power to establish a uniform currency, or the power to regulate
interstate commerce. On the other hand, the right of the separate states
to grant charters of incorporation is unquestionable. By the Tenth
Amendment of the Constitution it is expressly provided: "The powers not
delegated to the United States by the Constitution nor prohibited by it
to the states are reserved to the states respectively or to the people."
The Supreme Court long ago said: "A state may grant acts of
incorporation for the attainment of those objects which are essential to
the interests of society. _This power is incident to sovereignty._"[1]

[Footnote 1: _Briscoe v. Bank of Kentucky_, 11 Peters, 257, 317.]

The power to grant the franchise of corporate capacity being therefore
inherent in the sovereignty of the states, will not a tax imposed by
Congress upon the exercise of the franchise constitute an interference
with the power? If so the tax is unconstitutional.

The Supreme Court has repeatedly held, that the National Government
"cannot exercise its power of taxation so as to destroy the state
governments or embarrass their lawful action."[1] In the case of
_California vs. Central Pacific R.R. Co._[2] the question was whether
franchises granted to the Central Pacific Railroad Company by the United
States were legitimate subjects of taxation by the State of California.
The Supreme Court, in language frequently quoted in subsequent cases,
discusses the nature and origin of franchises, concluding that a
franchise is "a right, privilege, or power of public concern" existing
and exercised by legislative authority. After enumerating various kinds
of franchises, the Court remarks: "No persons can make themselves a body
corporate and politic without legislative authority. Corporate capacity
is a franchise." The Court continues: