. S. 190, 37 L. ed. 132, 13 concerning the meaning of the legislators. Sup. Ct. Rep. 293; New York ex rel. Schurz

88.

▼. Cook, 148 U. S. 397, 409, 37 L. ed. 498, 502, 13 Sup. Ct. Rep. 645; Bank of Commerce v. Tennessee, 161 U. S. 134, 146, 40 L. ed. 645, 649, 16 Sup. Ct. Rep. 456; Phoenix F. & M. Ins. Co. v. Tennessee, 161 U. S. 174-177, 40 L. ed. 660, 661, 16 Sup. Ct. Rep. 471.

In the last of these cases, on page 177, L. ed. p. 661, Sup. Ct. Rep. p. 472, we said: "It must always be borne in mind in construing language of this nature that the claim for exemption must be made out wholly beyond doubt; for, as stated by Mr. Justice Harlan, in Chicago, B. & K. C. R. Co. v. Guffey, 120 U. S. 569, 575, 30 L. ed. 732, 734, 7 Sup. Ct. Rep. 693, 696, 'It is the settled doctrine of this court that an immunity from taxation by a state will not be recognized unless granted in terms too plain to be mistaken.""

*And in next to the last, on page 146, L. ed. p. 649, Sup. Ct. Rep. p. 460, we also said:

upon its capital, the one being a charge for the privilege of carrying on the business, and the other an exemption of a part of the property of the bank from taxation. In the course of its opinion it said, after referring to a prior case:

"There the tax resisted, like those resisted in the cases relied on, was at least a tax of the same character; that is, a tax upon 'property,' while the tax involved in this litigation is one essentially different; it is a tax, it is true, but one upon callings or occupations, and it is controlled and gov. erned by rules and principles entirely different from those which bear upon property taxation. New Orleans v. Louisiana Sav. Bank & S. D. Co. 31 La. Ann. 638; Walters v. Duke, 31 La. Ann. 671; Morehouse v. Brigham, 41 La. Ann. 667, 6 So. 257; Articles 203, 206, 207, and 209 of the constitution of 1879 also disclose this very fully and clearly. (See New Orleans v. Ernst, 35 La. Ann. 746, and State ex rel. Ernst v. State & City Board, 36 La. Ann. 347.)

"These cases show the principle upon which is founded the rule that a claim for exemption from taxation must be clearly made out. Taxes being the sole means by which "The defendant urges that the license tax Sovereignties can maintain their existence, is substantially one upon its capital. The any claim on the part of any one to be ex-views expressed by us above indicate our empt from the full payment of his share of taxes on any portion of his property must, on that account, be clearly defined and founded upon plain language. There must be no doubt or ambiguity in the language used upon which the claim to the exemption is founded. It has been said that a well founded doubt is fatal to the claim; no implication will be indulged in for the purpose of construing the language used as giving the claim for exemption, where such claim is not founded upon the plain and clearly expressed intention of the taxing power."

Only last term the same doctrine was reaffirmed in Chicago Theological Seminary v. Illinois, 188 U. S. 662, 672, 47 L. ed. 641, 648, 23 Sup. Ct. Rep. 386, 387, in these words:

opinion upon this point. The mere reference in the license acts to the declared or nominal capital or surplus from business or banking institutions is not a tax upon the capital or surplus itself of the different banks, but a mere method of classifying the banks and establishing a graduation of li censes, as required by article 206 of the Constitution. State v. Liverpool, L. & G. Ins. Co. 40 La. Ann. 463, 4 So. 504; Morehouse v. Brigham, 41 La. Ann. 666, 6 So. 257.

"This court, in New Orleans v. State Nat. Bank, 34 La. Ann. 892, said: 'A provision in the charter of a corporation exempting its stock and real estate from taxation does not cover an exemption from license taxation. The grant of a charter to a bank, authorizing it to carry on a certain business "The rule is that, in claims for exemption during the term of its charter, does not imfrom taxation under legislative authority, port permission to do so without contrib the exemption must be plainly and unmis- uting to the support of the government in takably granted; it cannot exist by implica-like manner with natural persons pursuing tion only; a doubt is fatal to the claim." the same business.'

never

other exemp

I make these quotations, which are in harmony with the many other decisions of "The extent of the exemption granted orthis court, for even the most casual exam-iginally from taxation was from 'taxaination of them makes it apparent that the tion upon its capital.' It could rule therein stated is plainly ignored in this have claimed greater or case, and that a term whose meaning is well tion understood is stretched beyond its ordinary significance and to its utmost limits in order to include the alleged exemption.

The supreme court of Louisiana in this case held that a license tax was not within the exemption of the bank from any tax

than that. The law of 1890, the unconstitutionality of which is pleaded, does not pretend to impose, nor does it impose any tax upon the 'bank's capital,' and therefore there could by no possibility be, nor is there, any violation of any contract obligation through that act, even should there

*90

really be any existing obligation at all be- |i61 U. S. 134, 146, 40 L. ed. 645, 649, 16 tween the state and the defendant as to taxation."

That there is a clear distinction between a property tax on the capital of a corporation and a license tax for the privilege of carrying on the business of the corporation has been so often decided by this and other courts, and is so clear, that it seems almost a waste of words to refer to decisions. And yet it may be well to refer to a few that it may be apparent how strongly, emphatically, and for how long a time the distinction has been affirmed. As a preliminary thereto let it be borne in mind that the franchise of a corporation is the privilege granted to it to do the business named in its charter, and a license tax for the privilege of doing business is simply a tax upon the franchise. In Gordon v. Appeal Tax Ct. 3 How. 133, 150, 11 L. ed. 529, 537, decided in 1844, it was said:

Sup. Ct. Rep. 456. Many more cases might be cited to the same effect, but these will serve as illustrations. It is conceded that this distinction was recognized in Louisiana, though it is contended that it was not always held sufficient to uphold, in the case of a contract exemption of the capital, the retention of a power to impose license taxes, and some early decisions of the supreme court of that state are cited. But what does this argument amount to? Because the distinction between the two taxes has not always been recognized in Louisiana it must now be repudiated. The legislature must be held to have not recognized the distinction in this case, because the courts have sometimes in other cases failed to recognize it. It is not pretended that there has been a uniform ruling on the part of the supreme court of Louisiana ignoring the distinction. On the contrary, this very case (and this is only one of several) recognizes it. It seems to me this is a plain overturning of the hitherto settled rule of this court, that a doubt is to be resolved in favor of a state, for the alleged doubt in this particular case is resolved in favor of the corporation.

"A franchise for banking is in every state of the Union recognized as property. The banking capital attached to the franchise is another property, owned in its parts by persons, corporate or natural, for which they are liable to be taxed, as they are for all other property, for the support of government." In Hamilton Mfg. Co. v. Massachusetts, 6|lature be credited with recognizing the disWall. 632, 640, 18 L. ed. 904, 907:

"Property taxation and excise taxation, as authorized in the Constitution of the state, are perfectly distinct."

But upon what ground is it claimed that a doubt exists? Why should not the legis

tinction recognized elsewhere through the country and sometimes at least, if not always, in Louisiana? It is said that there is something peculiar in the organization of this bank; that its purpose was to aid the

In Farrington v. Tennessee, 95 U. S. 679, 24 L. ed. 558, Mr. Justice Swayne, after re-agricultural interests of the state, and that ferring to taxation of bank capital and shares of stock, added (p. 687, L. ed. p. 560):

"There are other objects in this connection liable to taxation. It may be well to advert to some of them.

"1. The franchise to be a corporation and exercise its powers in the prosecution of its business."

In Tennessee v. Whitworth, 117 U. S. 129, 136, 29 L. ed. 830, 832, 6 Sup. Ct. Rep. 645, 647, Chief Justice Waite declared:

the state assisted by a loan of its credit, and retained partial control through directors appointed by it. But is it not the rule that an exemption from taxation is not given as a gratuity, but by reason of some supposed benefit to the state as a whole or some particular interest therein? Does the fact that some interest in the state is specially benefited change the rule as to the construction of an exemption? It seems to me that that is a doctrine as novel as it is dangerous. It is true that the state loaned its credit, and retained a partial control through directors appointed by it, but we have in the legislation of Congress and in the decisions of this court a very suggestive analogy. The Union Pacific Railroad Company was a corporation chartered by Congress. It was given a large amount of public lands and the credit of the United States was loaned to it to the extent of $16,000 and over a mile. A partial control was retained through directors appointed by the government. In these respects it presents a close similarity to the Citizens' Bank. It was Both of these last cases were cited withheld by this court that while the franchise approval in Bank of Commerce v. Tennessee, given by Congress to this and other trans

*"In corporations four elements of taxable value are sometimes found; 1, franchises; 2, capital stock in the hands of the corporation; 3, corporate property; and, 4, shares of the capital stock in the hands of the individual stockholders. Each of these is, under some circumstances, an appropriate subject of taxation; and it is no doubt within the power of a state, when not restrained by constitutional limitations, to assess taxes upon them in a way to subject the corporation or the stockholders to double taxation."

rate, we are not justified in holding that the inere fact of an omission to press such a taxation upon the bank establishes that such a tax was included within the exemption in the face of a ruling of the highest court of the state that it was not.

For these reasons I am constrained to dissent from the opinion of the court. Mr. Justice Harlan also dissents.

continental railroads was exempt from state | ing authorities more accessible and more taxation, yet the property belonging to those conveniently reached for taxation. At any corporations was not. California v. Central P. R. Co. 127 U. S. 1, 32 L. ed. 150, 2 Inters. Com. Rep. 153, 8 Sup. Ct. Rep. 1073; Thomson v. Union P. R. Co. 9 Wall. 579, 19 L. ed. 792; Union P. R. Co. v. Peniston, 18 Wall. 5, 21 L. ed. 787. It was not doubted that Congress could in its discretion have provided for such exemption, but as it failed to prescribe it, the court held that it did not exist. If from the fact that the corporation was aided by bonds of the United States, was engaged in doing the work of the nation in interstate transportation, and a partial control retained by Congress, that its property as well as its franchise was exempt from state taxation, why should there be an inference from the fact that Louisiana aided by its bonds this particular corporation and retained a partial control thereof, 1. that it intended to grant any other exception than was expressly stated!

Again, it is contended that contemporaeneous construction determines that the exemption of the capital included the exemption of the franchise. It seems to me a sufficient answer is that in 1853 the supreme court held that a provision exempting the capital stock of a bank from taxation, except at a particular rate, exempted the bank from a license tax. New Orleans v. Southern Bank, 11 La. Ann. 41. It is not strange that thereafter there was no effort to impose a license tax on this bank and that the administrative officers respected the opinion of the supreme court, and did not until of late seek a reconsideration of that ruling. It also appears that there was no specific statute providing for a license tax upon banks until 1869, and that was after the decision of the supreme court referred to.

NICHOLAS C. BENZIGER et al., Petition-
ers,
v.

2.

UNITED STATES.

(192 U. S. 38)

Tariff-casts of sculpture.

The omission from the tariff act of 1897, ¶ 638 (30 Stat. at L. 200, chap. k, U. S. Comp. Stat. 1901, p. 1686), of the provi sions of prior tariff acts for the free entry of casts, was not intended to prevent the free entry of such casts as also come within the designation of "casts of sculpture" which, under 649, are entitled to free entry where specially imported, in good faith, for the use and by the order of any society incorporated or established solely for religious, philosophical, scientific, educational, or literary purposes.

Plaster casts of clay models, though painted and gilded and produced in unlimited quantities, are "casts of sculpture" which, under the tariff act of 1897, 649 (30 Stat. at L. 151, 201, chap. 11, U. S. Comp. Stat. 1901, pp. 1626, 1687), are entitled to free entry where specially imported, in good faith, for the use and by the order of any society incorporated or established solely for religious, philosophical, scientific educational, or literary purposes.

[No. 54]

January 4, 1904.

It is also said that if a license tax on the franchise is enforced it must be paid out of Argued December 10, 11, 1903. Decided the capital, and so, in effect, be a tax upon the capital. That argument would make in every case an exemption of the capital a relief from all taxation, for every tax must in the last analysis come out of the capital. But what, under those circumstances, becomes of the doctrine of a strict construc-in turn had affirmed the decision of a board the Southern District of New York, which tion of a contract exemption of taxes?

N WRIT OF CERTIORARI to the United
ON
Second Circuit to review a judgment which
States Circuit Court of Appeals for the
affirmed a judgment of the circuit court for

of general appraisers and the collector of the port of New York, assessing duties on the Circuit Court to reverse the decision of plaster casts. Reversed with directions to the board of general appraisers and of the collector, and to direct the latter to admit

Further, it must be remembered that objects and means of taxation were not in the years past sought for with the same avidity as at present. The demand for revenue was not so great, and there was much inattention to the matter of securing objects and devising modes of taxation. So the mere fact that a particular kind of tax was not sought to be enforced upon any institution is not conclusive of the fact that it was necessarily exempt therefrom. It may simply mean that other objects seemed to the tax-saints, and also two figures of adoring

the casts to free entry.

See same case below, 51 C. C. A. 587, 113
Fed. 1016.

Statement by Mr. Justice Peckham:
Certain figures representing various

⚫40

68.

angels, as specified in the collector's letter | tions of the mould are removed and their to the board of general appraisers, were, in contents joined together around a frame March, 1899, specially imported into the work of wood, and a figure is thus formed, port of New York in good faith, for the use the counterpart of the original model. The and by the order of societies incorporated or statue then goes to a skilled workman established solely for religious purposes. called a 'finisher,' who, with knife or other The importers claimed the figures were en- instrument removes any roughness resulting titled to free entry under paragraph 649 of from the joining of the sections, cures any the tariff act of 1897. (30 Stat. at L. 151, other defects in the moulding, and smooths 201, chap. 11, U. S. Comp. Stat. 1901, pp. it down generally. It is then passed to the 1626, 1687.) The appraiser returned them as painter and decorator, who completes it in "church statues, composed of plaster of the style desired. The statues in 'carton Paris, decorated," or as "articles and wares romain' and in 'stone composition' are made composed wholly or in chief value of earthy in the same manner, except that the latter or mineral substances, not specially provided are uniformly lined with coarse cloth. The for," and the collector assessed upon them a stations of the cross in 'carton pierre' and duty of 45 and 35 per cent ad valorem un-in terra cotta are produced in substantially der paragraphs 97 and 450 of the same act the same way (those in terra cotta, how(pages 156, 193).1 If dutiable, no question ever, being kiln dried or baked after mouldis made as to the correctness of the decisioning), and are painted and decorated in quite of the collector in assessing the duties as he the same manner as the statues, the foredid. The contention is that these figures ground and other landscape or perspective were "specially provided for" in this act effects being painted in suitable tints or under the paragraph above mentioned, 649. hues." The importers protested against the decision of the collector, and the case went to the board of general appraisers. Testimony was taken by the board and it found as a fact the manner in which the figures were made, which was as follows:

The protest was overruled by the board, and a petition for a review was duly filed by the importers (petitioners) and the case heard in the circuit court, southern district of New York, and that court affirmed the decision of the board. 107 Fed. 257. An appeal was taken to the circuit court of appeals, where the decision of the circuit court was affirmed on the opinion of the court below. Upon petition of the importers a writ of certiorari was issued from this court, and the case brought here for review.

Messrs. W. Wickham Smith and Charles Curie for petitioners.

Assistant Attorney General McReynolds for respondent.

Mr. Justice Peckham, after making the foregoing statement of facts, delivered the opinion of the court:

"The clay model of the subject, of desired size, is covered by a workman with a coating some two inches thick of plaster of Paris. When this coating has 'set' or hardened sufficiently, the clay figure inside is broken up and removed, and a plaster of Paris mould thereof thus obtained. Plaster is then carefully forced into this mould, and when dry is taken out in the form of the original clay figure. This plaster figure, after having been carefully gone over by an artist or skilled workman to cure any defects in the moulding, is in turn thoroughly covered with specially prepared plaster for the final mould. This is made in sections, which when dry are removed, and to- The petitioners claim that the figures in gether form a perfect mould, and this com- question here are entitled to free entry unposite mould becomes the manufacturer's der the provision of paragraph 649 of the substitute for the artist's clay or plaster cast tariff act of 1897 (30 Stat. at L. 151, 201, model from which he (the manufacturer) chap. 11, U. S. Comp. Stat. 1901, pp. 1626, produces his moulded statues in unlimited 1687), as being "casts of sculpture, where numbers. In the moulding process the sev- specially imported, in good faith, for the eral sections of the mould are in turn laid use and by order of any society incorpowith the concave side upward, and have a rated or established solely for religious, lining of 'carton pierre,' one-half inch or philosophical, educational, scientific, or litmore in thickness, carefully laid and pressed erary purposes," etc. The board of appraisinto them by the moulder's hands with the ers thought that on July 24, 1897, the day aid of suitable tools. The extended arms, of the passage of the tariff act, and for fingers, and other slender parts are strength- many years prior thereto, those figures beened by pieces of iron wire laid in the 'car-longed to a class which was known in comton pierre,' which is then lined either with merce, in art, and to the classifying officers heavy paper or coarse woven vegetable fiber of customs of the United States as "statucloth secured with glue. After the 'carton ary," and specifically as "church statuary.” pierre' has dried sufficiently, the several sec- In the opinion of the board it was stated:

1 U. S. Comp. St. 1901, pp. 1633, 1678.