The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1866-06-05
TAXATION or BANKERS AND. BROKERS'.

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Important Point Under tho Revenue
Law-Appiieation for an Injunction
Against tho United states Collector
and Assessors.
UNITED STATES CIRCUIT copRP.
Before Judge Nelson
Clark Dodge Co Sheridan Shook and Spivester r.
0N0G-This was motion for an injunction g. restrain
he collectors and OF internal revenue from col
ectng and assessing against bankers for sales on
their own account and others Mr. Burial appeared or
plaintiffs and said that tho plaintiffs were licensed
bankers under the first subdivision Of the seventy
ninth section OF the Internal act OF June 80
1884, aud arc not licensed brokers' and consequently
arc authorized by the subdivision or the said section
70 receive stocks for sale and lend and advance ON
stocks and that carries with Il the right 10 sell such
stocka They lend and advance money on such secur
ties sud In such cases sell 10 reimburse themsevea
Thy do not negotiate purchases such secur
ties do any OF the business which brokers are by tho
ninth paragraph OF said seventy nnth section author
lied 10 do. Notion made here by counsel TO con-
tinue preliminary injunction restraining the assess
He said that bankers arc not doing business as
when they receive securities for sale and discount when
they advance money on securities and sell to reimburse
themselves, when they receive orders 10 purchase
rites and make tho transactions In their and
pay therefor with their own money. and on repayment
thereof transfer tho property 10 their principals and In
case Of payment sell merely reimburse them.
Selves under any circumstances tho
bic In respect 70 the saies OF his own property and for
his account.
Mr. Courtney, for the government, said that II Is not
true charged by the plaintiffs that the proceedings Of
the defendants assert aud enforce the claims OF the
United States against the companans have been ad.
JUDGED TO be contrary 10 law The only evidence of such
allegation presented IN the ninth article OF the bi
which rectes tho late decision Of tho United States
prcme Court In the Of the United Harvey
Fisk aud Others and ALLEGES that said action twas insti
tuted action and the purpose OF determining
tho question herein and thereby presented" In con-
Guiding tina. that judgment Is binding on the United
prove tho contrary by the record In that The mat
ter then controversy submitted to the upon
agreed case, containing certain admissions OF fact
which thus declared cit is understood that these
admissions made for the sole purpose OF
submitting this controversy and In nowise
to Affect any party in any other proceedings"
This would seem 10 indicate that the action
stituted as test action The question submitted In this
Is the defendants liable 10 pay duties and tho
OF duties prescribed by the ninety ninth section OF
the aforesaid upon sales Of government securities
owned by them in their own right and upon thor own
account Il insisted that the entire In tho
OF Fisk 4 Hatch whether licensed bankers by deal
subjected the liabilities OF bankers dealing brokers
under the ninety ninth section The Supreme Court do
cded that they wore not, on the ground that Congress-
In amending the ninth paragraph Of section seventy
nine OF the act OF 1884 which defines the term broker
by inserting alter tho words "oher securities tho
words "for themselves or others, did not intend to
change the correct definition Of that term
and mako II moan that every man who sold
bis own stock was broker; tina, in
order 10 bring q banker within tho category OF
bankers doing business brokers under tho ninety
ninth section appear that no negotiated sales for
others As well as for himself What the and
tent Of the liability Of tho banker would be in such case
ths court did not pass upon as every such
precuded by tho decision tho facts that Fisk
Hatch, selling their securities merely not
thereby dealing a. brokers II Is claimed by the do
PENDANTS thai the fact OF dealing brokers' which
eliminated from the Fisk case Is here apparent the
face = she conplainants bill in spite OF the absurd
fasaed BY everything which prccedss 1t In the nth
article they acknowledge that they have negotiated pur
chss and sale. for nss sa an. sSav - s
stocks &c, for aud account OF divers partcs and
which, on receiving the prices and charges and com.
missions transferred and delivered 10 such parcs
The real issue In III easily Understood Il arises
under and DO determined By tho provisions or tho
Internal Revenue law That act provides that certain
occu pations shall not b. carried without license
Tho subdivision OF the seventy ninth section relates
10 banker and the ninth brokers In comparing the
business described n the latter clause with each Of tho
three classes Of banking business mentioned In the
former II will be found that they were and intended 70
DO entirely dissmilar Counsel further said that
who not being . banker nogotiaics purchases for
others be termed broker and banker Is not per-
admit that they negotiate purchases or stocks for
others and distinction can be raised between that
toned una a. the statute was beyond his
comprehension. He regarded 4 therefore -
premises q bankers dealing a. brokers and that the
present not affected by the decision " the su
preme Court. IN the case Of risk Hatch" y ap,
companantS insist that thoy are not Axabl for any Of
the iransaceions mentioned Ia the bill The decision
ferred to IA on the broad ground that be banker or
broker or otherwise, everybody exempt who deals
for himself and not for others But the very moment
he so engages dealing for others brings himself
within the definition OF broker, ~ laid down by said
ninth clause Of the seventy nth section and must be
licensed and taxed AZ broker with the single exception
that censed banker need not tako the additional
lie nse broker but the ninety ninth section which
nxss tho liability Of brokers, particularly men
lions along with brokers the OF bankers doing
b. siness brokers. and subecting them TO tho
liability 81 brokers IN its fullest extent IN
reference 10 taxation their personal sacs, a. IN
the case OF Getting Il II therefore supposable that
the Intended let you choose IN what capacity you
shall perform such acts and by merely calling yourselves
bankers esads liability TO which every other person
subject, Tho decisions referred 10 really cover the
whole ground for II the amendment was intended 10, In
the opinion OF the Court remedy Transparent evil Is II
70 presumed that that evil less transparent 10 tho
law the Court because cosked by the plea 81
bankerss He submitted that both upon reason and au
ttlorty tho motion should be dismissed
Nr W. Evarts followed In an argunsnt on behalf OF
the plsniina and spoke at some length Case stall on