The times. [volume] (Richmond, Va.) 1890-1903, 1895-04-09

,ha income tax. 1t decides that
sncomes from rents and State and mu-
nictpaI bonds cannot be taxed. The
,ourl il divided on the other provisions
Of the law. which sustains II.
THE announcement of the decision IN
the income tax case was made In the
nres.ucc of crowded courtroom. the
snectators' lobby being thronged TO It's
utmost capacity. Public interest IN the
case has drawn an attendance every day
since the argument TOOK place. That mas
taxed the power and ingenuity OF the
officials TO care for.
PROMINENT PEOPLE PRESENT.
Among those 81 the hall to-day were
Attorney General Oiney, Assistant At
torney-Cienerai Whitney. and Mr.. W.
u. Guthrie, of New York who took part
III the argument; Mr.. j. NJ. wilson, OF
Washington. OF counsel for j. q. Moore,
who sought an injunction 70 restrain IN
ternal Revenue Commissioner Miller from
proceeding 10 carry out the law; Senator
David B. Hill OF New York. VINO 50
yersistentiy fought the insertion OF the
tax provision IN the tarif law eH~Sec-
Tetary OF the Treasury Boutwell,, X. Is.
Bowler Comptroller of the Treasury
Senators Smith and Hunton, eX-Attorney-
General Garland. Hon. George {. Cor
ham, and a great many attorneys, more
or less interested in the action OF the
court. The members of the court, ox-
cept Assistant Chief Justice jackson,
entered the chamber promptly at noon.
A few cases of minor Importance were
disposed Of and the Chief Justice an
nounced that at the conclusion OF the
sitting on Thursday, the court would
adjourn over Good Friday. and several
orders by the court, arter which the
great case Of the day was read 10y him.
lie said amidst an almost painful still-
Less:
TEXT OF THE DECISION.
81 am charged with the duty of an
nouncIng the opinion and Judgment OF
the court ia the case of Charles Pollock
VS.. the Farmers Loan and Trust Com
pany et al"
The conclusions Of the court were
stated 10 be as follows.
l. That by tho Constitution Federal
taxation is divided into two great classes:
Direct taxes and dues, impOsts and eX-
Ciscs.
p That the imposition of direct taxes
IS guaranteed by the rule of apportion-
ment among the several States, accord
ing to numbers and the imposition oil
dues, imposts and excuses boy the rule OF
uniformity throughout the United states.
& That the principle that taxation
and representation go together was In
tended TO be and was prescribed in the
Constitution by the estimate OF the rule
of apportionment among the several
states SO that such apportionment should
be according TO the numbers III each
state.
4. That the States surrendered this power
10 levy imposts and TO regulate COM
rnerce to the general Government and
gave IL the concurrent power TO levy
direct taxes IN reliance on the protec-
tion afforded by the rules prescribed, and
that the compromises Of the Consutu-
lion cannot DO disturbed by legislative
action.
SUPPORTED ny HISTORICAL EVIDENCE.
B. That these conclusions result from
the text of the Constitution ana are sup
ported by the historical evidence furnish
ed by the circumstances surrounding the
framing and adoption of that instrument
and the views of those who framed this
amendment
G That the understanding and expec-
tation at the time of the adoption OF the
Constitution was that direct taxes would
not be levied by the general Govern
ment, except under the pressure OF eA-
traordinary emergency, and such has
been the practice down TO August 10,
1894 If the power to do so Is to bc eN-
ercised as an ordinary and usual means
OF supply. that fact furnishes an ad-
dluonal reasn for circumspectlon In dis
posing of the present case.
T. That taxes on real estate belong 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 owner
ship, belong to the same class.
g. That by no previous decision Of this
court has this question been adJudicat,d
90 the contrary of the conclusions now
announced. That so much OF the act or
August IL. 1884, as attempts TO impose a
tax uIon the rent or income of real
estate without apportionment Is Invalid.
Az TO CITY AND STATE BONDS.
The court is further of opinion that the
act Of August IL, 1894 Is invalid so TAR
US IL attempts 10 levy tax upon the
income derived from municipal ponds.
As munlvIal corporation is the repre-
sentative OF the State, and as insirumen-
talities OF th' State Government, the pro-
perty ard revenues of municipal corpora
lions ara not ne subjects of federal taxa
tior. nor Is the income derived from
state, county. and municipal securities.
since taxation on the interest 1herefrom
Operatcs on the power 20 borrow before
n Is exercised and las sensible IN
fiuence on the contract, and therefore.
such a tax Is a tax on tho power OF the
States and their hstrumentalities 10 bor-
row money and Consequently repugnant
10 the Constitution
I1pon each OF the other questions ar
gued at bar 20 wit
|. Whether the vtd provisions as 20
rents and incomes rom real estate In
Yalidates the whole act?
Q Whether as 20 ths income from per-
sCnal property as suth, the act Is un-
constitutional as laying direct taxes?
s. Whether ary part q the taxes, IL not
considered as q direcl tax, is invalid
for want OF uniformitylon either or the
grounds sugg6stedY
THE JUSTICES EQUALLY DIVIDED.
The justices who heard the argument
are equally divided. and therefore no
opinion is expressed.
The result Is that the decree OF the
Circuit Court is reversed. atd the cause
remanded, with instructions 20 enter
decree I'm favor OF complainant in re-
spect only OF the voluntary pyment OF
the tax on the rents and income OF it's
real estate, and that which u holds la
trust and on the income from the mu-
nicipal bonds owned or so held by II.
The Chief Justice said that the jurs-
dtction OF courts OF equity 20 prevent di-
version of funds by breach or trust
or illegal payment had been freqtenuy
af,rmed by the courts The question WAS
moi raised IN the court below, bat had
been explicitly waived on the argument
of the case, and the court felt Justihec In
proceeding 20 consideration sof she
case on its merits. He said that the
powcr 70 decide law unconstitutional
was used with reluctance, but the ~
aponeibuiW cAale not be eyaded whsa