[1] UNITED STATES (1-1) - TERRITORIAL EXTENT AND BOUNDARIES -AUTHORITY OVER PLACES ACQUIRED WITHIN STATE - JURISDICTION.
Under Const. Art. 1, SS 8, clause 17, respecting the exclusive
jurisdiction of the United States over property purchased by or ceded to the
Federal government for forts, magazines, arsenals, dockyards, and "other
needful buildings," the state's power to cede jurisdiction is limited to
those instances where it clearly appears that the land is to be used by the
United States for a constitutional or any governmental purpose; from which four
rules are deducible respecting jurisdiction over lands acquired by the United States
for public purposes.
[2] TAXATION (13) - UNITED STATES (1-1) - POWER OF STATE
-PROPERTY OF UNITED STATES - JURISDICTION - POWER TO TAX BUSINESS ACTIVITIES.
The acquisition by the Federal government of the lands
within the Columbia river or Coulee dam project, did not ipso facto deprive the
state of all jurisdiction with respect to such lands; but it has concurrent
power to impose an excise tax upon business activities conducted within the
area of the project; and it will not be presumed that the state has
relinquished its sovereignty; since taxation is an inherent, unlimited power that
cannot be contracted away.
[3] SAME. Where the Federal government and the state are
working in harmony and cooperating in every way in the construction of a huge
dam and power project, with important distinct functions for both state and
nation, it will not be held that the state will be excluded from all
jurisdiction over state functions, preventing the state from levying an excise
tax on activities in the area of the project, especially where the facts as a
whole argue conclusively that the state never intended to cede and the Federal
government never intended to take exclusive jurisdiction over the project.
Appeal from judgments of the superior court for Thurston
county, Wilson, J., entered December 2,
1935, dismissing actions to recover taxes paid under protest
and for injunctive relief, consolidated and tried to the court. Affirmed.
Luby & Pearson and Brown & Weller, for appellant.
The Attorney General and E.P. Donnelly, Assistant, for
respondent.
E.W. Schwellenbach, amicus curiae.
STEINERT, J. - Plaintiff brought these two actions seeking
(1) the refund of an amount exacted from, and paid by, him as an occupation
tax, and (2) an injunction to prevent the imposition against him of a subsequent
tax of the same kind. Trial before the court, without a jury, resulted in a
dismissal of both actions. Plaintiff has appealed.
The taxes imposed by the state in the first case were based
upon the total amount of sales of merchandise made by appellant and also upon
the total amount of gross income received by him in the performance of a
Federal government contract, all such sales and operations having been made and
conducted within the area comprised in what is known as the Columbia basin
project. The tax sought to be enjoined in the second case was based upon the
total amount of gross income received by appellant in the performance of a
second, and subsequent, Federal government contract operating within the same
area. The principal question in the first case, and the only question in the
second, is whether the state of Washington had any jurisdiction within the
territory of the project, sufficient to permit the state to impose and collect
an occupation tax for services rendered therein by appellant to the Federal
government.
A brief history of the Columbia basin project will be of aid
to a clearer understanding of the problem involved.
For a number of years, the people of this state have been
actively interested in the development of the
Columbia river and its tributaries. Between 1918 and 1932,
many surveys and reports were made by engineers employed either by the state or
else by the bureau of reclamation or the war department of the United States.
These surveys and reports had relation to navigation, the development of
hydro-electric power, and the reclamation of arid lands by irrigation. The
state and its people were directly and particularly interested in, and
concerned with, the features of power and reclamation. In 1932, the chief of
engineers of the United States Army, after an exhaustive investigation,
recommended a comprehensive plan for the improvement and development of the
Columbia river for the purposes of navigation, flood control, power and irrigation.
The plan contemplated the ultimate construction of ten dams in the Columbia river,
the first of which, together with a power plant, was to be erected at the head
of Grand Coulee.
In 1933, the state legislature created the Columbia basin
commission, consisting of five members, and authorized them to enter into
contracts and to employ any and all means necessary to secure the immediate development
of the Columbia basin project by means of the proposed Grand Coulee dam and the
orderly development of the power, water and soil resources incident thereto.
Chapter 81, Laws of 1933, p. 376, Rem. Rev. Stat. (Supp.), SS 3017-1 [P.C. SS
5724-26] et seq.
During this period of preparatory activities, the Grand
Coulee dam and power plant had an indeterminate status, owing to the
uncertainty as to whether the project would be a state or a Federal project. It
seems that originally it was contemplated that the Columbia basin commission
should at least carry on the necessary preliminary engineering. For that purpose,
the Columbia basin commission obtained from the state emergency relief
commission an allocation of $377,000 of emergency relief funds. This had the effect
of tying in the project with the matter of emergency relief work, which was
seriously engaging the attention of this, and of other states, at that time.
On June 30, 1933, the Columbia basin commission, in
pursuance of its plan, entered into a contract with the United States,
represented by the bureau of reclamation, department of the interior, wherein the
United States agreed to make the topographic surveys and
explorative work and to prepare the designs and specifications for construction
work on the dam, for which the Columbia basin commission agreed to pay an initial
sum of $50,000 at the time of the execution of the contract and the balance of
the allocation of $377,000 as the work progressed. It appears that, during the
period with which we are here concerned, the greater part of the $377,000 was
paid as agreed.
It soon became apparent, however, that the work of construction
itself would be of such magnitude and the expense so great that its completion
would require the intervention of no less an agency than the Federal government,
with the unlimited financial resources at its command. Consequently, steps were
taken to have the Grand Coulee dam and power plant included in the Federal
public works program. After considerable effort, this was accomplished, and an
allocation of sixty-three million dollars for the dam and power plant was made
by the Federal bureau commonly known as NIRA.
On November 1, 1933, the United States, represented by the
secretary of the interior, and pursuant to the reclamation laws and the
National Industrial Recovery Act, and the state of Washington, acting through
the Columbia basin commission, entered into a contract relating to the
construction of the dam, power plant and power transmission lines at the Grand
Coulee site, under the comprehensive plan above mentioned.
Some of the provisions of that contract are of particular interest
in this controversy. The contract began with a series of ten recitals. No. 1
referred to the fact that the allotment of sixty-three million dollars,
appropriated by NIRA, had been made available for the construction of the dam
and power plant. No. 9 recited that the increased amount of firm power made
possible at the lower dams by reason of the storage behind the Grand Coulee dam
was an important factor in making the lower dams self-liquidating. No. 10
referred to the fact that the Columbia basin commission had been created by the
state legislature for the purpose of cooperating with the Federal government in
securing the construction of the project and of the Grand Coulee dam.
The contract then set forth the articles of agreement by
number. The first, which is numbered article provided for the expenditure by
the United States of sixty-three million dollars, or so much thereof as was found
necessary, in the construction of a dam and power plant at Grand Coulee site.
Article 12 provided that the United States should retain title to the dam and
power plant until the cost of the project had been fully repaid into the
treasury of the United States. Article 13 reads as follows:
"13. Commission to Act in Advisory Capacity. The Commission
will act as an advisory board representing the state in an advisory capacity in
conferences with officers of the United States concerning the various important
questions which may arise from time to time in connection with the construction
and use of the said dam, power plant and transmission lines.
Then followed a number of provisions giving the state an
option, for a period of eight and one-half years after the date of the
contract, to purchase the perpetual right to the entire output of the dam and power
plant, upon the conditions set forth in detail therein. Article 24 reads as
follows:
"24. Rules and Regulations by Secretary. The Secretary
shall have the right to adopt and promulgate rules and regulations for the
administration of the said project and the right to determine and decide all
questions arising in connection with or growing out of the construction or
operation and maintenance of said proposed dam, power plants and transmission lines
and which are not expressly determined by law or the terms of this contract,
and his decisions on such questions shall be conclusive."
At this point, appellant's first connection with the project
appears. On November 29, 1933, appellant, a resident of San Diego, California,
entered into a contract with the United States for the excavation of overburden
at Columbia river dam site, Columbia basin project, "Washington," for
the sum of $534,500.
The specifications, attached to and made a part of the contract,
provided, among other things, that the appellant should obtain all required
licenses and permits, should give preference, after ex-service men, to citizens
who were residents of the county and state in which the work was to be
performed, should furnish compensation insurance in compliance with the laws of
the state wherein the work was to be done, and should comply with all applicable
provisions of Federal, state, and municipal safety laws and building and
construction codes.
Appellant entered upon the execution of the work under the
contract about January 1, 1934, and completed it in the summer of the same
year. During the entire performance of the work, appellant maintained his
office and living quarters within the territory of the project as hereinafter
designated.
After the completion of that contract, appellant, on July
18, 1934, entered into a second contract with the United States, which was for
the construction of a railroad at Grand Coulee dam, Columbia basin project, "Washington,"
for the sum of $235,570. The railroad was to be 34.5 track miles in length,
extending from the Northern Pacific Railway tracks at Odair, Washington, to the
dam site. The specifications in this contract contained the same provisions as
those to which we have specifically referred above. The actual residence of
appellant, for about one-half of the time during which the second contract was
being performed, was at Coulee City, which is outside of the territory of the
project, and for the remainder of the time was at the dam site, on government
land which had been obtained in the manner hereinafter described.
On July 16, 1934, which was two days before the execution of
appellant's second contract, the United States entered into a contract with
Silas Mason Company, Inc., and others, for construction work on Grand Coulee
dam and power plant, Columbia basin project, "Washington," for the
sum of $29,339,301.50. The last mentioned contract contemplated work on a
gigantic scale, as is indicated by the figures just given. That contract,
however, did not include the work to be done by appellant under either of his
contracts.
We make reference, at this time, to the contract of Silas
Mason Company, Inc., for the reason that out of it grew an action similar to
the two involved here. Silas Mason Co. v. State Tax Commission, ante p. 98, 61
P.2d 1269. That action and these two were tried in the superior court at the
same time and, by stipulation of the parties, all the evidence, in so far as it
was material, was considered as applying to all three cases. The respective
appeals were argued in this court on the same day, upon records containing identical
statements of facts.
The specifications attached to the contract of Silas Mason
Company, Inc., provided, among other things, and in addition to what has
already been mentioned, that the contractor should make all necessary
arrangements with the proper state and country authorities for school
facilities, and that police protection for the contractor's camp and the area
involved in and surrounding the construction work would be furnished by the
Washington state patrol in cooperation with the Federal government, but that
the contractor should provide, at its camp site, such jail facilities as were satisfactory
to the Washington state patrol.
The area included in the entire project above mentioned does
not specifically and satisfactorily appear from the record, and we are unable
to say exactly how much land is included therein. It does appear, however, that
the area is very extensive, covering many acres of land on both sides of the
Columbia river and including a railroad right of way 34.5 miles in length. There
are two important things, however, to be noted in this connection. The first is
that, during the time that the construction work was in progress, the United States,
through condemnation proceedings brought against a number of individuals and
corporations, acquired possession of, and title to, the various tracts of land
now within the area of the project. A transcript of one of such condemnation
proceedings, stipulated to be similar in form to all the others, is made a part
of the record herein. It shows that the title to that particular tract was
acquired by the United States on or after May 14, 1934, which was after appellant
had commenced work. The other important factor to be noted is that, included in
the area of the project, are school lands of the state and also tribal lands,
all of which have been taken over by the Federal government and now form a part
of the project.
At the seventy-fourth session of the United States Congress,
an act was passed authorizing the construction, repair, and preservation of
certain public works on rivers and harbors and for other purposes. The act
ratified and validated all contracts and agreements that had been theretofore
executed in connection with the Grand Coulee dam project. H.R. 6732, Public Act
409. The work contemplated to be done upon the project by the United States was
not in furtherance of any war measure or for the national defense, but simply
for the improvement of navigation and for industrial recovery.
During the period of the construction work under his first
contract, appellant maintained warehouses on ground within the project and at
the dam site, where he stored and sold gasoline, oil, tires and automobile
accessories. Appellant paid the state a tax on these sales, the recovery of
which forms a part of the basis of his first action.
At its regular session of 1933, the legislature of this
state passed an act commonly known as the occupation tax act, chapter 191, Laws
of 1933, p. 869 et seq. The act related to certain business activities
"within this state." At its special session of 1933, the legislature
amended the former act in certain respects. Chapter 57, Laws of 1933, Ex. Ses.
p. 157 et seq. That act likewise applied to business activities "within
this state." The latter act became effective January 18, 1934, which was
shortly after appellant's first contract had been entered into, but before it
was performed.
These two actions are in resistance to the application of
either of these legislative acts to appellant's activities. Appellant's first contention is that his
construction or excavation contracts constituted sales of services, within the
provisions of chapter 191, and that by SS 5, p. 879, of that act, read in
connection with SS 2 (2)(f), p. 875, the proceeds of his contracts were exempt
from the tax.
The answer to this contention is that the tax was not imposed
under chapter 191 as it originally stood, but under chapter 57, p. 157, SS 1
(designated as SS 2-a) (1), which clearly covers business activities of the
kind engaged in by appellant, if "within this state." This contention
of appellant is but briefly discussed by either counsel and, we think, merits nothing
further than what we have already said.
The principal, and only remaining, question in the case is
whether appellant's activities took place "within this state."
Specifically stated, the contention of appellant is that by virtue of the
United States constitution and the statutes of this state, the area contained
within the project upon which the excavation and construction work was
performed is under the exclusive jurisdiction of the United States; and that, therefore,
any tax legislation of the state is wholly inoperative within the area of the
project or upon any activities of appellant therein. Quotation of the specific
constitutional and statutory provisions involved will first be made.
[1] Art. I, SS 8, clause 17, of the constitution of the United
States provides that Congress shall have power: "To exercise exclusive
legislation in all cases whatsoever, over such district (not exceeding ten
miles square) as may, by cession of particular states, and the acceptance of congress,
become the seat of the government of the United States, and to exercise like authority
over all places purchased by the consent of the legislature of the state in
which the same shall be, for the erection of forts, magazines, arsenals, dockyards,
and other needful buildings;
Our reference to, and discussion of, this constitutional provision
relate only to the latter, or italicized, portion of the quotation.
Rem. Rev. Stat., SS 8108 [P.C. SS 7110], adopted in
1891, provides that:
"The consent of the state of Washington be and the same
is hereby given to the acquisition by purchase or by condemnation, under the
laws of this state relating to the appropriation of private property to public uses,
by the United States of America, or under the authority of the same, of any
tract, piece, or parcel of land, from any individual or individuals, bodies
politic or corporate, within the boundaries or limits of this state, for the
sites of locks, dams, piers, breakwaters, keepers' dwellings, and other necessary
structures and purposes required in the improvement of the rivers and harbors
of this state, or bordering thereon, or for the sites of forts, magazines,
arsenals, docks, navy yards, naval stations, or other needful buildings authorized
by any act of congress, . . . the consent herein and hereby given being in
accordance with the seventeenth clause of the eighth section of the first article
of the Constitution of the United States, and with the acts of congress in such
cases made and provided; and the jurisdiction of this state is hereby ceded to
the United States of America over all such land or lands as may have been or
may be hereafter acquired by purchase or by condemnation, or set apart by the
general government for any or either of the purposes before mentioned:
Provided, that this state shall retain a concurrent jurisdiction with the
United States in and over all tracts so acquired or set apart as aforesaid, so
far as that all civil and criminal process that may issue under the authority
of this state against any person or persons charged with crimes committed, or
for any cause of action or suit accruing without the bounds of any such tract,
may be executed therein, in the same manner and with like effect as though this
assent and cession had not been granted."
It will be observed that the statute, while somewhat broader
than Art. I, SS 8, clause 17, in its designation of structures and purposes,
nevertheless specifically recites that the consent therein given is in
accordance with the constitutional provision.
The provision of Art. I, SS 8, clause 17, as above quoted
and italicized, has been frequently construed by the United States supreme
court, and it is now definitely settled and accepted that there are two ways in
which lands within the jurisdiction of the state may become subject to the
exclusive jurisdiction of the
United States: (1) By purchase by the United States for
certain specified purposes, with the consent of the state, and (2) cession of
exclusive jurisdiction to the United States by the state. Ft. Leavenworth R.
Co. v. Lowe, 1-14 U.S. 525, 5 S. Ct. 995, 29 L. Ed. 264; United States v.
Unzeuta, 281 U.S. 138, 50 S. Ct. 284, 74 L. Ed. 761; Surplus Trading Co. v.
Cook, 281 U.S. 647, 50 S. Ct. 455, 74 L. Ed. 1091; Standard Oil Co. v. California,
291 U.S. 242, 54 S. Ct. 381, 78 L. Ed. 775.
From these cases, the following rules are deducible respecting
jurisdiction over lands acquired by the
United States for public uses: (1) When the land is acquired
for one of the purposes within Art. I, SS 8, clause 17, by purchase with
consent of the state, Federal jurisdiction is exclusive in such area for all
purposes; (2) when the land is acquired for one of the purposes within that clause,
but other than by purchase with the consent of the state, then Federal jurisdiction
is exclusive only to the extent of the purposes for which the land is held; (3)
when the land is acquired for a purpose not within that clause, but by purchase
with the consent of the state, then the United States has such jurisdiction
over the land as may be ceded to it by the state; and (4) when the land is acquired
for a purpose not within that clause, in any mariner other than by purchase
with the consent of the state, then the United States holds the land just as
any other proprietor does, except that the land may not be taxed by the state.
Our ultimate problem herein will be to determine under which one or more, if
any, of these classifications, the present case falls.
Manifestly, the construction work involved in this case does
not come within any of the uses implied in the descriptive terms of the
constitutional provision, unless it can be said to come within the term
"other needful buildings." If the case were one of first impression,
the rule of ejusdem generis would, in our opinion, exclude such work from the
classification of "needful buildings," because the particular work
was in no way connected with, or related to, forts, magazines, arsenals or
dockyards.
However, by judicial interpretation, over a long period of
years, the term "needful buildings" has been applied to the following:
a navy yard (Western Union Tel. Co. v. Chiles, 214 U.S. 274, 29 8. Ct. 613,
53 L. Ed. 994); a military hospital (Arlington Hotel Co. v.
Fant, 278 U.S. 439, 49 S. Ct. 227, 73 L. Ed. 447) ;a military reservation
(United States v. Unzeuta, 281 U.S. 138, 50 S. Ct. 284, 74 L. Ed. 761); an army
training and mobilization station (Surplus Trading Co. v. Cook, 281 U.S. 647,
50 S. Ct. 455, 74 L. Ed. 1091); a customs house (Sharon v. Hill, 24 Fed. 726); locks
and dams (United States v. Tucker, 122 Fed. 518); a post office (United States
v. Andem, 158 Fed. 996); a penitentiary (Steele v. Halligan, 229 Fed. 1011); an
Indian training school (United States v. Wurtzbarger, 276 Fed. 753); a military
cemetery (Wills v. State, 50 Tenn. 141);
a soldiers' home (Sinks v. Reese, 19 Ohio 306); a courthouse (State ex rel.
Jones v. Mack, 23 Nev. 359, 47 Pac. 763, 62 Am. st. 811).
While the structures mentioned in the foregoing eases are
not specifically named in, and do not strictly fall within, the constitutional
classification, it is, nevertheless, apparent that the particular structures or
"buildings" in those cases, with the possible exception of one, are
such as would necessarily require absolute and exclusive jurisdiction in the
United States government, because their operation is in the discharge of a
constitutional or governmental function, and there is no field for state
participation or state legislation.
The only possible exception in the list is the instance of
locks and dams, involved in the Tucker case. But even in such case, if the locks
and dams were owned and operated by the United States solely for the purpose of
facilitating navigation, as they concededly were in that case, their function
would likewise be a constitutional or governmental function. But irrigation, flood
control, and power development (except in so far as the latter two are intended
to promote navigation or else some war measure or the national defense), while
they may be of national interest and serve a public purpose, are not functions
enjoined upon the Federal government by the constitution, nor are they
delegated to the United States by the constitution, nor is it necessary that
they be committed, for their operation, to the exclusive jurisdiction of the United
States government. Legislative power, with reference to such things, is
reserved in the state.
Turning, now, to the statute above quoted, we note that the
state has given its consent to the acquisition, by purchase or condemnation on
the part of the United States, of lands for sites of locks, dams, etc., as well
as for the purposes set forth in the constitutional provision. For present
purposes, it may be conceded that the term "needful buildings" is
broad enough, under the construction given to that term by the Federal courts,
to include locks and dams. It is very probable that specific mention of locks
and dams was made in the statute in order to remove any doubt that may have
existed generally at, and prior to, the time of the decision in the Tucker
case, with respect to the inclusive intent of the constitutional provision.
The point that we make and stress here, and upon which we
rest our ultimate conclusion herein, is that, while the statute conferred
consent upon the United States to acquire land within the territory of the
state, the state's power to cede jurisdiction is limited by the statute to
those instances where it clearly appears that the land is to be used by the
United States for a constitutional or governmental purpose. As stated in the
leading case upon the subject, Ft. Leavenworth R. Co. v. Lowe, 114 U.S. 525, 5
S. Ct. 995, 29 L. Ed. 264,supra: "The essence of that provision [Art. I.
SS 8, clause 17, United States constitution] is that the State shall freely
cede the particular place to the United States for one of the specific and enumerated
objects."
[2] The question in this case, then, is whether, by reason
of the conjunction of the constitutional provision, the statute, and the
acquisition by the Federal government of the lands within the project in the manner
and for the purposes that the government acquired them, the state has been ipso
facto deprived of all jurisdiction with respect to such lands. However close
the question may seemingly be, we are of the opinion that the state has not
been deprived of all jurisdiction, but that it has a concurrent jurisdiction to
the extent, among other things, that it has the right to impose a tax upon
business activities conducted within the area of the project. The reason for
this conclusion is based upon what we conceive to be fundamental principles of
law and the conducive facts of this case.
By the enabling act of Congress, passed February 22, 1889,
the territory of Washington became the state of Washington. Subject to the
limitations and restraints of the Federal constitution, the state, as such, has
all the sovereign powers of independent nations over all persons and things
within its territorial limits. Sturges v. Crowinshield, 4 Wheat. 122, 4 L. Ed.
529; New York v. Miln, 11 Pet. 102, 9 L. Ed. 648; Cummings v. Missouri, 4 Wall.
277, 18 L. Ed. 356. The area within, and under, the jurisdiction of a state may
come under the exclusive jurisdiction of the United States by purchase by the Federal
government for a purpose prescribed by the Federal constitution and with the consent
of the state, or by cession of exclusive jurisdiction by the state to the
United States. In either event, the land acquires a territorial status and
ceases to be a part of the state, either territorially or jurisdictionally.
Concessions Co. v. Morris, 109 Wash. 46, 186 Pac. 655.
But, since self-preservation is the first law of nations and
states, as well as of individuals, it will not be presumed, in the absence of
clearly expressed intent, that the state has relinquished its sovereignty. Wills
v. State, 50 Tenn. 141; In re Kelly, 71 Fed. 545; Ex Parte Gaines, 56 Ark. 227,
19 S.W. 602; Barrett
v. Palmer, 135 N.Y. 336, 31 N.E. 1017, 31 Am. St. 835, 17
L.R.A. 720. (Four of these cases are cited approvingly in the Concessions Co.
case.)
The power of taxation is an incident of sovereignty and inherent
in the state, because government cannot exist or function without it. It is a
legislative power following the more general power to make laws. State ex tel.
Board of Commissioners v. Clausen, 95 Wash. 214, 163 Pac. 744. The power of
taxation is never to be suspended, surrendered, or contracted away. Amendment
XIV, Washington constitution. In the absence of constitutional restraint, the
power of the legislature over taxation is as unlimited as the subject with
which it deals. State ex rel. State Tax Commission v. Redd, 166 Wash. 132, 6
P.2d 619; 26 R.C.L. 27, SS 13. The taxing power of the state is never presumed
to have been relinquished unless the language in which the surrender is made is
clear and unmistakable. Erie R. Co. v. Pennsylvania, 21 Wall. 492, 22 L. Ed.
595; 1 Cooley on Taxation (4th ed) 159, 60.
[3] This is not a contest between the Federal government and
the state as to jurisdiction. It is a contest between the state, asserting its
concurrent, or partial, jurisdiction, and an individual who asserts that exclusive
jurisdiction rests in the Federal government. So far from there being any
contest as to jurisdiction between the two sovereign powers, the record
discloses that they are working in harmony and accord, each exercising the field
for which it is the better equipped and each, at the same time, recognizing the
field of the other. The Federal government, therefore, cannot possibly be prejudiced
by the result of this action.
It appears from what we have already stated that prior to,
at the time of, and at all times since, the inception of the project, the
United States and the state have cooperated in every way in the development and
construction of the dam and power plant. The Federal government at present
furnishes the money, supervises the work, and will, for a time, maintain the operation
of the project. The state, on the other hand, has furnished a large amount of
money for the preliminary work and now, through the Columbia basin commission, acts
in an advisory capacity to the Federal government in the further progress of the
work. The slate also has an option to take over the entire project when
completed.
The Federal government is involved in a huge undertaking,
the object of which is to promote navigation, develop power, and provide for
irrigation. The state is likewise concerned. Navigation is a function that comes
within the exclusive power of the Federal government by virtue of the constitution
of the United States. The development of irrigation and of power for industrial
purposes, however, is within the reserved powers of the state. There is, thus,
every reason why the Federal government and the state should cooperate, and, in
order to do so, each must have proportionate jurisdiction.
"We have in this Republic a dual system of government, National
and state, each operating within the same territory and upon the same persons;
and working without collision, because their functions are different. There are
certain matters over which the National Government has absolute control and no
action of the State can interfere therewith, and there are others in which the
State is supreme, and in respect to them the National Government is powerless. To
preserve the even balance between these two governments and hold each in its
separate sphere is the peculiar duty of all courts, preeminently of this – a duty
oftentimes of great delicacy and difficulty." South Carolina v. United
States, 199 U.S. 437, 26 S. Ct. 110, 50 L. Ed. 261.
On the other hand, if the state were excluded from all
jurisdiction, the residents of the project would be without school facilities,
police protection, and the right to vote, the workmen would be deprived of the benefit
of industrial insurance, and the rules for sanitation would be suspended; for,
if the state be wholly without jurisdiction, then it must follow that the state
may not extend its privileges to the residents of the project nor expend its
money in their behalf. Opinion of Justices, 42 Mass. 580; In re Town of
Highlands, 22 N.Y. Supp. 137; Sinks v. Reese, 19 Ohio 306; State ex rel. Lyle
v. Willett, 117 Tenn. 334, 97 S.W. 299; Ft. Leavenworth R. Co. v. Lowe, 114
U.S. 525, 5 S. Ct. 995, 29 L. Ed. 264; Surplus Trading Co. v. Cook, 281 U.S.
647, 50 S. Ct. 455, 74 L. Ed. 1091.
Furthermore, so far as the record supplies us with any
information, the Federal government did not acquire these lands until after the
work of construction, under appellant's first contract, had been begun. Some of
the lauds, it appears, were not acquired until about the time that the work
under the contract was completed. The record discloses that, when appellant entered
into the second contract, although all of the lands had then been acquired, the
state was exercising its jurisdiction within the project at the instance of the
Federal government itself. Moreover, it does not appear from the record that
the Federal government ever set apart any definite reserve as constituting the
project, but, rather, that it appropriated lands from time to time as the
necessities of the project required; this fact may not be a controlling one,
but is nevertheless entitled to consideration.
The facts, taken as a whole, argue conclusively, in our
opinion, that the state never intended to cede, and the United States never
intended to take, exclusive jurisdiction over the project. Facts consistent
with the retention, and inconsistent with cession, of exclusive jurisdiction by
the state should, in the absence of any assertion by the Federal government to
the contrary, be construed most strongly in favor of the state, to the end that
its territory be not diminished and that its jurisdiction in matters in which
the Federal government is not directly or immediately concerned be not entirely
lost.
We conclude, therefore, that the purposes of the project,
taken as a whole, do not fall exclusively within any of the enumerated classes
mentioned above, so as to give the United States exclusive jurisdiction over the
lands, but, rather in a class where several purposes are so intermingled as to
call for the exercise of jurisdiction by both the Federal government and the
state, according as their respective interests and duties require. In so far as
the legislative acts in question are concerned, they are operative upon the
business activities of the appellant within the project.
The judgments are affirmed.
ALL CONCUR.
