The sun., 1895-04-07
THE INCOME TAX DECISION.
IT Is Possible THAT THE Law MAr
BE DECLARED ToID.
The Court Said to Stand TO n Again.t the
Taxation ofIncomes from Rents nnd from
State and Municipai bonds, and Equally
Divided on tho Question or the Cousti-
tuttonality OF the Law as y Whole.

State and Municipal Bonds, and Equally
Divided on the Question or the Cou.tI-
,,,,o,,,,,v or ,,. r,v - , Whale.
WASHINGTON. April 8.-The Justices OF the
supreme Court OF the onited states heid maj
conference on tho income tax case this AFTER
noon. Thcy mot In the consultation room Mt
the Capitol ana had before thein printed PROOF
slips OF decision arrived ut several days ago.
These proofs were handed to the Justices yester-
day by Ch!ef justice Fuller, and until tho
consultation was held to-day II was thoroughly
Understood that the decision shoulu be READ by
Chiet Justice ruler on MONDAY next. The
premature publication to-day OF the substance
OF the decision hns caused the greatest indisna-
tion among the justices, however. and
one them SAID TO IHE sun correspon-
dent tonight that II Is possible that
the promulgation or the decision may
had to ascertain the leak by which the decision
ana others or ike importance nave reached tho
pubic IN advance OF their announcement IN
court. III ls propao!e however, that the original
arrangement VIII DC carried out. ana the de-
cision read by the Chief justice TO the court on
Monday.
The decision, as published To-Day. Is thought
tn be In the main correct. the only uncertainty
being with regard to the vote on the main ques-
N'''-
the Court has agreed that incomes derived from
the rental of real estate and from
state anu municipal bonds cannot he
subject to Federal taxation there seems TO
be no reasonable DOUBT. anu u Is equally certain
that the court was, until to-day equally divided
on the other sections OF the populistlc law. The
Justices have more than once changed their
minds. however. during the frequent consulta-
tons and there is still strong reason Tor oeiiev-
n n
nounced In court will declare the populistic
| law to be unconstitutional.
When the Justices first attempted to get to-
| gether on some Kind of decision after the In
| come tax arguments had been closed, they were
| apparently hopelessly divided on all phases OF
| the subject but after frequent consultations
they began to see their way clear to getting n
| decisive vote on the various sections OF the
| law.
Justices Brown. Shiras. White. and Harlan
| finally voted to sustain the law, although the
latter pointed out serious determinations in the
clause exempting from taxation the deposits OF
savings banks, mutual insurance companies
| and building and loan associations.
The argument OF Justice Harlan that these
| exemptions were a clear violation of the Con-
stitution was met with the counter argument
that to restore them would amount to the levy
| ing Of q tax by the Supreme Court which would
| NIoo po Cieaiiy Sos'ASS iioa
would not jeopardize tho effort to reach n
decision sustaining the law. and SO withdrew his
| opposition.
+! During the early consultations it is under
| stood that Chief Justice Fuller was strongly op-
posed to the argument that real estate and state
and municipal bonds should be exempt from
taxation II the law was to be sustained, and only
yielded to this principle when II became APPARENT
to him that to hold out would result In dvid-
l,,r~ SI,nt
be reached and tho whole income tax question
thus LETT TO be decided by each court in which a
| case involving its constitutionality Should be
| tried. On the question OF sustaining the law ms
a whole. however. he voted no with Justices
Field, Brewer, and Gray. thus making the vote
. tie. as Justice jackson, the ninth member OF
, the court, Is absent and did not sit in the case.
| Since that vote was taken 1t is rumored that
the Chief Justice has won over ono of his asso-
ciates and If this 10 true, the final vote on the
unconstitutionality OF the law rs a whole will
be 8 to 3, as 1t was on the question Of the ex-
! emption of incomes from real estate and state
and municipal bonds.
| II is understood that there will he no dissent
| ing opinion. although 1t has required the most
persistent effort to dissuade Justice Field from
delivering an elaborate and vigorous opinion
denunciatory Of the entire law and making
| plain its evident uncOnstitutionality.
Inc correspondent VI lhE olS
Of the Treasury officials to-day as TO the effect
upon the revenues of n decision that rents and
bonds are not taxable The answer was that
according to the compilation of the statistcians,
such decision would deprive tho Treasury Of
about one-third OF the expected revenues
from the operation OF the Income Tax
law. This estimate was followed by tho rosy
prediction that = loss of ten or fifteen
millions would be quite unimportant. as the
receipts from customs duties are certain to be
go large during the first half Of the coming
fiscal year that they will far exceed the ex-
penditurss 1t is noticeable that whenever the
Treasury deficit shows indications OF being un-
usually largo the officials predict great in
crease OF revenue " as soon as the tariff act is
in full operation
Senator voorhees,, Chairman OF the Finance
Committee. and an enthusiastic sponsor Of the
He said to-day: 1T may be that a portion of the