This section is from the book "The Constitutional Law Of The United States", by Westel Woodbury Willoughby. Also available from Amazon: Constitutional Law.
In Olcott v. The Supervisors37 Justice Strong, speaking for the court, says: "It must be kept in mind that it is only decisions upon local questions, those which are peculiar to the several States, or adjudications upon the meaning of the Constitution or statutes of a State, which the federal courts adopt as rules for their own judgments. That Whiting v. Fond du Lac County [a state decision sought to be held as controlling upon the federal courts] was not a determination of a question of local law is manifest. It is not claimed to have been that. But it is relied upon as having given a construction to the Constitution of the State. Very plainly, however, such was not its character or effect. The question considered by the court was not one of interpretation or construction. The meaning of no provision of the state Constitution was considered or declared. What was considered was the uses for which taxation generally, taxation by any government, might be authorized, and particularly whether the construction and maintenance of a railroad owned by a corporation, is a matter of public concern. ... It was decided that building a railroad, if it be constructed and owned by a corporation, though built by authority of the State, is not a matter in which the public has any interest of such a nature as to warrant taxation in its aid. For this reason it was held that the State had no power to authorize the imposition of taxes to aid in the construction of such a railroad and therefore that the statute giving Fond du Lac County power to extend such Bid was invalid. This was a determination of no local question, or question of statutory or constitutional law construction. It was not decided that the legislature had not general legislative power; or that it might not impose or authorize the imposition of taxes for any public use. Now, whether a use is public or private is not a question of constitutional construction. It is a question of general law. It has as much reference to the Constitution of any other State as it has to the State of Wisconsin. Its solution must be sought not in the decisions of any single state tribunal, but in general principles common to all courts. The nature of taxation, what uses are public and what are private, and the extent of unrestricted legislative power are matters which, like questions of commercial law, no state court can conclusively determine for us. This consideration alone satisfies our minds that Whitney v. Fond du Lac County furnishes no rule which should control our judgment, though the case is undoubtedly entitled to great respect."
37 16 Wall. 678; 21 L. ed. 382.