state can grant. And the power to tax, it must be remembered, involves
the power to destroy. This seems a long step from the theory of the men
who founded the Republic.

Nearly fifty years ago the Supreme Court stated the theory as follows:

The states are, and they must ever be, co-existent with the
National Government. Neither may destroy the other. Hence the
Federal Constitution must receive a practical construction.
Its limitations and its implied prohibitions must not be
extended so far as to destroy the necessary powers of the
States, or prevent their efficient exercise.[1]

[Footnote 1: _Railroad Co. v. Peniston_, 18 Wall., 5.]

The court buttresses its decision by the argument _ex necessitate_--that
to hold otherwise would open the way for men to withdraw their business
activities from the reach of federal taxation and thus cripple the
National Government. The Court says:

The inquiry in this connection is: How far do the implied
limitations upon the taxing power of the United States over
objects which would otherwise be legitimate subjects of
federal taxation, withdraw them from the reach of the Federal
Government in raising revenue, because they are pursued under
franchises which are the creation of the states?... Let it be
supposed that a group of individuals, as partners, were
carrying on a business upon which Congress concluded to lay an
excise tax. If it be true that the forming of a state
corporation would defeat this purpose, by taking the necessary