1. A graduated surtax on salmon canneries of five cents per case
of the product packed on all cases in excess of 10,000 and not more
than 25,000; ten cents per case on all from 25,000 to 40,000;
fifteen cents per case on all from 40,000 to 50,000, and
twenty-five cents per case on all in excess of 50,000, is within
the taxing power conferred on the Alaska Legislature by the Organic
Act of August 24, 1912. P.
269 U. S. 276.
2. This tax is not inconsistent with the provision of the
Organic Act that the authority therein granted to the legislature
to alter; modify and repeal laws in force in Alaska shall not
extend to the game, fish, and fur seal laws, which is coupled with
the proviso that the restriction shall not operate to prevent the
legislature from imposing other and additional taxes and licenses.
P.
269 U. S.
277.
3.
Semble that the purpose of this restriction was to
prevent the Territory from doing away with fish protection.
Id.
4. In exercising its taxing power on canneries, the legislature
may consider collateral advantages of fish protection.
Id.
5. The tax, by discriminating against large canneries in favor
of small ones, does not contravene the Fifth Amendment, since
classification of taxes by the amount of the corpus taxed is valid
when, as here, the inequalities are based on intelligible grounds
of policy. P.
269 U. S. 278.
2 F.2d 9 affirmed.
Certiorari to a judgment of the circuit court of appeals
affirming a judgment of the United States District Court in Alaska
in favor of the Territory, in an action to collect license
taxes.
Page 269 U. S. 275
MR. JUSTICE HOLMES delivered the opinion of the Court.
This is a suit by the Territory of Alaska to recover from the
petitioner, Pacific American Fisheries, license taxes alleged to be
due upon cases of salmon packed by the defendant at four canneries
named. The defendant in its answer set up that the territorial
taxing act was contrary to the Act of Congress of August 24, 1912,
c. 387, § 3, 37 Stat. 512, creating a legislative assembly in the
Territory of Alaska, and to the Constitution of the United
Page 269 U. S. 276
States. The territory demurred; there was a judgment for the
plaintiff, and this was affirmed by the circuit court of appeals. 2
F.2d 9. A writ of certiorari was granted by this Court. 267 U.S.
589.
The taxes in question were imposed by c. 101, § 1, Laws of
Alaska, 1923, amending c. 31 of the Laws of 1921. By (
c)
of that subdivision, salmon canneries, after a tax by (
b)
of ten cents per case, are charged an additional tax on a pack of
kings, reds, and sockeyes, counted together at any one cannery, as
follows: on all cases in excess of ten thousand and not more than
twenty-five thousand, five cents per case; in excess of twenty-five
thousand and not more than forty thousand, ten cents per case; in
excess of forty thousand and not more than fifty thousand, fifteen
cents per case, and on all in excess of fifty thousand, twenty
cents per case. Similarly, in (
d) and (
e), a tax
of four and one-half cents per case is imposed on medium reds,
cohoes, and pinks, with additional taxes for each increase of
numbers as in the previous subdivision. By (
f), chums are
taxed three cents per case. The petitioner says that this graduated
tax is inconsistent with the Act of Congress mentioned, which
provides that the authority therein granted to alter, amend, modify
and repeal laws in force in Alaska should not extend to the game,
fish, and fur seal laws, and presses this contention
notwithstanding the further proviso that this provision shall not
operate to prevent the legislature from imposing other and
additional taxes or licenses. The petitioner also says that the
classification upon which the surtax is based is unreasonable, and
a denial of due process of law, contrary to the Fifth Amendment of
the Constitution of the United States. No question is raised about
the uniform tax of ten cents per case imposed by (
b). That
has been paid.
The petitioner offers various reasons to show that this tax is
not what it purports to be, but is an attempt to regulate
Page 269 U. S. 277
fisheries, which, the petitioner believes, Congress has not
given the territory power to regulate. The answer alleges that it
was known that the revenue from these taxes would exceed the
appropriations and needs of the territory, and from this and other
things the conclusion is drawn that the taxes were levied with the
intent of driving the defendant out of its business. But the
premise could not be known, it only could be prophesied. If known,
the conclusion as to legislative intent would not follow, and if
the intent were entertained, in the only sense in which it
rationally could be imputed -- that is, to discourage canning the
larger amounts -- the legislature lawfully might act with that
intent. Fisheries were not the direct object of attack, but
canneries. It would require a strong case, in any event, to
invalidate a tax on things that the legislature had power to
regulate because of its collateral reaction on something else. But
here, even as to fisheries, the legislature is given power to tax.
Any tax is a discouragement, and therefore a regulation so far as
it goes, and the most plausible reconciliation of this power with
the restrictions upon amending or modifying the laws in force in
that the only purpose of the restrictions was to prevent the
territory from doing away with all protection in a shortsighted
rush for fish. At least we must take it to be clear that the
unlimited power expressly given may be exercised with consideration
of collateral advantages and disadvantages.
Alaska Fish Salting
& By-Products Co. v. Smith, 255 U. S.
44,
255 U. S. 48. It
could not be exercised intelligently otherwise. The extent of the
power is a question of specific interpretation, not of general
principle, and therefore we leave the many familiar cases that were
cited on one side.
It is not unworthy of notice that in § 9 of the Act of August
24, 1912, an earlier statute of July 30, 1886, c. 818, § 1, 24
Stat. 170, is taken up, in which the power of the territorial
legislatures to pass laws for the protection of
Page 269 U. S. 278
game and fish is recognized, and also that the latest revision
of the fish law by Congress was passed after the present tax law
had been enacted and had been upheld by the district court, that it
provided that nothing therein contained should curtail the powers
of the Territorial legislature of Alaska, and that it showed no
sign of dissatisfaction with the way in which those powers had been
used. Act of June 6, 1924, c. 272, § 8, 43 Stat. 464, 467.
It is much pressed that the tax discriminates against large
canneries in favor of small ones -- this especially as contravening
the Fifth Amendment and denying due process of law. Classification
of taxes by the amount of the corpus taxed has been sustained in
various connections heretofore. By way of specific answer, it is
pointed out by the Attorney General of Alaska that the size of the
run of salmon cannot be foreseen; that a cannery must be prepared
to its full capacity; that there always will be an irreducible
minimum of expense to be borne, whatever the size of the pack; that
therefore a small pack may mean a loss and a larger one a profit,
and that, on these considerations, the law justly may attempt to
proportion the tax to the probable gains. The inequalities of the
tax are based upon intelligible grounds of policy and cannot be
said to deny the petitioner its constitutional rights.
Judgment affirmed.