The spirit of democracy. [volume] (Woodsfield, Ohio) 1844-1994, 1869-02-09
@. 3. SUPREME COURT.

@. s.sUPREME COURT.
The Income Tax .ConstitutionaI..
lis Nature..The Duty of Assess.
Ors as to Returns of Income
Made In Coin.
The Pacific Mutual Insurance Com
pany cs. Franklin Soule.-In this case
the insurance company made their re-
turn OF income in coin, claiming that, as
it was received in that commodity, it
should be returned and taxed in the
same The assistant assessor, however,
reduced it to its equivalent in currency,
and the collector exacted payment on
that amount in government notes. The
company refused and seizure was made,
after which payment was made under
protest and the matter taken to the
courts. The court below-the Circuit
Court for California-were divided in
opinion and certified the following ques-
tlons to this court, among others of less
Importance: Whether under the act of
Congress authorizing the issue of Uni
ted States notes and for the redemption
and funding thereof, DC, there does not
exist between the government of the
United States and the holder of such
notes contract that they shall be re-
ceivable, dollar for dollar, as the equiv
alent of coined money in payment of
duties and taxes of character of those
collected from the plaintiff in this case !;
whether such notes are not property,
within the meaning Of the constitution
of the United States, and whether the
compelling of payment of taxes on such
increased amount would not be taking
private property for public use without
just compensation; whether the taxes
paid by the company and sought to be
recovered back are not direct taxes with
in the meaning of the constitution, and
therefore not legally levied, DC. Mr..
Justice Swayne delivered the opinion of
the Court, holding that the act of Con-
gress authorized the assessment as made
by the assessor, and that it required the
company to pay the amount demanded
and paid under protest. 1t is also held
that the tax on incomes is not a direct
tax, but duty or excise, and therefore
within the competency of Congress to
impose and exact. The other questions
are deemed to be sufficiently answered
by the answer given above, being to the
first and sixth questions certified.
NONRESIDENT ALIENS NOT REQUIRED TO
PAYa FEDERAL TAxEs-sTATE JURIsDIc-
TIoN TO IMPOSE TAXES
The Northern Central Railroad Com
pany Us. John c. Jackson-This is a
writ of error to the Circuit Court for the
District of Maryland. The defendant
in error, a foreigner and subject of
Great Britain, sued the plaintiff in error
for $3.50, the amount of the coupons
due on bonds of the company and held
by him. Upon demand made the COM
pany offered to pay the amount, less five
per cent. income tax to the United States
and three mills upon each bond reserved
to the State Of Pennsylvania under the
laws of that State. Upon the trial of
the case the plaintiff in error gave in
evidence the deed Of trust or mortgage
securing the bonds and the articles of
union consolidating into one company
corporations chartered by the States of
Pennsylvania and Maryland, and the
proceedings of those corporations au-
thorizing and asserting to the legisla-
tons of the two States effecting such
union. The Court was then asked to
instruct the jury that by force of the
act of Congress holders of bonds,
wherever resident, were liable to pay
the deduction of five per cent and also,
by the laws of Pennsylvania, to pay the
three mills additional tax on each
bond. The Court refused to so instruct,
but charged the jury that if they found
from the evidence that at the commence.
ment of the suit the plaintiff was the
lawful holder of coupons representing
interest due on bonds of the defendant
held by him, and that the plaintiff, when
he purchased the bonds, was British
subject, and resided there, the plaintiff
| Noo w ICSoNSl tilC dillOullG VI
such coupons without deductions. The
verdict was for the plaintiff, in accor-
dance with the view of the Court. The
company brought the case here by writ
of error, where it is now held. Mr.
Justice Nelson, delivered the opinion of
the Court, that, by true construction of
the internal revenue laws, it was not in
tended to tax the incomes of persons
other than citizens of the United States,
wherever resident, and of residents,
whether citizens or not; hence the stock
Of the defendant in error was not sub
ject TO the deduction made. AS to the
power of Congress to make law tax
ing nonresident foreigners in such cases
the Count expresses no opinion. 1t is
also held that the tax imposed by the
State of Pennsylvania connot be exacted
because the railroad in question is a
Maryland corporation, and the subject
for taxation was, therefore, beyond the
jurisdictional limits of Pennsylvania
Both debtor and creditor were outside
Of her territory, and neither of them
her subjects. The judgment now was
affirmed. Mr.. Justice Clifford dissent
ed, holding that both the State and fed
eral tax were lawful and subject to be
deducted as claimed by the company
The case was argued at the last term, and
by direction of the Court reargued at
the present term.
The Late Disaster at Danbury.
NEW YORK February Full partic-
ulars of the disaster at Danbury, Con-
necticut, state that the upper reservoir,
which was first to give way, is situated
two hundred and fifty feet above the
level of the river, which runs through