INDIRECT ENCROACHMENT ON FEDERAL AUTHORITY 377 earnings. Two of these were Colorado ^'* and Utah ^^ assessments of refrigerator cars, which determined by count the average number of cars within the state and fixed a valuation of $250 per car. Two were ad valorem assessments of interstate bridges.^^ Western Union Telegraph Co. v. New Hope ^^ and Atlantic d* Pacific Telegraph Co. V. Philadelphia ^^ sanctioned Ucense fees on telegraph companies based on the number of poles and of miles of wire, in spite of the fact that it was conceded that the exactions might yield some sur- plus over the cost of supervision on which the Hcense was pro- fessedly based. The state and municipal requirements sustained in these cases make it clear that it is not necessary to measure property taxes by a capitalization of earnings. Since it is feasible to assess cars and bridges and telegraph Unes in ways that do not make the tax vary with the income from their use, it is difficult to contest the position that taxes based on a valuation of capital stock or on divi- dends or gross receipts are in substance a species of income taxes. The sublimation by which earnings are transmuted into a valuation of capital stock need not deceive us. I. Taxes Measured by Gross Receipts. There is no dispute that gross receipts from interstate commerce are not taxable directly as such.^^ The Supreme Court will not swallow a gross-receipts pill unless it is fiction-coated. Our task is to discover what coating is necessary to make it palatable. In the section on taxes on privileges we have already dealt with Maine V. Grand Trunk Railway Co.,^ which sustained a gross-receipts " American Refrigerator Transit Co. v. Hall, 174 U. S. 70, 19 Sup. Ct. Rep. 599 (1899). 1* Union Refrigerator Transit Co. v. Lynch, 177 U. S. 149, 20 Sup. Ct. Rep. 631 (1900). 16 Pittsburgh, C. C. & St. L. Ry. Co. v. Board of Public works, 172 U. S. 32, 19 Sup. Ct. Rep. 90 (1898); Henderson Bridge Co. v. Henderson City, 173 U. S. 592, 19 Sup. Ct. Rep. 553 (1899). " 187 U. S. 419, 23 Sup. Rep. 204 (1903). 1* 190 U. S. 160, 23 Sup. Ct. Rep. 817 (1903). 1^ Fargo V. Michigan, 121 U. S. 230, 7 Sup. Ct. Rep. 857 (1887); Philadelphia & Southern Mail S. S. Co. v. Pennsylvania, 122 U. S. 326, 7 Sup. Ct. Rep. 1118 (1887); Western Union Telegraph Co. v. Alabama Board of Assessment, 132 U. S. 472, 10 Sup. Ct. Rep. 161 (1889); Western Union Telegraph Co. v. Texas, 105 U. S. 460 (1881).
- " 142 U. S. 217, 12 Sup. Ct. Rep. 121 (1891), 31 Harv. L. Rev. 579-80, 32 Hakv. L.
Rev. 241.
