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and it must, in consequence, be difficult in many states for a juristic person to subject itself to one of those parts, without ipso facto subjecting itself to the other two. The failure on the part of legislatures to appreciate that legal principles demand that a distinction should be made between the three parts necessarily places great practical difficulties in the way of a commercial association, which desires to place its center of administrative business in a state different from that in which it performed the formalities incidental to its constitution. If, in order to procure registration in state A, it had to adopt the constitution provided for by the laws of that state, it may subsequently be unable to establish itself as domestic in state B, since state B may require a different constitution in its domestic juristic persons. A peg cast in a square mould cannot be fitted to a round hole.

In conclusion, let us return for a moment to the American doctrine. Those who adhere strictly to the theory that the personality of a juristic person is pure fiction must maintain, as a consequence of that theory, that it is impossible for a juristic person to possess any nationality but that of the state by the law of which it was created. According to them a juristic person is a creature of law, and exists only in contemplation of the law which created it; and clearly the same juristic person cannot be contemplated by two laws at once. If it seeks to pass from the contemplation of one law to that of another, it must obtain some express authorization or recognition in the second state, which is in reality nothing less than a recreation. Domicile can have no effect upon its domesticity, for it can never be domestic in any state but that in which it first came into existence, either by express authorization or by mere registration. Some of the difficulties and deficiencies, theoretical and practical, inherent in this line of argument, have, it is hoped, been made clear in this article. The pith of the matter is that the actual character and practical circumstances of modern juristic persons tend to increase the importance of natural domicile amongst their legal characteristics, and to diminish that of the process by which they came into existence. Men tend more and more to see in juristic persons, not legal fictions, but real things; and if there is any reality in the nature of a juristic person, there can be no difficulty in admitting that the situation of its domicile can and should have the same effect upon its life in the law that it has upon that of a natural person.

LONDON.

E. Hilton Young.

Weiss
Calvo
Fiore

Pineau
Sacopoulo
Haladjian
Von Bar

Diena
Arminjon

Brocher
Clunet

Lyon-Caen et Renault
Surville et Arthuys
Mamelok
Vavasseur

Chervet
Despagnet

Asser et Rivier

Pillet

Abbreviated References.

Traité Théorique et Pratique de D. I. P. (1892).
Le Droit International Théorique et Pratique (4th ed., 1888).
Diritto Internazionale Privato, Vol. I. (3d ed.).
Des Sociétés Commerciales en D. I. P. (1894).
Des Personnes Morales en D. I. P. (1898).
Des Personnes Morales Étrangers (1901).

The Theory and Practice of P. I. L. (translated Gillespie, zd
ed., 1892).

Trattato di Diritto Commerciale Internazionale, Vol. I. (1900). Nationalité des Personnes Morales. Révue de Dr. Internatl. 1902.

Droit International Privé (1876).

Journal du D. I. P. et de la jurisprudence comparée, pub. par
E. Clunet.

Traité de Droit Commercial (2d ed., 1892).
Cours Élémentaire de D. I. P. (4th ed., 1904).

Die juristische Person im Internationalen Privatrecht (1900).
Des Sociétés constituées à l'Étrangère, etc. Clunet, 1874.
Des Sociétés Commerciales en D. I. P. (1886).
Précis de D. I. P. (1886).

Éléments de D. I. P. (1884).

Principes de D. I. P. (1903).

FEDERAL TAXATION OF INTERSTATE

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COMMERCE.

'HE policy of Congress for the greater part of the life of the United States under their present Constitution has been to promote free trade between all parts of the United States. This has been mainly accomplished by refraining from legislation to regulate interstate commerce. Of late years it has been urged in high quarters that statutes should be enacted to bring under federal supervision the larger corporations, having a franchise from a state, which dispose of goods through such commerce. One mode suggested for accomplishing this result has been the requirement of a federal license. It is the purpose of this paper to suggest another, as not legally impossible, taxation.

Congress has power to lay taxes, duties, imposts, and excises. The word "impost," as thus used, has been said by the Supreme Court of the United States not to cover imposts on importations from one state into another.1 In the same opinion it was held that the clause as to state laws for imposts or duties on imports and exports had no reference to interstate commerce. But should Congress lay such duties on exports from one state to another, would it necessarily be obnoxious to the provision in restriction of its powers that "no tax or duty shall be laid on articles exported from any state"?

A statute of such a character would most naturally take the shape of a tax on the business of shipping goods from one state to another for a market, when conducted by an artificial person of a certain character and attaining large proportions. It might, for instance, affect only private corporations so shipping goods of a value of $1,000,000 a year, and having a capital stock of not less than $5,000,000.

If Congress should be of opinion that artificial bodies of this kind, dealing in large values, and permitted to enjoy the privileges of a market as wide as the United States, with all the transportation facilities provided or kept in order under the national power to regulate commerce among the several states, were proper sources

1 Woodruff v. Parham, 8 Wall (U. S.) 123, 132.

2 Art. I. § 9.

from which to draw a revenue, is there anything in the Constitution of the United States to prevent legislation to that end? No doubt, such a tax on the shipper, for the privilege of shipment and sale, would in effect be a tax on exports from a state.1 But if the reasoning in Woodruff v. Parham be sound, is there anything in the Constitution which in terms forbids a tax on exports from a state to another state, whether imposed by Congress or by a state?

The importance of this question seems to justify an examination of the grounds of the opinion in that famous case.

It contains an historical review of the use of the terms "exports" and "imports" prior to the adoption of the Constitution, concluding thus: 2

...

"It is not too much to say that, so far as our research has extended, neither the word export, import, or impost is to be found in the discussions on this subject, as they have come down to us from that time, in reference to any other than foreign commerce, without some special form of words to show that foreign commerce is not meant. . . . Whether we look, then, to the terms of the clause of the Constitution in question, or to its relation to the other parts of that instrument, or to the history of its formation and adoption, or to the comments of the eminent men who took part in those transactions, we are forced to the conclusion that no intention existed to prohibit, by this clause, the right of one state to tax articles brought into it from another."

Mr. Justice Nelson filed a vigorous dissenting opinion. The power of Congress to regulate commerce, he observed, extends both to that with foreign nations and between the states. "The two are placed upon the same footing without any discrimination. The power is equally broad and absolute over the one as over the other. No distinction is made between foreign and interstate commerce; and why should the specific prohibitions to be found in the Constitution in relation to this subject receive a different interpretation, in the absence of any words indicating any such distinction? Take, as an example, the prohibition upon the federal government: 'No tax or duty shall be laid on articles exported from any state.' Is this clause, also, to receive the narrow and strained construction given to the one in question, and be applied only to exports to a foreign country? If so, then Congress may tax all exports from one state to another. If the terms in the clause before us do not

1 Brown v. Maryland, 12 Wheat. (U. S.) 419. 3 Ibid. 144.

2 8 Wall. (U. S.) 136.

embrace interstate commerce, then the above clause does not. As was said by the Chief Justice in Brown v. Maryland, 'There is some diversity in the language, but none is perceivable in the act which is prohibited.' Now, this is a prohibition or limitation upon the general commercial power conferred upon Congress, but if it only applies to foreign commerce, it loses more than half its efficiency as heretofore supposed to belong to it."

Similar views as to these points have been since expressed by other members of the Supreme Court of the United States, in dissenting opinions, but the doctrine of Woodruff v. Parham as to taxes by a state on exports and imports has notwithstanding been repeatedly reaffirmed.2

It is submitted that the historical basis on which it rests is insecure.

There can be no doubt that one of the immediate causes of the adoption of the national Constitution was the varying, conflicting, and discriminating legislation of the different states on the subject of trade not wholly domestic. It was the effect of this on the commerce of the Chesapeake which led to the Annapolis Convention, and that Convention led to the greater one at Philadelphia.3

4

Virginia, as early as October, 1782, had laid a duty on all ardent spirits, "which shall be imported or brought into this Commonwealth, either by land or water, from any port or place whatsoever." In the following May she took similar action as to all goods of certain kinds "which may be imported either by land or water into this state." There could, of course, be no importation by land, from a foreign country, for Virginia had no foreign neighbor.

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Massachusetts, on March 22, 1783, provided for an "impost" to be paid "at the Time and Place of Importation" on all goods" of European and India Growth and manufacture (on which no Duty or Excise is laid by any Act of this Commonwealth now in force), that shall be imported by land or water from any foreign Port, Island, or Plantation, or any other State whatever, into this State, and landed within the same."6

1 The Lottery Case, 188 U. S. 321, 373.

2 Am. Steel & Wire Co. v. Speed, 192 U. S. 500.

8 See Cook v. Pennsylvania, 97 U. S. 566, 574.

411 Hennings Laws 121.

5 Ibid. 196.

• Session Laws of 1783, State Reprint, 152.

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