
    The Western Union Telegraph Company v. The City of Richmond.
    March Term, 1875,
    Richmond.
    1. Interstate Commerce—Foreign Insurance Companies ^Taxation.—The council of the city of Richmond has authority, under the charter of the city, to impose a license tax upon a foreign telegraph company having an agency in the city and doing business therein. And there is nothing in the constitutions and laws of the state or of the United States which forbids such a tax, if it is equal and just in its provisions.
    2. City Ordinance—Construction.—Thongh the ordinance of the city imposing taxes speaks only of persons or firms doing business in the city, yet it imposes a tax in terms on telegraph companies, and obviously intends to include incorporated companies as well as individuals.
    3. Same—Corporations —When Deemed “Persons.” — Corporations are to be deemed and taken as persons when the circumstances in which they are placed are identical with those of natural persons expressly included in a statute.
    *4. Federal Agencies — State Power to Tax.— For a thorough and exhaustive investigation of the power of a state, and its limitations, to tax agencies of the United States government, see the opinion of Staples. J.
    5. Same—Same—Power of Congress to Exempt.—Corporations which derive their existence and exercise their franchises under authority of state laws, but are employed by the national government for certain duties and services, whilst Congress may exempt them from any state taxation which will really prevent or impede such services, yet in the absence of legislation by Congress to indicate that exemption is deemed essential to the performance of governmental services, it cannot be claimed on the mere ground that the corporation is employed as an agency of the government. And the tax may be either upon the property or business of the corporation.
    6. Same—Same—Distinction.—The cases recognize a distinction between taxation of the property belonging to a private corporation employed by the government, and taxation of the instrumentalities or means of the government in the possession of such corporations. The state may tax a banking institution; but it cannot tax the currency or the government’s bonds belonging to such bank. It may tax the railroad, but not the mail or the munitions or other property of the government. It may tax the contractor with the government, though not the contract.
    This was an action of assumpsit in the Circuit court of the city of Richmond, brought in May 1873, by the Western Union Telegraph Company against the city of Richmond, to recover the sum of one hundred and twenty-five dollars, the amount of a license tax which the company had been compelled to pay to the city of Richmond. The only questions in the cause were, whether the company could be subjected to pay a license tax to the city under the laws and constitutions of the state of Virginia and of the United States, and whether corporations were included in the terms of the city ordinance.
    The Western Union Telegraph Company is a corporation chartered by the legislature of the state of New York, and has an office and transacts business in the city of Richmond. The ordinance of the city classified telegraph companies and this company was placed in the third class, and the tax on the companies *in this class was fixed by the ordinance at one hundred and twenty-five dollars. This tax the agent of the company refused to pay, until the property of the company was levied on by the officer, when he paid it under protest. The case was submitted to the decision of the judge without a jury, and he rendered a judgment in favor of the city. And thereupon the company applied to this court for a writ of error; which was awarded. The laws and ordinances, as well as the facts, are sufficiently stated in the opinion of Staples, J.
    R. Xt. Smith, for the appellant.
    1. There is no mode provided in the ordinance whereby the proper classification of chartered companies could be ascertained; and the placing said telegraph company in the third class for taxation," and subjecting said company to a tax of $125, was wholly unauthorized by the said ordinance or any law whatsoever, state or municipal.
    There is no law which authorizes the city of Richmond, by its ordinance, to declare that the word “person” or “firm” should embrace bodies politic or corporate.
    2. That the statute of the state of Virginia in relation to commissioners and collectors of the public revenue for the year 1872 provides that but one license shall be required of a telegraph company; and that, upon the issuing of which license, messages a.id communications may be transmitted through any county or corporation in the state.
    That the city of Richmond a municipal corporation, deriving its powers from the legislature, has no power, in violation of this exclusive grant, to require another *license and superadd another tax upon the business of the said telegraph company.
    3. That the action of the corporate authorities of the city of Richmond, in requiring a license from the Western Union Telegraph Company, and imposing a tax thereon, is in violation of the third clause of section eight of article one of the constitution of the United States, which gives to Congress the power to regulate commerce among the several states.
    The agreed facts, stated in the record, show that the messages sent by this company often pass through many states; and, beyond all doubt, such communications constitute, within the meaning of the constitution, commerce or intercourse.
    In Gibbons v. Ogden, 9 Wheat. R. 189, Chief Justice Marshall said: “Commerce undoubtedly is traffic; but it is something more, it is intercourse. It describes the commercial intercourse between nations and parts of nations, in all its branches, and is regulated by prescribing rules for carrying on that intercourse.”
    So in Corfield v. Coryell, 4 Wash. C. C. R. 371, 379, Judge Washington says: “Commerce with foreign nations and among the several states can mean nothing more than intercourse with those nations and among those states for the purpose of trade, be the object of trade what it may; and thus intercourse must include all the means by which it can be carried’ on, whether by free navigation of the waters of the several states, or by a passage overland through the states, where such passage becomes necessary to the commercial intercourse between the states. ”
    In State of Pennsylvania v. The Wheeling & Belmont Bridge Company, 18 How. U. S. R. 431, Nelson, J., said: “The regulation of commerce includes intercourse and navigation.”
    In Crandall v. State of Nevada, 6 Wall. U. S. R. 35, *the Supreme court of the United States unanimously declared a statute of Nevada unconstitutional which imposed a tax on every passenger leaving the state.
    So in Minot v. The Phila. Wilm. & Balt. R. R. Co., 2 Abbott’s U. S. R. 324, it is decided that a tax imposed under a statute of the state of Delaware on the use of locomotives and cars on railroads in that state was unconstitutional, so far as it applied to locomotives and cars used in commerce between the states. That the transportation of persons or property through a state is beyond its power of taxation, under the commercial clause of the constitution of the United States.
    In the case of The Western Union Telegraph Co. v. The Atlantic and Pacific States Telegraph Co., 5 Nevada R. 102, the act of Congress, approved July 24th, ‘1866, entitled “an act to aid in the construction of telegraph lines, and to secure to the government the use of the same for postal, military and other purposes,” came under review before the Supreme court of Nevada. The question was directly raised, whether telegraph communication between the states was a part of commercial intercourse within the jurisdiction .of Congress, under the commercial clause of the constitution of the United States and the court held that it is. They say: “Is telegraphy any branch of commercial intercourse? To ask the question is to answer it. So interwoven has the custom of communication by telegraph become with trade and traffic, that to separate it, without serious disturbance of vast trade relations and financial transactions, would be a task as difficult as to cut the pound of flesh without a drop of blood. It is the life and soul of civilized commercial transactions : many of the most important are daily ruled by telegraph. The banker, the merchant, the farmer, the broker, all traders, depend upon the telegraph for *speedy information and means of intercourse in their various business and traffic. If the ship that carries the cargo comes within the constitutional power of Congress to regulate commerce, as it confessedly does, as a means of commercial intercourse, certainly the instrumentality through which is directed the lading, sailing and unlading of the ship, the purchase and sale of the cargo, and all the minutiae of the venture and the voyage, is equally a means, only of a higher and more advanced grade. ’ ’
    The decisions of the Supreme court of the United States, which review the power of Congress on this subject, are fully examined by the court in that case.
    We beg leave also to refer to the cases of Brown v. The State of Maryland, 12 Wheat. R. 419, 429; and the Passenger Cases, 7 How. U. S. R. 283.
    In the case of The Phila. & Reading R. R. Co. v. The Commonwealth of Penn., recently decided by the Supreme court of the United States, and not yet reported, the power of Congress to regulate commerce among the several states is fully considered. The court held that a tax imposed under an act of the legislature of the state of Pennsylvania of August 25, 1864, on articles carried through the state, or articles taken up in the state and carried out of it, or articles taken up without the state and brought into it, is unconstitutional and void.
    Waves of electricity are quite as fully subjects of exclusive dominion and property as any other external thing.
    The wire of a telegraph line is nothing but a way, a means of passage; and the thing passing is not the less property because it is one of the imponderable elements.
    “There is no distinction in principle between electric *fiuid conveyed through a parish, and water conveyed through a parish.” Alderson, J., Electric Tel. Co. v. Overseers of Poor of Salford, 24 L. J. Ex. 151-’2, new series, p. 324. It has repeatedly been ruled by the Supreme court of the United States that no state can tax either persons or property passing through it. It is an interference with interstate communication and intercourse, which is declared illegal. If this be true, then by what authority can the state of Virginia, and still less a municipal corporation created by its legislature, lay a tax on a license for sending telegraphic messages through the state, or out of the state into other states?
    The power of taxation condemned in the Pennsylvania case above cited does not, in principle, differ from that exercised by the city of Richmond in imposing a license tax on the Western Union Telegraph Company. If Virginia can tax a telegraphic communication passing through it from other states, however distant, why may not such other states do the same thing, and thereby break down the whole system of telegraphic communication by onerous taxation.
    By the statement of facts set out in the record, the Western Union Telegraph Company is one of the important agencies of the Federal government in the management and conduct of its various departments and national affairs; and, as such, no state or municipal corporation has a right to impose a license tax upon it, whereby the operations of the government may, at least to the extent of the usefulness of this instrumentality, be obstructed and impaired. We would refer on this question to the following authorities: Cooley Const. Lim. ch. 14, pp. 480-’1,-’2; McCulloch v. Maryland, 4 Wheat. R. 316, in which the court held that the law of Maryland imposing a tax *on the Bank of the United States was unconstitutional. In the unanimous opinion delivered by Chief Justice Marshall, he says: “The result is a conviction that the states have no power, by taxation or otherwise, to retard, impede, burden, or in any manner control the operation of the constitutional laws enacted by Congress to carry into execution the powers vested in the general government. This is, we think, the unavoidable consequence of that supremacy which the constitution has declared.” Weston v. Charleston, 2 Peters. R. 449, in which the court (Judge Marshall again delivering the opinion) say that a tax on stock of the United States, held by an individual citizen of a state, is a tax on the power to borrow money on the credit of the United States, and cannot be levied by or under the authority of a state consistently with the constitution. Bank Tax Case, 2 Wall. U. S. R. 200. A tax laid by a state on banks, “on a valuation equal to the amount of their capital stock paid in, or secured to be paid in, ” is a tax on the property of the institution; and when that property consists of stocks of the Federal government, the law laying the tax is void. Bank of Commerce v. New York City, 2 Black’s R. 620; The Banks v. The Mayor, 7 Wall. U. S. R. 16; Bank v. Supervisors, 7 Wall. U. S. R. 26; Brown v. Maryland, 12 Wheat. R. 419; Osborn v. Bank United States, 9 Wheat. R. 738-859; Dobbins v. Commissioners Erie County, 16 Peters. R. 435.
    The learned counsel for the appellee refers” to the case of Railroad Co. v. Peniston, 18 Wall. U. S. R. 5. In that case most of the authorities bearing on this question are cited, and the distinction is there broadly drawn between a tax on property and a tax on the business and operations of a corporation—the former being held liable to taxation, but the latter not so liable. I *ask the special attention of the court to that case. At page 35, the court expressly decide that a tax on the operations of an instrument employed by the general government to carry its powers into execution is unconstitutional. The court say (page 36): “This distinction, so clearly drawn in the earlier decisions, between a tax on the property of a government agent and a tax on the action of such agent, or upon his right to be, has ever since been recognized; ’ ’ and such continues the distinction to the present time.
    J. R. V. Daniel and U. Page, for the appellee.
    The appellant objects that the tax complained of was unauthorized by any law whatsoever, state or municipal; that the city of Richmond, acting under delegated authority, exceeded their authority in the imposition of this tax; that by the use of the words “person” or “firm” the ordinance did not include a body corporate, such as the Western Union Telegraph Company; and that the statute of the state of Virginia by implication forbids taxation on the part of the city.
    
      The legislature of Virginia, by its act providing a charter for the city of Richmond (Sess. Acts 1869-’70, p. 138, % 70), expressly grants to the municipal authority power to “grant or refuse licenses,” and to “require taxes to be paid on such licenses to agents of insurance companies (and several other specified employments), to commission merchants, and all other business which cannot be reached by the ad valorem system under the preceding section.” The preceding section provides for taxation of property by assessment. We submit that the business of the Western Union Telegraph Company comes fairly under the head last mentioned.
    *“A corporation is a political person, capable, like a natural person, of enjoying a variety of franchises.” 1 Kyd. 15. “The construction is that when ‘persons’ are mentioned in a statute, corporations are included, if they fall within the reason and design of the statute.” Angel & Ames on Corporations, p. 3, § 6. “A corporation has been held to be included in the term ‘individual’ in a tax law.” Otis &c. v. Ware, 8 Gray R. 509. In an important Virginia case it is settled that when 'the word “person” is used in a statute, corporations, as well as natural persons, ai'e included for civil purposes. Baltimore & Ohio R. R. Co. v. Gallahue’s adm’rs, 12 Gratt. 655. It will hardly be questioned that corporations “fall within the reason and design” of the ordinance, when it is observed that the section containing the words objected to, viz., “person and firm,” refers by the number of the section to “express companies and telegraph companies.”
    In regard to the assertion that the right of the city of Richmond to tax the Telegraph Company is taken away by the statute for the assessment of taxes, licenses, &c., for the year 1872 (Sess. Acts 1871-’2, p. 194, $ 143), the appellee contends that the words of the statute refer only to the commonwealth’s revenue, and that, in securing this to herself, she does not intend to deprive the city of Richmond of its reasonable income. There are no words to inhibit the city from the exercise of its chartered right. The words, “one license for the same company shall be sufficient,” are explained by the remainder of the clause, “and this section shall not be construed to require a license for each office of the same company,” It merely declares that the company, as a whole, and not each office for itself, shall obtain from the state authority a ^license, subject to the conditions prescribed. Taking this whole s'ection together, and applying to it the just rules of interpretation, its true intent and meaning will be seen to be that the incorporated company, having complied with the statutory regulations, is discharged from further requirements and demands on the part of the state. Ould & Carrington v. City of Richmond, 23 Gratt. 464; Gilkeson v. Frederick Justices, 13 Gratt. 577; Orange & Alex. R. R. Co. v. Alexandria, 17 Gratt. 176.
    The appellant further objects that the tax imposed by the city is unconstitutional, because it violates that clause of the constitution of the United States which gives to Congress the power to x-egulate commerce among the several states. It is asserted that telegraphic messages ax-e a most impox-tant element of commex-cial intercourse between the states, of which Congress has exclusive control. This objection is well answex'ed by the Supx'enxe court in its decision of the case of Paul v. Virginia, 8 Wall. U. S. R. 168.
    In that case the state of Virginia required of a'foreign insurance company, not only to pay a license tax, but to make a large deposit of bonds, as a condition precedent to carrying on its business within its territoxy: these requirements, it was contended, were unconstitutional, because the issuance of policies of insurance was a commercial transaction, the parties being domiciled in different states, and that the legislation in question was a regulation of commerce. But the court held otherwise; and in replying to the argument in support of the appellant’s view, it was said, that such ‘ ‘policies are not articles of commerce in any proper meaning of the word. They are not subjects of trade and barter offex-ed in the market as something having an existence and value independent *of the parties to them. They ax-e not commodities to be shipped or forwarded from one state' to another and then put up for sale.”
    There is much else in the opinion delivered in that case deserving of attention here, but we content oux-selves with the brief citation we have made.
    The appellee respectfully insists that the communications transmitted across the electric wires are no more articles of commerce, in the view taken above, than ax-e contracts of insux-ance made by companies chartered in one state with citizens of another. “In Nathan v. Louisiana, 8 How. U. S. R. 73, the court held that a law of that state imposing a tax on money and exchange bx-okex-s, who dealt entirely in the purchase and sale of fox-eign bills of exchange, was not in conflict with the constitutional power of Congress to regulate commerce. Tlie individxtal thus using his money and credit, said the court, ‘is not engaged in commerce, but in supplying an instrument of commerce. He is less connected with it than the ship builder, without whose labor foreign commerce could not be carried on.’ And the opinion shows that although instruments of commerce, they are the subjects of state regulation, and, inferentially, that they may be subjects of dix-ect state taxation.”
    Instruments of commerce, then, ax-e the subjects of state taxation. It will hax'dly be claimed that the electx-ic telegraph is mox-e than an instrument of commerce.
    Cooley v. Board of Wardens of Port of Philadelphia, 12 How. U. S. R. 299, 319; License Cases, 5 Id. 504, and therein opinion of Taney, C. J., (explaining Gibbons v. Ogden) p. 581; Wilson v. Blackbird Creek Marsh Co., 2 Peters. R. 245, 251. In the license cases it was decided tha tthe grant of a general authority to regulate *commerce is not, therefore, a prohibition to the states to make any regulations concerning it within their own territorial limits, not in conflict with an act of Congress. A state statute on this subject is valid, unless in opposition to an act of Congress repugnant to it, passed in the exercise of the power to regulate commerce. ‘ ‘The act (of the state) is not in violation of this power in its dormant state.” 2 Peters. R. 252.
    In the Passenger Cases, 7 How. U. S. R. 283, cited by the appellants, Justice McUean, in delivering the opinion of the court, adverse to the authority of the state in that case, uses these words: “A state cannot regulate foreign commerce, but it may do many things which more or less affect it. It may tax a ship or other vessel used in commerce, the same as other property owned by citizens. A state may tax the stages in which the mail is transported; but this does not regulate the conveyance of the mail any more than taxing a ship regulates commerce. And yet, in both instances, the tax on the property in some degree affects its use.” From the decision of the court dissent Taney, C. J., and Justices Daniel and Woodbury. See opinion of Chief Justice, pp. 470 and 480.
    The case of Brown v. Maryland was a direct tax on imports (vide p. 448 of 12 Wheaton). And see Woodruff v. Parham, 8 Wall. U. S. R. 123, and opinion of court concerning Brown v. Maryland.
    Osborn v. Mobile, 16 Wall. U. S. R. 479. In this case the question was whether an ordinance, in requiring payment for a license to transact in Mobile a business extending beyond the limits of the state of Alabama, was repugnant to the provision of the constitution vesting in Congress the power “to regulate commerce between the several states. ’ ’
    Osborn, agent of an express company chartered by *the state of Georgia, was fined for conducting his business without a license in Mobile. The Chief Justice, delivering the opinion of the court, decided that the ordinance was constitutional. The whole of his brief and forcible opinion bears upon the present case.
    A statute of Maryland required all traders resident within the state to take out licenses and to pay therefor certain sums from $12 to $150, according to a certain scale. The statute also required from all persons who were not permanent residents of the state, offering for sale any goods or merchandise not manufactured in Maryland, an annual license, for which $300 was to be paid. Held (Ward v. Maryland, 12 Wall. U. S. R. 418), that the statute imposed a discriminating tax upon non-resident traders, and that it was pro tanto repugnant to the Federal constitution and void. Mr. Justice Clifford, giving the unanimous opinion of the court, says: “Possessing, as the states do, the power to tax for the support of their own governments, it follows that they may enact reasonable regulations to provide for the collection of taxes levied for that purpose, not inconsistent with the power of Congress to regulate commerce, nor repugant to the laws passed by Congress upon - the same subject. Reasonable regulations for the collection of such taxes may be passed by the states, whether the property ta,xed belongs to residents or non-residents; and in the absence of any congressional legislation on the same subject, no doubt is entertained that such regulations, if not in any way discriminating against the citizens of other states, may be upheld as valid.”
    The appellant further alleges that the Western Union Telegraph Company is one of the important agencies of the Federal government, and, as such, that no state or municipal corporation has a right to ^impose a tax upon it, whereby it is said the operations of the government may be obstructed or impaired. On this point they refer to Cooley on Const. Limitations, and McCulloch v. Maryland, 4 Wheat. R. 316. The discussion in the former work is based upon the latter case. It was there decided that the State of Maryland could not tax the Bank of the United States, a creation of the Federal government, and its particular agent and servant, such as the mail, the mint, patent rights, and other similar federal creations, -yyhich the chief justice enumerates as belonging to the same class. “The sovereignty of a state extends to everything which exists by its own authority, or is introduced by its permission; but does it extend to those means which are employed by congress; to carry into execution powers conferred on that body by the people of the United States? We think it demonstrable that it does not.” The rest of his opinion clearly shows that, by “those means employed by congress, ” the chief justice refers to the governmental creations to which we have alluded. In the Bank Tax case, 2 Wall. U. S. R. 200, the capital consisted of stocks of the Federal government, and the decision in McCulloch v. Maryland applied.
    These views are further maintained in the case of National Bank v. Commonwealth, 9 Wall. U. S. R. 353, and especially to the opinion of the court, pp. 361-2. Directly to the point is the case of Thomson v. Pacific Railroad, 9 Wall. U. S. R. 579. In this latter case, the chief justice, in the opinion of the court, says: “We are not aware of any case in which the real estate, or other property of a corporation not organized tinder an act of congress, has been held to be exempt in the absence of express legislation to that effect, to just contribution, in common with other property, to the ^general expenditure for the common benefit, because of the employment of the corporation in the service of the government. It is true that some of the reasoning in the case of McCulloch v. Maryland seems to favor the broader doctrine. But the decision itself is limited to the case of the bank, as a corporation created by a law of the United States, and responsible, in the use of its franchises, to the government of the United States.” “We do not think ourselves warranted therefore in extending the exemption established by the case of McCulloch v. Maryland, beyond its terms. We cannot apply it to the case of a corporation deriving its existence from state law, exercising its franchise under state law, and holding its property within state jurisdiction and under state protection. ’ ’
    In Railroad Co. v. Peniston, 18 Wall. U. S. R. 5, a question arose whether- a railroad company chartered and aided by congress, partly controlled by the government and subject to its future regulations, the charter of the company conditioned that if the terms are not complied with, or the loans not paid, the road shall come under the control and management of congress, and subject moreover to the use of the government at all times for transmission of mails, dispatches, troops, stores, &c., was subject to state taxation. It was decided to be so subject.
    ‘ ‘There are, ’ ’ says the court in its opinion, “we admit, certain subjects of taxation which are withdrawn from the power of the states, not by any direct or express provision of the federal constitution, but by what may be regarded as its necessai-y implications. They.-g'row out of our complex system of government, and out of the fact that the authority of the national government is legitimately exercised within the states. While it is true that government cannot exercise its *power of taxation so as to destroy the state governments, or embarrass their lawful action, it is equally true that the states may not levy taxes, the direct effect of which shall be to hinder the exercise of any powers which belong to the national government. The constitution contemplates that none of those powers may be restrained by state legislation. But it is often a difficult question, whether a tax imposed by a state, does, in fact, invade the domain of the general government, or interfere with its operations to such an extent, or in such a manner, as to render it unwarranted. ' It cannot be- that a state tax, which remotely affects the efficient exercise of a federal power, is for that reason alone inhibited by the constitution. To hold that, would be to deny to the states all power to tax persons or property. Every tax levied by a state withdraws from the reach of federal taxation a portion of the property from which it is taken, and to that extent diminishes the subject upon which federal taxes may be laid. The states are, and they ever must be, co-existent with the national government. . Neither may destroy the other. Hence the Federal constitution must receive a practical construction. Its limitations . and its implied prohibitions must not be extended so far as to destroy the necessary powers of the states, or prevent their efficient exercise. ’ ’ He then considers the case of Thomson v. Pacific Railroad. “It may therefore be considered as settled, that no constitutional implications prohibit a state tax upon the property of an agent of the government, merely because it is the property of such an agent. A contrary doctrine would greatly embarrass the states in the collection of their necessary revenue, without any corresponding advantage to the United States. A very large proportion of 'the property within the states is employed *in execution of the powers of government. It belongs to governmental agents, and it is not only used, but it is necessary for their agencies. United States mails, troops and munitions of war are carried upon almost every railroad. Telegraph lines are employed in the national service. So are steamboats, horses, stage coaches, foundries, ship yards, and multitudes of manufacturing establishments. They are the property of natural persons, or of corporations, who are instruments or agents of the general government, and they are the hands by which the objects of the government are attained. Were they exempt from liability to contribute to the revenue of the states, it is manifest that the state governments would be paralyzed.” He then refers to the cases relied on by the complainants in the case before him, and by the appellants in the present case, viz: McCulloch v. Maryland, and Osborn v. Bank of U. S. In the former of these cases the tax ‘ ‘was not upon any property of the bank, but upon one of its operations; in fact, upon its right to exist as created. It was a direct impediment in the way of a governmental operation performed through the bank as an agent. ’ ’ ‘ ‘In Osborn v. The Bank, the tax held unconstitutional, was a tax upon the existence of the bank, upon its right to transact business within the State of Ohio. It was, as it was intended to be, a direct impediment in the way of those acts which congress for national purposes had authorized the bank to perform. ’ ’
    This last decision of the Supreme court, to our apprehension, is absolutely conclusive of all controversy upon the questions raised in the case at bar.
    If a private corporation, created by the laws of another state, for individual gain, unable to come into our midst and carry on its business, except by permission *of the laws of Virginia, is not subject to the taxing power of the commonwealth and its governmental agencies, because, forsooth, this corporation is a contractor with the Federal government, it would be difficult to say what persons or property are legitimate subjects of taxation. This monstrous proposition is, as we have seen, unsupported by authority, and is plainly repugnant to reason and justice. If maintained, it consummates the overthrow of all that is left of state government.
    
      
      Telegraph Companies—Interstate Commerce.—In Western Union Tel. Co. v. Seay, 132 U. S. 472, 10 Sup. Ct. Rep. 161, the court held that telegraph companies which have accepted the provisions of Rev. St. U. S. sections 5263-5268, cannot be taxed by the authorities of a state for any messages or receipts arising therefrom, from points within the state to points without the state and vice versa, as this is^interstate commerce, but may be so taxed or messages carried wholly within the state.
    
    
      
      Corporations — When Deemed to Be Persons.—In Lynchburg v. Railroad Company, 80 Va. 237, it was held that a section of the charter of the city of Lynchburg which grants authority to impose a license tax upon persons engaged in certain enumerated callings, and “upon any other person or employment, which it may deem proper, whether such person or employment be herein specially enumerated or not” does not empower the city to impose such tax upon a railroad corporation, which is neither a person or employment within the ordinary acceptation of these words. The decision is based on the rule of ejusdem generis. In support of the rule that corporations are to be deemed and taken as persons when the circumstances in which they are placed are identical with those of natural persons, see Stribbling v. The Bank of the Valley, 5 Rand. 180; Railroad Co. v. Gallahue, 12 Gratt. 663; U. S. Bank v. Merchants’ Bank of Baltimore, 1 Rob. 573. In Miller v. Com., 27 Gratt. 110, it was held that corporations are included under the term “persons” unless they are exempted by its terms, or by the nature of the subject to which the statute relates. See Crafford v. Supervisors of Warwick County, 87 Va. 116, and cases cited. In that case, act of March 2,1888 (Acts 1887-88, p. 465) providing that the judge of the county court should, upon the application of persons paying one-third of the taxes on real estate in the county of Warwick, order a poll tobe opened to ascertain the sense of the qualified voters as to whether or not the site of the courthouse should be changed, was continued and it was held that the word “persons” used in the act, included corporations.
    
   Staples, J.,

delivered the opinion of the court.

The charter of the city of Richmond authorizes the city council to raise annually, by taxes and assessments, such sums of money as they shall deem necessary to defray the expenses of the same,' and in such manner as they shall deem expedient, in accordance with the laws of the state and of the United States.

In the execution of the powers thus confided to them, the city council may grant licenses or refuse them. They may require taxes to be paid on such licenses to agents of insurance companies, and all business which cannot be reached by the ad valorem system. Acts of 1869-’70, page 138, secs. 69 and 70. In the case of Ould & Carrington v. City of Richmond, 23 Gratt. 464, this court construed these provisions as conferring upon the city council the g'eneral power of taxation, except only as it may be limited by the laws of the state or of the United States, and including all persons and subjects of taxation. It was also further held, that the mode of assessment adopted by the city council with reference to attorneys at law was sustained by the charter and by the constitution.

The plan adopted by the city council in assessing *telegraph companies is substantially the same as that pursued with reference to attorneys at law. They are divided into four classes, and required to pay a license tax graduated by the character of the business done by the company. The plaintiffs are placed in the third class, and are subjected to a license tax of one hundred and twenty-five dollars. The authority of the city council in the premises, and the validity of the assessment, must therefore be considered as adjudicated and settled by the decision of this court. It is said, however, that the ordinance of the city only applies to “persons or firms,” and not to chartered companies. It is very true that the twelfth section speaks of “persons or firms” only, but the eighth section expressly mentions “telegraph companies;” and it is very clear it was the intention to include all telegraph companies, whether incorporated or not. The sections construed together plainly show that, in using the words “persons or firms” in the city ordinance, the council designed to embrace chartered companies as well as individuals. And this is sanctioned by practice and the decisions of the courts. In Baltimore & Ohio R. R. Co. v. Gallahue’s adm’r, 12 Gratt. 655, 663, Judg'e Allen said: “Corporations are to be deemed and taken as pers ons, when the circumstances in which they are placed are identical with those of natural persons expressly included in a statute. * * * ”

Another ground taken by the plaintiffs is, that the act of March IS, 1872, provides that but one license shall be required of a telegraph company, upon the issuing of which, the company’s messages may be transmitted through any county or corporation of the state; and that the city of Richmond has no power, in violation of this exclusive grant, to require another license and impose another tax upon the business of the company.

*It is very clear, however, that the act of March 15th, 1872, refers only to state taxation and revenue. The object of that act was, no doubt, to relieve telegraph companies from the payment of a tax for each office and place of business, and to authorize the transmission of messages throughout the state under one license, and upon the payment of a single tax. It was not intended to interfere with municipal corporations in the exercise of powers of taxation conferred by their charters, or to strip them of valuable revenues derived from companies and individuals carrying on business within the corporate limits, and under the protection of the corporate government. This subject was fully considered in the case of Humphreys &c. v. Norfolk City, decided by this court at the spring term 1874; and to that case reference is made. 25 Gratt. 97.

For these reasons the tax in this case must be held to be valid, so far as the constitution and laws of the state are involved.

The only question remaining for consideration is, whether the tax is in violation of any provision of the constitution of the United States, or of any rights and privileges conferred upon plaintiffs by act of congress.

It is insisted • that the action of the city council in requiring the license, is repugnant to that clause of the constitution of the United States which gives to congress the power to regulate commerce among the states.

The argument of the learned counsel upon this point briefly stated is, that commerce is not merely traffic; it is something more, it is intercourse; and intercourse includes all the means by which commerce is carried on among the several states: that telegraph communication is an important branch of commercial intercourse; and if Virginia may impose a tax upon *those companies, so may every other state penetrated by their lines; and thus the whole system of telegraph communication may be destroyed by oppressive burdens in the form of taxation.

This proposition applies as well to states as to municipalities; and if the power of taxation is denied in one case it is in the other. The question is therefore a grave one, as well by reason of the principle as the amount involved.

The power of taxation, as universally conceded, is inherent in every sovereignty, and no constitutional government can exist without it. It extends to every person, to every trade and occupation, and every species of property. It is as essential to the states as to the Federal government. If it is important that the agencies of the Federal government shall be excepted from the taxing power of the states, it is equally necessary that those of the latter shall be maintained in undiminished force and vigor. In Osborne v. Mobile, 16 Wall. U. S. R. 479, 481, Chief Justice Chase said: “It is as important to leave the rightful powers of taxation unimpaired in the states as to maintain the powers of the Federal government in their integrity. ” The difficulty of drawing the line between the commercial power of the Union and the taxing power of the states is universally conceded. Clearly no law of the states, much less the exercise of this taxing-power, ought to be declared invalid upon, any mere speculative, indirect and contingent ground. The repugnancy to the constitution of the United States ought to be immediate, direct, and beyond all question.

If we assume that commerce means intercourse, as it clearly does, and that intercourse includes all the instrumentalities by which commerce is carried on ^'between the states, there is scarce an avocation in the state engaged in foreign trade and traffic which may not be brought within the influence of the constitutional inhibition. It will be conceded that a state may. tax a ship of one of its citizens engaged in the transportation of foreign merchandise, or passengers to and from the state; although it cannot tax the passengers or the merchandise. The reason is, that the ship is not commerce, but a mere instrument of commerce. Hays v. The Pacific Mail Steamship Co., 17 How. U. S. R. 596.

And so it has been held, that a license tax upon persons engaged 'in buying and selling foreign bills of exchange is not repugnant to the constitution of the United States. Nathan v. Louisiana, 8 How. U. S. R. 79. Such persons are not engaged in commerce, but simply in supplying an instrument of commerce. The court say ‘ ‘they are less connected with it than the shipbuilder, without whose labor foreign commerce cannot be carried on; and yet the business of ship building may be taxed as the exercise of any other mechanical art. No one can claim an exemption from a general tax on his business within the state on the ground that the products sold may be used in commerce.” In Paul v. Virginia, 8 Wall. U. S. R. 168, it was decided that the issuing of a policy of insurance is not a transaction of commerce within the meaning of the constitution, though the parties be domiciled in different states. The court say these contracts are not articles of commerce in any proper meaning of the word. They are not subjects of trade and barter offei-ed in the market, as something having an existence and value independent of the parties to them. They are not commodities to be shipped or forwarded from one state to another, and then put up for sale.

*The learned counsel for the plaintiffs cites the case of Crandall v. Nevada, 6 Wall. U. S. R. 35, in which the Supreme court held a statute of Nevada unconstitutional which imposed a tax upon every passenger leaving the state. This, however, was not upon the ground that such a tax is “a regulation of commerce, or even repugnant to any express provision of the constitution, but upon the broad principle that the Federal government had the right to call to the capital of the Union any and all of its citizens to aid in the military or civil service of the country; and every citizen from the most remote states or territories is entitled to free access to all the great departments of the government, executive, legislative and judicial; and this right cannot be made dependent upon the pleasure of a state over whose territory they must pass in the exercise of such right. And if the principle should be admitted at all, it might be carried to the extent of an entire prohibition.” An attempt was made by the counsel, who argued the case, to show that the tax was upon the business of the carrier who transports the passeng'ers, graduated by the amount of the business done. The court say, however, it was plainly a tax upon the passenger, and the officers and agents of the companies were mere collectors of the tax. It was this feature, and this alone, which rendered the tax inconsistent with the rights belonging to citizens of the different states, and with the objects the Union was intended to attain.

The case of “State Freight Tax,” 15 Wall. U. S. R. 285, is much relied on by the counsel for the plaintiffs. There the Supreme court held, that a statute imposing a tax upon freight taken up within the state and carried out of it, or taken up without and brought within the state, is repugnant to the clause of the constitution *giving to congress the power to regulate commerce. The reason assig-ned is, that the tax was not upon the companies nor their franchises, property or business, but upon the freight, or upon the consignor or consignee, and was so intended, and the company required to pay a mere toll-gatherer. And inasmuch as the transportation of freight for the purpose of exchange or sale is a constituent of commerce, a tax upon freight is necessarily a regulation of commerce.

In the case of “State Tax on Railway Gross Receipts, ’ ’ reported also in 15 Wall. U. S. R. 284, the Supreme court sustains a Pennsylvania statute imposing a tax upon the gross receipts of railroad companies, although these receipts are made up in part of freights received for transportation of merchandise to and from the state into other states. This case is plainly distinguishable from the one last cited. In the first, as has been seen, the tax was upon transportation, and the railroad company a mere agency for its collection. In the second, the tax was upon the company, measured in amount by the extent of its business, or the degree to which its franchise was exercised. It was conceded that the ultimate effect of the tax would be to increase the cost of transportation, and therefore to affect commerce itself. Nevertheless, it was not a tax upon commerce, any more than a tax upon a railroad or stage coach is a tax upon transportation, or a tax upon attorneys constitutes a tax upon clients.

The court further say, in effect, it is not everything that affects commerce that amounts to a regulation of it within the meaning of the constitution. The states have authority to tax the estate, real and personal, of all their corporations, including carrying companies, precisely as they may tax similar property when belonging to natural persons. Such taxation may be *laid on valuation or may be an excise; it may be a graduated contribution, proportioned to the value of the privileges granted, or to the extent of their exercise, or to the results of such exercise. Such a power is essential to the healthy exercise of the state governments ; and the Federal constitution ought not to be so construed as to impair, much less to destroy, anything that is necessary to their efficient exercise.

These cases show the great difficulty encountered by the Supreme court of the United States in dealing with this perplexing subject. They further show, I think, the anxiety of that court to preserve unimpaired the taxing powers of the states, so far as it can be done consistently with the paramount obligations of the Federal constitution. And although these decisions cannot perhaps be always harmonized, and the learned judges have been unanimous in but few of them, yet they certainly affirm the proposition that it is competent for a state to impose a tax upon individuals or corporations within its territory; and such tax, if it does not discriminate against nonresidents or the products of other states, maybe upon the property, or the franchises, or the business, of the individual or corporation; and its validity is not at all affected by the consideration that the party is engaged in foreign as well as domestic trade and traffic. Society for Savings v. Coile, 6 U. S . R. 594; Woodruff v. Parham, 8 Wall. Wall. U. S. R. 123; Hinson v. Lott, Ibid. 148.

In Hinson v. Lott, 8 Wall. U. S. R. 148, the Supreme court sustained a law of Alabama requiring every dealer in spiritous liquors introducing liquors into the state for sale to pay a tax per gallon before offering the same for sale within the limits of the state. Mr. Justice Miller in delivering the opinion of the court *said: “If this was only tax it would constitute an unjust discrimination against the products of other states in favor of those of Alabama, and might be so laid as to amount to an absolute prohibition ; but it appeared there was another tax of like amount upon all spirits manufactured in the state. Inasmuch, therefore, as the law merely subjected foreign articles to the same rate of taxation as applied to domestic, it was not an attempt to regulate commerce, but an appropriate and legitimate exercise of the taxing power of the states.”

These decisions of the Supreme court have a direct application to the case under consideration. In the first place, it will be observed that the ordinance of the City of Richmond makes no discrimination in favor of or against any express company. The tax is alike upon all, graduated by the extent of the business. In the next place, the tax is not upon the telegraph message or communication, but upon the company, measured by the business in the corporate limits. The effect of the tax may be to increase to some extent the expense of telegraph communication. It is very probable that the rates of telegraphing are established by general arrangement among all the companies, whether incorporated here or abroad, and it may be that these rates are fixed with reference to state and municipal taxation as to other necessary expenses. But the same thing is true as respects railroad companies engaged in the transportation of passengers and freight and domestic goods. A tax upon them is indirectly a tax upon such transportation. But no one ever questioned the constitutional power of a state to lay a .tax upon its railroad companies.

The same principle applies to express companies incorporated under the laws of one state, establishing *its offices in other states, and engaged in the transmission of matter internal and external.

In Osborne v. Mobile, 16 Wall. U. S. R. 479, the Supreme court say, although the ultimate effect of the tax may be to increase the cost of transportation, it is within the general authority of the state to tax persons, property, business or occupations within the state.

The mistake made in all this class of cases is in failing to distinguish between commerce itself and what may be termed a mere instrument of commerce. Telegraphic communication is not commerce; “it is not a subject of trade and barter ofEered in market as something having an existence and value independent of the parties to them. ” It is not an intercourse—though it may be, and doubtless is, an important and valuable instrument or agency by which intercourse is carried on between the different parts of the country. It cannot be said, however, that this intercourse is purely of a national character, affecting the commercial interests of all the states, and therefore requiring exclusive legislation by Congress. Conceding that Congress may regulate the telegraphic business of the country, it has not done so; and in the absence of any such legislation on the subject, there is no valid objection to a system of state taxation upon these companies in return for the protection they receive. They are incorporated under state laws, controlled by state regulations, and protected by state authority. It is true they are engaged in transmitting government messages at rates fixed by the postmaster general; but the railroads perform duties of a similar character in carrying the mail; so also the stage coaches. They are all subjects of state regulation, and are therefore necessarily liable to state taxation. The contract with the government for the transmission of its messages *is in no just sense a regulation of commerce. These terms, “to regulate commerce,” are well understood to mean the power to prescribe the rules by which commerce is to be governed. Hay on Com. $ 1061. The very fact that Congress has undertaken neither to exclude state taxation, or to prescribe any regulations for the various telegraph companies, indicates very clearly, that the whole subject was intended to be left to the states under whose laws they are incorporated.

Another ground taken by the plaintiff is, that the company is an important agency of the Federal government in the management of public affairs, and as such no state or municipal corporation is authorized to impose a license tax upon its business, whereby the operations of the government may be impaired or obstructed. This view is based mainly upon the provisions of the act of congress of the 24th July, 1866. This act authorizes any telegraph company, organized under the laws of any state, to construct lines of telegraph over any portion of the public domain, along any of the military or post roads, and across any of the navigable waters of the United States.

Authority is also given them to take from the public lands any material needful in the construction and operation of their lines of telegraph, and also to appropriate any portion of the public lands for their stations, not exceeding forty acres for each station. The act further provides, that communications of the government, its officers and agents, shall have priority over all others in their transmission over the lines, at rates fixed by the postmaster general. The provisions of this act were accepted by the plaintiffs, and the terms of government communication fixed accordingly by the postmaster general, and agreed to by the company. *It is argued, that if the state or any of its municipalities may impose a tax upon, or require a license of this company, they may impose it to any extent, and the effect may be to deprive the company altogether of the power to serve the government, or, at any rate, to impair its efficiency.

It is very clear that the states are prohibited from taxing either the property of the Federal government. or the instrumentalities by which its powers are carried into execution. This doctrine is well settled, and no one doubts its application to public corporations or other agencies created by the Federal government for carrying into execution national objects and purposes. But none of the cases have gone so far as to affirm, that because the Federal government enters into a contract with a corporation or a natural person to perform certain services this operates as an exemption from all state taxation. Can it be that a railroad company by entering into an arrangement with the postmaster general to carry the mails can escape the payment of its just public dues upon the pretext that its capacity to serve the Federal government may be thereby impaired. Chief Justice Marshall, in Osborne v. United States Bank, 9 Wheat. R. 738-860, has given a complete answer to that question. In that case it was argued, that the tax imposed upon the Bank of the United States by the legislature was constitutional, because the bank was established for private benefit, and was founded upon contract between individuals having private trade and private interest for its great and principal object. The chief justice said if these premises were true, the conclusion would then be inevitable. A private corporation engaged in its own business with its own views would certainly be subject to the taxing power of the state, as any individual *would be, and the casual circumstances of its being employed by the government in the transaction of its fiscal affairs would no more exempt its private business from the operation of that power that it would exempt the private business, of any individual employed in the same manner. But the premises are not true. The bank is a public corporation, created for public and national purposes. It is not an instrument which the government found ready made, and has supposed to be adapted to its purposes, but one which was created in the form in which it now appears, for national purposes only.

The very- reverse of all this is the status of this company. It was not created by the Federal government. It was not organized under any act of Congress, but under the laws of the state of New York. It is a private corporation, created for individual benefit and for the benefit of the private stockholders, carrying on business herte under the authority of Virginia statutes, and protected in its franchises and the enjoyment of its property by state laws and the police power of the city government. The Federal government has granted it certain privileges in consideration of the performance of certain services at certain specified rates of compensation. But the government has no interest in it and no concern with it, any further that the performance of these services. So long as these are not interfered with by the regulations of the states, it is no concern of the Federal government whether a tax is imposed at all, or whether it is upon the property or the franchise, or the business of the company. It is not pretended, there is not even a suggestion, that the tax prevents the transmission of the government messages, or that it impairs in the slightest degree, the capacity of the company for the ^fulfillment of its obligations. Exemption from all state or municipal taxation might with the same propriety be claimed by all railroad companies, express companies, and others eng-aged in the transportation of mail matter, upon the ground that such taxation may tend to prevent the performance of the contract, or at least to impair the efficiency of those agencies in the discharge of their duties.

Thé decisions of the Supreme court of the United States do not give the , least countenance to any such pretension. They establish the contrary doctrine. One of these, the case of National Bank v. Commonwealth, 9 Wall. U. S. R. 353, will show the manifest disinclination of the court to extend this doctrine of exemption from state taxation.

In that case it was conceded that the Eegislature of Kentucky might tax the stockholders upon the shares held by them in the national banks; but it was insisted that so much of the act as required the banks to pay such tax was invalid, because the banks, being instrumentalities of the Federal government, are beyond the reach of state legislation. This view, however, did not prevail. The Supreme court declared that the doctrine of exemption of Federal agencies from state taxation had its just limitation, a limitation growing out of the necessity in which it is founded. This limitation is, that these agencies are only exempted from state legislation, so far as that legislation may interfere with or impair their efficiency in performing the functions by which they are designed to serve the Federal government. Any other rule would convert a principle founded alone in the necessity of securing to the government the means of exercising its legitimate powers, into an unauthorized and unjustifiable invasion of the rights of the states. The banks are subject to *the laws of the states, and are governed in their daily course of business far more by the laws of the state than of the nation. Their contracts are governed and construed by state laws. Their acquisition and transfer of property, their right to collect their debts, and their liability to be sued for debts are all based on state laws. It is only when the state law incapacitates the banks from discharging their duties to the government that it becomes unconstitutional. We do not perceive the remotest probability of this in their being required to pay the tax which their stockholders owe to the state for the shares of the capital stock when the laws of the Federal government authorize the same.

In Thomson v. Pacific Railroad, 9 Wall. U. S. R. 579, the same doctrines are still more strongly stated. In that case the question was as to the validity of a tax imposed by the legislature of Kansas upon the railroad and telegraph property of the Union Pacific Railway Company. Fxemption from this taxation was claimed upon the ground, that although the company was incorporated under the laws of Kansas, congress had granted it lands and subsidies to a large amount, in consideration of which the company had executed a mortgage upon its property for the payment of five per cent, of its net gains, and had agreed to render services also in the transmission of messages, in the transportationpf mails, troops, munitions, and other property at reasonable rates of compensation: and it was insisted that the effect of the tax would be to impede and embarrass the company in the performance of these services as an agency of the government. Chief Justice Chase, in delivering the opinion of the court, dwelt at some length upon the distinction between a corporation created by the Federal government for national purposes, and corporations deriving their existence *and exercising their franchises under authority of state laws, but employed by the national government for certain duties and services. As to the latter, while congress may exempt them from any state taxation, which will really prevent or impede such services, yet in the absence of legislation by congress to indicate that exemption is deemed essential to the performance of the governmental services, it cannot be claimed upon the mere ground that the corporation is employed as an agency of the government. It is true that the tax in this case was upon the property of the railroad company; and the learned counsel seems to suppose there is a material distinction between such a tax and a tax upon the business of a corporation. But the reasoning of the court does not justify any such distinction. It applies equally to both forms of taxation. Indeed, Chief Justice Chase expressly says: “No one questions that the power to tax all property, business and persons within their respective limits, is original -in the states, and has never been surrendered. It cannot be so used as to defeat or hinder the operations of the national government; but it will be safe to conclude in general in reference to persons and state corporations employed in government service, that where congress has not interfered to protect their property from state taxation, such taxation is not obnoxious to the objection suggested. ”

These observations apply as strongly to a tax upon business as a tax upon property. Indeed there is no valid distinction between the two, so far as the principles of this case are concerned. The cases do recognize a distinction between taxation of the property belonging to a private corporation employed by the general government and taxation of the instrumentalities or means of the government in the possession *of such corporation. The state may tax a banking institution, but it cannot tax the currency or the government bonds belonging to such bank. It may tax the railroad, but not the mail or the munitions or other property of the government. It may tax the contractor with the government, though not the contract. Such tax may be upon the property of the corporation, or it may be graduated by the amount of its business. It is no concern of the Federal government, provided the tax is not prohibitory, or, at least, does not impair the efficiency of the corporation in the fulfillment of its contract with the government. Indeed a tax upon business in many instances is the only just and practicable mode of assessment. Chartered companies and individuals may carry on business to the amount of thousands of dollars without owning property, real or personal, of any conceivable value. If, whenever they happen to be employed in the service of the government, they are to be exempt from all those burdens which attach to all other persons, it is obvious that both states and cities will be deprived of most valuable subjects and sources of taxation. It is impossible to foresee the mischiefs that will arise from such a limitation upon the powers of the states. We see nothing in the constitution of the United States, or in the decisions of the Supreme Court, warranting such a conclusion.

Judgment affirmed.  