December 6, 1937
SILAS MASON CO., Inc., et al. v. TAX COMMISSION OF STATE OF
WASHINGTON et al. RYAN v. STATE OF WASHINGTON et al.
302 U.S. 186 (58 S.Ct. 233, 82 L.Ed. 187)
SILAS MASON CO., Inc., et al. v. TAX COMMISSION OF STATE OF
WASHINGTON et al. RYAN v. STATE OF WASHINGTON et al.
Nos. 7, 8.
Reargued: Oct. 12, 13, 1937.
Mr. E. P. Donnelly, of Seattle, Wash., for appellees Tax
Commission of Washington and others.
Messrs. John W. Davis, of New York City, and B. H. Kizer, of
Spokane, Wash., for appellant Ryan.
Messrs. E. P. Donnelly, of Seattle, Wash., and E. W. Schwellenbach,
of Ephrata, Wash., for appellees State of Washington and others.
Mr. Stanley Reed, Sol. Gen., of Washington, D.C., for the
United States, as amicus curiae, by special leave of Court.
Mr. Chief Justice HUGHES delivered the opinion of the Court.
These suits were brought to restrain the enforcement of the
Occupation Tax Act of the State of Washington (Laws 1933, c. 191, p. 869;
Ex.Sess., 1933, c. 57, p. 157 1 ) as applied to the gross income received by
appellants under contracts with the United States for work performed in
connection with the building of the Grand Coulee Dam on the Columbia River. 2
The Supreme Court of the State sustained the tax and affirmed judgments
dismissing the suits. Silas Mason, Inc. v. State Tax Commission, 188 Wash. 98,
61 P.2d 1269; Ryan v. State, 188 Wash. 115, 61 P.2d 1276. The cases come here
on appeal.
The questions are (1) whether the tax imposes an
unconstitutional burden upon the Federal Government, and (2) whether the areas
in which appellants' work is performed are within the exclusive jurisdiction of
the United States. On reargument, and at the request of the Court, the views of
the Government upon these questions were presented. With respect to the first
question, our ruling upholding the validity of a similar tax of West Virginia
as laid upon the gross receipts of a contractor engaged in building locks and
dams for the United States is controlling. James v. Dravo Contracting Company,
302 U.S. 134, 58 S.Ct. 208, 82 L.Ed. 155. We pass to the question of
territorial jurisdiction.
1. The following facts as to the nature and history of the
enterprise, as set forth in appellants' complaints and shown by evidence and
stipulations, are uncontroverted: The Columbia River, above its lower reaches,
partakes of the character of a mountain stream, its fall being great, its
current swift, and its course marked at intervals of a few miles by rapids
flowing over and through rocky masses of such magnitude as to render navigation
difficult and in many instances impossible save by the construction of canals
and locks. There are great alternations in its flow, its period of high water
depending upon the melting of snow in the mountains where its sources are
found. Its principal tributary is the Snake River, which has the same
characteristics. Through improvements that have been made and are contemplated,
the Columbia River is commercially navigable from its mouth to the mouth of the
Snake, and above that point the Columbia is navigable locally, from pool to
pool, to the mouth of the Okanogan River, but all such navigation is difficult
and not commercially feasible because of the physical conditions above
described. These characteristics, however, 'render it an ideal stream for the
development of hydroelectric power.' For the most part the Columbia River
within the United States flows through an arid country, 'the land being
immensely productive and rich when placed under irrigation but of no value
without irrigation.' The course of the river for the greater part of its length
in the United States lies wholly within the State of Washington. From a short
distance below the mouth of the Snake, the Columbia is the boundary between the
States of Washington and Oregon.
Following sporadic improvements extending over a number of years,
the Corps of Engineers of the War Department finally made an exhaustive survey,
and in 1932 the Chief of Engineers of the United States Army recommended a
comprehensive plan for the development of the Columbia River, which took into
consideration the use of its waters for the purposes of navigation, flood
control, power development, and irrigation. The plan contemplated the
construction of ten dams across the river at various points in Washington and
where the river is the boundary between Washington and Oregon. The uppermost of
these dams is at the head of Grand Coulee in Washington about 150 miles below
the international boundary and 274 miles above the mouth of the Snake River.
The plan was commonly described as the Columbia Basin Project.
In June, 1933, Harold L. Ickes was appointed Administrator
of Public Works, and later the President, under authority of the National
Industrial Recovery Act (sections 201—203, 48 Stat. 200—205 (40 U.S.C.A. §§
401—403)), directed the Administrator to include in the Public Works program
the Grand Coulee Dam and Power Plant. Appellants state that the project as
finally recommended by the War Department and the Department of the Interior
contemplated, among other features, a dam at the Grand Coulee to be 370 feet
high above low water (550 feet high, as actually constructed) and 4,290 feet
long on the crest, and a power plant to develop 2,100,000 horse power, at a
total cost of $392,000,000. Appellants add that this is the key dam on the
river and will create a lake 150 miles long, reaching the Canadian boundary;
that over 5,000,000 acrefeet of storage will become available, the release of
which when the flow of the river is at its lowest will double the prime power
of the river downstream to the Snake River and add more than 50 per cent. to
the power of the Columbia below the Snake; that the storage will have an
appreciable effect in reducing floods on the whole river; and that 'there will
be 905,500 acres of first class land available for irrigation.'
In 1933, the Legislature of the State of Washington created
the Columbia Basin Commission to promote the Columbia Basin Project. Laws 1933,
c. 81, p. 376; Ryan v. State, supra, 188 Wash. 115, 61 P.2d 1276, at page 1277.
For that purpose the Commission obtained an allocation of $377,000 of the
emergency relief funds of the State. On June 30, 1933, the United States,
represented by the Commissioner of the Bureau of Reclamation, under the
provisions of the Reclamation Act of June 17, 1902 ( 32 Stat. 388), and
amendatory and supplementary acts (43 U.S.C.A. § 371 et seq.), made a contract
with the Columbia Basin Commission by which the United States agreed to
undertake topographic surveys and exploratory work and prepare certain designs
and estimates for which the Columbia Basin Commission undertook to pay within
the limits of its appropriation. Ryan v. State, supra, 188 Wash. 115, 61 P.2d
1276, at page 1278.
On November 1, 1933, the Secretary of the Interior signed a
memorandum addressed to himself as Administrator of Public Works in which the
Secretary recommended that the project 'be considered a federal project to be
constructed, operated and maintained by the Bureau of Reclamation and to be
paid for from net revenues derived from the sale of its electric power.' Under
the same date, the United States, represented by the Secretary of the Interior,
in pursuance of the Reclamation Act of 1902 and the National Industrial
Recovery Act, made a further agreement with the State of Washington providing
for the expenditure by the United States, through the Bureau of Reclamation, of
the sum of $63,000,000 for the construction of a dam and power plant at the
Grand Coulee site, together with necessary transmission lines. There was
further provision that the United States should retain title to the dam and
power plant until the cost of the project, including the cost of the first unit
dam and power plant, had been fully repaid into the United States Treasury;
that the State Commission should act as an advisory board in conference with
officers of the United States concerning the various important questions which
might arise in connection with the construction and use of the dam, power
plant, and transmission lines; and that the State should have an option to
purchase the perpetual right to the entire power output of the first unit dam
and power plant upon prescribed conditions. Ryan v. State, supra, 188 Wash.
115, 61 P.2d 1276, at page 1278.
On December 12, 1933, the Secretary of the Interior and
Administrator of Public Works signed an amended Declaration of Taking in the
case of United States v. Continental Land Company et al., in the United States
District Court for the Eastern District of Washington, * in which it was stated
that certain lands at the Grand Coulee Dam site to the extent of 840.28 acres
'are hereby taken for the use of the United States' in the construction of a
dam 'for the regulation and control of the flow of the Columbia River, for a
storage reservoir from the damsite to the Canadian boundary, for the
improvement of navigation, for flood control, for hydro-electric power
development at the Grand Coulee damsite, for the increase of power development
downstream, for the reclamation of arid and semi-arid lands, for the domestic
use of water, and for the relief of unemployment.' Thereupon the United States
immediately acquired title and possession of the lands involved. 40 U.S.C. 258a
(40 U.S.C.A. § 258a). Shortly after, on January 4, 1934, the First Assistant
Secretary of the Interior gave formal notice to the Commissioner of Public
Lands of Washington of the intention of the United States to make examinations
and surveys and attached to the notice a list of lands owned by the State 'over
and upon which the United States requires rights of way for canals, ditches,
laterals and sites for reservoirs and structures appurtenant thereto; and such
additional rights of way and quantities of land as may be required for the
operation and maintenance of the completed works for the said proposed Columbia
Basin Project.' The notice was given pursuant to the state statutes to which we
shall presently refer. The lands in this list are described as 'Bed and Shore
Lands of Washington State' and 'Uplands of Washington State,' affected by
Columbia Basin Project.
In December, 1933, the Department of the Interior entered
into a contract with David H. Ryan (No. 8) for the excavation of the
'over-burden' at the damsite. That work was upon land, above high-water mark,
already or about to be acquired by the United States. The contractor completed
it in the summer of 1934, maintaining his office and living quarters within the
territory of the Grand Coulee Project. The contract provided that the appellant
should 'obtain all required licenses and permits,' should furnish 'compensation
insurance' in compliance with the laws of the State, and should 'comply with
all applicable provisions of federal, state, and municipal safety laws and
building and construction codes.' Ryan v. State, supra, 188 Wash. 115, 61 P.2d
1276, at page 1279.
In July, 1934, a contract was made between the United States
and Silas Mason Company and others, appellants in No. 7, for the construction
of part of the Grand Coulee Dam and Power Plant covered by described items in
the schedule of specifications, for the sum of $29,339,301.50. 3 This contract,
like that of Ryan, required the contractor to obtain licenses and permits and
to furnish compensation insurance in compliance with the workmen's compensation
law of the State.
Such a vast undertaking necessarily had in view a large
number of employees who with their families would require the appropriate
facilities of community life. Accordingly, the specifications provided for the
erection on the tract acquired by the government of a 'contractor's camp,'
embracing the various buildings incident to the work and homes for the
contractor's employees. The contractor was required, regardless of the approval
of the contracting officer, to 'comply with all the laws and regulations of the
State of Washington or any agency or subdivision thereof, which affect the
building, maintenance or operation' of the camp. The discharge of sewage into
the Columbia River was to conform to the laws and regulations of the Department
of Health of the State. The contractor was to make all necessary arrangements
with the proper state and county authorities for school facilities and for
police protection which within 'the area involved in and surrounding the
construction work' was to be furnished by the Washington State Patrol in
co-operation with the Government. The contractor was also to provide and
maintain jail facilities satisfactory to the Washington State Patrol and to
co-operate with it and the Government in the maintenance of law and order.
The contractor's camp has developed into a community called
'Mason City.' On the opposite side of the river lies another camp maintained by
the United States for the offices and residences of its engineers. It appears
that there are 'two regularly formed school districes' in the area in question,
one in the 'engineers' town' and one in 'Mason City,' under the laws of the
State of Washington; that in 'Mason City' the policemen employed by the
contractor have been made deputy sheriffs of Okanogan County; that the attorney
for the contractor has been appointed a justice of the peace, and one of the
doctors in the hospital at the camp has been made a deputy coroner, in that
county; that, in the fall of 1933, one who was operating a beer parlor within
the part of the area which lies in Grant County without a permit from the
county commissioners, was fined in a justice's court as provided in the local
ordinance; that the sheriff of Grant County has been called to the dam site to
investigate infractions of local law.
In September, 1934, the Department of the Interior made a
further contract with appellant Ryan for the construction of a railroad
connecting with the tracks of the Northern Pacific Railway Company at Odair,
Wash., and running to the site of the Grand Coulee Dam. The sole purpose of
this railroad was to assist in the construction of the dam and the appurtenant
works.
By the Act of August 30, 1935, 49 Stat. 1028, 1039, 1040,
the Congress 'validated and ratified' all the 'contracts and agreements' which
had been executed in connection with the Grand Coulee Dam.
2. No question is presented as to the constitutional
authority of Congress to provide for this enterprise or to acquire the lands
necessary or appropriate for that purpose. There is no contention that the
State may interfere with the conduct of the enterprise. The question of
exclusive territorial jurisdiction is distinct. That question assumes the
absence of any interference with the exercise of the functions of the Federal
Government and is whether the United States has acquired exclusive legislative
authority so as to debar the State from exercising any legislative authority
including its taxing and police power in relation to the property and
activities of individuals and corporations within the territory. The
acquisition of title by the United States is not sufficient to effect that
exclusion. It must appear that the State, by consent or cession, has
transferred to the United States that residuum of jurisdiction which otherwise
it would be free to exercise. Surplus Trading Company v. Cook, 281 U.S. 647, 650—652,
50 S.Ct. 455, 456, 74 L.Ed. 1091; James v. Dravo Contracting Co., supra. See,
also, Fort Leavenworth R. Co. v. Lowe, 114 U.S. 525, 527, 539, 5 S.Ct. 995, 29
L.Ed. 264; Arlington Hotel Co. v. Fant, 278 U.S. 439, 451, 49 S.Ct. 227, 229,
73 L.Ed. 447; United States v. Unzeuta, 281 U.S. 138, 142, 50 S.Ct. 284, 285,
74 L.Ed. 761.
In this instance, the Supreme Court of Washington has held
that the State has not yielded exclusive legislative authority to the Federal
Government. Ryan v. State, supra. That question, however, involving the extent
of the jurisdiction of the United States, is necessarily a federal question.
Brewer-Elliott Oil & Gas Co. v. United States, 260 U.S. 77, 87, 43 S.Ct.
60, 64, 67 L.Ed. 140; United States v. Utah, 283 U.S. 64, 75, 51 S.Ct. 438,
440, 75 L.Ed. 844; Borax Consolidated v. Los Angeles, 296 U.S. 10, 22, 56 S.Ct.
23, 29, 80 L.Ed. 9.
3. The question arises with respect (a) to lands acquired by
the United States from the State itself, (b) to lands acquired by the United
States from individual owners by purchase or condemnation, (c) to Indian tribal
lands.
Lands acquired from the State. These consist of the river
bed and shore lands and of certain uplands including 'school lands.'
While the United States has paramount authority over the
river for the purpose of the control and improvement of navigation, the title
to the river bed, as well as to the shore lands and school lands was in the
State (Port of Seattle v. Oregon & Washington R. Co., 255 U.S. 56, 63, 41
S.Ct. 237, 239, 65 L.Ed. 500), and the State had legislative authority over all
this area consistent with federal functions. United States v. Bevans, 3 Wheat,
336, 386, 387, 4 L.Ed. 404; Stockton v. Baltimore & N.Y.R. Co. (C.C.) 32 F.
9, 18; Hamburg-American S.S. Co. v. Grube, 196 U.S. 407, 415, 25 S.Ct. 352, 49
L.Ed. 529; Gromer v. Standard Dredging Co., 224 U.S. 362, 371, 372, 32 S.Ct.
499, 56 L.Ed. 801. The notice to the state authorities by the Department of the
Interior with respect to the river bed, shore lands, and uplands owned by the
State was said to be given 'pursuant to the Act of Congress of June 17, 1902 (
32 Stat. 388) and acts amendatory thereof and supplementary thereto.' 43 U.S.C.
371 et seq. (43 U.S.C.A. § 371 et seq.). The notice is set forth in the margin.
4 The reference is to the United States Reclamation Act. That act was not
intended to provide for the acquisition of exclusive federal jurisdiction. The
act itself stated the contrary (section 8, 43 U.S.C. 383). It directed the
Secretary of the Interior to proceed in conformity with the state laws in
carrying out the provisions of the act and provided that nothing therein
contained should be construed as interfering with the laws of the State
relating to the control, appropriation, use, or distribution of water used in
irrigation. The act has been administered in harmony with this controlling
principle that the State should not be ousted of jurisdiction. See Kansas v.
Colorado, 206 U.S. 46, 92, 93, 27 S.Ct. 655, 51 L.Ed. 956; Nebraska v. Wyoming,
295 U.S. 40, 42, 55 S.Ct. 568, 79 L.Ed. 1289: California Oregon Power Co. v.
Beaver Cement Co., 295 U.S. 142, 164, 55 S.Ct. 725, 731, 79 L.Ed. 1356.
The Department of the Interior expressly stated that the
notice was given 'pursuant to section 3378 of Pierce's Code (1929)' with
respect to examinations and surveys, and the list of state lands 'in pursuance
of section 3380 of Pierce's Code (1929).' These are sections 7410 and 7412 of
Remington's Revised Statutes, which with related provisions were enacted in
1905. Laws of Washington, 1905, p. 180. These provisions are set forth in the
margin. 5 They were manifestly enacted to give authority to the United States
to acquire property for the purposes of irrigation under the United States
Reclamation Act and with the corresponding limitations. Thus section 7410
(section 3378 of Pierce's Code) provides for notice by the Secretary of the
Interior to the Commissioner of Public Lands of the State that the United
States pursuant to the Reclamation Act intends to make examinations or surveys
for the utilization of specified waters. And section 7412 (section 3380 of
Pierce's Code) contemplates the proceeding under the Reclamation Act as
described in section 7410.
Section 7411 (section 3379 of Pierce's Code) refers to the
same sort of proceeding. As to appropriation of water, it provides that
appropriation 'by or on behalf of the United States shall inure to the United
States, and its successors in interest, in the same manner and to the same
extent as though said appropriation had been made by a private person,
corporation or association.' As to acquisition of title by the United States,
it provides:
'The title to the beds and shores of any navigable lake or
stream utilized by the construction of any reservoir or other irrigation works
created or constructed as a part of such appropriation hereinbefore in this
section provided for, shall vest in the United States to the extent necessary
for the maintenance, operation and control of such reservoir or other
irrigation works.'
Neither in the statutes governing the proceeding initiated
by the Secretary of the Interior nor in the state statute was there provision
for acquisition by the United States of exclusive legislative authority over
the lands of the State to which title was thus obtained. This is true with
respect to all the lands mentioned in the Secretary's notice embracing the bed
of the river, the shore lands, and the designated uplands including school
lands.
Lands acquired by purchase or condemnation. Appellants
contend that exclusive jurisdiction as to these lands vested ipso facto in the
Federal Government by the operation of clause 17, section 8, article 1, of the
Federal Constitution, which provides that the Congress shall have power 'To
exercise exclusive Legislation' 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, Dock-Yards, and other needful Buildings.'
Considering this provision in James v. Dravo Contracting Company, supra, we
construed the phrase 'other needful Buildings' to embrace locks and dams and
whatever structures are found to be necessary in the performance of the
functions of the Federal Government. We also concluded that clause 17 should
not be construed as implying a stipulation that the consent of the State to
purchases must be without reservations. We were unable to reconcile such an
implication with the freedom of the State and its admitted authority to refuse
or qualify cessions of jurisdiction when purchases have been made without
consent or property has been acquired by condemnation.
The statute of Washington which is relied upon as granting
consent and ceding exclusive jurisdiction to the Federal Government is section
8108 of Remington's Revised Statutes, the full text of which is quoted in the
margin. 6 This statute gives consent to the acquisition of lands by the United
States '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 is said to be given
in accordance with the constitutional provision found in clause 17 of section 8
of article 1 and with the acts of Congress in such cases made and provided.
The statute in terms refers to such acquisition 'from any
individual or individuals, bodies politic or corporate, within the boundaries
or limits of this state.' This language is not apt to describe acquisitions
from the State itself. And many years ago (1903) the Supreme Court of the State
so held with respect to the corresponding provisions of the Acts of 1890, p.
459, and 1891, p. 31, embodied in section 8108. State ex rel. Bussell v.
Callvert, 33 Wash. 380, 388—390, 74 P. 573. Under that construction, the
above-quoted provisions of section 8108 would be inapplicable to the
acquisition of title to the river bed, shore lands, and uplands owned by the
State, apart from our conclusions in the light of the proceedings taken under
the United States Reclamation Act and the pertinent state statute.
With respect to lands acquired from private owners, the Supreme
Court of the State has held in the instant case that the enterprise of the
Federal Government has a reach which takes it outside the purview of section
8108. The pith of the decision is that, while the statute contemplated the
building of locks and dams and other structures required in the improvement of
the rivers and harbors of the State, it did not contemplate the yielding by the
State of all legislative authority in connection with such a project as the
Columbia Basin Project embracing 'the development of irrigation and of power
for industrial purposes.' The state court concluded 'that the purposes of the
project, taken as a whole, do not fall exclusively within any of the enumerated
classes mentioned above (in the statute), 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.' Ryan v. State, supra, 188 Wash. 115, 61 P.2d
1276, at page 1284.
Considering the scope of the federal undertaking, we cannot
say that this construction of section 8108 is inadmissible. Thus
irrigation—'the reclamation of arid and semi-arid lands'—is an integral part of
the federal plan and the reservoirs for the storage of water were to be
provided with that end in view. That was set forth as one of the main
objectives, as well as the development of power, in the Declaration of Taking
filed in the federal court in the condemnation proceedings, and, whatever may
be said of power development so far as it is incidental to the improvement of
navigation, the reclamation of arid or semiarid lands has always been regarded
as a project which carried with it an appropriate recognition of a continued
state jurisdiction. Kansas v. Colorado, supra; Nebraska v. Wyoming, supra. We
cannot say that the state statute, enacted in 1891, must be taken as
conclusively showing an intent to yield exclusive jurisdiction in such a case.
Assuming that because of the presence of the federal question we are at liberty
to construe the statute for ourselves, we should, in harmony with our
principles of decision in such cases, give great weight to the views of the
state court as to the intent and limitations of the state statute in granting
consent and cession. See Freeport Water Company v. Freeport, 180 U.S. 587, 595,
596, 21 S.Ct. 493, 45 L.Ed. 679; Milwaukee Electric R. & L. Co. v. Railroad
Commission, 238 U.S. 174, 184, 35 S.Ct. 820, 59 L.Ed. 1254; Phelps v. Board of
Education, 300 U.S. 319, 322, 57 S.Ct. 483, 484, 81 L.Ed. 673; Dodge v. Board
of Education, 302 U.S. 74, 58 S.Ct. 98, 82 L.Ed. 57, decided November 8, 1937.
We should accept that construction unless we are satisfied that it does
violence to federal right based upon the statute, defeating the reasonable
anticipation and purpose of securing through the operation of the statute an
essential and exclusive legislative authority for the Federal Government.
Not only do we find no violence done to federal right or
frustration of federal intent by the State's construction of its statute, but
the evidence is clear that the Federal Government contemplated the continued
existence of state jurisdiction consistent with federal functions and invited
the cooperation of the State in providing an appropriate exercise of local
authority over the territory.
Even if it were assumed that the state statute should be
construed to apply to the federal acquisitions here involved, we should still
be met by the contention of the Government that it was not compelled to accept,
and has not accepted, a transfer of exclusive jurisdiction. As such a transfer
rests upon a grant by the State, through consent or cession, it follows, in
accordance with familiar principles applicable to grants, that the grant may be
accepted or declined. Acceptance may be presumed in the absence of evidence of
a contrary intent, but we know of no constitutional principle which compels
acceptance by the United States of an exclusive jurisdiction contrary to its
own conception of its interests. The mere fact that the Government needs title
to property within the boundaries of a State, which may be acquired
irrespective of the consent of the State (Kohl v. United States, 91 U.S. 367,
371, 372, 23 L.Ed. 449), does not necessitate the assumption by the Government
of the burdens incident to an exclusive jurisdiction. We have frequently said
that our system of government is a practical adjustment by which the national
authority may be maintained in its full scope without unnecessary loss of local
efficiency. In acquiring property, the federal function in view may be
performed without disturbing the local administration in matters which may
still appropriately pertain to state authority. In our opinion in James v.
Dravo Contracting Company, supra, we observed that the possible importance of
reserving to the State jurisdiction for local purposes which involve no
interference with the performance of governmental functions is becoming more
and more clear as the activities of the Government expand and large areas
within the States are acquired. And we added that there appeared to be no
reason why the United States should be compelled to accept exclusive
jurisdiction or the State be compelled to grant it in giving its consent to
purchases.
The federal intent in this instance is clearly shown. It is
shown not merely by the action of administrative officials, but by the
deliberate and ratifying action of Congress, which gives the force of law to
the prior official action even if unauthorized when taken. Swayne & Hoyt,
Ltd., v. United States, 300 U.S. 297, 301, 302, 57 S.Ct. 478, 479, 81 L.Ed.
659. As Congress validated and ratified 'all contracts' which have been
executed in connection with the Grand Coulee Dam project, we are at liberty to
refer to the terms of these contracts as manifesting the intention of Congress
no less than that of the officers who executed them. These contracts with
appellants were made in full appreciation of the inevitable creation, through
the carrying out of this project, of a large local community within the area
acquired by the United States, with residents whose needs could be suitably
served by the administration of the laws of the State without interfering in
any way with the execution of the federal plan. School facilities were to be,
and have been, provided by arrangements with the local authorities. Police
protection was to be, and has been, assured by co-operation with the State
Patrol. Cognizance of crimes committed within the area has been taken by local
prosecutors and judicial officers. It is futile to say that these local
authorities became federal authorities pro hac vice, for the contracts which
have been ratified by Congress manifestly contemplated action by the local
officers as representatives of the State and as acting in the exercise of state
jurisdiction.
In particular, appellants' contracts assumed that state
jurisdiction would extend to activities of the contractors. They were to obtain
all required licenses and permits. Compensation insurance under the laws of the
State was to be provided for their employees. State building regulations were
to be obeyed. The rules of the local Department of Health were to be observed
in the discharge of sewage into the river. We are at a loss to understand how
the continued jurisdiction of the State without conflicting with federal
operations could have been more fully recognized, or the assumption of
exclusive legislative authority by the United States more effectively
disclaimed, than by the action of Congress in ratifying the provisions of these
contracts.
Appellants' argument comes to this—that we must not only
override the construction of the state statute by the state court but that we
must construe the statute as compelling the Federal Government to assume an
exclusive legislative authority which it did not need, which it has not
accepted or exercised, and against the burden of which it has sought to protect
itself by securing state cooperation in accordance with the express
authorization of Congress. We find no warrant for such action.
Indian tribal lands. What has been said also disposes of the
contention in relation to this part of the area. Appellants say that title was
originally in the United States for the benefit of Indians on the Colville
Reservation. Executive Order of July 2, 1872. While at a later date the lands
were opened for entry (Act March 22, 1906, 34 Stat. 80; Proclamation of the
President, May 3, 1916, 39 Stat. 1778), it appears that they were withdrawn
before any entry was made. Appellants concede that title to these lands has
always been in the United States and hence could not have been acquired by
purchase or condemnation. But with respect to such lands exclusive legislative
authority would be obtained by the United States only through cession by the
State. Surplus Trading Co. v. Cook, supra, 281 U.S. 647, at page 651, 50 S.Ct.
455, 456, 74 L.Ed. 1091. If they may be deemed to be within the reference in
section 8108 to 'public land' which 'may be set apart by the general
government' for the purposes 'before mentioned,' we are brought back to the
questions already discussed, and we need not consider the question whether
these lands had in fact been set apart in the prescribed manner.
Our conclusion is that the State had territorial
jurisdiction to impose the tax upon appellants' receipts and that the tax does
not lay an unconstitutional burden upon the Federal Government.
The respective judgments are affirmed.
Mr. Justice McREYNOLDS, Mr. Justice SUTHERLAND, Mr. Justice
BUTLER, and Mr. Justice ROBERTS dissent for the reasons stated in the
dissenting opinion in James v. Dravo Contracting Company, supra.
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1
The Act describes the tax as laid 'upon the privilege of
engaging in business activities.' Section 2-a(1), as added by Laws Wash.1933,
Ex.Sess., p. 157, § 1 provides: '* * * there is hereby levied and there shall
be collected from every person engaging or continuing within this state in the
business of rendering or performing services * * * an annual tax or excise for
the privilege of engaging in such business * * * equal to the gross income of
the business multiplied by the rate of five-tenths of one per cent. * * *'
2
Appellant David H. Ryan, in No. 8, also brought an action to
obtain a refund of occupation taxes which he had paid. That action was
consolidated for hearing in the state courts with the suit for injunction to
restrain further collection.
*
For opinion on appeal, see (C.C.A.) 88 F.2d 104.
3
For administrative purposes and to avoid confusion with business
operations of the contractors elsewhere, the contractors organized the
appellant Mason-Walsh-Atkinson-Kier Company, and to avoid objections to an
assignment of the contract they entered into an agreement with the United
States in September, 1934, by which the new company was constituted the agent
of the contractors for the prosecution of the work without relinquishment of
their obligations.
4
'United States Department of the Interior
'Office of the Secretary, Washington
'Jan - 4 1934
'Bureau of Reclamation
'Mails and Files, Jan 5 1934
'Washington, D.C.
'State Commissioner of Public Lands,
'Olympia, Washington.
'Dear Sir:
'Please take notice that pursuant to the Act of Congress of
June 17, 1902 ( 32 Stat. 388) and acts amendatory thereof or supplementary
thereto, the United States intends to make examinations and surveys for the
utilization of the waters of Columbia River and its tributaries in the
development of the proposed Columbia Basin Project.
'The foregoing notice is given pursuant to Section 3378 of
Pierce's Code (1929).
'Please take further notice that attached hereto, identified
as 'Exhibit A' and made a part hereof is a list of lands owned by the State of
Washington, over and upon which the United States requires rights of way for
canals, ditches, laterals and sites for reservoirs and structures appurtenant
thereto; and such additional rights of way and quantities of land as may be
required for the operation and maintenance of the completed works for the said
proposed Columbia Basin Project. Please file this notice, together with the
attached list, in your office, as a reservation from sale or other disposition
of such lands, so described, by the State of Washington.
'The notice last herein given is in pursuance of Section
3380 of Pierce's Code (1929).
'Very truly yours,
'(Signed) T. A. Walters,
'First Assistant Secretary.'
5
'§ 7410. Exemptions pending federal investigation. Whenever
the secretary of the interior of the United States, or any officer of the
United States duly authorized, shall notify the commissioner of public lands of
this state that pursuant to the provisions of the act of congress approved June
17, 1902, entitled, 'An act appropriating the receipts from the sale and
disposal of public lands in certain states and territories to the construction
of irrigation works for the reclamation of arid lands,' or any amendment of
said act or substitute therefor, the United States intends to make examinations
or surveys for the utilization of certain specified waters, the waters so
described shall not thereafter be subject to appropriation under any law of
this state for a period of one year from and after the date of the receipt of
such notice by such commissioner of public lands; but such notice shall not in
any wise affect the appropriation of any water theretofore in good faith
initiated under any law of this state, but such appropriation may be completed
in accordance with the law in the same manner and to the same extent as though
such notice had not been given. No adverse claim to any such waters initiated
subsequent to the receipt by the commissioner of public lands of such notice
shall be recognized, under the laws of this state, except as to such amount of
the waters described in such notice or certificate hereinafter provided as may
be formally released in writing by a duly authorized officer of the United
States. If the said secretary of the interior or other duly authorized officer
of the United States shall, before the expiration of said period of one year, certify
in writing to the said commissioner of public lands that the project
contemplated in such notice appears to be feasible and that the investigation
will be made in detail, the waters specified in such notice shall not be
subject to appropriation under any law of this state for the further period of
three years following the date or receipt of such certificate, and such further
time as the commissioner of public lands may grant, upon application of the
United States or some one of its authorized officers and notice thereof first
published once in each week for four consecutive weeks in a newspaper published
in the county where the works for the utilization of such waters are to be
constructed, and if such works are to be in or extend into two or more counties,
then for the same period in a newspaper in each of such counties: Provided,
that in case such certficate shall not be filed with said commissioner of
public lands within the period of one year herein limited therefor the waters
specified in such notice shall, after the expiration of said period of one
year, become unaffected by such notice and subject to appropriation as they
would have been had such notice never been given: And provided further, that in
case such certificate be filed within said one year and the United States does
not authorize the construction of works for the utilization of such waters
within said three years after the filing of said certificate, then the waters
specified in such notice and certificate shall, after the expiration of said
last named period of three years, become unaffected by such notice or
certificate and subject to appropriation as they would have been had such
notice never been given and such certificate never filed.'
'§ 7411. Appropriation—Title to beds and shores. Whenever
said secretary of the interior or other duly authorized officer of the United
States shall cause to be let a contract for the construction of any irrigation
works or any works for the storage of water for use in irrigation, or any
portion or section thereof, for which the withdrawal has been effected as
provided in section 7410, any authorized officer of the United States, either
in the name of the United States or in such name as may be determined by the
secretary of the interior, may appropriate, in behalf of the United States, so
much of the unappropriated waters of the state as may be required for the
project, or projects, for which water has been withdrawn or reserved under the
preceding section of this act, including any and all divisions thereof,
theretofore constructed, in whole or in part, by the United States or proposed
to be thereafter constructed by the United States, such appropriation to be
made, maintained and perfected in the same manner and to the same extent as
though such appropriation had been made by a private person, corporation or
association, except that the date of priority as to all rights under such
appropriation in behalf of the United States shall relate back to the date of
the first withdrawal or reservation of the waters so appropriated, and in case
of filings on water previously withdrawn under said section 7410, no payment of
fees will be required. Such appropriation by or on behalf of the United States
shall inure to the United States, and its successors in interest, in the same
manner and to the same extent as though said appropriation had been made by a
private person, corporation or association. The title to the beds and shores of
any navigable lake or stream utilized by the construction of any reservoir or
other irrigation works created or constructed as a part of such appropriation
hereinbefore in this section provided for, shall vest in the United States to
the extent necessary for the maintenance, operation and control of such
reservoir or other irrigation works.'
'§ 7412. Reservation of necessary lands by United States
Procedure. When the notice provided for in section 7410 shall be given to the
commissioner of public lands the proper officers of the United States may file
with the said commissioner a list of lands (including in the term 'lands' as
here used, the beds and shores of any lake, river, stream, or other waters)
owned by the state, over or upon which the United States may require rights of
way for canals, ditches or laterals or sites for reservoirs and structures
therefor or appurtenant thereto, or such additional rights of way and quantity
of land as may be required for the operation and maintenance of the completed
works for the irrigation project contemplated in such notice, and the filing of
such list shall constitute a reservation from the sale or other disposal by the
state of such lands so described, which reservation shall, upon the completion
of such works and upon the United States by its proper officers filing with the
commissioner of public lands of the state a description of such lands by metes
and bounds or other definite description, ripen into a grant from the state to
the United States. The state, in the disposal of lands granted from the United
States to the state, shall reserve for the United States rights of way for
ditches, canals, laterals, telephone and transmission lines which may be
required by the United States for the construction, operation and maintenance
of irrigation works.'
6
'§ 8108. Consent to acquisition of certain rights by United
States, etc. 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, and all deeds, conveyances of title papers
for the same shall be recorded as in other cases, upon the land records of the
county in which the land so acquired may lie; and in like manner may be
recorded a sufficient description by metes and bounds, courses and distances,
of any tract or tracts, legal divisions or subdivisions of any public land
belonging to the United States, which may be set apart by the general
government for any or either of the purposes before mentioned by an order,
patent, or other official document or papers describing such lands; 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.'
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