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In Gillespie v. Oklahoma187 lessees of coal lands belonging to Indians and subject to restrictions by the United States were relieved from the burden of a state tax on the net income derived therefrom. "A tax upon such profits," declared Mr. Justice Holmes, "is a direct hamper upon the effort of the United States to make the best terms that it can for its wards." In distinguishing cases allowing state taxation of net income from interstate commerce, he pointed out that there the issue was one of degree of interference, while the rule as to instrumentalities of the United States "is absolute in form and at least stricter in substance." The leases themselves had been held not taxable, which brought into play the principle that "where the principal is absolutely immune from interference an inquiry is allowed into the sources from which net income is derived and if a part of it comes from such a source the tax is pro tanto void." Justices Pitney, Brandeis and Clarke dissented. 188
C. State Police Interference With Federal Functions.
After several varieties of judicial experience, the efforts of states to keep foreign corporations from resorting to the federal courts were finally completely frustrated in Terral v. Burke Construction Co.139 which held that a state may not revoke the license of a foreign corporation because it resorts to the federal courts. An earlier decision to the contrary was declared to have been overruled by more recent cases. The principle successfully invoked by the foreign corporation was declared by Chief Justice Taft not to depend upon whether the business done is interstate but to "rest on the ground that the federal Constitution confers upon citizens of one state the right to resort to federal courts in another, that state action, whether legislative or executive, necessarily calculated to curtail the free exercise of the right thus secured is void because the sovereign power
case holding that United States bonds need not be deducted from the assessment of national bank shares.
137 257 U. S. 501, 42 Sup. Ct. 171 (1922), 21 MICH. L. REV. 304. See 35 HARV. L. REV. 889.
138 In 10 GEORGETOWN L. J. (No. 1) 76 is a note on state taxation of Indian agents of the federal government.
139 257 U. S. 529, 42 Sup. Ct. 188 (1922), 21 MICH. L. REV. 330. See 22 COLUM. L. REV. 476; 35 HARV. L. REV. 881; 7 Iowa L. B. 258; 20 MICH. L. REV. 897; 6 MINN. L. REV. 407; 1 TEX. L. Rev. 82; 8 VA. L. REV. 539; and 31 YALE L. J. 772.
of a state in excluding foreign corporations, as in the exercise of all others of its sovereign powers, is subject to the limitations of the supreme fundamental law." This appears to found the decision on constitutional rights of citizens (presumably of stockholders, since corporations are not recognized as citizens within the privileges and immunities clause), but the case is reviewed here for the reason that the ground relied on in the past has been the impropriety of state interference with the practical exercise of the jurisdiction of the federal courts.140
While it was laid down in Ponzi v. Fessenden141 that without the consent of the United States a state court cannot assume control over a person sentenced to imprisonment by a federal court for violation of a federal statute, the case held that upon the consent of the United States given by the Attorney General it is proper for a federal prisoner to be put on trial in a state court. Alleged difficulty in executing the possible sentence of the state court under such circumstances was found not to exist, since the execution of the state sentence might readily be made to commence after the expiration of the term of the federal sentence.
Efforts of state constitutions to prescribe to state legislatures certain restrictions or modes of procedure in ratifying amendments to the federal Constitution were declared in Leser v. Garnett142 to be without effect, since the ratification of proposed amendments is a federal function immune from state interference or regulation.
The execution of treaties is for the United States and not for the states. In illustration of this it was declared in Collins v. Loisel143 that notwithstanding references in an extradition treaty to the laws of the asylum country, which must in the case of many crimes be the laws of our component states, the question whether there is a variance between the evidence and complaint on which the proceedings are based "is to be decided by the general law and not by that of the state." To this was added that "no procedural rule of a state could give to the prisoner a right to introduce evidence made irrelevant by the treaty."
140 The immunity of consuls from prosecution in state courts is considered in 35 HARV. L. REV. 752, 763.
141 258 U. S. 254, 42 Sup. Ct. 309 (1922), note 71, supra.
142 258 U. S., 42 Sup. Ct. 217 (1922), 21 MICH. L. REV. 65.
In Kendall v. Ewert144 it was laid down that in the absence of federal legislation providing for the administration of the estate of a dead Indian, the state law may be applied.
In Sloan Shipyards Corporation v. United States Shipping Board145 the Emergency Fleet Corporation was found not to be the United States itself notwithstanding the fact that the United States owned all of its stock. As a mere agent of the federal government, it was held not to be immune from suit. The suits in question were brought in the federal courts, but the possibility of actions in the state courts is contemplated in the opinion. Mr. Justice Holmes answers the objection to lack of uniformity of decisions in state courts as to the powers and liabilities of the corporation by pointing out that such suits may be removed to the federal courts. From this it seems that in the absence of a petition for removal, the state courts might proceed to deal with actions against this federal agent.146
State encroachment on powers belonging to or exercised by the United States is considered in the sections on Miscellaneous Federal Powers and on Regulation of Commerce.
2. Relations Between States.
Boundary controversies between states were dealt with in Georgia v. South Carolina147 and in Oklahoma v. Texas,148 the solutions depending upon other considerations than those of constitutional construction. It may be questioned, too, whether it was constitutional construction that settled the respective powers of the litigants in Wyoming v. Colorado149 to authorize appropriations of water from a stream rising in the defendant state and flowing on into the plaintiff state. In such matters the Supreme Court "goes on its own," so to speak. Whether this is unique in constitutional law is another story. In the principal case the state second along the line of flow sought to prevent the first state along the line of flow from author
144 259 U. S. —, 42 Sup. Ct. 444, note 127, supra.
145 258 U. S. 42 Sup. Ct. 386 (1922), 21 MICH. L. REV. 70. 146 In 31 YALE L. J. 216 is a note on a case holding that a state may require a license for the truck of a contractor carrying United States mail; in 31 YALE L. J. 333 a discussion of a decision allowing a state statute escheating deposits unclaimed for 20 years to apply to deposits in a national bank. 147 257 U. S. 516, 42 Sup. Ct. 173 (1922).
148 259 U. S. —, 42 Sup. Ct. 406 (1922). See 5 ILL. L. Q. 63. 259 U. S.
-, 42 Sup. Ct. 552 (1922). See 5 ILL. L. Q. 57.
izing new diversions. Both states recognized the rule of "appropriation" and the Supreme Court therefore laid down that existing appropriations had to be taken into account in determining what new appropriations might be authorized. It sought to accord equality of protection to existing appropriations in both the upper and the lower state. In determining the quantity of water available for this purpose, it considered what might reasonably be done through storage to preserve the possible flow, and took as its test not the highest or lowest natural flow in actual experience, but "a fairly constant and dependable flow materially in excess of the lowest" to be "obtained by means of reservoirs adapted to conserving and equalizing the natural flow." It refused to give a preference to the upper state on the ground that junior appropriators therein might make more efficient use of the water than senior appropriators in the lower state. It found how much water was reasonably necessary to satisfy reasonable needs of appropriations in the lower state senior to the proposed new appropriation in the upper state and it enjoined so much of the proposed new appropriation as would interfere with the satisfaction of these needs.
An instance of an agreement or compact between two states validated by the consent of Congress came before the court in Olin v. Kitzmiller150 through an assertion by an alien who had declared his intention to become a citizen that the inter-state agreement that no fishing license would be granted to one who was not a citizen or who had declared his intention to become one was equivalent to a contract that licenses would be granted to aliens who had declared their intentions to become citizens, and that therefore the denial of a license to such a declarant impaired the obligation of contracts. Without deciding whether an individual could thus avail himself of such a compact between states, the court found that the agreement obligated neither state to grant any license but merely restricted them from granting licenses to other than the classes specified.
259 U. S.
42 Sup. Ct. 510 (1922), 21 MICH. L. REV.