INDIRECT ENCROACHMENT ON FEDERAL AUTHORITY 645 mined amount is certain to be raised by the state, whatever the methods adopted, is of course open to question. The actual situa- tion may be one in which an income tax is not a substitute for other demands, but is the only feasible method of obtaining addi- tional revenue. But even so, if the income tax does not bear more heavily on interstate business than on local business, there seems to be no controlling reason why the interstate business should be held inviolate, whether the income tax is supplementary to, or in lieu of, other taxes. The opinion of the Supreme Court in United States Gliie Co. v. Oak Creek ^^ shakes the criticism heretofore ^^ passed upon Baldwin Tool Works V. Blue,^"^ in which the federal district court for the northern district of West Virginia sustained the West Virginia ex- cise on corporations. Judge Pritchard supported the inclusion of net receipts from interstate commerce on the authority of the de- cisions approving the assessment of railroad property by capital- izing net earnings, ^^ and sanctioning a gross-receipts tax in Heu of others.^^ He appears to minimize the issue unduly when he says: "While the statute imposes a special tax in addition to other license taxes, ascertained in some instances by the income that may arise in interstate transactions, nevertheless this is not a tax upon interstate commerce, nor can we conceive of any theory upon which it may be properly said to be a burden upon interstate commerce." ^^ Judge Pritchard evidently proceeds upon the familiar and some- what exploded distinction between the subject and the measure of the tax, when he argues that "the fact that the measure of that tax may be determined partly from the business of an interstate character could not be said to be such an interference with inter- state commerce as to render the act unconstitutional."^* He does not mention Galveston, H. &" S. A. Ry. Co. v. Texas,'^^ nor indicate ^ Note 2, supra.
- • 31 Harv. L. Rev. 760-75. In making this criticism, the writer proceeded on the
assumption that there was no distinction between an excise measured by net earnings and one measured by gross receipts. " 240 Fed. 202 (1916). " Cleveland, C, C. & St. L. Ry. Co. v. Backus, 154 U. S. 439, 14 Sup. Ct. Rep. 1 122 (1894). " United States Express Co. v. Minnesota, 223 U. S. 335, 32 Sup. Ct. Rep. 211 (1912).
- ° 240 Fed. 202, 205 (1916). " Ibid., 206.
« 210 U. S. 217, 28 Sup. Ct. Rep. 638 (1908), 32 Harv. L. Rev. 385/.
