The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1895-03-08
WASHINGTON NEWS.
Argument Begun Against The
Income Tax.
PROSPECTS OF AN EXTRA SESS-
ION OF CONGRESS DISCUSSED.

The President Thinks the County Needs a
Rest and Will Not Call Session Unless
Danger Threatens the Treasury.
Washington. March 7.-The income tar
cases were argued in the Supreme Court of
the United States before large number of
attorneys and spectators. Besides the views
of the the striking array of counsel engaged
in the case, there was furnished to the
| court remark BILE amount and variety of
litera ture. This included two extracts from
evidence ss'proying historic facts" from
general literature and from authorities
bearing upon the question whether the
words 'direct tax" and direct taxes'' as
used in the Federal Constitution. embrace
| The tax on incomes, or are limited to tax
on land only. The teachings of political
| economists defining the direct and indirect
taxes Dy Max West, A. NJ. PHI. D., of the
University of Chicago, which paper con-
| ta ined probably hundred definitions by
| authorities as far back as 1864, and a brief
BIZ the solicitors and counsel Flor John G.
Moore. plaintiff in the District Of Columbia.
| on suit for injunction against the Com
missioner of Internal Revenue Miller. The
foreg going was pI Iepared on behalf of the op-
ponents OF the tax. For the government
and parties 10 the litigation who advocated
the tax, were: A brief for the United
States by Attorney General Olney and
Assistant Attorney General Whitney. with
citations of the scope and effect of federal
excise during President Washington's ad-
| ministraIion, and the period of the war of
1912.
w. d. Guthrie of New YORK, began the
argument speaking for the appellants, who
antagonize the law. He confined himself
co the presentation of the contention that
the law was unconstitutional. because of
the inequality and lack of uniformity and
| n umerous Illegal exceptions. The right and
power of Congress to tax incomes from in
vestments in municipal boLds was express
| ly denied by Mr.. Guthrie. The right of
stockholders of corporations, the manage
| ment of which proposed voluntarily to pay
| the tax. to seek relief by Injunction, Mr..
Guthrie asserted. was we'll established in
the case of Dodge VS.. Walsey tls Howarn)
and the principles laid down In that case
| had been atfirrued by the Supreme Court of
the United States. The Farmers Land and
Trust company. said the counsel, had
capital stock of million dollars with a
surplus of five million, doing business at a
profit of S3oo,O0o annually.
| 1t owned real estate valued at seven
million dollars, with an annual rent roll of
| S50.CuO. It owned two million dollars worth
of municipal bonds, from which it received
| 1000 in trrest annually. 1t held. as tIus-
tee,ssfor nors and other beneficiaries over
one hum ed parcels OF real estate. from
which it collected rents. If the management
did not preserve he rights. and the law
should be held unconstitutional the oorpo-
| ration would become involved in litigation
with these minors and other benefciaIies.
The law is unconstitutional the counsel
averred, for the reason that it was class
| legislation. and that 1t was class legislation
| the brief of the Attorney General distinctly
| admitted, as the following quotation would
prove: Congress has adopted minimum
| income for the purpose of taxation limit
of $4,000, which limit may be said now to
| divide the upper from the lower middle
class, financially speaking, in the larger
cities. or to divide the middle class from the
wealthy in country districts.'
| Mr.. Guthrie proceeded at length to show
| that the law made illegal exceptions. and
illustrating this, stated that the Mutual In
surance company in New York city, with a
surplus of S204.000.0O0, would be exempt
from a tax of $780, a year, which their
| principal rival in the same business. con-
| Quoting it for the same purpose. but operat-
| ing as a stock concern, must pay. Ths ex-
| ception of these mutual and other semi or
wholly benevolent institutions, savings
| banks, building and loan associations and
| the like. it was contended WAS in violation
| of the Constitution and rendered the law
| null and void. The Attorney General, in
his brief, said Mr.. Guthrie, .argued: THAT
similar Determinations and exemptions had
always been familiar in federal leg islation,
but never before had been questioned, and
| have the force of the practical construction
of the Constitution, that they have been
| familiar in state legislation, and in the
absence of peculiar restrictions in the state
constitutions, have been always sustained -
1--WE challenge the correctness of that
| statement" Mr.. Guthrie added. I'VE have
| not been able to find single such excep-
tion or discrimination in any OF the pre-
vious income tax laws. copies of which are
| furnihsed the Court" -,
| Upon what constitutional inhibition do
! YOU base your argumentt'' inquired justice
| Harlan.
Upon the lack of uniformity, required
by the irst section of article eight, and the
fifth amendment to the Constitution" an
| swered Mr.. Guthrie.
Further discussion on this point of equaIi-
ty and discrimination. Mr.. Guthrie asked
The Count to consider the sit uation, had a
| majority of Congress voted to assess tax
| upon the mutual corporations and exempt
corporations. II am of the opinion" he
said it would have been d severe tax upon
| Your patiense to listen t. the argument in
favor Of such proposition. and yet if the
| power of discrimination and favoritism ex-
lists in Congress. the court cannot say:
Thus Jar and no farther shall you 60. The
lower to discriminate granted, the power
to con fisc ,te and destroy necessarily fol
lows.
Upon the question of uniformity of tax,
which the Constitution requires, Mr..
Guthrie said, the con tention of the govern
mept and other advocates cf the law, that
nn;formity was a geOgra phiCal limitatic