The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1870-09-19
LEGAL IMTEELxeENcH.
Important Revenue Deci.ion-Rairoad Taxes

Important Revenue DecisiOn-RaiIrOad Taxes.
United States Circuit COurt-Jttdge Strong.
In the case Of the Phiadeipha and Reading Rail
road Company VS.. Barnes, Collector of Internal Re-
venue Judge Strong read an elaborate opinion, de.
Gliding that as the law stood before the passage of
the act of July a. 1870 the dividends and interest
paid by railroad companies on and after January l,
and that the act of July H. 1870, could not be ac-
cepted as a legislative exposition Of the meaning
of the former law, so far as it applied to the pre-
sent case There were number of cases involving
the same question. We annex copy of the
The substance of the second plea to which there has
been demurrer is that the plaintiffs who are railroad
Ser on the I'D Of December 1862 part
SetWSen St and and thst
dividend declared payable to the stockholders and
return thereof was %ade to the
% e cent o the amount Of the dividend was
by him the plaintiffs which due and payable
T % SpS e 0 S bs sE
paid in response to the demand whereupon the de-
fendapts who the collector and deputy collectors
with five cent additional thereto and the interest
accrued thereon and that this the supposed tres
plea of justification, and, in order to determine
its sufcency insuciency it is necessary to inquire
whether there was any legal for assessing and col
ound IN the revenue Of oonsress Of Juno 80
@ by II ba a Ts %
lection of tax upon dividends declared by railroad com
pecembe Of that year. not receivable By
'nH Of essential to inquiry that it be deter
mined whether the tax railroad dividends by the
nd fs
made by such companies and upon the interest payable
by 5ne @ m is v s Fl @ e ye
n By 5S he % oaS eped Ss By the as 1851 D
annually upon the gains profits and M Of % per
n
kind of property rents interest," dividends, salaries
ed the eIse%here
derived one thousand dollars The same section
cared that the tax therein provided for should be
come for the year ending the s day of December next
@ that % tn b as %s
duration Of the tax defined nee by the l6th section which
posed shall be levied the LIST day of March, and be due
year until ana including the year eighteen hundred and
the IL g nT the sR
tends to income of every description whether derived
ddn
a y alS % Sf
the gains profits and income of there
BY act Of 1881 required that there should be included
of gains and profits Of ali
Of Ss5 hS W9q be to sh
the amount of incomes received from institutions
per centnm Of the dividends made By such
and pay the to the officer to receive the
for % & services in the civic Or naval other
sentaves and Delegates Congress- which tax
has been But these executions recognize the
gains from the salaries pay United States officers
guide to the return Of nSo%e tue
next following seeon requires to be made to the ass
the tax such dividends interest and Salaries was in
II is indispensable to understanding of the
be read and considered together Those numbered from
l6 to 2s inclusive are al classified ID under the title IN
Together they constitute system devised impose and
Ry
Of ooecon IS different @ % apped to the
Of income or portion Of his gains The tax
so and himself pay the that portion the district
for the tax upon the dividends Of banking trust and
rance companies by the 2Oth section OF the act by
esred and PAID and upon prots made
tarnpits nsTisas ion q Companies a
dividends and Interests are and It is ta4 al tbe
rate ss that collected from other incomes but tbs
eet It stii another prescribed BY the issS sec
Tr Gd the RsSera
OF fR b his as an officer
qured deduct at the rate per cent 1t is very ob.
Og
portions were ENC not to be % &
sisant Assessor, because their certainly
Soaa return Hf'f
se l sqen @ t f . eenanasu @ & ake oy tne
warrant the belief that Congress intended
greater or longer continued than that imposed upon
cS%nate against FsdeTa oosrs and them
tax their salaries after taxes all other sala
res had ceased The dividends received by shareholder
OF railroad company, canal turnpike slackwateT
navigation of banking, trust insurance
company, are in every sense much his income
the dividends he receive other company for
example, bridge manufacturing corporation. So is
the interest recsved for loans railroad company
truly income OF the bondholder
by him on permanent loans corporation,
to enact that one who lent his money 10 teiseraph
| company TO a mining manufacturing COMPANY
| should be exempt tiom upon his int
received after Dee 81 1858 but that one who lent to
canal railroad company should TO pay the tax
indefinitely for all timer Is such reasonabie con-
of the act OF 1864! And an-the salary
officer OF the United States is his nceme as Certainly
salary received by another from
Was il designed and except the other? To mn
| mind the shows intent to make such dscr
minatons must regard the l2Oth l2lst l22d 1896
sectors imposing distinct tax the subjects
mentioned in them but having ony this purpose
scribe peculiar mode OF securing the collection of por
on of the previously imposed by the ll6h section
And SUCH think has been in effect, the construction
of the Supreme Court In jackson The Nor6hern Gen
trail Railway Company, tried in the Circuit UOur
of the United States for the District Maryland, the
primary question whether the interest payable
by RAILROAD companies chargeabe against resi-
dent alens and il ruled by the Chief Justice that
not The ruling based upon the position that
tau such interest the that imposed by the
1l6th section viz part of the income and that
the l6th section did not neude nonresident Aliens the