The record-union., 1895-04-09
LAW TAXING INCOMES.
CONTINUED FROM FIRST pAeE.l

Springer case, brought by -Representa-
tive Springer of Illinois, and by an ex-
haustlve review of the nature of the di-
rect and indirect taxation, in the course
of which Chief Justice Fuller reviewed
the debates leading up to the framing of
The Federal Constitution.
In conclusion, the Chief Justice stated
that this conclusion upon the Pollock
case covered the two other cases. The
delivery of the opinion consumed just
one hour.
Chief Justice Fuller was followed by
Justice Field, who read the first dissent
ing opinion, speaking in a low tone that
contrasted noticeably with the loud de-
livery of the Chief Justice. Justice
Fields opinion was largely devoted to a
revisw of the provisions regarding rents,
and was a vigorous denunciation Of the
principle sought to be established by the
income tax law, his conclusions being in
conformity to those announced by the
Chief Justice. He also attacked the law
on account of the lack OF uniformity,
and dwelt upon it's exemptions and dis
elimination which was, he said, class leg
islation.
He devoted especial attention 10 the
exemptions of savings banks, mutual
insurance companies and building and
loan associations. He quoted census fig-
ures to show the extent of the operations
OF these companies, and said that ii these
facts were not convincing, Congress
could not be convinced. Though one rise
from the dead" He took issue with
those who cont ntended that there could be
no legitimate Limitation upon the power
of Congress to impose taxes.
Justice Field concluded by saying that
ne was OF the opinion that the entire law
should be declared unconstitutional
Justice White also announced dis
sent. He thought the court in its decis-
Ion to-day had overthroWn long line or
decisions and the uniform practices since
the foundation of the Government. The
bill was, he said, prayer for an ln1unc-
ton of the trust companies from making
Ats returns. The practice had been that
an action for injunction before the pay
ment of a tax would not lie. 1t was an
effort to accomplish by indirection what
the statutes of the Unked States forbid
man to do by direct process. While the
main opinion asserted that there were nu-
merous precedents, he called attention to
the fact that only two were cited. He
thought, therefore, relief was granted i'll
violation OF the practice of the court. He
regretted that this line of decisions was to
be oVerthrown for annullinR an Act Of
Congress which he considered in the line
OF the former opinions of the court. He
affirmed that Congress has as unlimited
power OF the taxation as is exercised by
any Government in the world. He said
the great question at issue was whether
the income tax was direct tax, and that
question, he said, he thought had been
decided a hundred years ago in the
Hylton case, and in that case the judg-
ment practically decided that direct
taxes were confined to taxes on land as
such. He said he considered If there had
previously been any doubts they had
been set aside in the Springer case, and
the question of validity OF all income tax
established. He could not see that there
was hairs breadth of difference between
these cases and those now under consid-
GRAFTON. He agreed with lis colleagues
that the tax was unconstitutional as to
State, county and municipal bonds.
Justice Whites dissension probably re-
fected in a considerable measure the
views which would have been promul-
gated had the court sustained the law
substantially as whole. Concerning the
form in which the cases came before the
court, he said:
First-The suit cannot be maintained,
because its real object is 10 enjoin the
collection of tax.
Secondly the text of the statute of
the United States the right 10 enjoin the
payment OF a United States tax is denied
Thirdly adjudications of this court
from the foundation OF the Govern
ment until the present time, it
has been held that a United States
Court will not enjoin the payment
of aItax due the United States, and that
the proper proceeding for a person on
whom such a tax Is levied, and who
would assert his constitutional immunity
from taxation, is to pay the tax under
protest. and sue for its recovery.
Fourth and fifth-Ihe claim here is
that the relief sought is not an injunction
against the collection of the tax, but an
Injunction against Its payment by the
corporation. The theory upon which
this contention rests is that as the cor
poration is a trustee of the stock kholder,
the stockholder is entitled TO have it en-
joined from making this payment. The
contention is, in my judgment, absolutely
unsound, since its promise is that the
stockholder, by proceeding against the
corporation, can do by indirection that
which he cannot do directly.
Sixth-The contention that because the
complainant is stakeholder in cor
poration equitable rights supervene, is,
in my opInlou, unsound.
Seyenth-Ihls principle is clearly ap-
plicable to United States tax especially
in view of the mandatory terms OF the
Act of Congress forbidding an Injunction
Eighth-An assertion that the claim
here asserted is not of right to have the
corporation enJoined from paying the
tax, but simply of right to have an in
junction against a voluntary payment
such as would deprive the stockholder of
his legal privilege, is, l think a mere
Hubtertuge.
Ninth-If the purpose of this bill is to
prevent voluntary payment, then the
case gives rise to no necessity for de-
terminlng the cOnstltutlonality of the law.
Tenth-ln such a case the proper rem
edy is writ OF mRndamus to compel the
corporation to confirm the duty OF pay
ing under protest, so as to preserve the
right of suing to recover. This remedy
could be resorted 10, and 1 take it that it
would be allowed without deciding the
question of constitutionality.
Eleyenth-Ihis being true the theory
here adopted that it is necessary to pro-
nounce upon the constitutlonaiity of the
law In order to protect the rights of the
stockholders seems to be unsound.
Tweltth-Ihe only decisions referred to
In the opinion as supporting the concIu-
sion reached by the court are: Dodge vs..
Wolsey Us How 80 1nd.); HaWes VS.. Oak
land Q04 u. S. 450). Neither of these
authorities, in my judgment, sustains the
position in support of which it is cited.
The first of these cases involved a ques-
tion of State tax, and therefore was clearly
outside of the rule applied in the case of
United States taxes. The second case
was controversy between stock holder
and a corporation regarding the adminis-
tfatlon OF corporate affairs. 1t involved
no question of taxation whatever, and
therefore the decision did not deal at all
with the Act of Congress, or the enforce
ment OF the continuous line of decisions
of this court, holding that it will not
restrain the payment of tax or allow re-
lief from the premises until the party had
paid, and issuing redress by suing for re-
covery.
On the merits OF the Act he made the
following points:
First-The Government of the United
States possesses plenary powers of taxa
tion-all powers which belong to any
Government as such, subject only to The
limitation imposed by the Constitution,
is forbidding the levying of an export
fox