In July, 1922, the Kitnama highway district, a municipal corporation organized under the laws of the state of Idaho, voted bonds of the district in the sum of $90,000 for the construction of a highway from east to west, through the district. The present suit was thereafter instituted by the Oregon Short Line Railroad Company, the principal property owner within the district, to restrain the highway commissioners from issuing or selling the bonds thus authorized. From a decree in favor of the plaintiff, this appeal is prosecuted.

There is little or no controversy over the facts. The highway district is approximately 15 miles in length from east to west by 10 miles in width from north to south, and comprises about 96,000 acres. The main line of the railroad company, from Green River, Wyo., to Huntington, Or., extends through the district in an easterly and westerly direction. The proposed highway parallels the railroad, and forms or will form a part of a national highway extending through and beyond the boundaries of the state. The territory within the district is for the most part public domain of the United States, and consists of arid sagebrush land, a part of which is susceptible of cultivation if water is made available for irrigation; but there is no present prospect that water will ever bé available for that purpose. There are no natural resources of any kind within the district, and the local business of the railroad therein is little more than nominal. All the farms within the district, except two, have been abandoned. In the year 1921, the railroad company owned 93.4 per cent, in value of all property within the district, and this percentage was slightly increased in the year 1922, because of depreciation in the value of the remaining property. The highway, when constructed, will contribute in no way to the business of the railroad company. On the contrary, the highway will have a tendency to divert business from the railroad. These and other facts, conceded by the parties to be true, are set forth with greater detail in the opinion of the court below and need not be repeated here. Oregon Short Line Railroad Co. v. Kimama Highway Dist. (D. C.) 287 Fed. 734 .

The appellants contend that there is a difference between a general tax' and a local assessment; that the former is not based upon special or local benefits; that this is a tax, and not a local assessment; and that the power of taxation, in its very nature, acknowledges no limits and involves the power to destroy. The distinction relied upon, no doubt, exists; but, broad as is the general power of taxation, we cannot concede that it knows no limits, in a case like this. A highway district, in the state of Idaho, is not a political municipality, and is not created for general governmental purposes. As said by the Supreme Court of that state in Shoshone Highway District v. Anderson, 22 Idaho, 109 , 125 Pac. 219 :

The claim that such a district, created for such a purpose, can be vested with unlimited power to tax, cannot be sustained. In State v. Newark, 37 N. J. Law, 415, 420 ( 18 Am. Rep. 729 ), the court said:

In Norwood v. Baker, 172 U. S. 269, 278 , 19 Sup. Ct. 187, 190 ( 43 L. Ed. 443 ), it was said:

See, also, Gast Realty Co. v. Schneider Granite Co., 240 U. S. 55 , 36 Sup. Ct. 255, 60 L. Ed. 526 ; Houck v. Little River Drainage District, 239 U. S. 254 , 36 Sup. Ct. 58, 60 L. Ed. 266; Kansas City So. Ry. v. Road Improvement District, 256 U. S. 658 , 41 Sup. Ct. 604, 65 L. Ed. 1151 ; Myles Salt Co. v. Board Commissioners, 239 U. S. 478 , 36 Sup. Ct. 204, 60 L. Ed. 392 , L. R. A. 1918E, 190; Branson v. Bush, 251 U. S. 182 , 40 Sup. Ct. 113, 64 L. Ed. 215 ; Thomas v. Kansas City So. Ry., 261 U. S. 481 , 43 Sup. Ct. 440, 67 L. Ed. 758 . In the latter case, the court said:

*434 There the Legislature of the state of Arkansas had created a drainage and levee district, imposing upon it the duty of constructing drainage works, empowering it to raise the necessary money by construction notes and a bond issue of $100,000, and directing the levy of an annual tax upon all lands and railroads within the district, not exceeding six pep cent, of the assessed valuation. Fifty-seven per cent, of the taxes thus imposed fell upon the railroads, and after reviewing the facts the court held that such a tax was grossly discriminatory and void. And as said by the court below in this case:

We concur in the conclusion of the court below that the tax in question is palpably arbitrary and grossly discriminatory, and' its decree is therefore affirmed.