of Pennsylvania at the time the appraisement was made. This contention was overruled by the state courts.

The facts upon which the judgment rests were found by the court, and are as follows:

"1. The Delaware, Lackawanna and Western Railroad Company was organized under the special act of the general assembly of Pennsylvania approved March 11, 1853, by the consolidation of the Liggetts Gap Railroad Company, incorporated under the act of April 7, 1832, whose name was, by the act of April 14, 1851, changed to Lackawanna and Western Railroad Company, and the Delaware and Cobbs Gap Railroad Company, incorporated by the act of April 7, 1849. Into the Delaware, Lackawanna and Western Railroad Company as formed by the merger of the Lackawanna and Western Railroad Company and the Delaware and Cobbs Gap Railroad Company were merged, December 27, 1865, the Keyser Valley Railroad Company; August 12, 1870, the Nanticoke Coal and Coke Company, and June 17, 1870, the Lackawanna and Bloomsburg Railroad Company. The company, as authorized by special act of Pennsylvania legislature, has its general office and treasury in the city and State of New York, though its corporate home is in Pennsylvania. It is authorized by law to own coal lands in Pennsylvania, and to mine, buy and sell coal and convey the same to market; and, in addition to its business of owning and operating an extensive system of railroads, is engaged in the business of mining, buying and selling coal. The proper officers of the company returned and appraised its capital stock as of the actual value, between the first and fifteenth days of November, 1899, of $48,470,000, and in making up the claim of the State for taxes for said year, the auditor general made no deductions whatever, but charged tax at five mills upon said aggregate valuation of $48,470,000, the said tax amounting to $242,350. Amongst other property in addition to its railroad, the company owned coal located at points outside of Pennsylvania in New York, Illinois and other States of the value of $1,702,443, and, as already stated,

no deduction was made by the auditor general in his statement of account against the company for or with respect to this coal. All taxes assessed against the company for 1899 in other States, on coal located there, have been paid, according to the belief and so far as the secretary of the company can now, May 25, 1901, recall.

"There were other items in dispute in addition to the coal, and they were covered by defendant's appeal, but the attorney general, on behalf of the Commonwealth, and counsel for the defendant, entered into an agreement in writing as follows, viz.:

"And now, to wit, April 10, 1901, it is hereby agreed that the jury shall deduct and not include in its verdict any tax upon $1,702,444, being the value of coal held and owned at points in States other than Pennsylvania, according to the facts as set forth in the depositions of Fred. F. Chambers and W. H. Truesdale, defendant's treasurer and president, respectively, hereto attached and made part hereof. The said deduction having been made final judgment shall be entered upon the verdict of the jury in favor of the Commonwealth and against the defendant. The question of defendant's liability to the Commonwealth of Pennsylvania for taxes upon or in respect of said coal held, owned and stored at points in States other than Pennsylvania is hereby reserved, and it is agreed that it shall be submitted for the determination of the court. If the court shall be of the opinion that upon the facts stated in the aforesaid depositions of Fred. F. Chambers and W. H. Truesdale, attached to and made part hereof, the defendant is liable for tax to the Commonwealth of Pennsylvania upon coal thus held, owned and stored at points in States other than Pennsylvania, then judgment shall be entered in favor of the Commonwealth and against the defendant for the further sum of $8,512.21, being five mills upon the said $1,702,443, the value of the said coal, to which amount there shall be added the usual attorney general's commission of five per cent, either of the parties to be at liberty to file exceptions to, and appeal from, the decision of the court upon the said reserved

point with like effect as if the case had been tried by the court without a jury under the act of April 22, 1874.'

"3. The case having been submitted to the jury, a verdict was rendered as follows, viz.:

"The judgment entered upon said verdict has been paid by defendant, leaving open only the one question submitted to the court as aforesaid of the defendant's liability to taxation with respect to capital stock invested in coal located outside of Pennsylvania.

"4. The facts agreed upon by counsel for the Commonwealth and the company are set forth in the affidavits of W. H. Truesdale, president, and Fred. F. Chambers, the secretary and treasurer of the company, and, in so far as they relate to the reserved question, are as follows, viz.:

"Under powers conferred by special charter previous to the adoption of the present constitution of Pennsylvania, the Delaware, Lackawanna and Western Railroad Company is largely engaged in the mining and purchasing of anthracite coal in Pennsylvania, nearly all of which coal it transports to points without said State and there sells. By far the greater part of this coal is transported from the mines for immediate delivery at points in other States, and is not kept or held in stock in said other States longer than is necessary for the purpose of transferring possession from this company to the purchaser; but at certain points in other States, as, for instance, at Buffalo, N. Y., and at Chicago, Ill., the company

keeps constantly on hand a stock of coal for purposes of sale, the same being stored in yards or upon docks maintained by the company for that purpose. The coal thus on hand awaiting sale between the first and fifteenth days of November, 1899, the date when the company's capital stock is required by law to be appraised for taxation, was of the value of not less than $1,702,443, and was included in the valuation of the company's capital stock upon which tax was charged in the auditor general's account. The coal thus on hand at that date was approximately the amount usually kept in stock at such points. The said coal when shipped from Pennsylvania was destined to said points in other States, with no intention of ever returning the same to Pennsylvania. On the contrary, said coal was intended to, and did, become part of the general mass of property in said other States, and the company is there annually taxed upon or in respect to the same, and was so taxed for 1899. When the coal thus kept in stock in the States of New York, Illinois, and other States outside of Pennsylvania is sold, the proceeds are returned to the company's treasury in the city and State of New York.

"In 1899 the company sold and delivered coal at points outside of the State of Pennsylvania of the aggregate value of not less than $18,587,258, but this was either contracted for before it left the mines or delivered upon, or within a comparatively short time after its arrival at the points in other States to which it was to be delivered. What I have said above was with reference only to coal kept in stock at points outside of Pennsylvania for purposes of sale.'

"5. The corporation defendant is authorized by law to transact business and to hold lands in other States for depot, wharfage and coal-yard accommodations and to make such agreements and contracts with corporations and individuals of other States as may be necessary and expedient for the transporting and vending of coal mined and purchased by it, and defendant is also authorized to have and maintain its general office and place of business, and to hold its stock

198 U.S.

Argument for Plaintiff in Error.

holders' meeting, in the State of New York, and to have as president, directors and other officers non-residents of the State of Pennsylvania. The company is taxable upon the value of the property represented by its capital stock, and not upon the amount of the latter."

Mr. M. E. Olmsted, with whom Mr. W. W. Ross and Mr. A. C. Stamm were on the brief, for plaintiff in error:

The tax claimed is a tax on property. Pennsylvania v. N. Y., Penna. & O. R. R. Co., 188 Pa. St. 169; Bank of Commerce v. New York City, 2 Black, 620; Bank Tax Case, 2 Wall. 200; Commonwealth v. Standard Oil Co., 101 Pa. St. 145.

It was not within the intent or power of the legislature to impose a tax on tangible property without the territorial limits, and protection of the laws, of the State. Commonwealth v. Del., L. & W. Ry. Co., 145 Pa. St. 96; Commonwealth v. Mining Co., 5 Pa. County Ct. Rep. 89, and other cases in note thereto; Commonwealth v. Westinghouse Co., 151 Pa. St. 265; Commonwealth v. Dredging Co., 122 Pa. St. 386.

The coal involved in this case was permanently located and actually taxed in other States. Commonwealth v. Coal Co., 197 Pa. St. 351.

This coal is exempt in Pennsylvania as it is taxable in other States under Brown v. Houston, 114 U. S. 622; Coe v. Errol, 116 U. S. 517; Coal Co. v. Balis, 156 U. S. 577; United States v. Knight, 156 U. S. 1, 13; Kelley v. Rhoads, 188 U. S. 1; Diamond Match Co. v. Ontonagon, 188 U. S. 82; Finley v. Philadelphia, 32 Pa. St. 381.

Taxing property having its situs in another State violates the Federal Constitution. It violates interstate comity and interstate commerce. McCulloch v. Maryland, 4 Wheat. 316, 429; St. Louis v. Ferry Co., 11 Wall. 423; Hays v. Pacific Mail, 17 How. 596; State Tax on Foreign-held Bonds, 15 Wall. 300; Railroad Co. v. Jackson, 7 Wall. 262; Pullman Co. v. Pennsylvania, 141 U. S. 18; Adams Express Co. v. Ohio, 165