New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1895-04-09

BOUQUET
The Best of all Toilet Soaps.

head came tho exceptions in favor of those per
who not in possession OF an income OF
$4,000: of mutual insurance companies, savings
banks and partnerships. all organized for and do
ing the same business as that Of corporations au-
thorized by the States These exceptions. 1t was
held, were arbitrary and caprcious. and not based
upon sound public policy. 81 That incomes from
investments in State and municipal bonds could not
be taxed.
The Chief Justice proceeded to n consideration of
the Constitutional requirements with respect Of the
imposition Of the two forms of taxation direct and
Indirect and said that the trainers Of the Consti;u-
ton intended make the consent OF those who were
expected TO pay essential to the validity Of any tax
They had just come out OF a conflict upon the great
principle of taxation with Representations and they
intended to together-that Congress should
50 impose tax that it would fall with even force
and effect upon all of the constituents of hose who
voted for IT,
The States represented In the Constitutional Con-
venton said the Chief Justice surrendered their
right to levy mposts excuses AMI duties 10 the
general Government They looked forward TO the
time when great States to the west Of tnom would
be coming into the Union. and when ;hey gave up
that right they did with confidence that the rule
of uniformity would be observed in the laying OF
taxes by the Congress.
QUESTION OF DIRECT TAXATION.
The first question be considered said Chief
Justice Fuller, was whether or not a tax on rents
is direct tax within the meaning OF the Constiu-
ton 1t had always been held. he said. that tax
on estate real or personal was direct tax. but II
might be that the Constitution had different mean
ing and that II was to be applied In this Ca:e In
that view became necessary TO inquire "hat we're
direct taxes at the time the Constitution was adopted
The fftv-flve members of the Constitutional Colven-
ton were men Of great sagacity alive he duties
and responsibilities of their trust They had before
them the example of Great Britain and the con-
stitutions OF the several States which they lad, in
many cases helped to frame Many Of them were
well versei In the literature OF the time. especially
on the subject Of political economy.
The Chief Justice then made extensive quotations
from the history of the debates in the convention
on the subject OF taxation. The Inference from
them he said that the general distinction be-
tween direct and indirect taxation was well under
stood by the members OF the convention. and that
the expectation that direct tax would be the
last resort of Congress.
The celebrated case of Hylton against the United
States decided on March g. 1856. then referred
70 at great length. the one in which il was held
that n tax on carriages was lot n direct tax the
several opinions filed by the justices We're quoted
and Chief Justice Fuller asserted that in none OF
them was there any expression Of opinion = -
whether or not anything except land and 1apitaton
taxes was a direct tax. but they were confined t.
tho case at hand The case he said. seemed % turn
upon the declaration Of Hamilton as % what con-
sttuted direct taxes II there had beer reference
TO the decisions of the country froTl which the
United States derived its Jurisprudence. 1t would
have been fatal. for in Great Britain income take"
had always been treated direct taxes.
The opinion then proceeded to review the de-
cistons made by the Supreme Court in cases aris-
ing under the OF 1861, which. the Chief justice
said counsel had contcnded. declared tina; an income
tax was not a direct tax. AMI must be regarded as
controlling in the case under review. TIE principe
of stare decsus he continued applied only to cases
directly In point No court had ever he'd itself
bound by any part OF decision Mt necessary 10
decide the case before IL The duty OF any court
charged with the construction Of constitutional pro-
visions was not to extend decision Oh question
If an error Of principle was likely thereby TO De
perpetuated or committed. In the light Of these OBJ
servatjons the opinion considered the decisions down
TO that In the Springer case. and concudei that
they were all dlsnguishable from the one IN hand
The Springer case exception 10 the rule mas
much as Il did not present the point RAISED IN ths
case-Is a tax on rents tax on real estate? The
Court the opinion continued was unable TO see any
distinction between a tax on real estate ana tax
on the rents arising from such real estate. WHAT
IS land but the income thereof? was asked IN"
constitutional requirement was that direct taxes
should be laid only by apportonnent among the
States according TO population ana this lax We"
direct tax There was distinction between an
annual tax on the value OF the land and a tax on
the land Itself. constitutional provisions. u vas
said could be thus evaded; Il was the sub
stance. and not the form or shadow. tnat was 10
prevail In constituting them Upon this point there
were many decisions, and some OF them were
quoted
What the Constitution intended 10 prevent. sald
the Chief Justice, was that tax should BE- lad
on the residents OF any State by the representatives
Of other States The exercise Of the power to levy
direct taxes was to be restricted TO extraordinary
occasions
THE DECISIONS ANNOUNCED.
In conclusion therefore, upon this point the chief
Justice announced that the Court were OF opinion
that that part the law imposing taxes upon rents
obtained from real estate was invalid.
Next in order the opinion considered the third
objection 20 the law: That It imposed a tax upon
the income derived from investments in state ana
municipal bonds AMI was therefore invalid
Chief Justice Fuller reasscrte1 the general 'rln-
c!pe that a tax Government bonds was hcc -
be n tax on contracts and prejudic1l TO the puhlc
interest 1t was therefore obvious that such tax
on the power Of States municipalities to rake
contracts was prejudcial public policy ana t're-
| fore unconstitutional
On the other matters involved IN the case OF ilyle
| against the Continental Trust Company, 81 New
York City, and In the Of John G. Moore against
| Joseph S. Miller Commissioners OF Internal He'e-
| nue. for an injunction 10 restrain him from pro-
| ceedlng to carry out the law. appealed rom the
courts of the District Of Columbia, CHIEF Justice
| Fuller stated that the Court was equally diVlded'
The Judgment OF the lower courts, as far rs IL re-
| lated to The payment OF the tax on rents ana state
| and municipal bonds. was reversed. In the Moore
case the effect OF the Courts action Is to dilrm the
refnsal of an Injunction against the Commissioner Of
| Internal Revenue.
JUSTICE FIELD DENOUNCES THE LAW.
Justices Field and White read independent opln-
| Ions. the former holding the law wholly invalid lie
| aaid:
OF
| thrown doubts upon the meaning OF the WordS
direct taxes Thus In Springer agt United states
OC2 l.. :. 5S6) II held that tax upon gains,
profits and income was an excise or duty, ana not
| a direct tax within the meaning of the Constlti-
ton and that Its imposition not therefore UNI
constitutional And In Pacific Insurance Company
| agt Soue q Wall 1899 It held that an income
tax or duty upon the amounts INSURED, renewed or
| continued by insurance companies, upon the gross
| amounts of premiums received by them and upon