I INDIRECT ENCROACHMENT ON FEDERAL AUTHORITY 675 it would not transgress by adding lower maxima for smaller corpora- tions."^ A statute with a maximum, it was urged, should be re- garded as one imposing a specific tax, with a sliding discount in favor of corporations whose moderate capitalization entitled them to it."« This is in substance the Virginia statute. It imposes a specific $5,000 fee and allows corporations having less than $90,000,000 a deduction measured not precisely, but roughly, according to the amount by which their capital is less than $90,000,000. Mr. Jus- tice McReynolds appears to conceive it important that Virginia put the corporations into ten-miUion-dollar groups and did not vary the tax directly according to the capital, but it is hard to see how this is significant where there are fixed maxima. Moreover this does-not describe the method of measuring the tax on corpora- tions whose capital was between $50,000 and $1,000,000. The statute could hardly have been "more palatable if all such corpora- tions were charged the same amount, instead of a percentage of their actual capital. What is important is that there shall be a fair limit to any tax that may be imposed. It is apparent that the maximum or maxima must be reasonable, or the situation comes within the Western Union case rather than the Baltic Mining case. Such is clearly the position taken by the court in General Railway Signal Co. v. Virginia}^ The approval of the Virginia decision was accorded gingerly, Mr. Justice McReynolds saying: "Inspection of the statute shows that prescribed fees do not vary in direct proportion to capital stock, and that a maximimi is fixed. In the class to which plaintiff in error belongs the amount specified is one thou- sand doUars and, under all the circumstances, we cannot say that this is wholly arbitrary or unreasonable. "Considering what we said in Baltic Mining Co. v, Massachusetts, 231 U. S. 68; St. Louis Southwestern Ry. Co. v. Arkansas, 235 U. S. 350; Kansas City, Ft. Scott b° Memphis Ry. Co, v. Botkin, 240 U. S. 227; Kansas City, Memphis &" Birmingham R. R. Co. v. Stiles, 242 U. S. in, the two characteristics of the statute just referred to must be regarded as sufl&cient to save its validity. It seems proper, however, to add that the case is on the border line. See Looney v. Crane Co., 245 U. S. 178; "^31 Harv. L. Rev. 738-39. , 136 /Jj^. - '"31 Harv. L. Rev. 777, 941-42. "^ Note 132, supra.
