The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1895-04-09

II was not to be presumed that the franz
bic of appreciating what they were doing
when they provided for the differentiation
forms of taxation. The trainers of the
fundamental law had before them more
prominently than any other thought the
should. go hand in hand The Constitution
was the result of a compromise between
whereby the states surrendered the right
of levying imposts, duties and excises, but
i was evident they did not mean to trans
Ter TO the general government the right
to levy direct taxes in cases of great
emergencies. This compact, the Chief
Justice said. had been observed up to the
1894 Vs.
VIRTUALLY A DIRECT TAX
The Chief Justice held that In taxing the
income derived from land it virtually and
to all intents and purposes, taxed the land
ITSELF for, he asked, what was the land to
any one but for the profit derived from it?
The name of the tax was unmportant but
the effect was of vast consequence, and as
there could be neither distinction nor ma
terial difference between taxing the land
and the profit derived from it, the court
had reached the opinion that this portion
OF the law was invalid and could not be
The same conclusion was reached in re-
gard TO the provision for taxing State,
county and municipal bonds He said in
erect, that it was clearly never intended
by the States to delegate authority to the
national Congress to weaken their credit
Dy providing a tax upon their instrument
talities and revenue agencies. Such an ex-
erc1se OF power was repugnant to the Con-
sssl.utIon ana therefore, the portion of the
law putting it into execution must also
be declared invalid
=, On the other points involved the opinion
did not venture because of the even di-
vision of the court. The Chief Justice was
not not prepared to give out the full text of
the decision, but furnished the following
summary of the concluding of
to the press:
'.First-That by the Constitution federal
taxation is divided into two great classes:
cises.
IS governed by the rule of apportionment
among the several States according to
numbers and the imposition of duties, i'm
posts and excises by the rule of uniformity
throughout the United States.
Ih1rd-That the principle that taxation
and representation go together was intend-
ed to be and was preserved in the Constitu
t1on by the establishment of the rule of
apportionment among the several States,
SO Inat SUCH apportionment should be ac-
cording to numbers in each State
"Fourth-That the States surrender their
power TO levy fmposts and to regulate COM
merce to the general government and gave
IL the concurrent power to levy direct taxes
the rules prescribed, and that the promises es
OF the Constitution cannot be disturbed by
legislative action.
from the. text of the Constitution, and are
supported by the historical evidence fur
the framing and adoption of that instru-
ment. and the views of those who framed
and adopted it,
'Sixth-That the understanding and ex-
pectation at the time of the adoption of
the Constitution was that direct taxes
ernment except under the pressure of ex-
traordinary exigency. and such has been
power to do so is to be exercised as an
ordinary and usual means of supply, that
cumspection in disposing of the present
case
long to the class of direct taxes. and that
the taxes on the rent or income of real es-
tate, which is the incident of its ownership,
belong to the same class.
"Eighth-That by no previous decision of
this court has this question been adjudi-
Gated to the contrary of the conclusions
.Ninth-That so much of the act of Aug
Is, 1894 as attempts to impose tax on the
rent or income of real estate without ap-
p0rtionment is invalid.
MUNICIPAL BONDS NOT TAXABLE.
1.-The court is further of opinion that the
act of Aug. 10, 1884, is invalid so far as it
attempts to levy tax upon the income
derived from municipal bonds. AS mu-
nicipal corporation is the representative of
the State and one of the instrumentalities
of the State government, the property and
revenues of municipal corporations are not
income derived from State, county and
municipal securities, since taxation on the
interest therefrom operates the power
to borrow before it is exercised, and has a
sensible influence on the contract, and
therefore, such tax is tax on the power
of the States and their instrumentalities to
borrow money, and consequently repugnant
to the Constitution.
upon each of the other petitions argued
at the bar, tO-wit: ID Whether the void
provisions as to the rents and incomes from
real estate invaidates the whole act? o.
whether as to the income from personal
property as such the act is unconstitu-
tional as laying direct taxes? Co. whether
any part of the tax if not considered as a
direct tax, is invalid for want of uniform
the justices who heard the arguments are
equally divided and, therefore, opinion
is expressed
The result is that the decree of the
Circuit Court is reversed and the case re-
manded with directions to enter decree
in favor of complainant in respect only of
the voluntary payment of the tax on the
rents and income of its real estate, and
that which it holds in trust and on the in
come from the municipal bonds owned or
so held by it,"
that this opinion upon the Pollock case
covered the two other cases. The delivery
of the opinion consumed just one hour.
Chief Justice Fuller began 1905 and con-
cluded at :05 He was followed by Justice
Field who read the first dissenting opinion
speaking in a low tone. that contrasted
noticeaby with the loud delivery of the
Chief Justice