estroy 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:

In view of this description of the nature of a franchise, how
can it be possible that a franchise granted by Congress can be
subject to taxation by a state without the consent of
Congress? Taxation is a burden and may be laid so heavily as
to destroy the thing taxed or render it valueless. As Chief
Justice Marshall said in _McCulloch v. Maryland_, "The power
to tax involves the power to destroy."... It seems to us
almost absurd to contend that a power given to a person or
corporation by the United States may be subjected to taxation
by a state. The power conferred emanates from and is a portion
of the power of the government that confers it. To tax it is
not only derogatory to the dignity but subversive of the
powers of the government, and repugnant to its paramount
sovereignty.

[Footnote 1: _Railroad Company v. Peniston_, 18 Wall., 5, 30.]

[Footnote 2: 127 U.S., 1.]

It is true that the Court was here discussing the right of a state to
tax franchises granted by the United States, and not the converse of
that question. The reasoning of the Court would seem, however, to apply
with equal force to the right of the United States to tax a franchise
granted by a state acting within the scope of its sovereign authority.

Patent rights and copyrights are special privileges or franchises
granted by the sovereign or government, and under the United States
Constitution the right to grant patents and copyrights is expressly
conferred on Congress. It has been held repeatedly that patent rights
and copyrights are not taxable by the states[1]. As said by the New York
Court of Appeals in a case involving the power