Ryan v. State, 188 Wash. 115, 61 P.2d 1276 (1936).

                     RYAN v. STATE.                     115
 Oct. 1936               Statement of Case.

           [No. 26060. En Banc. October 28, 1936.]
          DAVID H. RYAN, Appellant, v. THE STATE OF
                WASHINGTON, Respondent.
          DAVID H. RYAN, Appellant, v. THE STATE TAX
                COMMISSION, Respondent. «1»

[1] UNITED STATES (1-1) - TERRITORIAL EXTENT AND BOUNDARIES -
AUTHORITY OVER PLACES ACQUIRED WITHIN STATE - JURISDICTION.
Under Const. Art. 1, SS 8, clause 17, respecting the
exclusive jurisdiction of the United States over property
purchased by or ceded to the Federal government for forts,
magazines, arsenals, dockyards, and "other needful
buildings," the state's power to cede jurisdiction is limited
to those instances where it clearly appears that the land is
to be used by the United States for a constitutional or any
governmental purpose; from which four rules are deducible
respecting jurisdiction over lands acquired by the United
States for public purposes.

[2] TAXATION (13) - UNITED STATES (1-1) - POWER OF STATE -
PROPERTY OF UNITED STATES - JURISDICTION - POWER TO TAX
BUSINESS ACTIVITIES. The acquisition by the Federal
government of the lands within the Columbia river or Coulee
dam project, did not ipso facto deprive the state of all
jurisdiction with respect to such lands; but it has
concurrent power to impose an excise tax upon business
activities conducted within the area of the project; and it
will not be presumed that the state has relinquished its
sovereignty; since taxation is an inherent, unlimited power
that can not be contracted away.

[3] SAME. Where the Federal government and the state are working
in harmony and cooperating in every way in the construction
of a huge dam and power project, with important distinct
functions for beth state and nation, it will not be held that
the state will be excluded from all jurisdiction over state
functions, preventing the state from levying an excise tax on
activities in the area of the project, especially where the
facts as a whole argue conclusively that the state never
intended to cede and the Federal government never intended to
take exclusive jurisdiction over the project.

Appeal from judgments of the superior court for
Thurston county, Wilson, J., entered December 2,

«1» Reported in 61 P.2d 1276.

 116    RYAN v. STATE.
                Opinion Per STEINERT, J.          188 Wash.

1935, dismissing actions to recover taxes paid under
protest and for injunctive relief, consolidated and
tried to the court. Affirmed.

Luby & Pearson and Brown & Weller, for appellant.

The Attorney General and E.P. Donnelly, Assistant,
for respondent.

E.W. Schwellenbach, amicus curiae.

                     RYAN v. STATE.                     117
 Oct. 1936              Opinion Per STEINERT, J.

For a number of years, the people of this state have
been actively interested in the development of the
Columbia river and its tributaries. Between 1918 and
1932, many surveys and reports were made by engineers
employed either by the state or else by the
bureau of reclamation or the war department of the
United States. These surveys and reports had relation
to navigation, the development of hydro-electric
power, and the reclamation of arid lands by irrigation.
The state and its people were directly and particularly
interested in, and concerned with, the features
of power and reclamation. In 1932, the chief
of engineers of the United States Army, after an
exhaustive investigation, recommended a comprehensive
plan for the improvement and development of the Columbia
river for the purposes of navigation, flood control,
power and irrigation. The plan contemplated
the ultimate construction of ten dams in the Columbia
river, the first of which, together with a power plant,
was to be erected at the head of Grand Coulee.

In 1933, the state legislature created the Columbia
basin commission, consisting of five members, and
authorized them to enter into contracts and to employ
any and all means necessary to secure the immediate
development of the Columbia basin project by means
of the proposed Grand Coulee dam and the orderly
development of the power, water and soil resources
incident thereto. Chapter 81, Laws of 1933, p. 376,
Rem. Rev. Stat. (Supp.), SS 3017-1 [P.C. SS 5724-26]
et seq.

During this period of preparatory activities, the
Grand Coulee dam and power plant had an indeterminate
status, owing to the uncertainty as to whether
the project would be a state or a Federal project. It
seems that originally it was contemplated that the
Columbia basin commission should at least carry on

 118    RYAN v. STATE.
                Opinion Per STEINERT, J.          188 Wash.

the necessary preliminary engineering. For that
purpose, the Columbia basin commission obtained from
the state emergency relief commission an allocation
of $377,000 of emergency relief funds. This had the
effect of tying in the project with the matter of
emergency relief work, which was seriously engaging the
attention of this, and of other states, at that time.

On June 30, 1933, the Columbia basin commission,
in pursuance of its plan, entered into a contract with
the United States, represented by the bureau of
reclamation, department of the interior, wherein the
United States agreed to make the topographic surveys
and explorative work and to prepare the designs and
specifications for construction work on the dam, for
which the Columbia basin commission agreed to pay an
initial sum of $50,000 at the time of the execution of
the contract and the balance of the allocation of
$377,000 as the work progressed. It appears that,
during the period with which we are here concerned,
the greater part of the $377,000 was paid as agreed.

It soon became apparent, however, that the work of
construction itself would be of such magnitude and
the expense so great that its completion would require
the intervention of no less an agency than the Federal
government, with the unlimited financial resources at
its command. Consequently, steps were taken to have
the Grand Coulee dam and power plant included in the
Federal public works program. After considerable
effort, this was accomplished, and an allocation of
sixty-three million dollars for the dam and power plant
was made by the Federal bureau commonly known as
NIRA.

On November 1, 1933, the United States, represented
by the secretary of the interior, and pursuant to the
reclamation laws and the National Industrial Recovery
Act, and the state of Washington, acting through the

                     RYAN v. STATE.                     119
 Oct. 1936              Opinion Per STEINERT, J.

Columbia basin commission, entered into a contract
relating to the construction of the dam, power plant
and power transmission lings at the Grand Coulee
site, under the comprehensive plan above mentioned.

Some of the provisions of that contract are of
particular interest in this controversy. The contract
began with a series of ten recitals. No. 1 referred to
the fact that the allotment of sixty-three million
dollars, appropriated by NIRA, had been made available
for the construction of the dam and power plant. No.
9 recited that the increased amount of firm power
made possible at the lower dams by reason of the
storage behind the Grand Coulee dam was an important
factor in making the lower dams self-liquidating.
No. 10 referred to the fact that the Columbia basin
commission had been created by the state legislature
for the purpose of cooperating with the Federal
government in securing the construction of the project
and of the Grand Coulee dam.

The contract then set forth the articles of agreement
by number. The first, which is numbered article
provided for the expenditure by the United States of
sixty-three million dollars, or so much thereof as was
found necessary, in the construction of a dam and
power plant at Grand Coulee site. Article 12 provided
that the United States should retain title to the
dam and power plant until the cost of the project had
been fully repaid into the treasury of the United
States. Article 13 reads as follows:

"13. Commission to Act in Advisory Capacity. The
Commission will act as an advisory board representing
the state in an advisory capacity in conferences
with officers of the United States *concerning the
various important questions which may arise from
time to time in connection with the construction and
use of the said dam, power plant and transmission
lines.*" (Italics ours.)

 120    RYAN v. STATE.
                Opinion Per STEINERT, J.          188 Wash.

Then followed a number of provisions giving the
state an option, for a period of eight and one-half
years after the date of the contract, to purchase the
perpetual right to the entire output of the dam and
power plant, upon the conditions set forth in detail
therein. Article 24 reads as follows:

"24. Rules and Regulations by Secretary. The
Secretary shall have the right to adopt and promulgate
rules and regulations for the administration of
the said project and the right to determine and decide
all questions arising in connection with or growing
out of the construction or operation and maintenance
of said proposed dam, power plants and transmission
lines *and which are not expressly determined by law*
or the terms of this contract, and his decisions on such
questions shall be conclusive." (Italics ours.)

At this point, appellant's first connection with the
project appears. On November 29, 1933, appellant, a
resident of San Diego, California, entered into a
contract with the United States for the excavation of
overburden at Columbia river dam site, Columbia
basin project, "Washington," for the sum of $534,500.
The specifications, attached to and made a part of the
contract, provided, among other things, that the
appellant should obtain all required licenses and
permits, should give preference, after ex-service men, to
citizens who were residents of the county and state in
which the work was to be performed, should furnish
compensation insurance in compliance with the laws
of the state wherein the work was to be done, and
should comply with all applicable provisions of Federal,
state, and municipal safety laws and building
and construction codes.

Appellant entered upon the execution of the work
under the contract about January 1, 1934, and
completed it in the summer of the same year. During
the entire performance of the work, appellant

                     RYAN v. STATE.                     121
 Oct. 1936              Opinion Per STEINERT, J.

maintained his office and living quarters within the
territory of the project as hereinafter designated.

After the completion of that contract, appellant, on
July 18, 1934, entered into a second contract with the
United States, which was for the construction of a
railroad at Grand Coulee dam, Columbia basin project,
"Washington," for the sum of $235,570. The railroad
was to be 34.5 track miles in length, extending from
the Northern Pacific Railway tracks at Odair,
Washington, to the dam site. The specifications in this
contract contained the same provisions as those to
which we have specifically referred above. The actual
residence of appellant, for about one-half of the time
during which the second contract was being performed,
was at Coulee City, which is outside of the territory
of the project, and for the remainder of the time was
at the dam site, on government land which had been
obtained in the manner hereinafter described.

On July 16, 1934, which was two days before the
execution of appellant's second contract, the United
States entered into a contract with Silas Mason Company,
Inc., and others, for construction work on Grand
Coulee dam and power plant, Columbia basin project,
"Washington," for the sum of $29,339,301.50. The
last mentioned contract contemplated work on a gigantic
scale, as is indicated by the figures just given. That
contract, however, did not include the work to be done
by appellant under either of his contracts.

We make reference, at this time, to the contract of
Silas Mason Company, Inc., for the reason that out
of it grew an action similar to the two involved here.
Silas Mason Co. v. State Tax Commission, ante p.
98, 61 P.2d 1269. That action and these two were
tried in the superior court at the same time and, by
stipulation of the parties, all the evidence, in so far
as it was material, was considered as applying to all

 122    RYAN v. STATE.
                Opinion Per STEINERT, J.          188 Wash.

three cases. The respective appeals were argued in
this court on the same day, upon records containing
identical statements of facts.

The specifications attached to the contract of Silas
Mason Company, Inc., provided, among other things,
and in addition to what has already been mentioned,
that the contractor should make all necessary arrangements
with the proper state and country authorities
for school facilities, and that police protection for
the contractor's camp and the area involved in and
surrounding the construction work would be furnished
by the Washington state patrol in cooperation with
the Federal government, but that the contractor should
provide, at its camp site, such jail facilities as were
satisfactory to the Washington state patrol.

The area included in the entire project above mentioned
does not specifically and satisfactorily appear
from the record, and we are unable to say exactly how
much land is included therein. It does appear, however,
that the area is very extensive, covering many
acres of land on both sides of the Columbia river and
including a railroad right of way 34.5 miles in length.
There are two important things, however, to be noted
in this connection. The first is that, during the time
that the construction work was in progress, the United
States, through condemnation proceedings brought
against a number of individuals and corporations,
acquired possession of, and title to, the various tracts
of land now within the area of the project. A transcript
of one of such condemnation proceedings, stipulated
to be similar in form to all the others, is made
a part of the record herein. It shows that the title
to that particular tract was acquired by the United
States on or after May 14, 1934, which was after
appellant had commenced work. The other important
factor to be noted is that, included in the area of the

                     RYAN v. STATE.                     123
 Oct. 1936              Opinion Per STEINERT, J.

project, are school lands of the state and also tribal
lands, all of which have been taken over by the Federal
government and now form a part of the project.

At the seventy-fourth session of the United States
Congress, an act was passed authorizing the construction,
repair, and preservation of certain public works
on rivers and harbors and for other purposes. The
act ratified and validated all contracts and agreements
that had been theretofore executed in connection with
the Grand Coulee dam project. H.R. 6732, Public
Act 409. The work contemplated to be done upon the
project by the United States was not in furtherance
of any war measure or for the national defense, but
simply for the improvement of navigation and for
industrial recovery.

During the period of the construction work under
his first contract, appellant maintained warehouses
on ground within the project and at the dam site,
where he stored and sold gasoline, oil, tires and
automobile accessories. Appellant paid the state a tax
on these sales, the recovery of which forms a part of
the basis of his first action.

At its regular session of 1933, the legislature of
this state passed an act commonly known as the occupation
tax act, chapter 191, Laws of 1933, p. 869 et seq.
The act related to certain business activities "within
this state." At its special session of 1933, the
legislature amended the former act in certain respects.
Chapter 57, Laws of 1933, Ex. Ses. p. 157 et seq. That
act likewise applied to business activities "within this
state." The latter act became effective January 18,
1934, which was shortly after appellant's first contract
had been entered into, but before it was performed.

These two actions are in resistance to the application

 124    RYAN v. STATE.
                Opinion Per STEINERT, J.          188 Wash.

of either of these legislative acts to appellant's
activities.

Appellant's first contention is that his construction
or excavation contracts constituted sales of services,
within the provisions of chapter 191, and that by SS 5,
p. 879, of that act, read in connection with SS 2 (2)(f),
p. 875, the proceeds of his contracts were exempt from
the tax.

The answer to this contention is that the tax was
not imposed under chapter 191 as it originally stood,
but under chapter 57, p. 157, SS 1 (designated as
SS 2-a) (1), which clearly covers business activities of
the kind engaged in by appellant, if "within this
state." This contention of appellant is but briefly
discussed by either counsel and, we think, merits
nothing further than what we have already said.

The principal, and only remaining, question in the
case is whether appellant's activities took place
"within this state." Specifically stated, the contention
of appellant is that by virtue of the United States
constitution and the statutes of this state, the area
contained within the project upon which the excavation
and construction work was performed is under the
exclusive jurisdiction of the United States; and that,
therefore, any tax legislation of the state is wholly
inoperative within the area of the project or upon
any activities of appellant therein. Quotation of the
specific constitutional and statutory provisions involved
will first be made.

[1] Art. I, SS 8, clause 17, of the constitution of the
United States provides that Congress shall have
power:

"To exercise exclusive legislation in all cases
whatsoever, over such district (not exceeding ten miles
square) as may, by cession of particular states, and
the acceptance of congress, become the seat of the
government of the United States, *and to exercise like*

                     RYAN v. STATE.                     125
 Oct. 1936              Opinion Per STEINERT, J.

*authority over all places purchased by the consent of
the legislature of the state in which the same shall
be, for the erection of forts, magazines, arsenals,
dockyards, and other needful buildings;* . . ." (Italics
ours.)

Our reference to, and discussion of, this constitutional
provision relate only to the latter, or italicized,
portion of the quotation.

Rem. Rev. Stat., SS 8108 [P.C. SS 7110], adopted in
1891, provides that:

"The consent of the state of Washington be and the
same is hereby given to the acquisition by purchase
or by condemnation, under the laws of this state
relating to the appropriation of private property to public
uses, by the United States of America, or under the
authority of the same, of any tract, piece, or parcel of
land, from any individual or individuals, bodies politic
or corporate, within the boundaries or limits of this
state, for the sites of locks, dams, piers, breakwaters,
keepers' dwellings, and other necessary structures and
purposes required in the improvement of the rivers
and harbors of this state, or bordering thereon, or for
the sites of forts, magazines, arsenals, docks,
navy yards, naval stations, or other needful buildings
authorized by any act of congress, . . . the consent
herein and hereby given being in accordance with the
seventeenth clause of the eighth section of the first
article of the Constitution of the United States, and
with the acts of congress in such cases made and
provided; and the jurisdiction of this state is hereby
ceded to the United States of America over all such
land or lands as may have been or may be hereafter
acquired by purchase or by condemnation, or set apart
by the general government for any or either of the
purposes before mentioned: Provided, that this state
shall retain a concurrent jurisdiction with the United
States in and over all tracts so acquired or set apart
as aforesaid, so far as that all civil and criminal
process that may issue under the authority of this
state against any person or persons charged with
crimes committed, or for any cause of action or suit

 126    RYAN v. STATE.
                Opinion Per STEINERT, J.          188 Wash.

accruing without the bounds of any such tract, may be
executed therein, in the same manner and with like
effect as though this assent and cession had not been
granted."

It will be observed that the statute, while somewhat
broader than Art. I, SS 8, clause 17, in its designation
of structures and purposes, nevertheless specifically
recites that the consent therein given is in accordance
with the constitutional provision.

The provision of Art. I, SS 8, clause 17, as above
quoted and italicized, has been frequently construed
by the United States supreme court, and it is now
definitely settled and accepted that there are two ways
in which lands within the jurisdiction of the state may
become subject to the exclusive jurisdiction of the
United States: (1) By purchase by the United States
for certain specified purposes, with the consent of the
state, and (2) cession of exclusive jurisdiction to the
United States by the state. Ft. Leavenworth R. Co. v.
Lowe, 1-14 U.S. 525, 5 S. Ct. 995, 29 L. Ed. 264; United
States v. Unzeuta, 281 U.S. 138, 50 S. Ct. 284, 74 L.
Ed. 761; Surplus Trading Co. v. Cook, 281 U.S. 647,
50 S. Ct. 455, 74 L. Ed. 1091; Standard Oil Co. v.
California, 291 U.S. 242, 54 S. Ct. 381, 78 L. Ed. 775.

From these cases, the following rules are deducible
respecting jurisdiction over lands acquired by the
United States for public uses: (1) When the land is
acquired for one of the purposes within Art. I, SS 8,
clause 17, by purchase with consent of the state, Federal
jurisdiction is exclusive in such area for all purposes;
(2) when the land is acquired for one of the purposes
within that clause, but other than by purchase
with the consent of the state, then Federal jurisdiction
is exclusive only to the extent of the purposes
for which the land is held; (3) when the land is acquired
for a purpose not within that clause, but by

                     RYAN v. STATE.                     127
 Oct. 1936              Opinion Per STEINERT, J.

purchase with the consent of the state, then the United
States has such jurisdiction over the land as may be
ceded to it by the state; and (4) when the land is
acquired for a purpose not within that clause, in any
mariner other than by purchase with the consent of
the state, then the United States holds the land just
as any other proprietor does, except that the land may
not be taxed by the state. Our ultimate problem
herein will be to determine under which one or more,
if any, of these classifications, the present case falls.

Manifestly, the construction work involved in this
case does not come within any of the uses implied in
the descriptive terms of the constitutional provision,
unless it can be said to come within the term "other
needful buildings." If the case were one of first
impression, the rule of ejusdem generis would, in our
opinion, exclude such work from the classification of
"needful buildings," because the particular work was
in no way connected with, or related to, forts,
magazines, arsenals or dockyards.

However, by judicial interpretation, over a long
period of years, the term "needful buildings" has
been applied to the following: a navy yard (Western
Union Tel. Co. v. Chiles, 214 U.S. 274, 29 8. Ct. 613,
53 L. Ed. 994); a military hospital (Arlington Hotel
Co. v. Fant, 278 U.S. 439, 49 S. Ct. 227, 73 L. Ed.
447) ;a military reservation (United States v. Unzeuta,
281 U.S. 138, 50 S. Ct. 284, 74 L. Ed. 761); an army
training and mobilization station (Surplus Trading
Co. v. Cook, 281 U.S. 647, 50 S. Ct. 455, 74 L. Ed.
1091); a customs house (Sharon v. Hill, 24 Fed. 726);
locks and dams (United States v. Tucker, 122 Fed.
518); a post office (United States v. Andem, 158 Fed.
996); a penitentiary (Steele v. Halligan, 229 Fed.
1011); an Indian training school (United States v.
Wurtzbarger, 276 Fed. 753); a military cemetery

 128    RYAN v. STATE.
                Opinion Per STEINERT, J.          188 Wash.

(Wills v. State, 50 Tenn. 141); a soldiers' home
(Sinks v. Reese, 19 Ohio 306); a courthouse (State ex
rel. Jones v. Mack, 23 Nev. 359, 47 Pac. 763, 62 Am.
st. 811).

While the structures mentioned in the foregoing
eases are not specifically named in, and do not strictly
fall within, the constitutional classification, it is,
nevertheless, apparent that the particular structures or
"buildings" in those cases, with the possible exception
of one, are such as would necessarily require absolute
and exclusive jurisdiction in the United States
government, because their operation is in the discharge of
a constitutional or governmental function, and there is
no field for state participation or state legislation.

The only possible exception in the list is the instance
of locks and dams, involved in the Tucker case. But
even in such case, if the locks and dams were owned
and operated by the United States solely for the purpose
of facilitating navigation, as they concededly
were in that case, their function would likewise be a
constitutional or governmental function. But irrigation,
flood control, and power development (except in
so far as the latter two are intended to promote
navigation or else some war measure or the national
defense), while they may be of national interest and
serve a public purpose, are not functions enjoined
upon the Federal government by the constitution, nor
are they delegated to the United States by the constitution,
nor is it necessary that they be committed, for
their operation, to the exclusive jurisdiction of the
United States government. Legislative power, with
reference to such things, is reserved in the state.

Turning, now, to the statute above quoted, we note
that the state has given its consent to the acquisition,
by purchase or condemnation on the part of the United
States, of lands for sites of locks, dams, etc., as well

                     RYAN v. STATE.                     129
 Oct. 1936              Opinion Per STEINERT, J.

as for the purposes set forth in the constitutional
provision. For present purposes, it may be conceded
that the term "needful buildings" is broad enough,
under the construction given to that term by the Federal
courts, to include locks and dams. It is very
probable that specific mention of locks and dams was
made in the statute in order to remove any doubt that
may have existed generally at, and prior to, the time
of the decision in the Tucker case, with respect to the
inclusive intent of the constitutional provision.

The point that we make and stress here, and upon
which we rest our ultimate conclusion herein, is that,
while the statute conferred consent upon the United
States to acquire land within the territory of the state,
the state's power to cede jurisdiction is limited by the
statute to those instances where it clearly appears
that the land is to be used by the United States for a
constitutional or governmental purpose. As stated in
the leading case upon the subject, Ft. Leavenworth R.
Co. v. Lowe, 114 U.S. 525, 5 S. Ct. 995, 29 L. Ed. 264,
supra:

"The essence of that provision [Art. I. SS 8, clause
17, United States constitution] is that the State shall
*freely* cede the particular place to the United States
for one of the specific and enumerated objects."
(Italics ours.)

[2] The question in this case, then, is whether, by
reason of the conjunction of the constitutional
provision, the statute, and the acquisition by the Federal
government of the lands within the project in the
manner and for the purposes that the government acquired
them, the state has been ipso facto deprived
of all jurisdiction with respect to such lands. However
close the question may seemingly be, we are of
the opinion that the state has not been deprived of
all jurisdiction, but that it has a concurrent jurisdiction

5 - 188 WASH.

 130    RYAN v. STATE.
                Opinion Per STEINERT, J.          188 Wash.

to the extent, among other things, that it has the
right to impose a tax upon business activities conducted
within the area of the project. The reason for this
conclusion is based upon what we conceive to be
fundamental principles of law and the conducive facts of
this case.

By the enabling act of Congress, passed February
22, 1889, the territory of Washington became the state
of Washington. Subject to the limitations and restraints
of the Federal constitution, the state, as such,
has all the sovereign powers of independent nations
over all persons and things within its territorial limits.
Sturges v. Crowinshield, 4 Wheat. 122, 4 L. Ed. 529;
New York v. Miln, 11 Pet. 102, 9 L. Ed. 648; Cummings
v. Missouri, 4 Wall. 277, 18 L. Ed. 356. The area
within, and under, the jurisdiction of a state may come
under the exclusive jurisdiction of the United States
by purchase by the Federal government for a purpose
prescribed by the Federal constitution and with the
consent of the state, or by cession of exclusive
jurisdiction by the state to the United States. In either
event, the land acquires a territorial status and ceases
to be a part of the state, either territorially or
jurisdictionally. Concessions Co. v. Morris, 109 Wash. 46,
186 Pac. 655.

But, since self-preservation is the first law of
nations and states, as well as of individuals, it will not
be presumed, in the absence of clearly expressed intent,
that the state has relinquished its sovereignty.
Wills v. State, 50 Tenn. 141; In re Kelly, 71 Fed. 545;
Ex Parte Gaines, 56 Ark. 227, 19 S.W. 602; Barrett
v. Palmer, 135 N.Y. 336, 31 N.E. 1017, 31 Am. St.
835, 17 L.R.A. 720. (Four of these cases are cited
approvingly in the Concessions Co. case.)

The power of taxation is an incident of sovereignty
and inherent in the state, because government cannot

                     RYAN v. STATE.                     131
 Oct. 1936              Opinion Per STEINERT, J.

exist or function without it. It is a legislative power
following the more general power to make laws. State
ex tel. Board of Commissioners v. Clausen, 95 Wash. 214,
163 Pac. 744. The power of taxation is never
to be suspended, surrendered, or contracted away.
Amendment XIV, Washington constitution. In the
absence of constitutional restraint, the power of the
legislature over taxation is as unlimited as the
subject with which it deals. State ex rel. State Tax
Commission v. Redd, 166 Wash. 132, 6 P.2d 619; 26
R.C.L. 27, SS 13. The taxing power of the state is never
presumed to have been relinquished unless the language
in which the surrender is made is clear and
unmistakable. Erie R. Co. v. Pennsylvania, 21 Wall.
492, 22 L. Ed. 595; 1 Cooley on Taxation (4th ed) 159,
60.

[3] This is not a contest between the Federal
government and the state as to jurisdiction. It is a contest
between the state, asserting its concurrent, or partial,
jurisdiction, and an individual who asserts that
exclusive jurisdiction rests in the Federal government. So
far from there being any contest as to jurisdiction
between the two sovereign powers, the record discloses
that they are working in harmony and accord,
each exercising the field for which it is the better
equipped and each, at the same time, recognizing the
field of the other. The Federal government, therefore,
cannot possibly be prejudiced by the result of this
action.

It appears from what we have already stated that
prior to, at the time of, and at all times since, the
inception of the project, the United States and the
state have cooperated in every way in the development
and construction of the dam and power plant. The
Federal government at present furnishes the money,
supervises the work, and will, for a time, maintain the

 132    RYAN v. STATE.
                Opinion Per STEINERT, J.          188 Wash.

operation of the project. The state, on the other
hand, has furnished a large amount of money for the
preliminary work and now, through the Columbia
basin commission, acts in an advisory capacity to
the Federal government in the further progress of
the work. The slate also has an option to take over
the entire project when completed.

The Federal government is involved in a huge
undertaking, the object of which is to promote navigation,
develop power, and provide for irrigation. The state
is likewise concerned. Navigation is a function that
comes within the exclusive power of the Federal
government by virtue of the constitution of the United
States. The development of irrigation and of power
for industrial purposes, however, is within the reserved
powers of the state. There is, thus, every reason
why the Federal government and the state should
cooperate, and, in order to do so, each must have
proportionate jurisdiction.

"We have in this Republic a dual system of government,
National and state, each operating within the
same territory and upon the same persons; and
working without collision, because their functions are
different. There are certain matters over which the
National Government has absolute control and no action
of the State can interfere therewith, and there
are others in which the State is supreme, and in
respect to them the National Government is powerless.
To preserve the even balance between these two
governments and hold each in its separate sphere is the
peculiar duty of all courts, preeminently of this - a
duty oftentimes of great delicacy and difficulty."
South Carolina v. United States, 199 U.S. 437, 26 S.
Ct. 110, 50 L. Ed. 261.

On the other hand, if the state were excluded from
all jurisdiction, the residents of the project would be
without school facilities, police protection, and the
right to vote, the workmen would be deprived of the

                     RYAN v. STATE.                     133
 Oct. 1936              Opinion Per STEINERT, J.

benefit of industrial insurance, and the rules for
sanitation would be suspended; for, if the state be wholly
without jurisdiction, then it must follow that the state
may not extend its privileges to the residents of the
project nor expend its money in their behalf. Opinion
of Justices, 42 Mass. 580; In re Town of Highlands,
22 N.Y. Supp. 137; Sinks v. Reese, 19 Ohio 306; State
ex rel. Lyle v. Willett, 117 Tenn. 334, 97 S.W. 299;
Ft. Leavenworth R. Co. v. Lowe, 114 U.S. 525, 5 S.
Ct. 995, 29 L. Ed. 264; Surplus Trading Co. v. Cook,
281 U.S. 647, 50 S. Ct. 455, 74 L. Ed. 1091.

Furthermore, so far as the record supplies us with
any information, the Federal government did not acquire
these lands until after the work of construction,
under appellant's first contract, had been begun. Some
of the lauds, it appears, were not acquired until about
the time that the work under the contract was
completed. The record discloses that, when appellant
entered into the second contract, although all of the
lands had then been acquired, the state was exercising
its jurisdiction within the project at the instance
of the Federal government itself. Moreover, it does
not appear from the record that the Federal government
ever set apart any definite reserve as constituting
the project, but, rather, that it appropriated lands
from time to time as the necessities of the project
required; this fact may not be a controlling one, but is
nevertheless entitled to consideration.

The facts, taken as a whole, argue conclusively, in
our opinion, that the state never intended to cede, and
the United States never intended to take, exclusive
jurisdiction over the project. Facts consistent with
the retention, and inconsistent with cession, of
exclusive jurisdiction by the state should, in the absence
of any assertion by the Federal government to the
contrary, be construed most strongly in favor of the

 134    GORD v. HARMON & CO.
                          Syllabus.                188 Wash.

state, to the end that its territory be not diminished
and that its jurisdiction in matters in which the Federal
government is not directly or immediately concerned
be not entirely lost.

We conclude, therefore, that the purposes of the
project, taken as a whole, do not fall exclusively within
any of the enumerated classes mentioned above, so as
to give the United States exclusive jurisdiction over
the lands, but, rather in a class where several purposes
are so intermingled as to call for the exercise of
jurisdiction by both the Federal government and the state,
according as their respective interests and duties
require. In so far as the legislative acts in question are
concerned, they are operative upon the business
activities of the appellant within the project.

The judgments are affirmed.

ALL CONCUR.