246 HARVARD LAW REVIEW that the cost of a thing is the test of its value? "^^ It is a practical impossibility to "eliminate all of the value which flows from the use, and place the assessment at only the sum remaining." ^° There are only two alternatives. "Either the property must be declared wholly exempt from state taxation or taxed at its value, irrespective of the causes and uses which have brought about such value." «i Of course Mr. Justice Brewer's conclusion is not so ineluctable as he seems to think. The value for purposes of state taxation need not be the economic exchange value. While railroad property is merged in the business in which it is engaged, since it has no feasible alternative uses, this is not true of all property, and by resort to hypothesis a separation can be made of the value of the property of a railroad from that of the business which it serves. The fact that it may be difl&cult or impossible to express the results mathe- matically with any degree of accuracy does not prevent some compromise between the two alternatives which Mr. Justice Brewer regarded as the only ones conceivable. Such a compromise the court has been compelled to make time and again in finding "fair value" for purposes of rate regulation. ^^ And the same compromise might have been made in finding value for purposes of taxation. When the court declines to do so, it is guided by considerations of policy, whether it is aware of the fact or not. Mr. Justice Brewer plainly invokes considerations of policy when he declares: "And the uniform ruling of this court, a ruling demanded by the har- monious relations between the States and the national government, has affirmed that the full discharge of no duty entrusted to the latter re- strains the former from the exercise of the power of equal taxation upon all private property within its territorial limits. All that has been decided is that, beyond the taxation of property, ... no state shall attempt to impose the added burden of a license or other tax for the privilege of using, constructing, or operating any bridge, or other instrumentality of interstate commerce, or for carrying on of such commerce." ^ " 154X7.5.439,446, i4Sup. Ct. Rep. 1122 (1894). w Ibid. ^ Ibid.
- 2 See Robert L. Hale, "The Supreme Court's Ambiguous Use of 'Value' in Rate
Cases," 18 Col. L. Rev. 208.
- 154 U. S. 439, 446, 14 Sup. Ct. Rep. 1122 (1894).
