The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1870-11-28

ject; but IT, under no circumstances, tax Is 10 be
assessed upon raw or leaf tobacco, even when sold
directly to consumers, then l would recommend
that an equivalent for the specific tax on the pro-
duct be imposed upon the dealer, as special tax,
whenever ne sells directly to consumers"
The law authorizes the Commissioner Of Internal
Revenue to designate and establish at any port OF
entry in the United States, bonded warehouses for
the storage OF tobacco and snuff in bond intended
for expectation; at the same time it authorizes the
Collector in charge of exports at such ports to issue
permit for the withdrawal Of such tobacco and
snuff for consumption after the tax had been paid
thereon. Upon taking charge of this office L
found that there had been established by my pre-
decessor under the act OF July 20 1868, fifteen ex-
and snufT intended for export, viz. -One at Boston,
8 at New York. at Philadelphia, at Baltimore,
San Francisco. Repeated applications have been
made within the last eighteen months for additional
Der already established more than accommodate the
export trade. The quantity OF tobacco stored In
the several export bonded warehouses during the
fiscal year ending June 30, $780, was 196l2,529
pounds; withdrawn for expectation, S,26S,O9I
pounds withdrawn upon payment of tax, 12,0O6,3II
pounds. This shows that only about two-ffths OF
the goods bonded are actually exported Nearly
all Of these are exported from Kew York and
Boston. 1t is a fact that large proportion
of the goods stored in these warehouses was
never intended for expectation. The goods them
selves are unsuited for foreign markets, and are
shipped by the manufacturer in bond, and, when
stored, are consigned to wholesale dealers and job
bers thus securing to the latter the advantage OF
payment of the tax the law requires In all other
cases, before the removal Of goods from the manu-
ldCJuIeT. Dy bHlpplLR bhcsS ROUuS III DOuuI bhC
dealers and jebbers receive average from four
to five months credit and as this privilege can only
pS enyoycu Ny uedIeIs au Joooeis III -.
where, by law, these warehouses are authorized TO
be established, 1t creates an inequality in
the trade, and is the source OF much complaint. To
remedy this, and correct the evils OF this system,
would recommend that the law be so amended as TO
allow no goods entered for export in bonded ware
houses to be withdrawn therefrom for consumption,
upon payment of tax, until twelve months from the
time they were so bonded BY limiting the time Tor
withdrawal no goods will be entered except such as
aptuaV intended for eXnOft. and the DriViega
OF Withdrawing for consumption after twelve
months Will relieve parties who, having eutered
goods for export, fail afterward to export
the same. Should 1t be deemed inexpedent to
limit the time before which permits for the with
drawal of goods on the payment OF tax are not to
be issued 10y the collector, then would suggest
that further authority be given to the Commissioner
to establish bonded warehouses at other places than
at ports of entry giving such facilities for bonding
and equal time before payment OF taxes to wholesale
deaersa and j9bbers in manufactured tobacco mother
large cities as are now enjoyed by those doing husi-
ness in the cities mentioned, where export bonded
warehouses are located.
Act Of July a. lSI0.I deem 1t my duty to call the
attention Of Congress through you to certain de-
fecs, antiquities, and contradictions, which In the
hurry OF legislation, incidental to the closing abors
of session. appear in The act Of July IA, 1910. 1t
is believed to have been the Intention to retain all
the taxes imposed upon the sales Of distilled spirits
wines, and malt liquors. by the act OF July 20, 1888,
and acts amendatery thereof. Sections OF the
act of July II, 1870, nevertheless repe4ls the
tax upon sales Of malt liquors. 1t was evidently the
purpose OF section to empower collectors to remit
at any time prior to Aug. l, 1872 all penalties for
Of stamps was with fraudulent intent; but, owing to
change made in the bill as reported ~ the Senate
TO postpone until August. ISL, the relief which was
designed to be immediate. Section IL provides
that sections 120 III and 22 of the act of July 30,
1864, IS amended shall he construed to impose the
taxes therein mentioned to August l, 1870, aud no
longer" Section Is provides = that there shall
be levied and collected, for ana during the
on on" the amount of all interest on On coupons
paid or bonds other evidences of debt, issued and
payable in one or more years after date, by any of
the corporations in this section hereinafter men,
Toned and the amount OF all dividends of earnings
income or gains hereinafter declared by any bank,
trust company, savings institution insurance COM
pany, railroad company, canal company, turnpike
water company, whenever and wherever the same
shall be payable and to whatsoever person the same
may be due including non residents, whether citi-
zens aliens" 1t is believed to have been the III
tenion to continue the per cent. tax until August
for on and after that date but owing to the peculiar
language of the statute no tax can be withheld
from coupons falling due during the last ave
recent decision OF the Circuit Court in the State oil
Pennsylvania, no tax can be withheld from div
dends, coupons or interest payable during the hrsi
seven months or 1870, and corporations cannot oe
required to pay any taxes upon the dividends paya
withhold a tax from the salaries OF persons in the
CIVIL military, or naval service OF the United state
! during the fret seven months of 1870 turns also
| upon the points involved in the case above named
The amount OF tax indirectly involved In this ques
ton is very little less than S60OOOOO. 1t Is or sucf
in the decision of the Circuit Court until it shall have
been affirmed by the Court of last resort; Step
have been taken, therefore. TO have the opinion o
the Supreme Court of the United States pronounced
! upon the questions in issue.
Herein deem it proper to state that as early a.
January 4, 1870, called the attention OF Congress
through its appropriate committee, to the amblgui
ties of the law then in force, and the difficulties
likely 10 arise in the collection of these taxes, an
asked for legislation upon the subject This reques
was repeated February s, April and 25, and Ma.
26 following, and was repeated orally aud in perso
| at several other times, The legislation mail
| enacted July Il, but has been declared by the Cir
cult ouTt OF Pennsylvania to have been too late
serve the purpose desired 1t is provided in sectlo
| 10 that
When any dividend is made interest is paid which il
eudes any part OF the sprps or cntingeat tHna OF az
thereon, which includes of the dividends il
whose officers are suthOrized by law to withhold pc
cent on the same the amount Of tax so PAID on tnat 20
been withheld and paid on dividends, interests,
such dividend or interest.
Owing to a change in the rate OF taxation from
per cent TO 21G per cent, taxes property paid upo
surplus prior TO August may now be again appr,
prated to the payment of taxes upon earnings Sine
that date so that IN some cases these later earning
escape taxation entirely. IL wnud have resute
differently If the law had provided for deiuctlO
of taxed surplus from dividends instsad OF a redu
Public resolution No. rs, approved July l3, 1s7
relieved insurance companies from certain take
but an act passed the next day restored them
language so plain as in my Judgment TO operate as
repeal OF the resolution. The repeal Of the ia
upon receipts for money includes practically
repeal Of the tax upon demand and sight draft
bank checks, etc. person who has money on d
post, instead OF drawing by check, receives u
money and gives his receipt whichis retained by q
bank as q voucher. This practice is increasiT
and seems likely 10 become general. While It Is a
evasion Of taxes, II is one for which the present la
provides no remedy. The repeal of the soecial ca
npon apothecaries takes effect May /, 1871. Att
that time they must either abandon the dlspenslI
and sale OF wines and spirits oifcinal upon phys
clans prescriptions or otherwise, or pay speci
taxes as liquor dealers, unless there shall be a.