, 1866-02-17

centufD on the amount Of the cDupopg of the
United States, and three nills-on each dollar
Of the principal or OF the arn0,mt Of the
bonds tor Pennsylvania We will consider
each Item:
The Internal Revenue act Of Congress, 40.
proved 3larch !, 1885, imposes On tho income
Of every person residing IN The United States
and Of every citizen Of .he United States re-
siding abroad, whether derived from Interest
dividends Or other sources, n duty Of Ave pei
ccDtun on the exceas orer six hundred dollar
t and not exceeding five thousand dollars, ant
Of ten pct esntum on the exeess over iiv,
thousand dollars.
In the Same section Il Is provided that OF
ascertalninE the income Of any person llabl,
to an income tat, the amount or INCOME ra
ccived as dividends from Institutions. who's.
officers, as required by Law, withhold pc,
eentum Of theE dividends and pay the sami
meat, shall be includcd, and the amount sf
withheld shall be deducted from the. ta1
which would be otherwise assessed. !:
Il Ihte section, i u cteaz, imposes no iacome
tax, whether derived itomFnterest On bonds, ,oi
from dlvidends on shares, or from any Other
the United states.
It imposes, therefore, no income tax On tht
plaintiff Jacksonr who Is neither such cit!
zen OF resident.
It Is clear, also, that Congress regarded th.
duty on dividends directed to be withheld bj
the onicers Of the companies paying then;
and to be paid over BY them to tho prope
! officers OF the Government a. an income tax
to be paid only by citizens or residents Of tn
United States. /;
The fact that Cougre regarded the duty O.
dividends In this llght, aids materially in III.
construction or the one hundred and twenty
second section Of the internal revenue act
which Is mainly relied upon By the deleu
dant-
This section subjects all railroad, canal,
turnpike, canal navigation or. slack-wates
companies 10 q duty OF fve per centum on M
interests and, dividends derived from Their
bonds or shares, and authorizes them to hold
hat amount from bondholders or aharehold-
err, and makes payments to the government =
discharge to that extent from payment to
them. The language L. general, and If the
section stood alone An argument OF some force
might be drawn from 1t, that Congress intend
ed to impose au income on interest and diyf
deuds from such bonds and shares, without
reference to the the citizenship or residence
the holders But the section does not stand
alone. Il must be considered IN connection
with other parts Of the act, and the one hun
dred and sixteenth section, ns we hare already
observed. regards dividends subject to deduG-
ton by the officers Of the companies paying
them, as income, not taxable except when
payable to Sitlzeus OF residents. !.
i Is impossible to ascribe to Congress 1
! different intention In regard to interests.
Sound principles OF construction require us
to regard this section Us simply providing for
the cheap and efficient collection OF the ta1
on Incomes dariVed from tha bonds and
shares of the companies described, and not at
all as touching the number Of classes OF In.
come taxpnyera-:
Tho interests and dividends on which the;
duty Is Thus collected must be resurtied a. the.
sane interests and dividends on which duty is
imposed by the .one hundred and sixteenth
scetiots, mud AS subject to duty only when
hela7by citizens or residents Of the United
states.: .-...- -
The defendant's prayer for instructions,
therefore, must. be denied So far q it asserts
right on the part of:tha railroad company to
deduct Eve per cent from 1.-The amount Of
interest coupons held by the plaintiff
The defendant also clai1ns by his prayer
right to deduct from the amount OF the cous
pons sued on three mills per dollar upon each
+ Three mills per dollar on each bond Is three
dollars on each thousand dollar bond The
intelcst due On each thousand dollar bond Is
thirty dollars. The claim, therefore. Is to de-
dnct three dollars from each thirty dollars Of
interest, OF, in. other words, ten per; cen.nm
to be paid Into the treasury of Pennsylvania
For the support Of this clnim We have been
referred to the 9Sth and 1olss sections Of the
General Tax Law OF Pennsylvania, a. printed
IL Bright1ey's Digest, edition Of 1853, and I'd
the Sd section Of statute OF the same STATED
imposing additional taxes, approved April
20, 1864. We have had tfma Tor ve1y little
further search, and are not aware Of any otherr
statute which can be regarded: ms supporting
the claim.~ We shall consider It, therefore,,
almost exclusively with reference 10 the prof.
visions to which We have been relerred.
The arst Of these, in section oS, page 1877, Of
Bright1ey, is mere enumeration Of the sub
1ects Of taxation IN Pennsylvania. Among.
these are ineludsd mortgages money
owing By solvent debtors, whether By prom
ment, and also all public loans or stocks
whatsoever, except those Issued by this COM
mocWcalth. 1T Is not easy to Imagine that!
interest coupons are intended by either Of
these descriptions, They are certainly not
..m,ostgagsss :. n,or E. :, a. nor "pnblic ioans," nor
tion it must be under that Of "-money owing
by insolvent debtors,' nnd that they do not
: come under this Is almost conclusIvcly proved
BY Its remaining words, namely, :" by prom-l
lssoty,note2 penal Or single bnl, bond Or judg;;
Inference, that It Was the principal OF the
money owlpg.'' and not the interest payable
and paid from time to time, which: was re-.
Earded as the subject Of taxation.
And this Inference Is strengthened by the.
the one hundfed and first section Of the same
law. The section specifies certain property TO-
be Assessed at certain rates far State purposes.
and then adds the clause cited TOR the defend
ant, namely, "and all Other. property taxable
lor state purposes three mills on every dollar
reference here to the taratfm Of. .i1terest.. h
tereat taxed as Income Is not aptly described
as property taxed on the value thereof Nor
Is it likely that 50 triffng = tax MS three mills
On ,t1e doiar-thrce-tenth Of one per cent,
less than eight dollars on the. amount OF the /
intarest coupons sued on-woulE be imposed
as tax On interest considered ns, income.
and It Is quite impossible that any such tax
should have been imposed on the principal Of
the debt, Of which tHenty-six: hundred and Y
my dol]ars is half year interest, and direct:
ed to be collected by deductions Gsom the in
terest. Such tax would f,e "a enormous %.
the tax on interest would ba tri1ing, and would
be unprecedented in tha history Of taxntton.
The third provision cited for the defendant j
Is from the third section OF the act of 1864. It 4
provides that the officers, Of Incorporated |
companies paying interest, On which, By The i
laws OF Pennsylvania, q taxis Imposed, shal
retain the amount Of the tax aud pay 1t eyer
to the State Treasurer.
AS we do not regard. this tuo nrst p<oyis-
Ions cited r-the defendants council 81 I'M
posing any tax on the interest On tha bonds
Snrd the citation fon. .the act Of 1851 as Imp
plicable.
If mo tnS Is imposed by the laws of Pennsyl-
vania On the interest due from o company,
none can be retained:
There Z. indeed ,as statutory pro't.io1 to
which, doubtless, II was inteaded to apply.
The 105th section Of tie General Tx Law,
found On page zS0'of Rrightley, imposes tax
on tha interest a9cfubS On the loans or stocks
Issued by corporations and EuaIantied By the
State, and this IL tax which might be prop
tioa ly tie officers Of the corporation ; but 1t
does not apply to the bonds Of the defendant, |
for It Is not clnlraed that they arc GUARANTEED J
By the State. Pr
II follows that We must override The prayer
Of the defendant II l. proper to add that We,
have seen nothing in the statutes Of Penusyl-
Legislature ever intended to tag bonds or the
interest on bonds held by the citizens Of ether
States OF the subjects OF foreign powers
These views relieve Us from the necessity Of
considering the grave II not difficult QUESTION,
whether my one State cnn tux the interest on
the " hole bonds OF railroad company. whose
road lies In several States, whosa fanchisea
are conferred by the act Of several State5, and
whose means to pay interest must be derived
ftom the operations Of Its road ne7ery State
where II lies.
It Is certain that II one Stale can impose
ducttou from Interest, every other Slate IN |
which TIE road u operated may do the same.
and so the whole road may be. virtually taxed
IN every State where part Of 1t lies.
We leaFe this question to be deciled when
1t saaU become necessary,
[Tfue eopy,l JAs, II, CHEW,
Clerk Circuit Court U. s.
a Twice Buried BOY in HIne Comes
Home Alive.
From the Adfiar, Mfth Expositor-I
4 valued correspondent sends us the facts
II case Of identity which has few para,iels'
-Four days after the rebels fired 90 toft sam
ter, son Of Mrs. Duncan. Of Mecca, ~, ~"
listed fnr the var Tia iQfnfd Weatetn EFSF |