INDIRECT ENCROACHMENT ON FEDERAL AUTHORITY 383 intimated rather strongly that the court thought the tax constitu- tional. This he did by way of distinguishing it from those declared invalid in Fargo v. Michigan ^° and Philadelphia & Southern Mail S. S. Co. V. Pennsylvania.^^ His comment is as follows: " In those cases there was a distinct tax upon the gross earnings with- out reference to any other tax, and not in substitution or in Heu of another tax, while in this case the act plainly substitutes a dififerent method of taxation upon the property of the railroad company. It is a tax upon the lands and all the other property of the company, but instead of placing a valuation upon the lands and other property, and apportioning a certain amount upon such valuation directly, as was the old method, a new one is established of taking a percentage upon the gross earnings as a fair substitute for the former taxes upon all the lands and property of the company, and when it is said, as it is in this act, that the tax col- lected by this method shall be in lieu of all other taxes whatever, it would seem that it might be claimed with great plausibility that a tax levied under such circumstances and by such methods was not in reality a tax upon the gross earnings, but was a tax upon the lands and other property of the company, and that the method adopted of arriving at the simi which the company should pay as taxes upon its property was by taking a percentage of its gross earnings."*^ A gross-earnings tax, then, is a property tax, if it is imposed in lieu of a property tax. This sounds somewhat like sajdng that what is exempted is taxed, and what is taxed is not taxed. By a little logodasdaly, things are not what they seem to be. Since taxes on property measured by receipts are valid, and taxes on receipts are not valid, taxes on receipts in lieu of taxes on property must be called taxes on property in order to sustain them. North Dakota had given to the pertinent section of the law of 1883 the heading:
- ' Percentages of gross earnings to be paid in lieu of other taxes." ^^
The Act of 1889, in referring to taxes "due under the assessments under said law of 1883," had called them "taxes on both territorial and interstate earnings."^ But the Supreme Court did not see its way clear to accept the designation and to declare that taxes on receipts from interstate commerce are not regulations of that com-
- " Note 19, supra.
- ^ Note 19, supra.
^ 168 U. S. 651, 671, 18 Sup. Ct. Rep. 242 (i « Ibid., 654.
- Note 39, supra.
