Freeland tribune. (Freeland, Pa.) 1888-1921, 1895-05-09

the Arguments .-- Counsel Attack
the Constitutionality of the Law.
Say 1t Should BE Declared Void.
Washington, May THE reargument
of the income tax cases began in the su-
preme court of the United States yester-
day in the presence of large assemblage
of law and laity For the first time
since last November there was full
complement of justices on the bench.
Justice Jackson took an active interest
in the proceedings, and there was ap-
pa"ently Lothing to warrant the eXpec-
tation that he might not be able to un-
dergo the fatigue of the hearing. 1t was
well on toward o'clock when w. ID.
Guthrie opened the argument for the
petitioners, Messrs. Hyde and Pollock,
who seek to enjoin the directors of the
Farmers Loan & Trust and Continen-
tai Trust companies Of New York, from
paying the tax on the dividends declared
on the stock of these corporations, and
in so doing attack the constitutionality
of the law
Against Direct Taxation.
In submitting the petition for re-
hearing, Mr. Guthrie said there was
doubt, not so much as to whether con
grcss had power to tax, but as to its
method of taxation The decision in this
case should settle finally and forever the
greatest constitutional question ever
brought before the court. In the con
ventions called to ratify the constitution
the matter of direct taxes was particu-
larly referred to. Mr. Guthrie then
called the attention of the court to the
Nyi ippa napGnnul f1rpppTtV
particularly referred to, in order to show
the court that the people understood that
taxes on personally were included in the
term "direct taxes. " Marshall, in the
Virginia convention, explained the term
direct taxes when he said: "The objects
of direct taxes are we'll understood, but
they are few Lands slaves, stock of all
kinds, and a few other articles of do
nestle property"
Tax Laws of the Colonies
Mr.. Guthrie also quoted from debates
in the conventions in North Carolina
New York, Massachusetts, Rhode Island,
etc, TO show that the people did not un-
derstand or consider the word direct
In the constitution applied only to capt.
tation taxes and taxes directly on land
Mr. Guthrie then examined the tax laws
of the colonies and states in order to
show the familiarity of the delegates
with taxes not only upon land and In
come derived therefrom, but upon per-
sonal property or estate and the income
and profits thereof. This examination
tended to prove that the delegates must
have intended to include a tax on per
sonal estate, for otherwise, it must be
clear that ii they contemplated merely
land tax, they would have used these
words
Land and Personal Property.
No difference In principle between the
taXations Of land and the taxation Of
personal property could be suggested
which was recognized in Jurisprudence,
Land had some use irrespective of its
income, but the great body of personal
property has no value whatever to It's
owner, except by reason of the income
arising therefrom Logically, if taxes
on rents, issues and profit of real estate
are equivalent to taxes on the land itself
and, therefore direct taxes, taxes on the
income Of personal property as such must
be equivalent to taxes on such property
and therefore direct taxes.
Invalidates the Whole Act.
Mr.. Guthrie then presented the views
set forth at some length in the brief upon
the contention that as it was clearly the
intention OF congress to have the law act
as a whole upon all incomes, the pro-
visions which are unquestionably void
invalidates the whole act In order to
preserve the provisions now remaining
the court must strike out words actually
used, such as rents, income and product
of land.
Court Must Interpret, Not Remodel.
Counsel took the ground that It was
impossible for the court to remodel the
the act and say that congress would have
passed the act without the provisions
which it has in terms made an integral
part, For the court to do this would be
legislating and making law, not declar-
ing or interpreting it. This contention
was enforced by many citations from de-
cisions
Lack of Uniformity
The most glaring instance of the lack
Of uniformity and equality was the ex-
ception of selected corporations and in
stitutions under which over So 600, 000,-
900 of accumulations were relieved from
the duty and burden of federal taxation.
The real question in the case was whether
this act lacks uniformity and creates in
devote themselves to that question of
fact and not to refuting what was so
strenuously argued by the government
that the uniformity required by the con-
stitution was merely geographical. There
fore the act of 1864 failed wholly to com
ply with the constitutional requirement.
Mr. Whitney for the Government.
Mr.. Guthrie was followed by assist
ant attorney general +. b. Whitney In
support of the law. Mr.. Whitney said
the government would suggest nothing
further on the subject of tax upon state
and municipal bonds than had been set
forth in the original argument. 1t was
not necessary, he said, that a law should
specify In its terms every exception to
which it is subject in order to make it
constitutional; otherwise, he submitted,
there have been but few valid tax laws
passed by the congress. The ruling of
the court az to the subject Of state and
municipal bonds, Mr.. Whitney said, did
not, in the opinion of the governments
counsel, affect the other points involved.
A Student Loses His Eycsiaht