It is established that a State may not, without violating the Commerce Clause, fix and enforce rates for the continuous transportation of goods between two points within the State, when a part of the route is, however, outside the State. The doctrine though not at first very positively stated may be considered as firmly adopted since the decision of Hanley v. Kansas City Southern R. Co.50

It would seem that the doctrine as to the taxation of receipts for transportation over routes running outside the State but between points within the State is not to be so strictly construed against the States as is that of the regulation of the rates. This is on the theory that the transportation over suck routes is a unit and must be charged for as such, whereas a tax on the railway company based on the amount of transportation over its roads within the State is a reasonable one. Such a tax as this was upheld in Lehigh Valley R. Co. v. Pennsylvania51 and, it is to be admitted, that the language employed by the court would seem to indicate that commerce carried on between two points within the same State is to be considered in all cases domestic even when part of the route lies outside the State.52 But when the attempt was made to apply the same doctrine to the state regulation of rates, the court, in Hanley v. Kansas City Southern R. Co. speaking of the decisions of state courts which had applied the doctrine of the Lehigh case to rate regulation said: "We are of opinion that they carry their conclusion too far. That [the Lehigh case] was the case of a tax, and was distinguished expressly from an attempt of a State directly to regulate the transportation while outside its borders."

49 169 U. S. 466; 18 Sup. Ct. Rep. 418; 42 L. ed. 819.

50 187 U. S. 617; 23 Sup. Ct. Rep. 214; 47 L. ed. 333. See also U. S. v. D. L. & W. R. Co. (C. C), 152 Fed. Rep. 269.

51 145 U. S. 192; 12 Sup. Ct. Rep. 806; 36 L. ed. 672.

52 The court say: The question "is simply whether, in the carriage of freight and passengers between the points in one State, the mere passage over the soil of another State renders that business foreign, which is domestic. We do not think that such a view can be reasonably entertained, and are of opinion that this taxation is not open to constitutional objection by reason of the particular way in which Philadelphia was reached from Mauch Chunk."