Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1886-10-28
Important Question Raised in the Mat
ter of the Construction Of the
Law.
Shall the Materials Entering Into and
Also the manufactured Article
Be Taxed?
The Point Placed Before the ATTORNEY
General and a Decision expected
Soon.

special from Washington says: An
important question has arisen in the mat
ter of the construction of the oleomar-
garine law. The question arises under
section of that act, and is whether the
materials which enter into the manufac-
tUred product, as well as the EproducG it
self, must be taxed two cents per pound.
Mr.. Chesley, the solicitor of the Internal
Revenue Bureau, one of the Oldest law
yers in Washington, who has had many
years experience in the construction of
internal revenue laws, has given his opin-
ion that, while the language of section 2
would seem to require that the tax should
be imposed both upon the material and
upon the products, yet that it was the
manifest intention of the trainers of the
bill and the design of Congress that the
tax should be imposed only upon the
manufactured product. This opinion
was approved by Miller, Commissioner of
Internal Revenue, and the regulations
which were originally drafted to
impose a tax upon both the mater
ials and the product were modi-
fled to conform to the opinion
of Solicitor Chesley. This opinion of
Mr.. Chesley, as approved by the COM
missioner with themodifed regulations,
was submitted to acting Secretary Fair
child. The latter, while concurring with
the spirit of Solicitor Chesley, doubted
the power of the department to seem to
modify, by instructions and reg
ulatiOns, what appeared 10 be the extent
of the law. The whole subject was re-
ferred to the Attorney General long
time since for his opinion. That opin-
ior. has not been received, although they
remain but twelve days before the law
goes into effect. Internal Revenue Off
cials are som ewhat concerned at the de-
lay in the Office of the Attorney General,
and are anxiously awaiting the decision
of that officer. It is now promised for
tomorrow. Itmay be that the opinion
will be of such a character that the regu-
lations Of the Internal Revenue Bureau
will have to be modified to keep it.
"There is DANGER" said one of the old
est of the Internal Revenue officials,
that the law will go by default if the OPP
inion shall not be at once received. If
changes are necessary there will not be
time enough to make them. The opin-
ion is now promised for tomorrow, but
1T has been promised before, so we don't
know what we can rely upon"
Tho opinion of Mr.. Chesley proceeds
upon the assum ption that the tax would
be unequal, and for that reason might be
of doubtful cOnstitutionaIity. This ques-
tion was raised in Congress at the tim Q
that the bill was under discussion. MFR.
Hatch, of Missouri, Chairman of the
Committee on Agriculture, who was the
chief promoter of the measure, was
asked the direct question whether section
meant that the tax should be imposed
both upon the materials and the manu-
featured article. His reply was that the
tax was to be imposed solely upon the
manufactured product, and upon this
statement the bill was passed. Informa-
ton which was furnished to Congress by
the Internal Revenue Bureau at the time
was to the same effect. Should the At
torney General decide that the tax is to be
imposed apon both the product and upon
It's constituents, the effect would be to
still further strengthen the great firms
that now manufacture OleOmargarine and
to drive the small manufacturers from
the market. The firm of Armour & Co.,
for instance manufacture both the ma
terials and the products. One of the
large New York firms purchase the ma
terials chiefly from Armour & Co. and
manufacture only the product. It has
been represented to the Internal Revenue
the law indicated be made the New York
firm would be compelled to abandon
the business, as it would be
taxed practically 4 cents upon the
product, while Armour & Co. would only
be taxed 2 cents. Another point has
arisen Ia the construction of that section
of the law which requires that oIeomar-
gerlne shall only be put up in wooden
kegs IN quantities of not less than ten
pounds. 1t appears that firm in Phila-
delphla has been manufacturing oleomar-
garlne for fifteen years for export to
South America that has all been put up
IN TIN cans IN size ranging from ten to six
ty pounds each and that if the law is to be
strictly construed as to the character of
the package this firm will be compelled
to abandon It's export trade for the rea-
son that oleomargarine cannot be ex-
ported to hot countries in wooden tubs
A prominent internal revenue official who
has had much to do with the regulations
expressed the opinion that the butter
men will be disappointed IN the opera
ton of the law, and that they will find that
the tax will not drive oIeomargarine out
of the market, but that it will give it a
character and a government trademark
which will establish i on permanent
basis and put it in successful competition
with the pure article
Collector Stone, of Chicago, has had an
interview with the Commissioner of In
ternal Revenue and Mr.. Bates, chief of
the Assessment Division, to day, with ref
erence to these matters, and will remain
here through tomorrow in the hope that
the opinion of the Attorney General will
be received.
The internal revenue bureau to-day be-
gan shipping the new oleomargarine
stamps to collectors.