HARLAN, J., FULLER, CH. J., and PECKHAM, J., dissenting. 203 U. S.

taining the amount really due. We do not think it was the intention of Congress to conclude the bankruptcy courts by the findings of boards of this character, and that the claim should have been upon the basis of the capital stock actually outstanding.

The amount claimed for the year 1903, it is insisted, had not accrued at the time of the adjudication in bankruptcy, which was on April 23, 1903, the return being made on May 2, 1903, and the assessment was not made until July 1, 1903; but the annual return required to be made to the board, on or before the first Tuesday in May, is upon the basis of the capital stock issued and outstanding the first of January preceding the making of the return. The bankrupt act requires the payment of all taxes legally due and owing. We think the tax thus assessed upon that basis was legally due and owing, although not collectible until after the adjudication.

We reach the conclusion that, under the bankruptcy act these taxes, in the amounts hereinbefore indicated, were entitled to preferential payment in favor of the State of New Jersey, and that the Circuit Court of Appeals erred in reaching a contrary conclusion.

Its judgment will be

Reversed and the cause will be remanded to the District Court for further proceedings in conformity with this opinion.

MR. JUSTICE HARLAN (with whom concurred MR. CHIEF JUSTICE FULLER and MR. JUSTICE PECKHAM) dissenting.

The Chief Justice, Mr. Justice Peckham and myself dissent from the opinion of the court. In our judgment the "taxes" owing by a bankrupt to a State-which section 64a of the bankruptcy act provides shall be paid in advance of the payment of dividends to creditors-do not embrace an "annual license fee or franchise tax" (the words of the New Jersey statute), which, strictly, is not a property tax, but only an exaction by the State for the privilege given to a corporation

203 U.S. HARLAN, J., FULLER, CH. J., and PECKHAM, J.,.dissenting.

to do certain business under its charter. We think the bankruptcy act should be so construed. It cannot be otherwise construed without doing gross injustice to those creditors of the bankrupt corporation who have business transactions with it at its place of business. Here the bankrupt corporation did no business in New Jersey. So far as appears, it did not have, nor expect to have, any connection with that State except to become incorporated under its laws. It had its seat of operations and all its tangible property in the State of Illinois. It had no property in New Jersey. Its scheme was to get a charter from New Jersey and then go to another State for purposes of its business. We do not think that Congress intended that in the distribution of the assets of a bankrupt preference should be given to the claims of a State which have their origin in and are wholly based upon a bargain with the State whereby certain privileges are granted in exchange for certain payments-privileges which the State may grant or withhold at pleasure. In our opinion the word "taxes" in the bankruptcy act was intended to embrace only burdens or charges imposed in invitum and which were in their nature and in reality "taxes," as distinguished from governmental exactions for privileges granted. The claim of New Jersey, whatever its true amount, should not be given priority, but should be placed upon the same footing with claims of other creditors. This view is consistent with the act of Congress.

Argument for Plaintiff in Error.

203 U. S.

ALABAMA AND VICKSBURG RAILWAY COMPANY v. MISSISSIPPI RAILROAD COMMISSION.

ERROR TO THE SUPREME COURT OF THE STATE OF MISSISSIPPI.

No. 97: Argued November 13, 14, 1906.-Decided December 17, 1906.

A State may insist upon equality of rates, and although a State may not compel a railroad company to do business at a loss, and even though the company may, against the power of the State, establish rates which afford reasonable compensation, if it voluntarily establishes local rates for some shippers-even though under the guise of a rebilling rate on interstate shipments-it cannot resist the power of the State to enforce the same rate for all shippers-or claim that the rate so fixed by the commission acting under authority of the State deprives it of its property without due process of law.

86 Mississippi, 667, affirmed.

ON November 16, 1903, the Railroad Commission of Mississippi, by written order, directed the Alabama and Vicksburg Railway Company, hereinafter called the Vicksburg company, to put into effect, over its line of road from Vicksburg to Meridian, a flat rate of 3 cents per 100 pounds on grain and grain products. December 3, 1903, an application was made by the railway company to the chancellor of the Fifth Chancery District of the State to restrain the enforcement of this order. July 11, 1904, a temporary injunction issued on the filing of the bill was dissolved and the bill dismissed. On appeal to the Supreme Court of the State this decree of the chancellor was affirmed (86 Mississippi, 667), and thereupon this writ of error was sued out.

Mr. Harry H. Hall for plaintiff in error:

The application for the flat rate of three and one-half cents was made, and its enforcement ordered, solely for the purpose of beating down the fair interstate grain tariff of the railroads operating between Meridian and St. Louis.

203 U. S.

Argument for Defendant in Error.

The acceptance, whether voluntary or involuntary, of a "rebilling" or "proportionate" interstate rate, is not the acceptance of the same rate as applied to local traffic; and, even though an unremunerative rate were voluntarily adopted by a carrier, such adoption would not justify its imposition by a railroad commission. Wabash case, 118 U. S. 557, 576; Swift & Co. v. United States, 196 U. S. 375; Import Rate case, 162 U. S. 197; Parsons v. Chicago & N. W. Ry. Co., 167 U. S. 447; L. S. & M. S. v. Smith, 173 U. S. 684-697; M. & S. L. Ry. Co. v. Minn. R. R. Comm., 186 U. S. 268.

The rate of three and one-half cents is less than the actual cost of hauling. For a State, under pretense of regulating tariffs, to require a railroad company to carry freight at a loss, would be a taking of private property for public use without compensation and without due process of law. Minneapolis &c. R. R. Co. v. Tompkins, 176 U. S. 167; Chicago &c. R. R. Co. v. Becker, 35 Fed. Rep. 883; Smyth v. Ames, 169 U. S. 466; Nor. Pac. R. v. Keyes, 91 Fed. Rep. 47; South Pac. R. Co. v. Railroad Com., 78 Fed. Rep. 236; Metropolitan Trust Co. v. Houston &c. R. Co., 90 Fed. Rep. 683; Cin. &c. R. Co. v. Dey, 35 Fed. Rep. 866; St. Louis &c. R. Co. v. Gill, 156 U. S. 649; Reagan v. Farmers Loan & Trust Co., 154 U. S. 362.

To enforce this flat rate of three and one-half cents would be denying to appellant the equal protection of the law. Cotting v. Godard, 183 U. S. 79; L. & N. R. R. Co. v. McChord, 103 Fed. Rep. 217.

The order of the Mississippi Railroad Commission directly interferes with interstate commerce. G., C. & S. F. R. Co. v. Hefley, 158 U. S. 98: L. & N. R. R. Co. v. Eubank, 184 U. S. 27; Northern Pac. Ry. Co. v. Keyes, 91 Fed. Rep. 47.

Mr. Hannis Taylor and Mr. C. H. Alexander, with whom Mr. Monroe McClurg was on the brief, for defendant in error: A State has power to regulate traffic carried on within its limits, not strictly interstate. Postal Telegraph-Cable Co. v. Charleston, 153 U. S. 692. A railroad corporation largely enVOL. CCI-32

Argument for Defendant in Error.

203 U. S.

gaged in interstate commerce is amenable to state regulation and taxation as to any of its service which is wholly performed within the State, and not as a part of interstate service. Penna. R. R. Co. v. Knight, 192 U. S. 21; Pullman Co. v. Adams, 189 U. S. 420; Kehrer v. Stewart, 197 U. S. 67.

The Supreme Court of Mississippi therefore decreed that the business in question was really intrastate business, and that the order in question made by the Railroad Commission of that State related to a matter within its exclusive jurisdiction. The decree of the lower court was confined to a single subjectmatter wholly within the control of the State of Mississippi and not subject to any of the clauses of the Federal Constitution which the plaintiff in error has invoked.

Upon a writ of error this court has no right to review the decision below, upon the ground that the finding was against the evidence or the weight of the evidence. Upon a writ of error, this court cannot review a decision of a question of fact, even where, by the local practice of the State, the law and the facts are tried together by the judge without a jury. Dower v. Richards, 151 U. S. 658; Egan v. Hart, 165 U. S. 188; 6 Ency. of Pl. & Pr. 996.

Even if the commerce in question was interstate, the order of the Railroad Commission prohibiting a discrimination within the State was not illegal.

Plaintiff has failed to overcome the burden which the law puts upon it to establish the fact that the commerce in question is not wholly intrastate. Even if it were otherwise, even if it were clear that the commerce in question was interstate, the order in question which simply undertakes, not to impose a burden, but to remove an unlawful discrimination, is not illegal. Brannon on the Fourteenth Amendment; Railroad Co. v. Fuller, 17 Wall. 560; Denver R. R. v. Atchison Co., 15 Fed. Rep. 650; Providence Co. v. Providence, 15 R. I. 303; Shipper v. Penna. R. R. Co., 47 Pa. St. 338; West. Un. Tel. Co. v. James, 162 U. S. 650.

The proof in the record does not uphold the contention that