The record-union., 1895-04-09
Special to the REcoRp-uNrox.

Special to the RECoRD-UNIoN. a
WASHINGTON, April S.-Afer almost
month of deliberation the United States
supreme Court rendered its decision to-
day in the income tax cases, deciding by
divided court the law to be valid, ex-
cept regarding the incomes derived from
rents and from municipal bonds, on
which point the decision was that the tax
was unconstitutional.
The Judges filed promptly in at high
noon, and there was very little pre-
iminary work before the Chief Justice
began the delivery of an opinion which
is regarded by many as the most inn
portant and far-reaching in its effects
that has been rendered in this court since
the days of the rebellion.
Justice Fuller, after making a few
routine announcements, began at 1905 to
read the courts decree in the case of
Charles Pollock VS.. the Farmers Loan
and Trust Company and others. This
was the first in order Of the cases against
the trust companies, and the conclusion
reached applies also to the case of Hyde
VS.. the Continental Trust Company. as
the questions at issue are the same in
each case.
Mr.. Fuller began with brief reference
to the question Of jurisdiction in the case.
This point, he said, had been frequently
referred to, but he dismissed it by saying
that as the question had not been raised
IN the court below, and had been sheIyed
In the argument of the case by the Su-
preme Court, there appeared no objection
TO considering the case purely on it's
merits.
The body of the opinion is devoted to
the consideration of the question from a
constitutional point of view, and involved
a very elaborate definition of the mean
ing Of the phrase direct taxes.n and also
a construction of the constitutional re-
quIrement as to appointment.
OPINIONS OF JUSTICES.
WASHINGTON, April S.-The anxiouslv
awaited decision of the United States Sn-
preme Court in the income tax case was
rendered to-day by Chief Justice Fuller.
The court knocked out the law as far as
it taxes incomes derived from rents and
also from State, county and municipal
bonds By tie vote of the court the law
was sustained in other respects.
The courts conclusions, alter review
ing the historical and other phases of the
questions, were as follows:
In Charles Pollock VS.. the Farmers,
Loan and Trust Company ct al. it is es-
tablished:
FirsC-That by the Constitution Federal
taxation is divided into two great classes
direct taxes ana duties, imposts and
excises.
Second-The imposition of direct taxes
is governed by the rule of apportionment
among the several States, according to
mum DerS and imposition of dutjps i'm
posts and excises by the rule of unitorm-
lTy throughout the United States
Ihlrd-Ihat the principle that the tax
alton and the representation go together
was intended to be and was preserved in a..
the Constitution by the establishment OF
the rule Of appOrtiOnment AMONG tha
several States SO that such happortionnnenG
should be according to numbers in each
State.
Fourth-That the States surrendered
their power TO levy imposts and to regu-
late commerce to the General Govern
ment and gave it the concurrent Dower
to levy direct taxes in reliance on the
protection afforded by the rules pre-
scribed and that the compromises of the
Constitution cannot be disturbed by legis-
lative action.
Fifth-That these conclusions result
from the text of the Constitution and
are supported by the historical evidence
furnished by the circumstances surround-
ing the framing and adoption of that in
strument, and the views of those who
framed and adopted it.
SiXth-Ihat the understanding and ex-
pectatiOn at the time of the adODtion of
the Constitution was that direct tax
would not be levied upon the General
Government except under the pressure
of extraordinary exIgency, and such has
been the practice down TO August 10, 1884.
Ii the power TO do so IS to be exercised as
an ordinary and usual means OF supply.
that fact furnishes an additional reason
for circumSpection in disposiug of tho
present case.
Seventh-That taxes on real estate be-
long to the class Of direct taxes, and with
the taxes on the rent or income of real
estate, which is the incident of it's owner
ship, belonging to the same class.
Eighth-Ihat by no previous decision
OF this court has this question been ad-
Indicated to the contrary of the conclu-
sions now announced.
Nlnth-Ihat so much of the Act of
August 10, 1894, as attempts to impose
tax upon the rent or income of real estate
without apportionment is invalid
The court is further of the opinion that
the Act of August I5 1894 is invalid. 80
for as it attempts to levy a tax uDon the
income derived from municipal bonds.
AS municipal corporation is the repre-
sentative OF the state, and one OF the iu-
strumentalities of the State Governments.
the property and revenues of municipal
corporations are not subjects of Federal
taxation, nor is the income derived from
State, county and municipal securities,
since taxation on the interest therefrom
operates on the power to borrow before it
is exercised. and has a sensible influence
on the contract, and therefore such a tax
is tax on the power of the State and
their instrumentalities to borrow money,
and consequently repugnant to the Con-
stitution.
Upon each of the other petitions argued
at the bar, to wit: First, whether the
void provisions as to rents and incomes
from real estate invalidates the whole act;
second, whether as TO the income from
personal property as such the Act is un-
constitutional as laying direct taxes;
third, whether any part of the tax, il
not considered as direct tax, is invalid
for want of uniformity on either of the
grounds suggested, the Justices who
heard the arguments are equally divided,
and therefore no opinion 10 expressed.
The result is that the decree of tho
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
rents and income of its real estate and
that which it holds in trust, and on tho
income from the municipal bonds owned
or so held by 1t.