“ The State of New Jersey imposes on each domestic corporation 'an annual franchise tax * * * for the privilege of having or exercising its corporate franchise' in the State. [1] This tax, as applied to appellant, is measured by the corporation's 'net worth,' which is defined as the sum of the corporation's issued and outstanding capital stock, paid-in or capital surplus, earned surplus and undivided profits, other surplus accounts which will accrue to the shareholders (not including depreciation reserves) , and debts owed to shareholders owning 10 percent or more of the corporation's stock. ”

“ Appellant protested, claiming that under R.S. § 3701, 31 U.S.C. § 742, 31 U.S.C.A. § 742, these bonds were immune from state taxation. The New Jersey courts upheld the Commissioner's assessment, and this appeal contests the validity of the state statute as so applied. ”

“ Appellant contends that this tax is not in reality a franchise tax, but is rather in the nature of a direct property tax on the immune federal obligations. Corporate franchises granted by a State create a relationship which may legitimately be made the subject of taxation, Home Ins. ”