Harlan F. Stone

“ The private corporation, whatever its public duties, carries on its business for private profit, and is subject to the obligation, common to all, to contribute to the expense of government by paying taxes. The municipality, which is enabled to function only because it is a tax gatherer, may acquire property or conduct a business in the interest of the public welfare, and its gains, if any, must be used for public ends. ”

“ The injury, which appellant fears may result, is the consequence of competition by the city, and not necessarily of the imposition of the tax. Even without the tax, the possibility of injury would remain, for the city is not bound to conduct the business at a profit. The argument that some way must be found to interpret the due process clause so as to preclude the danger of such an injury fails to point the way. Legislation may protect from the consequences of competition, but the Constitution does not. ”

“ Asserting that no effective tax is imposed with respect to the business carried on by the city, appellant argues that the taxation of its competing business is a denial of equal protection and deprives it of its property without due process. The tax is also assailed because the measure of it is vague and uncertain, and because, by imposing a license tax upon the privilege of doing the business, the ordinance impairs appellant's franchise contract which gave it the right to conduct the business. ”

“ We need not stop to inquire whether the equal protection clause was designed to protect the citizen from advantages retained by the sovereign, or to point out the extraordinary implications of appellant's argument when applied to expansions of government activities which have become commonplace. ”

“ Of the circumstances in which the ordinance was adopted and of the provision in section 6 declaring the tax applicable to the city's business, the state court said in the present suit:
'The city, in its proprietary capacity, is in competition with appellant in the power and light business. The possible consequences to appellant, if it is subjected to an excise of 3 per cent. on its gross revenues, while its competitor escapes the burden, are too obvious for discussion. ”

“ In view of the terms of the ordinance and of the city's attitude declared by its counsel, it is manifest that, if the pledge be only of the net revenues, the tax falls on the city's business just as on the other, and that the charge of unreasonable discrimination is without any basis. ”

“ Appellant asserts a contract under its franchise to use the streets of the city for the purpose of carrying on its business for an unexpired term of years. It argues that the franchise is a contract license to carry on the business, and that the exaction of a tax as a condition precedent to the enjoyment of the license will operate to destroy the privilege granted by the franchise. ”

“ Revenues of the city from its electric light business are required by the city charter, article VIII, § 9, to be deposited in a special 'city light fund,' separate from the general funds of the city, and transfer from one fund to the other, except by direction of the city council, is forbidden by the city charter. Article IX, § 17. Section 6 of the ordinance, in terms, imposes the same tax on the city 'so far as permitted by law,' as that levied on appellant. ”

“ A business which in private hands might be exempted from taxation because not conducted for private profit is no less privileged because its capital is supplied by the government which controls it in the public interest. These considerations are in no way affected by calling the city's activity 'proprietary' instead of 'governmental.' Compare South Carolina v. ”

“ It does not preclude competition, however drastic, between private enterprises or prevent unequal taxation of competitors who are different. Those were risks which appellant took when it entered the field. No articulate principle is suggested calling for the conclusion that the appellant is not subject to the same risks because the competing business is carried on by the state in the exercise of a power which has been constitutionally reserved to it from the beginning. ”

“ It is enough for present purposes that the equal protection clause does not forbid discrimination with respect to things that are different. The distinctions between the taxing sovereign and its taxpayers are many and obvious. ”

“ The assault is confined to this taxing ordinance. Other ordinances, some provisions in the city's charter, and still other enactments, have a real bearing on the matter, but their validity under the Constitution of the United States is not called in question.
I agree that the second and third grounds of the assault must be held untenable for the reasons stated in the opinion; and I further agree that the first ground must fail-but for reasons essentially different from those which the opinion announces. ”

“ The Fourteenth Amendment does not purport to protect property from every injurious or oppressive action by a state, Memphis Gas-Light Co. v. Taxing District of Shelby County, 109 U.S. 398, 400, 3 S.Ct. ”