The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1870-09-20
JUDGE STRONGS REVENUE DE-
CTSTON

JUICE STRONG yesterday delivered decision
in the United States Circuit Court in the
case of the Philadelphia and Reading Rail-
road VS.. Barnes, collector of internal revenue,
ct oL.. which settles vexed question in a
manner that will be in an eminent degree
satisfactory not only to the stockholders of
railways but to all who have been annoyed by
the operations of q peculiarly vexatious law,
which has been made additionally irritating
by the arbitrary and partial decisions of the
present Commissioner of Internal Revenue.
The case brought before Judge Strong may
be briefly stated thus-On the 22d of Janu-
ary, 1869, the Philadelphia and Reading Rail-
road declared a dividend on their
capital stock as part of its earnings,
incomes, and gains made and accrued
between July 1st, 1869, and December 1st,
1869, and this dividend was declared pay
able on the 18th of January, 1870. When
the railroad company made its return to the
collector he made an assessment of five per
cent. upon the amount which was made pay
able on March 81, 1870. The company did
not pay. and the collector made distress for
the amount of the tax and five per cent.
additional, whereupon the company entered
suit for trespass.
The Judge takes the ground that there is
nothing to warrant the belief that Congress
intended to impose a burden upon income
derived from one species of property greater
or longer continued than that imposed upon
income from other property, and the sections
of the law which provide for the deduction
of the income tax upon the dividends on
Of of fharc 1ari in tina re
do not, in his opinion, impose distinct tax,
but are only intended to secure the collection
of the tax imposed alike on all per-
sons who have taxable incomes. In the case
under consideration the main question
turned upon whether dividend declared De-
ceniber 22, 1869, but declared to be payable
on January II, 1870, was income of 1869 or
1870, according to the meaning of the act of
Congress. Judge Strong thinks very de-
cidedly that it was income for 1870, as it was
not available to the stockholders until that
year, although it was earned by the company
in 1869. The Judge says:-"The act speaks
of income derived from any kind of property,
etc. 1t seems to contemplate tax upon in
comes received or receivable, something out
of which a tax can be paid. If it were not
80 tAe taA AiSnt NO eAdcleu ior Ind1 "nicu
never came and never could come into the
hands of the taxpayer" That this view of the
case is in accordance with law as we'll as
common sense scarcely needs argument, and
there would have been no occasion for dis
pute if the Commissioner of Internal Reve-
nue. were not endowed with the unpleasant
faculty of creating difficulties of his own
with regard to the collection of the tax, which
are entirely supplementary to those created
by Congress. The decision of Judge Strong
in favor of the Philadelphia and Reading
Railroad will affect all the railroad companies
in the United States, and it must be salts
faction to stockholders to know that the
question has been definitely decided by a COM
petent court instead of being any longer left
to the caprice of an eccentric chief of bureau,