[249 U.S. 252, 253] Messrs. John N. Sebrell, Jr., of Norfolk, Va., and Bynum E. Hinton, of Washington, D. C., for appellant.
Mr. Justice CLARKE delivered the opinion of the Court.
The appellant, the Telegraph Company, in its bill filed in the District Court of the United States for the Eastern District of Virginia, sought to enjoin the city of Richmond and its officers from collecting an annual license tax of $300 imposed upon the company by ordinance 'for the privilege of doing business within the city of Richmond, but not including business done to or from points without the state, and not including any business done for the government of the United States, its officers or agents,' and also from attempting to collect an annual fee of $2, imposed by another ordinance, for each telegraph pole which the company maintained or used in the streets of the city.
The allegations of the voluminous bill essential to be considered are: That the company accepted the act of Congress of July 24, 1866 (14 Stat. 221, c. 230 [Comp. St. 10072-10077]), entitled, 'An act to aid in the construction of telegraph lines,' etc., and is engaged in transmitting messages by telegraph, intrastate and interstate-this is admitted; and the following which are denied, viz. that the cost of doing the intrastate business transacted by the company at Richmond is greater than the receipts from it, and that since both taxes must be paid, if at all, from receipts from interstate commerce they constitute such a burden upon that commerce of the company as to render them unconstitutional and void.
The evidence introduced on the trial was largely in the form of affidavits, together with a transcript of the evidence taken in a former case, which was stipulated into the record.
The District Court held the taxes valid and dismissed the bill. On the constitutional questions involved a direct appeal brings the case into this court for review. [249 U.S. 252, 257] Except for the contention that this record shows affirmatively and clearly that the taxes complained of are necessarily unreasonable and a burden upon interstate commerce, the case could well be disposed of, without discussion, on the authority of decided cases.
That the city of Richmond has authority, under the statutes of Virginia and its charter, to impose an occupation or license tax on the business of the telegraph company done within the city is clear enough. Virginia Code, 1042; Charter of the City of Richmond, 67; Postal Telegraph-Cable Co. v. Norfolk, 101 Va. 125, 43 S. E. 207; Postal Telegraph-Cable Co. v. Norfolk, 118 Va. 455, 87 S. E. 555. Assuming the existence of this power in the city, since interstate and government service are expressly excluded from liability for the license charge, the following cases sustain the validity of the tax: Postal Telegraph-Cable Co. v. Charleston, 153 U.S. 692 , 14 Sup. Ct. 1094; Emert v. Missouri, 156 U.S. 296 , 15 Sup. Ct. 367; Kehrer v. Stewart, 197 U.S. 60 , 25 Sup. Ct. 403; Western Union Telegraph Co. v. Richmond, 224 U.S. 160 , 32 Sup. Ct. 449; Williams v. Talladega, 226 U.S. 404, 416 , 33 S. Sup. Ct. 116.
The principle of these cases, and of many others cited in the opinions, is that, as against federal constitutional limitations of power, a state may lawfully impose a license tax, restricted, as it is in this case, to the right to do local business within its borders, where such tax does not burden, or discriminate against, interstate business, and where the local business purporting to be taxed, again as in this case, is so substantial in amount that it does not clearly appear that the tax is a disguised attempt to tax interstate commerce. Such a tax is not, as is argued, an inspection measure, limited in amount to the cost of issuing the license or supervising the business, but is an exercise of the police power of the state for revenue purposes, restricted to internal commerce, and therefore within the taxing power of the state. Postal Telegraph-Cable Co. v. Charleston, Williams v. Talladega, supra, and [249 U.S. 252, 258] Western Union Telegraph Co. v. Alabama State Board of Assessment, 132 U.S. 472, 473 , 10 S. Sup. Ct. 161.
A statute of Virginia requires all telegraph companies doing business in the state to transmit all messages, state or interstate, which are tendered by other companies or by individuals upon payment of the usual charges. This requirement that the appellant shall engage in intrastate business, construed with the ordinance imposing the license tax, results, it is argued, in imposing a burden upon its interstate business for the reason that the net receipts from its intrastate business are insufficient to pay the tax, and therefore payment, if compelled, must be made from the interstate receipts. If the facts were as thus asserted it well might be that this tax would be invalid (Pullman Co. v. Adams, 189 U.S. 420 , 23 Sup. Ct. 494; Williams v. Talladega, 226 U.S. 404, 416 , 417 S., 33 Sup. Ct. 116), but a careful examination of the record fails to convince us that it contains that clear and convincing evidence that the tax thus falls upon interstate commerce which is necessary to justify a finding that the ordinance is unconstitutional and void.
There remains to be considered the fee, as it is called in the ordinance imposing it, of $2 for each pole maintained or used in the streets of the city of Richmond. This character of tax has also been the subject of definite decision by this court and has been sustained where not clearly shown to be a direct burden upon interstate commerce or unreasonable in amount, having regard to the purpose for which it may lawfully be imposed. St. Louis v. Western Union Telegraph Co., 148 U.S. 92 , 13 Sup. Ct. 485; Western Union Telegraph Co. v. Borough of New Hope, 187 U.S. 419 , 23 Sup. Ct. 204; Postal Telegraph-Cable Co. v. Baltimore, 156 U.S. 210 , 15 Sup. Ct. 356; Atlantic & Pacific Telegraph Co. v. Philadelphia, 190 U.S. 160 , 23 Sup. Ct. 817; Western Union Telegraph Co. v. Richmond, 224 U.S. 160 , 32 Sup. Ct. 449. These decisions do not conflict with Postal Telegraph-Cable Co. v. New Hope, 192 U.S. 55 , 24 Sup. Ct. 204, or Postal Telegraph-Cable Co. v. Taylor, 192 U.S. 64 , 24 Sup. Ct. 208. In the former of these [249 U.S. 252, 259] cases the decision of this court rests upon its conclusion that the jury found the tax unreasonable in amount and in the latter the ordinance involved was disposed of on exception to the affidavit of defense, admitting the allegations of the bill that no inspection of the poles or wires or supervision of the business of the company had been, or was intended to be, made by the borough, and that if made the cost could not reasonably be one-twentieth of the tax imposed. This showing, taken with other facts in the case, it was held, rendered the charge unreasonable and void.
The decisions cited sustaining this character of tax proceed upon the principle that, although the occupation of its streets by a telegraph company engaged in interstate commerce, which has accepted the act of Congress of 1866, cannot be denied by a city, yet since the use of its streets for its poles by such a company is necessarily, in a measure, permanent and exclusive in character, and different in kind and extent from that of the general public, and since such use imposes contingent liabilities upon a city, it is competent for it, in the exercise of its police power, to exact reasonable compensation 'in the nature of rental' for the use of its streets, having regard to the duties and responsibilities which such use imposes on the municipality. Even if the net returns from the intrastate business should not equal such tax, and it must be paid from interstate earnings, this alone would not be conclusive against its validity. If the method of doing interstate business necessarily imposes duties and liabilities upon a municipality, it may not be charged with the cost of these without just compensation. Even interstate business must pay its way-in this case for its right of way and the expense to others incident to the use of it. St. Louis v. Western Union Telegraph Co., 148 U. S. supra, p. 98 et seq., 13 Sup. Ct. 485; Atlantic & Pacific Telegraph Co. v. Philadelphia, 190 U.S. 160, 163 , 23 S. Sup. Ct. 817; St. Louis v. Western Union Telegraph Co., 149 U.S. 465 , 13 Sup. Ct. 990. Such compensation should [249 U.S. 252, 260] also include the expense of inspection of the poles and wires used, and of such supervision of the business of the company conducted in the streets as may be reasonably necessary to secure the safety of life and property of the inhabitants and of the users of the streets; but with the authority in the courts, on proper application, to determine whether, under the conditions prevailing in a given case, the charge made is reasonably proportionate to the service to be rendered and the liabilities involved, or whether it is a disguised attempt to impose a burden on interstate commerce. St. Louis v. Western Union Telegraph Co., 148 U.S. 92 , 13 Sup. Ct. 485; St. Louis v. Western Union Telegraph Co., 149 U.S. 465 , 13 Sup. Ct. 990; Postal Telegraph-Cable Co. v. Baltimore, 156 U.S. 210 , 15 Sup. Ct. 356; Atlantic, etc., Co. v. Philadelphia, 190 U.S. 160, 163 , 23 S. Sup. Ct. 817; Western Union Telegraph Co. v. Pennsylvania R. R. Co., 195 U.S. 540, 566 , 25 S. Sup. Ct. 133, 1 Ann. Cas. 517; Western Union Telegraph Co. v. Richmond, 224 U.S. 160, 169 , 32 S. Sup. Ct. 449.
These decisions and principles dispose of the 'pole tax' before us.
The total amount of this tax was in 1911, $344, in 1914, $384, and in 1915, owing to the extension of the city limits, it became $666. There is evidence, which must be credited, that poles and wires in the streets of a city require official inspection and supervision to secure their being kept in proper position and repair, so that they will not interfere with street traffic and may not, especially in time of storm, become crossed with wires carrying high-tension currents and thus cause fires and loss of life and property. There is conflict in the evidence as to the cost to the city of such inspection and regulation, but the amount stated does not seem excessive for the service which should be rendered, and which witnesses for the city testified was rendered, in looking after the many poles of the appellant, part of which, at least, carried many wires. As great or greater charges were sustained in St. Louis v. Western Union, 148 U.S. 92 , 13 Sup. Ct. 485; Postal [249 U.S. 252, 261] Telegraph-Cable Co. v. Baltimore, 156 U.S. 210 , 15 Sup. Ct. 356; Western Union Telegraph Co. v. Richmond, 224 U.S. 160, 172 , 32 S. Sup. Ct. 449.
The contention cannot be allowed that the ordinance is shown to be void by a formula, devised by an officer of the appellant and pressed upon our attention, for determining the division of costs and expenses between interstate and intrastate business, which it is claimed shows that the pole tax must be paid wholly from receipts from interstate business.
Regardless of obvious criticisms which might be advanced to this formula and to the inadequacy of the data furnished by the record for testing its validity, the charge imposed upon the company, as we have seen, was so moderate in amount, having regard to the necessary burdens which the poles and wires in the streets must impose upon the city and is so well within the prior holdings of this court, which we have cited, that it cannot be accepted as a sufficient basis for declaring the ordinance invalid.
There is no disposition on the part of this court to modify in the least the law as it has been stated in many cases, that 'neither licenses nor indirect taxation of any kind, nor any system of state regulation, can be imposed upon interstate any more than it can be imposed upon foreign commerce; and that all acts of legislation producing any such result, are ... unconstitutional and void.' Crutcher v. Kentucky, 141 U.S. 47, 62 , 11 S. Sup. Ct. 851, 855 (35 L. Ed. 649); Western Union Telegraph Co. v. Kansas, 216 U.S. 1 , 30 Sup. Ct. 190. But municipal ordinances, which for constitutional inquiry are deemed state laws, will be declared void only where clearly shown to be unconstitutional, and this very certainly cannot be said of the ordinances in this case, assailed, as they are, upon inadequate evidence and upon purely empirical calculations which we are asked to adopt.
It results that the decree of the District Court must be