Weekly standard. [volume] (Raleigh, N.C.) 1858-1865, 1864-01-20
For the Standard.
RALEIGH, Jan. 9, 1864
His Ercelleney q. B. Vance: -

4G.
RALEIGH, Jan. 9, 1864
His Ezcelleney T. B. Hanee: ,,5 -... 'rs.;-3 II.
SR:-In connection with the matter inquired Of |
by your letter of the 23d Dec. last, have deemed
it proper at the instance Of the chief officers Of
certain State corporations to give my opinion
upon the tax intended to be levied on them ny the
Confederate Congress. / shall select the Banking
and Railroad corporations. ,,,. -,
A careful perusal Of the Revenue act shows that
some of the subjects are taxed once only some twice
and some three times Thus farmers are taxed once
only and that tax is tenth of their products. The
land, labor and producing animals are not taxed
Bankers are taxed LIST $500 for the license, and
I'd their profits are taxed as income Dealers are
taxed LIST for the license I'd upon the gross amount
of sales, and Sd upon their income The subjects
of taxation are carefully separated. There are
certain subjects called registered" subjects, be-
the person cannot follow the business without
the payment Of tax for license which is registered
Railroad and Banking corporations are not included
among them, see, secs. Q, g. 4, and paragraph to
sec. 6. By sec. 1t is provided:
That the Secretary of the Treasury shall cause
to be assessed and ascertained on the first of JAN
uary next or as soon thereafter as practicable the
income and profits derived by each person, joint
stock company and corporation from every occupa-
. tion employment or business, whether registered
; or not, in which they may have been engaged and
iTOU every investment OF L8OOf, 6kiN properly Ut
money, and the income and profits derived from any
source whatever, except salaries, during the calen
dar year preceding the first day of January next
and the said income and profits shall be ascertaned
assessed and taxed in the manner hereinafter pre-,
scribed." I'D. -.. = -.
By paragraph 6, under section 8, wherein it is
provided how certain incomes shall be .ascertained
and what portion paid as tax, it is declared "all
joint stock companies and corporations shall reserve
kov,fk of - Isr,
Gend and reserved fund, to be paid to the collector
of the Confederate tax and the dividend then paid
to the Stockholders shall not be estimated as part
Of bis income" &C. +, + "Provided the in
comes and profits upon which the above tax is to be
imposed shall not be deemed to include the products
of land which are taxed in kind &c. + And,
provided further, that in the annual earnings
of said joint stock companies and corporations set
apart as aforesaid, shall give profit of than
10 and less than 20 per centum on their capital
stock paid in, eighth of SAID sum so set apart
Shall be paid as tax to the collector as aforesaid
and in case said sum so set apart shall give profit
of more than 20 per cent. their capital stock paid
IN, one-sixth thereof shall be reserved and paid
aforesaid"
The above is the only place in the law where the
tax on such corporations is directly spoken Of.
Now, unless they are included in section l Of the
act there is no other part of it which taxes them.
AS to section l, itlays LIST tax on provisions not
needed for families during the residue of the year !;
and ID " on all moneys, bank notes or other cur.
rency on hand or on deposit the lst of July next
and on the value of all credits on which the interest
has not been paid, held owned by any person, CO.
partnership or corporation OIL the first of July next
and not employed in a business tho income deriped
from achich is taxed under the provisions of thus
act'
The clear meaning of the enactment u.s. that
moneys, whatever constituted Of, having the char
scter Of currency, being the LIST of July, 1868,
either In actual possession of the owner placed
with another for safe keeping, and also, all credits
which the interest had not been paid which said
currency and credits, held or owned by any person,
partnership or corporation, if not employed in q
business, the income derived from which is taxed
under the provisions of the act should be taxed
per cent
That the law intended in this section to put ind,-
vduals and corporations the same footing in re-
gard to the tax on currency and credits is obvious
and that it did not intend to tax either if employed
in business the income Of which is taxed, is equal.
ly clear. Thus credit (oond or note,) on which
the interest had not been paid, was taxed on its
entire value of principal and interest one per cent
and is not the subject of any other tax under the act
If the interest had been paid the principal is not
taxed at all but under section 8, the interest ID
taxed as income at rate according to the en-.
tire income, varying from to Is per cent
terest was derived. The capital on which Bank
does its business and from which it derives its in.
come is composed of its money currency and
credits much Of it on one day is made up of cash
and on the next of credits Thus are they employ.
ed by the banks this is the course of its business
1t to be remembered that the tax intended to be
imposed, is tax on the owner of the currency
whether it be in his custody in that of another
son. The depository is not taxed because the de-
poster is, for it designed to charge man
with double tax, because he might seek place o.
safety for his money.
Now, if it be admitted that credit of 800 ex
listing on the lst of July, and employed in bus(
ness yielding taxed income, is not taxed, land this
is clear,) why should be 500 in cash, received
on the lst of July in the course of the same bust
ness the income of which is taxed As for instance
on that day A pays the money due on his note il
bank, which Immediately borrows. This eredi
was employed in q taxable income business, and il
the like manner was the cash. So of manufactu
ring corporation, which soli cloth of the value o
$1,000 on first Of June got the money on 1st o
July, and purchased raw material with it on tn,
I'd. Likewise of a Railroad Company, constantly
receiving freghts, &C., and constantly disbursinI
in REPAIRS paying salaries, &c.
In conclusion, [ quote paragraph from the syn
opss of the decisions made by the Secretary of tn
Treasury, under the tax laws, headed Credits"
"CREDrrs.-Sec. 1st taking credits, is to be con
strued in connection with Sec. 8, taxing incomes
The scheme of the law is to lay an alternative ia!
of one per cent on capital, 8, 10 or Is per cent
on incomes. 1t is not designed to tax capital an
again the interest; and this is the idea conveyed b.
the law when speaking of credits upon which til
interest has not been paid" AW interest receives
during the year 1868 is subject to income tax, an
capital tax, is therefore, designed to be laid upo