The evening herald. [volume] (Shenandoah, Pa.) 1891-1966, 1895-04-09
NO TAX ON RENT INCOMES,
Municipal, State and County Bonds
Also Relieved.
DECLARED TO BE DIRECT TAXES.

Opposed to the Measure 49, Dissenting |
Opinions by Justices Field and White.
WASHINGTON, April 9.-After almost a |
month of deliberation the United States |
supreme court rendered its decision yes
terday in the income tax cases, deciding |
by divided court the law to be valid ex-
Cept as regards the income from rents and
from municipal bonds on which points
the decision was that the tax was uncon-
There was only one member of the bench
Jackson, who has not
been able to be in attendance upon the
court since last fall, and who has not par
ticipated in the consideration of the case
in any way. 1t is to his absence that the
even division of the court on the majority
of the propositions involved in the case is
due. If he had been present such result
would have been impossible and the opin-
ions would have included a discussion of
all the points involved, instead of only the
two in regard to the incomes derived from
rents and municipal and state bonds,
There were only two minor decisions
rendered by members of the bench when
Chief Justice Fuller after making few
routine announcements, began to read the
courts decree in the case of Charles Pol
lock vs. the Farmers Loan and Trust
company and others. This was the first
in order of the cases against the trust com
panies, and the conclusions reached in it
apply also to the case of Hyde VS.. the Con
tinental Trust company, as the questions
at issue are the same in both cases. The
chief Justice read with considerable rapid
ity, but his voice was at all times clear
and distinct and lawyers present who had
familiarized themselves with the case had
little or no difficulty in following him.
The delivery of the opinion consumed an
hours time, and all present gave the
closest attention.
The body OF the opinion was devoted TO
the consideration of the question from Il
constitutional point of view, and involved
a very elaborate definition of the meaning
of the phrase direct taxes" and also a
construction of the constitutional require
ment as to apportionment. He said that
under the constitution federal taxes We're
divided into direct taxes and duties, inn
posts and excises and laid down the rule
that direct taxes should under that in
strument be governed by the rule of ap-
portionment among the several states ac-
cording to population.
Referring to the question of direct tax
alton he said that it was not to be pre-
sumed that the trainers of the constitu-
tion were not men capable of appreciating
what they were doing when they provided
for the differentiation of imposts, excises
and duties from other forms of taxation.
They knew perfectly well, for instance,
that a tax on lands was generally regarded
as a direct tax and it was provided that
direct taxes should be apportioned among
the states, and is therefore, as thus appor-
toned, practicable and just The trainers
| OF the fundamental law had before them
more prominently than any other thought
the idea that taxation and representation
should go hand In hand.
| In support of that idea the just revo-
| lutionary struggle had been made, and 1t
had surely not been the intention of the
convention that state of affairs should
arise which would make it possible for
any of the states to combine for the pur-
pose of extorting taxes from other states.
Furthermore, the chief justice continued,
the constitution was the result of a com
promise between the states and the federal
| government whereby the states surren-
dered the right of levying imposts, duties
and excises, but it was evident did not
mean to transfer to the general govern
ment the right to levy direct taxes, except
in cases of great emergency. This com
| pact, the chief justice said, had been OBJ
served up to the time of the passage of the
act of August, 1894.
The fact that such tax as that under
consideration had been provided by con
gress at a time when the country was en-
joying profound peace was adverted to
| and this, the justice said, was a circum
stance which should call for the exercis,
| of especial circumspection in considering
the present law 1t was an innovation o
a most striking and significant character
and was clearly in contravention of tn
wishes of the states when they, indepen
dent sovereigns up to that time in them
selves parted with portion of their pre-
negatives in respect to taxation.
Much of this reasoning was meant t.
apply to the question of the taxation q
incomes derived from rents, but the chic
Justice devoted a considerable part of tn
opinion to the especial consideration c
this branch Of the inquiry, and held tina
in taxing the income derived from land
virtually and to all intents and purpose
taxed the land itself, for, he asked, wha
was the land TO any one bat Tor the prof.
derived from it9 He failed to see any di
tinction between tax on the land itse
and on the profit derived from it, and L
one had gone so far as to contend that
tax on land would be direct tax. Th
court had reached the opinion that tn
, portion of the law was invalid and coul
not be sustained.
The same conclusion was reached In r
gard to the provision for taxing stat
Q county and municipal bonds, but into tn
question the chief justice did not go
fully as into that Of the rent incomes. II
4 said in effect that il was clearly never il
a tended by the sta tes to delegate authorit
to the national congress to weaken the
credit by providing a tax upon their il
s strumentalities and revenue agencie
r Power to tax these agencies must of n
! cessity imply the exercise of an inluen'
u ( upon a contract before it was made Sue
a an exercise Of power was repugnant 60 q
=, constitution, and, therefore, the portic
of the law putting 1t into execution mu
Q also be declared invalid.
a On tbe otbOr pOints inVOlyed the OuiuiC