Evening star. [volume] (Washington, D.C.) 1854-1972, 1895-05-07
MIR. Whitney Presents the Govern
ment's Side.
THE LAWS CONSFIFUTIONALITY
Reviewing Legislation and De-
cisions Concerning Taxation.
ATTORNEY GENERAL SPEAKS

nearing had closed yesterday Mr. Guthrie
1or the petitioners closed his argument and
Assistant Attorney General Whitney open.
ed the governments case, speaking I'D to
the adjournment.
When the Supreme Court assembled today
all the seats on the bench were again oc-
cupled as on yesterday. and the visitors
crowded the limited space of the court
room as they have done every day that the
income tax has been before the court.
though not to great an extent as yes
terday.
Mr.. Whitney began by explaining that his
historical brief which he had promised
yesterday had not reached him from the
printer. and said that he had already gone
| almost as far into the question as he should
In quoting English precedents orally and in
giving the facts as to the meaning of the
various words and phrases used in taxa.
tion He said his statement of facts would
be MS principal argument, and he believed
that in case of the character of the in
come tax cases now under argument the
facts were the best argument that could
be made.
The Weight of Evidence.
He claimed that the weight of evidence
was to the following effect:
1st. The word duty" had a legal defini-
ton. The phrase direct tax had none
but was borrowed from political economy.
ID A specific personal property tax, q
specific real property tax and specific in
come tax were each duty within the
meaning of the Constitution A general
tax on all personal property at valuation
was not duty, impost or excise at ALL
nor was 1t a direct tax in political econ
omy.
Sd. A specific real property tax would
probably have been considered to be an
indirect tax.
4th. A general income tax. properly 30
called, was unknown at the time of the
Constitution, but was duty within its
9Th. specific personal property or spe-
cihc income tax was duty and not q
direct tax.
The division between taxes and duties.
he said, is shown clearly in the analysis
of English statutes set forth in the his
torical argument. Taxes fell upon the
whole land of the kingdom, or the whole
personal property of the kingdom, meas
ured by valuation; and, for obvious rea-
sons. were apportioned. Duties were uni.
form in their operation and included every
thing which was not to be taxed. The dis
tinction between tax and duty was invari-
ably maintained.
The decision in the Hylton case was, he
said directly in line with this argument
MIR. Whitney, however, reverted to Eng
lish tax legislation sufficiently to examine
briefly the stamp tax and the English in
come tax of 1899.
The stamp act levied In 17ts5 and which
was so familiar to Americans of the revo.
lutionary period was, he said, known at
that time as duty, and it provided, among
other things, for duties on bonds, mort
cages, lands &c. He said that up to the
time of the constitutional convention there
had been but one income tax in existence
In England. and that was the tax on offices
and pensions.
Taking up the American system of tax
alton at the time of the revolution he said
1t was devoid of uniformity and very diff
cult of classification.
summing 1t up, he said. the main result
of the examination Of the system in the
various states had been negative in char
acter anC had shown first, that the systems
were SO different that II was hard to de-
termine how they did lay their taxes and
secondly, that there was no settled mean-
Ing to the word duty. The same tax was
duty at one place and excise at an
other
Hence, the only definition which the
trainers of the Constitution could have
obtained was that used in England.
Direct Taxes Discussed.
Mr.. Whitney then proceeded to a discus
sion of the meaning of the phrase direct
taxes" The first striking fact was he
said. that at the time the Constitution
was framed this phrase had no legal mean
ing. Unm 1t was made to do duty in the
United States Constitution 1t had never
teen used in a statute or a written consti-
tuition. 1t had, however, been used by the
political economists and notably so by
Adam Smith. Yet, Adam Smith had he de-
clared, never given an exact definition Of
the phrase.
John Locke's opinion in the dispute over
Walpole's excise act was alluded to, Mr..
Whitney declaring that he held first, Of
all philosophers, that all taxes ultimately
fall upon the land. Turget held that tax
on salaries. faculties or profits was an in
direct tax.
Justice Gray inquired whether Turget
meant profits on business or on lands to
be an indirect tax, to which Mr.. Whitney
replied that in his time there was no real
estate business as it is now conducted.
Robert Morris had never discussed direct
and indirect taxes. but Alexander Hamilton
had more than once touched upon the
question. While the French meant by df-
rect taxes those on land only, Adam Smith
for the first time included all taxes on
personal property, and his theory was first
published during the revolutionary war.
A tax the profits of real estate IL coll
lected from the landlord, was regarded
by Oliver Wolcott in 1876 as an indirect
tax. The amount of mans rent, the
sum he put into his house, was regarded
by Wolcott and others of his time as q
good measure of his income. Oliver VOL
colt, in his report. considered that a tax
on everything was direct tax. on any
class of things an indirect. 1t was theory
Of that time that a legislature could lay
either an indirect direct tax on the same
class of property.
Supreme Court Decisions.
How much weight was to be given to de-
cisions of the Supreme Court. Mr.. Whitney
asked, on questions of taxation? Congress
must act by the light 1t had, and sometimes
not for a century did questions dribble up
to the court. If this government was to be
run according to any system Congress must /
be able to rest upon definitions explicitly I
laid down by the court. The opposition
seemed to hold that a question must 90
forward or backward according to the
view of the occupants Of the bench at the /
particular times In which the question waa
raised. The opposition had gained much
applause from the public on the SUPPOSE
tion that their motto was that thing was
never decided until 1t was decided rightly.
He failed to see how Congress could at
tempt to legislate If 1t could not rely upon
the permanency Of decisions once made BY
the Supreme Court. Certainly 1t must
have the assurance in attempting to levy
taxes that the definitions Of the court were
to be adhered to.
The Hylton Case.
Taking UP the Hylton case Mr.. Whitney
said the court, at the time the decision was
rendered. was especially adapted to pass