Opinion — Williams v. City of Talladega

WILLIAMS v. CITY OF TALLADEGA.

ERROR TO THE SUPREME COURT OF THE STATE GF ALABAMA.

No. 44. Argued November 7, 8, 1912.—Decided December 23, 1912.

The privilege given telegraph companies under the act of July 24,

1N66, to use military and post roads of the United States for poles

and wire, was permissive and did not ereate corporate rights and priv-

ileges to carry on the business of telegraphy.

The corporate rights and privileges were derived from the laws of the

State of incorporation.

The permission given by the act of 1866 does not prevent a State from

WILLIAMS v. ‘TALLADEGA. 405

226 U.S. Argument for Plaintiff in Error.

taxing the real or personal property of a telegraph company within

its borders or from imposing a license tax upon the right to do a

local business within the State. West. Un. Tel. Co. v. Kansas, 216

U. 3. 1, distinguished.

Unless there is a claim that a Federal right is violated the reasonable-

ness of a municipal license ordinance is for the State to determine.

In determining its validity this court must consider a municipal ordi-

nance as it has been construed by the highest court of the State.

An agency of the Federal Government in the execution of its sovereign

power is not subject to the taxing power of the State.

An ordinance which taxes without exemption the privilege of carrying

on business, part of which is a governmental agency such as teleg-

raphy, and makes no exemption of that class of the business, in-

cludes its transaction and is void as an unconstitutional attempt to

tax a Federal agency.

Where, as in this case, the part of the license exacted necessarily affects

the whole it makes the entire tax unconstitutional and void.

164 Alabama, 633, reversed.

Tue facts, which involve the validity of an ordinance of

a municipality in Alabama to impose a license fee on tele-

graph corporations transacting an intrastate business

without exempting messages sent by the Government,

are stated in the opinion.

Mr. Rush Taggart and Mr. William M. Williams, with

whom Mr. John F. Dillon, Mr. George H. Fearon, Mr. F.

N. Whitney and Mr. Roy Rushton were on the brief, for

plaintiff in error:

The act of July 24, 1866, §§ 5263-5268, Rev. Stat.,

granted to the telegraph company accepting its provisions

the right to go into any State, and as an agency of the

Government to construct, operate and maintain telegraph

lines along, over and upen the post roads, and over, under

or across the navigable waters of the United States.

No State by legislation ean prevent the construction of

telegraph lines. The right to maintain and operate is

given as fully and completely as the right to construct.

This right is not simply to operate from point to point

4060 OCTOBER TERM, 1912.

Argument for Plaintiff in Error. 226 U.S.

within the State as a government agent for the transmis-

sion of government messages, but also to operate for any

and all business which may be offered the telegraph com-

pany, interstate and intrastate, government and private

messages alike. Charles River Bridge Case, 11 Pet. 420,

557; United States v. Denver Ry. Co., 150 U.S. 1: Brown

v. Maryland, 12 Wheat. 436, 467.

A franchise was granted to the telegraph company by

Congress. California v. Pacific R. R. Co., 127 U.S. 1, 35;

West. Un. Tel. Co. v. Texas, 105 U.S. 460.

The property of a corporation of the United States may

be taxed by a State, but not through its franchise. Cent.

Pac. R. R. Co. v. California, 162 U.S. 92.

The legislation leading to the act of July 24, 1866,

originated in the Senate at the first session of the 39th

Congress. The legislative history of the act as it appears

in Cong. Globe, pt. 2, Ist Sess., 39th Cong., p. 979, and

Report of the Postmaster General, on the subject of a

postal telegraph, laid before the Senate, and by it referred

on June 4 to a select committee, shows clearly that with

respect to intrastate as well as interstate business under

this act of July 24, 1866, the Western Union Telegraph

Company was created an instrumentality of the Federal

rovernment, and endowed with a franchise to construct,

maintain and operate telegraph lines on the post roads of

the United States, with the duty, in the operation of these

lines, to serve not only the Government of the United

States under the conditions named in the act, but also to

serve the public which might want to transact business

over its lines.

This being so, then clearly an attempt to impose a

license tax upon the company, either by any State or

municipality, is an attempt to require, as a condition to

the exercise of this government franchise within the

State, the payment of a tax upon the grant so made by

the Government. This is not permissible. See West. Un.

WILLIAMS vr. TALLADEGA 407

226 U.S. Argument for Plaintiff in Error.

Tel. Co. v. Massachusetis, 125 U.S. 330; Carthage v. First

National Bank, 71 Missouri, 508; National Bank v.

Chatianooga, 8 Heisk. (Tenn.) S14.

Upon the question as to the right of the State or mu-

nicipality arbitrarily thus to exclude the telegraph com-

pany, see West. Un. Tel. Co. v. Kansas, 216 U.S. 1; Puil-

man Co. v. Kansas, 216 U. 3S. 56.

The ordinance cannot be sustained as an act coming

within the police power of the City of Talladega. West.

Un. Tel. Co. v. New Hope, 187 U.S. 419; Adanitic &e. Tel.

Co. v. Philadelphia, 190 U. S. 160; Pastal Tel. Co. v.

Taylor, 192 U.S. 64, do not apply, as no expense whatever

was incurred in the way of police inspection or super-

vision in this instance.

If license fees at the average rate obtaining in Georgia,

Alabama, Virginia and South Carolina for the year 1912

had been applied in all the States of the Union at cities,

towns and villages where offices are maintained by the

telegraph company, the total license fees would have

amounted to $659,973.60 in addition to all other taxes

now paid.

There is no exclusion from the ordinance of the right to

do government business within the State, and the right to

transact such business is likewise clearly within the pro-

hibitions of the ordinance until the telegraph company

has paid the amount demanded. Railroad Co. v. Peniston.

IS Wall. 5; Netll, Moore & Co. v. Ohio, 3 How. 720.

If a municipality may by an ordinance like this demand

all the net revenue of a telegraph company as a considera-

tion for the privilege of doing business with other points

within the State, it is clear that the offices maintained in

a State for both interstate and intrastate business may

in time be required to be supported wholly by the inter-

state commerce business. This would result in abandon-

ing many offices, thus depriving the Government of many

of the facilities now available to it, and which have been

408 OCTOBER TERM, 1912.

Argument for Plaintiff in Error. 226 U.S.

constructed and operated by the telegraph company under

the act of Congress of July 24, 1866.

Congress has the power to grant a franchise to do an

intrastate as well as an interstate telegraph business on

the post roads of the United States. Leloup v. Mobile,

127 U.S. 640; West. Un. Tel. Co. v. Texas, 105 U.S. 460;

West. Un. Tel. Co. v. Massachusetts, 125 U.S. 530.

Since Congress by the act of 1866, conferred upon the

Western Union Telegraph Company the right to do an

intrastate telegraph business along the post roads, the

City of Talladega cannot impose a license tax thereon.

McCullough v. Maryland, 4 Wheat. 316; Osborn v. Bank: of

U. S., 9 Wheat. 740; West. Un. Tel. Co. v. Visalia, 149

California, 744; West. Un. Tel. Co. v. Lakin, 101 Pac. Rep.

1094; West. Un. Tel. Co. v. Wright, 185 Fed. Rep. 250;

Harmon v. Chicago, 147 U. 8. 396; Moran v. Chicago, 112

U.S. 69; California v. Cent. Pac. Ry. Co., 127 U.S. 1, 45;

West. Un. Tel. Co. v. Texas, 105 U. S. 460; Union Pac.

R. R. Co. v. Peniston, 18 Wall. 5.

The ordinance is in contravention of the laws of the

United States, in that it fails to exclude messages sent

on Government business within the State. Postal Tel.

Co. v. Charleston, 153 U.S. 692; West. Un. Tel. Co. v.

Texas, 105 U. 8. 460; Leloup v. Port of Mobile, 127 U.S.

650.

The ordinance is invalid for the reason that the license

imposed is for revenue and not for police regulation or

inspection. Postal Tel. Co. v. Taylor, 192 U. 5. 64; Sunset

Tel. Co. v. Bedford, 115 Fed. Rep. 202; Ottuma v. Zekind,

95 Iowa, 622; Chaddock v. Day, 75 Michigan, 527; Austin

v. Murray, 16 Pick. (Mass.) 126.

The City of Talladega has no right to arrest an operator

of the Western Union Telegraph Company for violating

a license ordinance.

The telegraph company in the transmission of govern-

ment messages is in the service of the Government as is a

WILLIAMS v. TALLADEGA. 409

220 U:. 5. Argument for Defendant in Error.

rural mail carrier. Ex parte Conway, 48 Fed. Rep. 77;

Re Matthews, 122 Fed. Rep. 248, 259.

The ordinance is unreasonable and therefore void.

When an ordinance imposes a license that is unreason-

able in amount, the ordinance is for that reason void.

Ex parte Byrd, 84 Alabama, 17, 20; Hendrick v. State, 142

Alabama, 43, 46; Marion v. Chandler, 6 Alabama, 899, 901;

Ex parte Frank, 52 California, 606; Postal Tel. Co. v. New

Hope, 192 U.S. 55; Ottuma v. Zekind, 95 Iowa, 622; Sim-

rall vy. Covington, 90 Kentucky, 444; Brooks v. Mangan, 86

Michigan, 576; Chaddock v. Day, 85 Michigan, 527; St.

Paul v. Laidler, 2 Minnesota, 190.

Mr. J. K. Dizon for defendant in error:

The first point insisted on by counsel for plaintiff in

error is that the franchise of the company to do business

in Talladega is derived solely from Congress, and is there-

fore not taxable by the city for the purpose of revenue.

While this court has held that where the privilege or

license tax is for the use of the city and imposed upon the

company’s business generally it must be charged solely

under police power and should be approximately what it

cost for police protection and inspection, St. Louis v. West.

Un. Tel. Co., 148 U.S. 92, a different rule applies where

the same is limited to a license based solely on intrastate

business. In such a case the charge can be made both as

a police regulation and for the purpose of raising revenue.

This court has held in numerous cases that, notwithstand-

ing a telegraph company has accepted the conditions of

the act of July 24, 1866, a license fee may be imposed on

such company for business done exclusively within the

State. Postal Tel. Co. v. Charleston, 153 U.S. 692; West.

Un. Tel. Co. v. Texas, 105 U. 8. 460; Ratterman vy. West.

Un. Tel. Co., 127 U.S. 411; West. Un. Tel. Oo. v. Pennsyl-

vania, 128 U.S. 39; West. Un. Tel. Co. v. Massachusetts,

125 U.S. 530; West. Un. Tel. Co. v. Missouri, 190 U.S.

410 OCTOBER TERM, 1912.

Argument for Defendant in Error. 226 U.S.

412: West. Un. Tel. Co. v. Seay, 132 U.S. 472. See also

37 Cyc. 1622; Williams v. Talladega, 164 Alabama, 633;

West. Un. Tel. Co. v. Freemont, 26 L. R. A. 698.

The second proposition which is urged in the brief of

counsel for plaintiff in error is that even if this court

followed the former decisions on this question, notwith-

standing this, it will declare this ordinance invalid because

of the fact that governmental messages are not excluded

from this ordinance.

In this case the tax is limited in the terms of the ordi-

nance levying it to the business of sending messages be-

tween points exclusively within the State. The fact that

a part of the business done by the company consists in

the sending of messages for the Government does not

affect the right of the State to impose a reasonable privi-

lege tax. Whether government messages are transmitted

at a reduced rate which has material effect upon the com-

pany’s income at Talladega, is the subject of proof and

must be taken into account when passing upon the reason-

ableness of the license charged. Moore v. Eufaula, 97

Alabama, 670.

There is no evidence showing that any governmental

messages were sent by the Talladega office on which any

fees were charged.

This court will only consider an objection of this charac-

ter, if the city or State has authority to fix a license, where

it is so unreasonable that it amounts practically to con-

fiseation. The ordinance in this case does not impose an

unreasonable license fee. This court cannot review the

state court as to the amount. Postal Tel. Co. v. Charles-

ton, 153 U. 8. 692, 699. If business done wholly within

a State is within the taxing power of the State, the courts

of the United States cannot review or correct the action

of the State in the exercise of that power. Troy v. West.

Un. Tel. Co., 164 Alabama, 482.

The evidence does not show anything as to business

WILLIAMS v. TALLADEGA. 411

226 U.S. Opinion of the Court.

year in and year out, which would justify the court in

pronouncing the tax in question to be void. Williams

v. Talladega, 164 Alabama, 633; Atlantic Tel. Co. v. Phila-

delphia, 190 U. S. 160; Nashville & Chattanooga R. R. v.

Attalla, 118 Alabama, 362.

Mr. Justice Day delivered the opinion of the court.

This is a writ of error to review the judgment of the

Supreme Court of the State of Alabama affirming the

judgment of the City Court of Talladega. 164 Alabama,

633.

D. G. Williams, the plaintiff in error, was convicted of

doing business in the City of Talladega, as agent of the

Western Union Telegraph Company, from October 1,

1908, to December 31, 1908, without taking out and pay-

ing for a license, in violation of an ordinance of the city.

The ordinance contained a schedule of licenses for divers

businesses, vocations, occupations and professions carried

on in the city, among others, the following:

‘“€158. Telegraph Company. Each person, firm

or corporation commercially engaged

in business of sending messages to and

from the City to and from points in the

state of Alabama for hire or reward... $100.”

Section 2 of the ordinance declared that the license was

exacted in the exercise of the police power of the city,

as well as for the purpose of raising revenue for the city.

The fourth section provided that any person, firm or

corporation who engaged in any trade, business or pro-

fession for which a license was required, without first

having obtained such license, should be guilty of an offense

and upon conviction should be fined not less than one and

not more than one hundred dollars, and that each day

should constitute a separate offense.

The record discloses that the corporation was organized

412 OCTOBER TERM, 1912.

Opinion of the Court. 226 U.S.

under the laws of the State of New York and had accepted

the provisions of the act of Congress of July 24, 1866,

14 Stat. 221, c. 230 (Rev. Stat., $§ 5263-5268) and for

several years theretofore and during the years 1907 and

1908 had had an office in the City of Talladega and was

engaged in the business of transmitting messages between

private parties and between the departments and agencies

of the United States Government from Talladega to other

points in the State of Alabama and also from other points

in the State of Alabama to Talladega; that during the

months of October, November and December, 1908,

Williams was employed by the Western Union Telegraph

Company as manager of its office at Talladega; that a

license fee of $25 was demanded of him for the quarter

ending December 31, 1908, which was refused, and that he

was fined $25 and costs, and in the event of his failure to

pay the fine and costs he was sentenced to labor on the

streets for fifty days. It also appears that the Western

Union Telegraph Company pays taxes on its property in

the State. In addition to the agreed facts, from which the

above statement is taken, it is shown by the testimony

of the defendant that the lines of the Western Union

Telegraph Company enter and leave the city over the

right of way of the Southern Railroad and the Louisville

and Nashville Railroad, both of which are public railroads,

and that within the City of Talladega the company has

lines which leave the right of way of the railroad com-

panies and proceed along public streets to the office of the

company; and also that government messages were re-

layed daily at the Talladega office; that it received mes-

sages between the different departments of the Govern-

ment of the United States at this office from points within

the State; and that government messages were given a

preference and were sent at reduced rates. From the

testimony, the Supreme Court of Alabama found that for

the year 1908, not including the month of January, the

WILLIAMS v. TALLADEGA. 413

226 U.S. Opinion of the Court.

company did its intrastate business at a net loss of eighty-

six cents.

This case differs from some cases which have been in

this court involving the right to tax the Western Union

Telegraph Company, in that it places emphasis upon the

alleged immunity from taxation of the class herein in-

volved, because, it is contended, by the act of 1866,

Congress, by virtue of the authority given it to establish

post roads, conferred Federal franchises upon the com-

pany and made the Western Union Telegraph Company

an instrumentality of the Federal Government, endowed

with franchises to construct, maintain and operate tele-

graph lines on the post roads of the United States, with

the duty in the operation of those lines not only to serve

the Government of the United States, but also to serve the

public which might wish to transact business over its

lines. This being so, it is now insisted that the attempt to

impose a license tax upon the company, either by the State

of Alabama or any of its municipalities, is an attempt to

impose a tax on the franchises so created by the Federal

Government.

The question made upon this point was considered in

Postal Telegraph Cable Co. v. Charleston, 153 U. 8. 692.

In that case the Postal Telegraph Cable Company had

accepted the provisions of the act of 1866, and the state

statute imposed a license of $500 upon the telegraph com-

pany for business done exclusively within the City of

Charleston, not including any business done to or from

points without the State and not including any business

done by the officers of the United States. It was con-

tended for the telegraph company that the license re-

quired by the ordinance was a tax upon it for the privilege

of exercising its franchise within the City of Charleston;

that the telegraph company having constructed its lines

along post roads in the City of Charleston and elsewhere,

no state or municipal authority could collect a license fee

414 OCTOBER TERM, 1912.

Opinion of the Court. 226 U.S.

from it for the privilege of conducting its business, “thus

restraining the powers possessed by it under its franchises

and under the acts of Congress,” and furthermore that the

ordinance in question was an interference with interstate

commerce and therefore void. It will thus be seen that

in that case not only was the contention made as to the

interstate commerce feature of the telegraph company’s

business, but it was specifically claimed that to exact such

a license would restrain the powers possessed by it under

the franchises created by the act of Congress. After re-

viewing a number of cases, Mr. Justice Shiras, who

delivered the opinion of the court, said (p. 700):

“It is further contended that the ruling of the cited

cases does not cover the case of a telegraph company which

has constructed its lines along the post roads in the City

of Charleston, and elsewhere, and which is exercising its

functions under the act of Congress as an agency of the

Government of the United States. It is obvious that the

advantages or privileges that are conferred upon the com-

pany by the act of July 24, 1866 (Rev. Stat., §§ 5263-

5268), are in the line of authority to construct and main-

tain its lines as a means or instrument of interstate com-

merce, and are not necessarily inconsistent with a right on

the part of the State in which business is done and prop-

erty acquired to tax the same, within the limitations

pointed out in the cases heretofore cited.”

In Western Union Telegraph Co. v. Gotilieb, 190 U. S.

412, this court, again considering the act of 1866, after

quoting from the opinion of Mr. Justice Miller in Wesfern

Union Telegraph Co. v. Massachusetts, 125 U. 5. 530, said

(p. 423), speaking by Mr. Justice McKenna:

“These propositions were laid down: That the com-

pany owed its existence as a corporation and its right to

exercise the business of telegraphy to the laws of the

State under which it was organized; that the privilege

of running the lines of its wires over and along the mili-

WILLIAMS v. TALLADEGA. 415

226 U.S. Opinion of the Court.

tary and post roads of the United States was granted by

the act of Congress, but that the statute was merely per-

missive and conferred no exemption from the ordinary

burdens of taxation; that the State could not by any

specific statute prevent a corporation from placing its

lines along the post roads or stop the use of them after

they were so placed, but the corporation could be taxed

in exchange for the protection it received from the State

‘upon its real or personal property as any other person

would be. And describing the particular tax imposed

it was said:

“The tax in the present case, though nominally upon

the shares of the capital stock of the company, is in effect

a tax upon that organization on account of property

owned and used by it in the State of Massachusetts, and

the proportion of the length of its lines in that State to

their entire length throughout the whole country is made

the basis for ascertaining the value of that property. We

do not think that such a tax is forbidden by the acceptance

on the part of the telegraph company of the rights con-

ferred by section 5263 of the Revised Statutes, or by the

commerce clause of the Constitution.’”’

In the latest utterance of this court upon the subject

under consideration, Western Union Telegraph Co. v.

Richmond, 224 U.S. 160, Mr. Justice Holmes, delivering

the opinion of the court, said (p. 169):

“The act of Congress of course conveyed no title and

did not attempt to found one by delegating the power to

take by eminent domian. Western Union Telegraph Co.

v. Pennsylvania Railroad Co., 195 U.S. 540, 574. It made

the erection of telegraph lines free to all submitting to

its conditions, as against an attempt by a State to exclude

them because they were foreign corporations, or because

of its wish to erect a monopoly of its own. Pensacola

Telegraph Co. v. Western Union Telegraph Co., 96 U.S. 1.

It has been held to prevent a State from stopping the

416 OCTOBER TERM, 1912.

Opinion of the Court. 226 U.S.

operation of lines within the act by injunction for failure

to pay taxes. Western Union Telegraph Co. v. Attorney

General of Massachusetts, 125 U. 8. 530. But excepi in

this negative sense the statute is only permissive, not a

source of positive rights.”

These cases, taken together, establish the proposition

that the privilege given under the terms of the act to use

the military and post roads of the United States for the

poles and wires of the company is to be regarded as per-

missive in character and not as creating corporate rights

and privileges to carry on the business of telegraphy,

which were derived from the laws of the State incor-

porating the company, and that this permissive grant

did not prevent the State from taxing the real or personal

property belonging to the company within its borders

or from imposing a license tax upon the right to do a local

business within the State. Nor is there anything running

counter to the former cases in the case of Western Union

Telegraph Co. v. Kansas, 216 U. 8. 1, wherein it was held

that the attempt to levy a graded charter fee upon the

entire capital stock of the Western Union Telegraph

Company, a corporation of another State, engaged in

commerce among the States, as a condition to the right

to do local business within the State of Kansas, was void

as an attempt, when the substance of things was reached,

to tax the right of the company to do interstate business

within the State and as a tax upon pruperty beyond the

limits and jurisdiction of the State.

It is further contended that the tax is unreasonable

and unjust because of its effect upon interstate business.

The reasonableness of the ordinance, unless some Federal

right set up and claimed is violated, is a matter for the

State to determine. It is contended that the result of the

tax upon the intrastate business conducted at a loss is to

impose a burden upon the other business of the company

and is therefore void. The Supreme Court of Alabama,

WILLIAMS v. TALLADEGA. 417

226 U.S. Opinion of the Court.

however, reached the conclusion that the attempted test

for eleven months, showing a loss of eighty-six cents, is

not a sufficiently accurate representation of the business

of the company conducted at Talladega to render the

tax void. With this view we agree, and we are not satis-

fied that the tax is such as to impose a burden upon inter-

state commerce, and therefore make it subject to attack

as a denial of Federal right.

It is further contended that this ordinance is void be-

cause it makes no exception as to the sending of govern-

ment messages. In this respect it is suggested in the brief

of the defendant in error that the ordinance may be con-

strued as not to include business transacted by the com-

pany as anagency of the Government, and as applying only

to commercial business of a different character; but, in

view of the construction which the Supreme Court of

Alabama has placed upon it, we must consider the ordi-

nance as construed by that court. Upon the authority of

a previous case (Moore v. Eufaula, 97 Alabama, 670),

it held the ordinance valid, although it does not exclude

messages sent for the Government of the United States.

In this connection it said:

“The fact that a part of the business done by the com-

pany consists in the sending of messages for the govern-

ment does not affect the right of the state to impose a

reasonable privilege tax, ;

We therefore have to consider whether a license tax by

a State on the doing of business within the State, includ-

ing the transmission of government messages, by a tele-

graph company which has accepted the terms of the act

of 1866, can be lawfully imposed. By the act of 1866

government messages are given priority over all other

business and are transmitted at the rates annually fixed

by the Postmaster General; and before the telegraph

companies exercise any of the powers or privileges con-

ferred by the law they are required to file with the Post-

VOL. CCXXVI—27

”

418 OCTOBER TERM, 1912.

Opinion of the Court. 226 U.S.

master General their written acceptance of the restrictions

and obligations of the act (Rev. Stat., $§ 5266 and 5268).

This court has had occasion to consider the effect of this

legislation and the acceptance of its terms by the telegraph

company, so far as the transmission of government tele-

grams and the transaction of government business is con-

cerned. In the case of Telegraph Co. v. Texas, 105 U. 5.

460, an ordinance was held void which required the com-

pany to pay a tax of one cent for all full rate messages sent,

and one-half cent for every message less than full rate.

This was in addition to taxes paid by the company on real

and personal property in the State. The ordinance was

held void as levying a tax upon interstate messages and

also void in so far as it undertook to tax the transaction of

government business. After declaring that as to such

business companies which had accepted the terms of the

act became government agencies, this court, speaking by

Mr. Chief Justice Waite, said (p. 464):

“The Western Union Telegraph Company having ac-

cepted the restrictions and obligations of this provision

by Congress, occupies in Texas the position of an instru-

ment of foreign and interstate commerce, and of a govern-

ment agent for the transmission of messages on public

business. Its property in the State is subject to taxation

the same as other property, and it may undoubtedly be

taxed in a proper way on account of its occupation and its

business. The precise question now presented is whether

the power to tax its occupation ean be exercised by placing

a specific tax on each message sent out of the State, or

sent by public officers on the business of the United

States.”

And, after dealing with the interstate commerce feature

of the law, said (p. 466):

“ As to the government messages, it is a tax by the State

on the means employed by the government of the United

States to execute its constitutional powers, and therefore,

oT See

WILLIAMS rv. TALLADEGA. 419

226 U.S. Opinion of the Court.

void. It was so decided in McCulloch v. Maryland (4

Wheat. 316), and has never been doubted since.”

The ordinance sustained in Postal Telegraph Cable Co.

y. Charleston, supra, expressly excluded interstate and

government messages.

Were it otherwise, an agency of the Federal Government,

in the execution of its sovereign power, would be at the

mercy of the taxing power of the State. It is enough in this

connection to refer to the cases of McCulloch v. Maryland,

supra; Osborn v. Bank, 9 Wheat. 738; Railroad Co. v. Pen is-

ton, 18 Wall. 5; California v. Central Pacific R. R. Co., 127

U.S. 1; Central Pacific R. R. Co. v. California, 162 U.S. 91.

We have, then, an ordinance which taxes, without ex-

emption, the privilege of carrying on a business a part of

which is that of a governmental agency constituted under

a law of the United States and engaged in an essential

part of the public business—conununication between the

officers and departments of the Federal Government.

The ordinance, making no exception of this class of busi-

ness, necessarily includes its transaction within the privi-

lege tax levied. This part of the license exacted neces-

sarily affects the whole and makes the tax unconstitu-

tional and void. In Leloup v. Port of Mobile, 127 U.S. 640,

Mr. Justice Bradley, speaking for the court, said (p. 647):

“It is urged that a portion of the telegraph company’s

business is internal to the state of Alabama, and therefore

taxable by the state. But that fact does not remove the

difficulty. The tax affects the whole business without

diserimination.”” And see Western Union Co. v. Alabama

Assessment Board, 132 U. S. 472, 477; Allen v. Pullman

Car Co., 191 U. 8. 171, 179.

For this reason we think the judgment of the Supreme

Court of Alabama should be reversed and the case re-

manded to that court for further proceedings not incon-

sistent with this opinion.

Reversed.