commonwealth raise money by taxation for the purposes set forth in the act?

[After referring to a provision permitting the use by the Homestead Commission of the savings bank deposits of unknown owners, untouched for 30 years, which a prior statute had required to be paid to the state to be kept for the owners:] [This] would be treating the money in substance as escheated. Even if it were escheated it then would be money in the treasury freed from any trust. Such money, however, is public money and can be appropriated only to public uses. It can no more be diverted for private benefit than can money raised by taxation. Simmons v. Hanover, 23 Pick. 188; Allen v. Marion, 11 Allen, 108.

Taxation is somewhat historical in its nature and can be most intelligently approached by comparison of those subjects which have been held to be a public use and those which have been held not to be a public use. It is not now open to question that the establishment and maintenance of water and sewerage systems and electric light and gas plants are public uses. They relate to commodities which are or have become universally necessary, and they cannot be procured by each individual or family acting separately, but require co-operation. As a practical matter provision for these necessities is monopolistic in character, and having due regard to the reasonable convenience of the public, there can be no competition respecting them. The permanently exclusive use of portions of the public ways is essential to the effective furnishing of these necessities. Highways are public in their nature, and their construction and repair are legitimate public expenses. Hence they cannot be appropriated to any use which is private. These necessities cannot be provided without the exercise of powers conferred only by the Legislature, and commonly require the exercise of eminent domain. Although water and artificial light are in a certain sense beneficial to individuals, their public functions are so overshadowing as to stamp them as proper subjects for state or municipal ownership. Opinion of the Justices, 150 Mass. 592, 24 N. E. 1084, 8 L. R. A. 487.

On the other hand it was said in Opinions of the Justices, in 1893, 155 Mass. 598, 30 N. E. 1142, 15 L. R. A. 809, and again in 1903, 182 Mass. 605, 66 N. E. 25, that it was beyond the power of the Legislature to authorize cities and towns to engage in the business of furnishing coal or fuel to the public. The economic aspects of conducting business of this character through public instrumentalities are not for our consideration. Such a system is not possible under our Constitution. The grounds upon which these opinions were founded are that such enterprises are conducted by individuals. They are universally recognized as legitimate and proper fields for private and personal adventure. No legislative authority is required to engage in them, and no powers derived from

that source are needed for their prosecution. It is a natural right subject only to regulation by the police power. A person lawfully engaged in such business cannot be driven out by taxation to support his rival even though that rival be an arm of government.

The questions of the present order are closely analogous to those raised by the order of the honorable House considered in Opinion of the Justices, 204 Mass. 607, 91 N. E. 405, 27 L. R. A. (N. S.) 483. It was said there in substance that it was not within the power of the Legislature to authorize the taking of land outside the limits of streets for the purpose of being leased or sold under such restrictions as would insure proper development of industrial and commercial facilities. Such purpose was said to be primarily for the aggrandizement of individuals and only incidentally for the promotion of the public weal. We are unable to distinguish the purchase, development, rental and sale of land in the manner provided by the present bill from the principles announced in these decisions and opinions and many others collected and somewhat reviewed in 204 Mass. 607, 91 N. E. 405, 27 L. R. A. (N. S.) 483.

Buying and selling land always has been freely exercised by all individuals who desired, under the Constitution. Proprietorship of his own home has been one of the chief elements of strength in the citizen, and widely diffused land ownership has conferred stability upon the state. It is matter of common knowledge that thousands of inhabitants of the commonwealth who are "mechanics, laborers or other wage-earners" have become, through industry, temperance and frugality, owners of the homes in which they dwell. These proprietors, however humble may be their houses, cannot be taxed for the purpose of enabling the state to aid others in acquiring a home whose temperament, environment or habits have heretofore prevented them from attaining a like position. Although eminent domain differs from taxation in the occasion and manner of its exercise, it rests for its justification upon the same basic principle of public necessity. If this be held to be a public purpose, it would be lawful to authorize the commission to exercise the power of eminent domain. This would mean that the home of one wage-earner might be taken by the power of the commonwealth for the purpose of handing it over to another wage-earner. Neither the power of taxation nor of eminent domain goes to this extent. If the purpose is a public one, the property of every inhabitant, however improved or used, must yield to the superior right. But if the end to be gained is not public, no one can be compelled to contribute under either form of governmental power.

Ownership of a bit of land is one of the deep seated desires of mankind. The property resting on such proprietorship is among the dearest rights in the minds of many people secured by the

Constitution. If the power exists in the Legislature to take a tract of land away from one owner for the purpose of enabling another to get the same tract, the whole subject of such ownership becomes a matter of legislative determination and not of constitutional right.

Experiments in other lands, where the people have established either no bounds or fragile ones to the absolutism of governmental powers by a written constitution, afford no guide in the determination of what our Constitution permits.

It may be urged that the measure is aimed at mitigating the evils of overcrowded tenements and unhealthy slums. These evils are a proper subject for the exercise of the police power. Through the enactment of building ordinances, regulations and inspection as to housing and provision for light and air lies a broad field for the suppression of mischiefs of this kind. Questions answered in the negative.

III. Classification for Taxation

PEOPLE ex rel. HATCH v. REARDON.

(Court of Appeals of New York, 1906. 184 N. Y. 431, 77 N. E. 970, 8 L. R. A. [N. S.] 314, 112 Am. St. Rep. 628, 6 Ann. Cas. 515.)

[Appeal from the Appellate Division of the Supreme Court of New York for the First Department. A New York statute of 1905 imposed a stamp tax, of two cents on each $100 of face value or fraction thereof, on all sales or transfers of shares of stock in associations or corporations. Non-payment of the tax was made a misdemeanor. One Hatch sold 100 shares of the Southern Railway Company of Virginia, at the market value of $30.75 a share, and 100 shares of the Chicago, Milwaukee & St. Paul Railroad Company of Wisconsin, at the market value of $172 a share. The face value of each of these shares was $100. Hatch was arrested for non-payment of the tax on these sales, and a writ of habeas corpus was issued for his release. The writ was dismissed by the Supreme Court and this was affirmed by the Appellate Division. Other facts appear in the opinion.]

VANN, J. * * *Second. The classification made by selecting one kind of property and taxing the transfer of that only, is assailed as so arbitrary, discriminating, and unreasonable as to deprive certain persons of their property without due process of law and to withhold from them the equal protection of the laws. All

8 For discussion of principles, see Black, Const. Law (3d Ed.) §§ 165, 166.

taxation is arbitrary, for it compels the citizen to give up a part of his property; it is generally discriminating, for otherwise everything would be taxed, which has never yet been done, and there would be no exemption on account of education, charity, or religion, and frequently it is unreasonable, but that does not make it unconstitutional, even if the result is double taxation. People v. Home Ins. Co., 92 N. Y. 328, 347. The right to tax is not granted by the Constitution but of necessity underlies it, because government could not exist or perform its functions without it. While it may be regulated and limited by the fundamental law, it exists "independently of it as a necessary attribute of sovereignty." People v. Adirondack Ry. Co., 160 N. Y. 225, 236, 54 N. E. 689, 692. "The power of taxation being legislative, all the incidents are within the control of the Legislature. The purposes for which a tax shall be levied; the extent of taxation; the apportionment of the tax; upon what property or class of persons the tax shall operate; whether the tax shall be general or limited to a particular locality, and in the latter case, the fixing of a district of assessment; the method of collection, and whether a tax shall be a charge upon both person and property, or only on the land—are matters within the discretion of the Legislature and in respect to which its determination is final." Genet v. City of Brooklyn, 99 N. Y. 296, 306, 1 N. E. 777, 783. "A tax may be imposed only on certain callings and trades, for when the state exerts its power to tax it is not bound to tax all pursuits or all property that may be legitimately taxed for governmental purposes. It would be an intolerable burden if the state could not tax any property or calling unless at the same time it taxed all property or all callings." Connolly v. Union Sewer Pipe Co., 184 U. S. 540, 562, 22 Sup. Ct. 431, 440, 46 L. Ed. 679; Armour Packing Co. v. Lacey, 200 U. S. 226, 235, 26 Sup. Ct. 232, 234, 50 L. Ed. 451. "We cannot say that treating stocks of corporations as a class subject to special restrictions was unjust discrimination or denial of the full protection of the laws." Otis v. Parker, 187 U. S. 606, 610, 23 Sup. Ct. 168, 170, 47 L. Ed. 323. "The Legislature must decide when and how and for what public purposes a tax shall be levied and must select the subjects of taxation." 1 Cooley on Taxation (3d Ed.) 255.

There is no express restriction upon this power in our state Constitution and no implied restriction, except by the primary guaranties relating to life, liberty, property and due process of law. The same is true of the federal Constitution except as to certain subjects of national interest under the control of Congress, such as imports, patent rights and agencies used to carry the powers of Congress into execution. Subject to these restraints, the Legislature has supreme control of the power to tax, and its action, even if arbitrary, discriminating and unreasonable, is binding upon all

persons and property within the boundaries of the state. The state retained all the power of legislation that it did not part with in adopting the federal Constitution or consenting to the amendment thereof, and subject to that exception, it is as supreme as the British Parliament, which is restrained only by the custom of the realm and the conservatism of the people. Taxes upon the right of succession to property by will and intestate law, on special franchises and upon the sale of intoxicating liquors, are recent instances of the exercise of this power by the state through the selection of special subjects of taxation, involving the exemption of all others, each of which was attacked as in violation of both Constitutions, but all were sustained by the courts. The tariff and internal revenue laws show that the same power of selection has been exercised by Congress, and the federal courts have uniformly upheld it. Indeed, the prototype of the statute before us was an act of Congress passed in 1898, known as the War Revenue Act (Act June 13, 1898, c. 448, 30 Stat. 448 [U. S. Comp. St. 1901, p. 2286]), imposing a stamp tax on sales, transfers and deliveries of stock certificates, which was sustained without dissent by the Circuit and Supreme Courts of the United States. United States v. Thomas (C. C.) 115 Fed. 207; Thomas v. United States, 192 U. S. 363, 24 Sup. Ct. 305, 48 L. Ed. 481. A like tax on sales of merchandise, although expressly limited to those made at "any exchange or board of trade," leaving all other sales untouched, was also sustained, and the declaration made that "a sale at an exchange does form a proper basis for a classification which excludes all sales made elsewhere from taxation." Nicol v. Ames, 173 U. S. 509, 521, 19 Sup. Ct. 522, 527, 43 L. Ed. 786.

The Legislature has power to classify as it sees fit by imposing a heavy burden on one class of property and no burden at all upon others, the remedy for injudicious action being in the hands of the people, not of the courts. Arbitrary selection and discrimination characterize the history of legislation, both state and national, with reference to taxation, yet, when all persons and property in the same class are treated alike, it has uniformly been sustained both by the state and federal courts. The tax on tobacco, on oleomargarine and the like is not less arbitrary or discriminating than the tax in question. While a tax upon a particular house, or horse, or the houses or horses of a particular man, or on the sale thereof, would obviously invade a constitutional right, still a tax upon all houses, leaving barns and business buildings untaxed, or upon all horses or the sale thereof, leaving sheep and cows untaxed, however unwise, would be within the power of the Legislature. This is true of a tax on all houses with "more than one chimney," or "with more than one hearthstone," or on all race horses. The power of taxation necessarily involves the right of selection, which is without limitation, provided all persons in the same situation