210 U. S. Argument for Plaintiffs in Error. the power of Congress to regulate commerce among the States was concurrent with that of the State, it has become universally accepted doctrine that the power of Congress to regulate commerce among the States is exclusive. Philadelphia Steamship Co. v. Pennsylvania, 122 U. S. 326; Telegraph Co. v. Texas, 105 U. S. 460; Pickard v. Pullman Co., 117 U. S. 34; Fargo v. Michigan, 121 U. S. 230; W. U. Tel. Co. v. Pennsylvania, 128 U. S. 39; Ratterman v. W. U. Tel. Co., 127 U. S. 411; Western Union Tel. Co. v. Alabama, 132 U. S. 472; Postal Tel. Co. v. Adams, 155 U. S. 698. It is contended that the Steamship case is not strictly applicable because in that case all of the receipts were interstate and foreign, while here, part of the receipts are domestic. This variance in the facts does not affect the principle or the result as a tax on interstate receipts cannot be sustained because the same tax is levied at the same time upon state receipts. State Freight Tax Case, 15 Wallace, 232; W. U. Tel. Co. v. Texas, 105 U. S. 460; Pickard v. Pullman Co., 117 U. S. 34; W. U. Tel. Co. v. Alabama, 132 U. S. 477; Allen v. Pullman Co., 191 U. S. 171; Leloup v. Mobile, 127 U. S. 648; Caldwell v. North Carolina, 187 U. S. 622; Brenan v. Titusville, 153 U. S. 289; Asher v. Texas, 128 U. S. 132; Robbins v.Shelby Taxing District, 120 U. S. 489; Norfolk & Western Ry. Co. v. Sims, 191 U. S. 441; Crutcher v. Kentucky, 141 U. S. 47; Stockard v. Morgan, 185 U. S. 37. If it should be held, however, that the tax here involved is an occupation tax, there remain four propositions, three of which at least must be decided against the contention of plaintiffs in error before this tax can be sustained. 1. An occupation, license, or privilege tax cannot be laid on the occupation or business of engaging in interstate commerce, although at the same time such a tax be laid on the same party engaged in intrastate commerce. 2. Assuming that the tax is imposed only on the intrastate occupation, the same is invalid, because: The State in levying a tax on a state occupation cannot base Argument for Defendant in Error. 210 U.S. the same in whole or in part on the earnings of an interstate occupation, as the State cannot, in arriving at the amount of the tax, take as a basis those things which the State has no power to tax, for this would accomplish indirectly what the State may not do directly. The assessment of the tax at a sum equal to one per cent of the gross interstate earnings in effect is an impediment and serious obstruction to, and therefore a burden upon interstate commerce, as the carrier, in fixing his interstate rate, will necessarily consider that from the earnings of every pound carried, he must give to the State one per cent. If it be admitted that the State can so demand one per cent, it may demand any larger percentage, and under this form of taxation the State may without practical limit, regulate the interstate commerce even to the extent of suppressing the same 3. Though a tax be levied on the state occupation, where the burden of the same will necessarily fall on the interstate occupation and the party is not at liberty to decline the state occupation, such a tax cannot stand. 4. The tax is laid on both the occupation of doing a state and interstate business. There is no room left for construction upon this proposition. Steamship Co. v. Port Wardens, 6 Wall. 31; Welton v. Missouri, 91 U. S. 281; Steamship Co. v. Pennsylvania, 122 U. S. 346; Stockard v. Morgan, 185 U. S. 27, 37; Robbins v. Shelby Taxing District, 120 U. S. 496; Corson v. Maryland, 120 U. S. 502; Ratterman v. Western Union Tel. Co., 127 U. S. 411; L. & N. R. R. Co. v. Eubank, 184 U. S. 27; Wabash Ry. Co. v. Illinois, 118 U. S. 557. Cases cited by defendant in error, viz., Gross Receipts Tax Case, 18 Wall. 206; Maine v. Grand Trunk Ry. Co., 142 U. S. 217, discussed and distinguished. Mr. Robert Vance Davidson, Attorney General of the State of Texas, and Mr. William Edward Hawkins, for defendant in error: The tax prescribed by chap. 141 of the acts of the twenty 210 U.S. Argument for Defendant in Error. ninth legislature of Texas is an occupation tax. Maine v. Grand Trunk Railway, 142 U. S. 217; State Railroad Tax Cases, 92 U. S. 603; State Tax on Railway Gross Receipts, 15 Wall. 284; Osborne v. Mobile, 16 Wall. 479; Nathan v. Louisiana, 8 How. 73; Constitution of Texas, Art. 8, §§ 1, 2, 9 and 17; State of Texas v. G., H. & S. A. Ry. Co., 97 S. W. Rep. 71; Albrecht v. State, 8 Texas App. 217; Languille v. State, 4 Texas App. 322, and cases cited; State v. Stevens, 4 Texas, 137; Aulanier v. Governor, 1 Texas, 664; State v. Bock, 9 Texas, 369; Thompson v. State, 17 Texas App. 258; Texas Banking and Ins. Co. v. State, 42 Texas, 637; Galveston County v. Gorham, 49 Texas, 289; Blessing v. Galveston, 42 Texas, 660; Fahey v. State, 27 Texas App. 161; Higgins v. Rinker, 47 Texas, 396; Pullman Co. v. State, 64 Texas, 274; Cumberland R. R. Co. v. State, 52 L. R. A. 756; Capital City Water Co. v. Board of Revenue, 107 Alabama, 303; Cooley on Taxation (3d ed.), 1094 et seq. An occupation tax is peculiar in its character. It is not a tax upon property, but upon the pursuit which a man follows in order to acquire property. Appeal of Bangor, 109 Pa. St. 89. A franchise is a particular privilege conferred by law, emanating from the sovereign power and vested in individuals, or a corporation. Webster's International Dictionary; 3 Words and Phrases, pp. 2929-2937. A franchise to be a corporation is distinct from a franchise acquired and exercised by a corporation, to own, maintain and operate a railway. People v. Commissioners, 174 N. Y. 417. Individuals, whether alone or when associated with others, have an inherent right to pursue some lawful occupation, subject, however, to such taxes as the State may impose. But a corporation is wholly a creature of the law in so far as its right to exist is concerned. Such right of a mere existence is a primary franchise, vesting, as we have seen, in the individuals who organize the corporation. To the corporate entity so created the State grants the right Argument for Defendant in Error. 210 U. S. which the individual, or the association of individuals, inherently enjoy; viz., the right to do business within the State, or, in other words, to pursue a given occupation. Memphis & Little Rock R. R. Co. v. Commissioners, 112 U. S. 609; Horn Silver Mining Co. v. New York, 143 U. S. 313; People v. State Board, 174 N. Y. 417; Iron Silver Mining Co. v. Cowie, 31 Colorado, 450; 3 Words and Phrases, 2929-2937. The legislature of Texas has a perfect right to require those owning, operating, managing or controlling a railroad lying in whole or in part, within this State, to pay, not only an ad valorem tax, but also a tax for the privilege of the continued exercise of their franchises to do business within this State. The mileage basis of apportionment, as applied by the Texas statute to the gross receipts of lines of railroad lying partly within and partly without the State of Texas, is constitutional, valid and fair, and correctly and justly determines what proportion of the entire receipts of such line of railroad results from business done within the State of Texas. Michigan Central Ry. Co. v. Powers, 201 U. S. 288; Adams Express Co. v. Kentucky, 166 U. S. 171, 180; W. U. Tel. Co. v. Taggart, 163 U. S. 1; W. U. Tel. Co. v. Massachusetts, 125 U. S. 552; Cleveland &c. Ry. Co. v. Backus, 154 U. S. 439; Central Pacific Ry. Co. v. California, 162 U. S. 91; Maine v. Grand Trunk Ry., 142 U. S. 217; Pittsburg &c. Ry. Co. v. Backus, 154 U. S. 421; Cooley on Taxation (3d ed.), 163, 164. A statute may affect interstate commerce without amounting to a regulation thereof. McLean v. Denver & Rio Grande R. R. Co., 203 U. S. 50; Ficklen v. Shelby Co., 145 U. S. 21; Ouichita Packet Co. v. Aiken, 121 U. S. 444; State Tax on Railway Gross Receipts, 15 Wall. 293; Sherlock v. Alling, 93 U. S. 99; Smith v. Alabama, 124 U. S. 465; Western Union Tel. Co. v. James, 162 U. S. 656. The tax prescribed is not, in substance or effect, a tax, or a burden upon, or a regulation of interstate commerce. It is not upon articles of or receipts from interstate commerce, and such receipts are immaterial except in so far as they enter into and become a part of the measure by which the amount of the tax is determined. Maine v. Grand Trunk Ry. Co., 142 U. S. 217; State Tax on Railway Gross Receipts, 15 Wall. 284; Wisconsin & Michigan Ry. Co. v. Powers, 191 U. S. 387; Delaware Ry. Tax Case, 18 Wall. 206; Erie Ry. Co. v. Pennslyvania, 21 Wall. 492; New York, Lake Erie & Western Ry. Co. v. Pennsylvania, 158 U. S. 431; McHenry v. Alford, 168 U. S. 651; State Railroad Tax Cases, 92 U. S. 575; Nathan v. Louisiana, 8 How. 73; Home Ins. Co. v. New York, 134 U. S. 594; Western Union Tel. Co. v. Taggart, 163 U. S. 1; Horn Silver Mining Co. v. New York, 143 U. S. 315; New York State v. Roberts, 171 U. S. 664, and cases cited; Pacific Express Co. v. Siebert, 142 U. S. 350; Lacy v. Packing Co., 200 U. S. 226; Cumberland Railroad Co. v. State, 52 L. R. A. 764. The tax here levied is not "on" gross receipts, but "equal to" a given percentage "calculated on the gross receipts." Lord Eldon held: Where the salesman has an amount of money equal to one-tenth of the profits this gives him no action of account, and, therefore, he is not a partner; but where he is to receive one-tenth of the profits, this gives him an action of account, and, therefore, makes him a partner. Parsons on Contracts (8th ed.), 160, citing Lord Eldon. The word "equal," as used in the statute, means "having the same magnitude, the same value." Webster's International Dictionary. "Equal" implies, not identity, but duality; the use of one thing as the measure of another. It is so understood in the plain language of the people. Little Rock & M. R. Co. v. St. Louis, I. M. & S. Ry. Co., 59 Fed. Rep. 400; Kentucky & I. Bridge Co. v. Louisville & N. R. R. Co., 37 Fed. Rep. 624; Little Rock & M. R. Co. v. St. Louis, I. M. & S. Ry. Co., 63 Fed. Rep. 775. MR. JUSTICE HOLMES delivered the opinion of the court. This is an action against certain railroads to recover taxes and penalties. The Supreme Court of the State held the penal |