interstate business as the length of the road over which said interstate business is carried in this State bears to the entire length of the road over which said interstate business is carried." This is the law which the plaintiff says is unconstitutional for the reasons above set forth.

The demurrer to the bill was sustained on the ground that the act of 1893 made no valid contract of exemption from taxation, and that the act of 1897, repealing the exemption granted in 1893, was a constitutional law.

The plaintiff makes a supplemental alternative argument that the later statute should not be construed to repeal the act of 1893 with regard to roads in the plaintiff's position. If that were so the plaintiff would have no standing in this court. But the repeal is plain from the express words at the end of the section quoted from the act of 1897, repealing all acts or parts of acts contravening the provisions of that section, from the fact that it is an amendment of the section quoted from the act of 1893, and from the case of Manistee & Northeastern Railroad Co. v. Commissioner of Railroads, 118 Michigan, 349, 350. See also Welch v. Cook, 97 U. S. 541. On that question we follow the state court. Northern Central Railway Co. v. Maryland, 187 U. S. 258, 267.

The first and main question, then, is whether the act of 1893 purported to make an irrevocable contract with such railroad as might thereafter comply with its terms. The question is pretty well answered by a series of decisions in this court. A distinction between an exemption from taxation contained in a special charter and general encouragement to all persons to engage in a certain class of enterprise, is pointed out in East Saginaw Manfg. Co. v. East Saginaw, 13 Wall. 373, ("Salt Co. v. East Saginaw "); S. C., 19 Michigan, 259. In earlier and later cases it was mentioned that there was no counterobligation, service, or detriment incurred, that properly could be regarded as a consideration for the supposed contract. Rector, etc., of Christ Church v. Philadelphia County, 24 How. 300; Tucker v. Ferguson, 22 Wall. 527; Grand Lodge, etc., of Louisiana VOL, CXCI-25

v. New Orleans, 166 U. S. 143. See Tomlinson v. Jessup, 15 Wall. 454, 459. But whatever the ground, thus far attempts like the present to make a contract out of the clauses in a scheme of taxation which happen to benefit certain parties have failed. See further, Welch v. Cook, 97 U. S. 541, and Manistee & Northeastern Railroad Co. v. Commissioner of Railroads, 118 Michigan, 349, in which the state court deals with this very act.

It may be that a State, by sufficient words, might bind itself without consideration, as a private individual may bind himself by recognizance or by affixing a seal. A State might abolish the requirement of consideration altogether for simple contracts by private persons, and, it may be that it equally might dispense with the requirement for itself. But the presence or absence of consideration is an aid to construction in doubtful cases-a circumstance to take into account in determining whether the State has purported to bind itself irrevocably or merely has used words of prophecy, encouragement or bounty, holding out a hope but not amounting to a covenant.

In the case at bar, of course the building and operating of the railroad was a sufficient detriment or change of position to constitute a consideration if the other elements were present. But the other elements are that the promise and the detriment are the conventional inducements each for the other. No matter what the actual motive may have been, by the express or implied terms of the supposed contract, the promise and the consideration must purport to be the motive each for the other, in whole or at least in part. It is not enough that the promise induces the detriment or that the detriment induces the promise if the other half is wanting. If we are to deal with this proviso in a general tax law as we should deal with an alleged simple contract, while no doubt in some cases between private persons the above distinctions have not been kept very sharply in mind, Martin v. Meles, 179 Massachusetts, 114, 117, it is clear that we should require an adequate ex

pression of an actual intent on the part of the State to set change of position against promise before we hold that it has parted with a great attribute of sovereignty beyond the right of change. See Vicksburg, Shreveport & Pacific Railroad v. Dennis, 116 U. S. 665, 668. Looking at the case in this way, then, we find no such adequate expression. No doubt the State expected to encourage railroad building, and the railroad builders expected the encouragement, but the two things are not set against each other in terms of bargain. See Covington v. Kentucky, 173 U. S. 231, 238, 239.

But this is a somewhat narrow and technical mode of discussion for the decision of an alleged constitutional right. The broad ground in a case like this is that, in view of the subject matter, the legislature is not making promises, but framing a scheme of public revenue and public improvement. In announcing its policy and providing for carrying it out it may open a chance for benefits to those who comply with its conditions, but it does not address them, and therefor it makes no promise to them. It simply indicates a course of conduct to be pursued, until circumstances or its views of policy change. It would be quite intolerable if parties not expressly addressed were to be allowed to set up a contract on the strength of their interest in and action on the faith of a statute, merely because their interest was obvious and their action likely, on the face of the law. What we have said is enough to show that in our opinion the plaintiff never had a contract, and therefore makes it unnecessary to consider the usual power to alter, amend or repeal charters, etc., contained in the constitution of Michigan, Tomlinson v. Jessup, 15 Wall. 454; Covington v. Kentucky, 173 U. S. 231; Citizens' Savings Bank v. Owensboro, 173 U. S. 636, or a similar power in the general railroad law of 1873, of which the above acts of 1893 and 1897 were amendments through intervening amending acts:

We need say but a word in answer to the suggestion that the tax is an unconstitutional interference with interstate commerce.

In form the tax is a tax on "the property and busi

ness of such railroad corporation operated within the State," computed upon certain percentages of gross income. The prima facie measure of the plaintiff's gross income is substantially that which was approved in Maine v. Grand Trunk Railway Co., 142 U. S. 217, 228. See also Western Union Telegraph Co. v. Taggart, 163 U. S. 1.

Decree affirmed.

MR. JUSTICE WHITE, not having heard the arguments, took no part in the decision.

STATE BOARD OF ASSESSORS v. COMPTOIR NATIONAL D'ESCOMPTE.

APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE EASTERN DISTRICT OF LOUISIANA.

No. 157. Argued October 28, 29, 1903.-Decided November 30, 1903,

There is no inhibition in the Federal Constitution against the right of a State to tax property in the shape of credits where the same are evidenced by notes or obligations held within the State, in the hands of an agent of the owner for the purpose of collection or renewal, with a view to new loans and carrying on such transactions as a permanent business. A foreign corporation, whose business in Louisiana was in the hands of an agent, furnished to customers sums of money and took from them collateral security; for reasons satisfactory to the parties, instead of taking the ordinary evidence of indebtedness, the customers drew checks, never intended to be paid in the ordinary way, but intended by the parties to be held as evidence of the amount of money actually loaned; these loans could be satisfied by partial payments from time to time, interest being charged upon the outstanding amounts, and if not paid at maturity the collateral was subject to sale; when paid, the money might be again loaned by the agent to other parties, or remitted to the home office, and the business was large and continuing in its character. Held, that as such checks were given for the purpose of evidencing interestbearing debts, they were the evidence of credit for money loaned, localized in Louisiana, protected by its laws, and properly taxable there under the provisions of the tax law of 1898 of Louisiana, which has already

New Orleans v. Stempel,

been sustained as constitutional by this court. 175 U. S. 309.

THE Comptoir National d'Escompte de Paris, a corporation organized under the laws of the republic of France, filed its bill in the Circuit Court of the United States for the Eastern District of Louisiana, seeking to enjoin collection of certain taxes and to cancel the assessment thereof. These taxes were undertaken to be collected under an assessment upon office furniture, $1000; money in possession, $20,000; "money loaned on interest, all credits, and all bills receivable for money loaned on interest or advanced for goods sold, $175,000." There is no contest as to the taxes assessed upon the furniture or money in possession, but it is sought to enjoin the collection of the tax assessed upon the $175,000, which for the year 1891 is the sum of $4550.

Complainant avers that it has no money loaned on interest, credits or bills receivable for money loaned on interest or advanced, or for goods sold within the State of Louisiana, subject to taxation; that its credits in said State are debts due to it, of which it has no legal evidence of indebtedness within the State, and that these debts have no legal situs in Louisiana, and can only be taxed at the domicile of the Comptoir in Paris. That the taxes assessed were in violation of the constitution and jurisprudence of Louisiana, and were also in violation of the Fourteenth Amendment to the Federal Constitution, inasmuch as the action complained of denied to the complainant the equal protection of the laws and deprived it of its property without due process of law.

The respondent took issue upon these allegations, and avers that complainant has credits within the State, amenable to the taxing power, and the assessment upon the $175,000 was legal and valid.

Testimony was taken by a special examiner under an order of court, and the case partially heard, and was then referred to a master, who made separate findings of fact and conclusions of law.