The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1866-06-01

tnuS FURNISH positive instead Ot negative aid. To
pr pose naked suffrage as au amendment to the
Constitution would be q great deal more direct
and simple, and 1t would have Just as good a
chance of ratification.
The Tax on Bankers and Brokers' Sales.
From the Herald.
We notice that another effort is being made by
some of the Wall street bankers to evade the
payment of the Government tax on their sales of
stocks. This movement has become periodical,
and as regular as the appearance of strawber
ries. Last year, as Judge Nelson was returning
from Washington to his summer residence at
Cooperstown, the bankers and brokers waited
upon him and secured an order to stay the en-
fo1cement of the collection Of the revenue tax
on their sales made on their own account. The
Government officials were then required to ap-
pear at Coopelstown, few months later, to
show why permanent injunction should not be
granted. This they did, but Judge Nelson de-
cided IN favor of the bankers and brokers, aud
thus deprived the Government OF a large amount
oil revenue.
The case was appealed 10 the Supreme Court
at Washington, where the decision OF Judge
Nelson was reversed. The decree of the Court
. was not rendered until just before the adjourn
ment OF the Court, and in the meantime the
bankers and brokers had accomplished their
object. Several OF the hrms had by that time
gone out of the business or formed new copart-
nerships, while others had failed. The Depart
me0J AT WaSnl0gJO0, lmueuaJely upon the de-
cree OF The Supreme Court directed the revenue
officers 10 enforce the collection OF the tax on
brokers sales made on their own account as we'll
as on commission.
In accordance with this order the bankers and
brokers we've notified to make out their returns
for the tax on sales made on their own account.
majority OF the brokers readily complied with
this order; the returns were beng promptly
made and the revenue of the Government largely
increased as the result. For once there seemed
to be q prospect that Wall street speculation
would be compelled to pay its proportion of the
revenue tax and not be able to escape and throw
the burden upon the industrial interests. But
just at this stage Judge Nelson again turns up,
journeying from Washington to his summer
resort at Cooperstown. No sooner is his arrival
known here than Clark, Dodge d Co. apply to
him for an injunction restraining the internal
revenue collectors from collecting tax upon their
sales OF stocks aud other securities, whether
made on their own account or on account of
others, on the ground that they are doing bust
ness under a bankers license and therefore are
not required TO pay tax on such transactions.
Judge Nelson forthwith granted an order stay
ing proceedings, and notified the revenue Off
cIals, as in the former case, to appear at Coopers
town 10 show why a permanent Injunction
81 ould not be Issued, and then resumed his Jour
ney to his summer residence. The brokers,
having thus secured another years exemption
from the tax, are perfectly content. 1T, upon
argument OF the case, Judge Nelson grants a
permanent injunction, then all that the brokers
in Wall street will have to do is to throw up
license, and they can all escape the revenue tax.
Thus it will be seen that there is an important
question involved IN this matter-one which
largely affects the revenue of the Government.
We understand that there is at the present
time nearly one and halt million OF dollars of
tax held back by bankers, on one preteXt or
another, which they expect to retain as their
own profits il this Injunction is finally granted.
This, as matter OF course, is sum worth con-
tending Tor, and with that amount back OF them
an extraordinary pressure will be made to secure
decision. The law on this subject is very
plain, and 1t was clearly the intention of its
trainers that all sales oil stocks should pay tax.
The decision OF the Supreme Court has removed
every bubble on the part the licensed brokers.
But now the bankers come in With another eX-
cuse, with the evident intention OF getting rid of
the payment Of The tax. This being the case, we
call uI on Congress to arrange the PHI raseology
OF the new internal revenue law, before 1t Is
finally passed, that there can be no doubt as to
It's meaning, and remove all plea or excuse for
an Injunction in the future.
But there is another very important phase to
this question. The present law specially stipu-
lates that all brokers and bankers shall pay,
upon all sales OF stocks and bonds, onetwenticth
OF one per cent, and on sales OF gold, silver,
bullion, and coin, One-tenth OF one per cent.
Now 1t is the established custom OF the bankers
and brokers TO charge all their customers the
Government tax, in addition to their own fees.
This is the universal rule. Therefore, IN all
sales made on commission, the customer pays
the taX-not the banker and broker. They sim
ply retain the tax required by law TO pay over
10 the Government. This move of Clark, Dodge
d Co. is therefore, simply an effort on the part
OF the bankers to add the amount thus collected
from their customers TO their own profits. IT,
how ever, now that they have received this one
twentieth or onetenth OF one per cent, as the
case NAV be, ON the plea that hey have got to
pay that amount to the revenue officer they
turn around and secure an Injunction, on the
ground that they are not liable for thattaX then
they have defrauded their customers. If they
are not required oy law to pay that tax to the
Government, then every one OF their customers
can recover, by legal proceedings, the amount
thus paid.
1t certainly was not the intention of the Gov
eTnment TO levy tax on sales o stock for the
sole purpose of increasing the fees Of the
bankers. The tax was fixed tor the purpose Of
obtaining a revenue. The one-twentleth and
one-tenth of one per cent, collected OF the
brokers nor can they legally retainlt under the
law upon any other preteXt whatever except to
pay 1t over TO the TAX collector. f1heY are not
required by the law to pay the tax to the Gov
eminent, then the tax has been traudulently
taken away from their customers. We, there
lore, advise all Of those parties who have been
selling stocks and gold through Clark, DODGE
Co., or any other bankers who retnse to pay
the Government tax TO commence legal pro-
Ceedngs forthwith and bring TINS question to a
test. Let us know to whom this money belongs.
If 1t does not belong to the Government then
the bankers VIII be compelled to refund 1t TO
their customers and they have made themselves
criminally liable under the State laws for OBJ
tanning money under false pretenses.