tion of possession as a proper means of preventing sale or gift. This was premised on "the notorious difficulties always attendant upon efforts to suppress the liquor traffic." The succeeding paragraph, however, said that the undoubted power to forbid manufacture, gift, sale, purchase or transportation necessarily negatived the existence of any constitutional right to possess, since "an assured right of possession would necessarily imply some adequate method to obtain not subject to destruction at the will of the state."

This power to outlaw intoxicating liquor was also the basis of the decision in Eiger v. Garrity which upheld an Illinois statute making a judgment against a liquor dealer for loss to dependents of his customers, by reason of his ministrations, a lien upon the premises in which the liquor was sold, provided the owner thereof knew of the use to which the premises were put. The landlord whose building was subjected to the liability in suit complained particularly that he was given no opportunity to be heard in the action against the saloon keeper in which the right of recovery was adjudicated and the quantum of damages assessed. But the court replied that he might protect himself by selecting his tenant and by fixing the amount of rent and in other ways, and that the statute in effect made the tenant the agent of the landlord. The owner's rights were said to be sufficiently guarded by allowing him to "be heard to deny the rendition of the judgment against the tenant, the making of the lease authorizing the sale of intoxicating liquor, or, if his knowledge of such use be the issue, he may be heard on that question." From an Idaho sheep owner came the complaint that a statute prohibiting any person having charge of sheep from allowing them to graze on a range on the public domain previously occupied by cattle violated the Fourteenth Amendment by denying to sheep owners the equal protection of the laws and abridging their privileges as citizens of the United States. But Omaechevarria v. Idaho" held the complaint without merit, finding that

43 (1918) 246 U. S. 88. See 86 Central Law Journal 313, and 27 Yale Law Journal 850.

under the circumstances cattle required a protection against encroachment by sheep that sheep did not need against cattle, since sheep would graze with cattle but cattle would not graze with sheep. Segregation was necessary, and, in view of the situation in the state, the adjustment made was regarded as fair to the interests of both groups of stock owners. Justices Van Devanter and McReynolds dissented, but whether on the dueprocess point or on the decision that the state had not trespassed on federal authority does not appear.

Five cases involved that branch of the police power which controls the activities of public-utility enterprises. Pennsylvania R. Co. v. Towers45 held that where a railroad company has already established commutation rates for suburban service, the state may regulate such rates within the limit of reasonableness, and fix them below those charged for regular service, since the service to commuters is of a special character differing from general passenger service. Great Northern Ry. Co. v. Minnesota sanctioned a requirement that a railroad company construct across its right of way a suitable sidewalk to connect with and correspond to the walk on the abutting property. Chicago, M. & St. P. Ry. Co. v. Minneapolis Civic Association47 sustained an order forbidding two railroads which owned and controlled a corporation having nominally independent terminal facilities from adding to long-haul rates an additional charge for switching over the terminal railroad, when no such charge was made for exactly similar service over the other terminals in the city operated and owned by the roads. The separate terminal corporation was found to be nothing but a facility used by the two roads jointly in the same way that they used their other separate terminals, and the court looked behind the corporate entity and found merely a device by which discrimination was accomplished. The other two cases dealt with the reasonableness of rates. Manufacturers' Ry. v. United States48 involved no novel ques

45 (1917) 245 U. S. 6. See 85 Central Law Journal 331, 18 Columbia Law Review 155, 16 Michigan Law Review 124, and 27 Yale Law Journal 404.

46 (1918) 246 U. S. 434. 47 (1918) 247 U. S. 490. 48 (1918) 246 U. S. 457.

tion of law, but was concerned with somewhat complicated computations which were found to justify an order of the interstate commerce commission fixing rates for the use of terminal facilities. In Denver v. Denver Union Water Co.,49 however, a most interesting and important question of law was raised. Whether the question was technically decided admits of doubt, owing to the dispute between the majority and the minority as to the proper interpretation of the ordinance complained of.

The city of Denver and the Denver Water Company had been haggling for some years over the purchase of the latter by the former, and had come to no agreement. Meanwhile the company's formal franchise had expired. The city thereupon passed the ordinance in question, prescribing certain rates and prefacing its requirement by a declaration that the company "is without a franchise and a mere tenant by sufferance of the streets." In view of this, Mr. Justice Holmes contended for the minority, consisting of himself and Justices Brandeis and Clarke, that the company's property should be valued at no more than what it would bring for other uses. Mr. Justice Pitney, however, speaking for the majority, insisted that the ordinance prescribing rates recognized a duty to continue the service and impliedly granted "a new franchise of indefinite duration, terminable by the city or by the company at such time and under such circumstances as may be consistent with the duty that both owe to the inhabitants of Denver." The property therefore must be valued as property in use, and not as junk. The majority opinion would have been stronger if it had omitted the argument that "the cost and detriment to a property owner attributable to the use of his property by the public .. are measured day by day, month by month, year by year, and are little influenced by the question how long the service is to continue." This neglects the fact that the plant would sell for considerably less than it would cost to reproduce it, on account of the power of the city to erect a new plant and to forbid the use of the old.

" (1918) 246 U. S. 178. See 31 Harvard Law Review 1036, 16 Michigan Law

This is the point of Mr. Justice Holmes's query "how a company in that situation can assert a constitutional right to a return upon the value those pipes would have if there under a permanent right of occupation, as against a city that is legally entitled to reduce them to their value as old iron by ordering them to be removed at once." This being the legal situation, Mr. Justice Holmes brought to bear the argument that, as the company "could be stopped by the city out and out, the general principle is that it could be stopped unless a certain price is paid." He recognizes, however, that "this principle has not been applied in cases where the condition tended to bring about a state of things that there was a predominant public interest to prevent," but he finds no such predominant public interest here.

The possibility of exceptions to the rule relied on by the minority indicates plainly that the determining issue in each case must be one of policy. Mr. Justice Holmes seems to recognize a difficulty in his position when he remarks that "it may be said that to argue from such abstract rights is to discuss the case in vacuo-that practically the company cannot stop furnishing water without being ruined, or the city stop receiving it without being destroyed." This he concedes to be true, but he answers that "it also is true and not quite so tautologous as it seems, that the law knows nothing but legal rights," and that "the mutual dependence of the parties upon each other in fact does not affect the consequences of their independence of each other in law."

The solution of the difficulty seems to be that the city must go far enough in constructing a new plant to convince the water company that it is in earnest. Then a bargain may be made that will satisfy the city, whether it pleases the company or not. It is a pity that legal principles do not afford some way of compromise that can adjust such differences without sending the contestants back to their haggling.

IV. TAXATION

The cases previously referred to,50 holding that excises on foreign corporations measured by total capital stock were invalid regulations of interstate commerce, declared also that the taxes took property without due process of law because in effect they fell on property outside the jurisdiction. Whether the same condemnation under the Fourteenth Amendment would be visited on similar taxes on foreign corporations not engaged in interstate commerce remains to be seen. The issue will depend upon whether the court is still of its ancient opinion that over such corporations the state holds a complete and arbitrary power to exclude or eject, which justifies any lesser burdens that may be concocted. An analogous view still obtains with respect to domestic corporations, but there is rather strong evidence that the court plans to abandon the notion of arbitrary power over any foreign corporation, whether engaged in interstate commerce or not.

In International Paper Co. v. Massachusetts,51 Mr. Justice Van Devanter stated as a distinct proposition that "consistently with the due process clause, a State cannot tax property belonging to a foreign corporation and neither located nor used within the confines of the State." A tax measured by total capital stock was said to be on the entire property of a corporation, notwithstanding the fact that it is "declared by the State imposing it to be merely a charge for the privilege of conducting local business therein." This statement had reference to foreign corporations "doing both a local and interstate business in several states," but no reference to the kind of business in which a corporation was engaged was included in the earlier statement that the power of the state over foreign corporations "is not unrestricted or absolute, but must be exerted in subordination to the limitations which the Constitution places on state action."

50 Cited in notes 12, 13 and 14, supra.