New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1895-03-08
INCOME TAN CASES UP.
ARGUMENT BEFORE THE SUPREME COURT
BEGUN.
xorAR1E ARRAY or COUNSEL PREsENT-W. d
GUTHRIE OPENS FOR THOSE WHO
ADV, coxTEsTING THE LAW.


Washington March tine eApso,a',U" e"a, .s'o
,oo,,n ,ax cases would be argued IN the supreme
lhCoihe ,aN '.n,,od States to-day was responsible
o.. ,ha attendance at the opening OF court VI d"
lor inc 49, lumber Of attorneys and spec
unusual, i,ne N hear the eminent counsel en-
- pu, q was vel toward the close OF the
go. session before the Court called 'he cases.
, intervening time being occupied by argument
tn' a,'sas previously the docket. Besides the
- ~ the striking array of counsel engaged IN
.ua,se there was also furnished to the court a
arkabla amount and variety OF literature
when " D. Guthrie. OF New-York, began the
,urent speaking for the appellants. who antag-
onize the law. there was a remarkable gathering
IN tho courtroom. OF counsel connected with the
case there were Attorney General Olney Assistant
Attorney General Whitney. James C. Carter ana
" C. C;ulliyer representing the Government ana
those who uphold the Jaw; Joseph H. Choate eX-
Senator Edmunds. j. w Wilson. Clarence A sew
ard W d. Guthrie. David Wilcox and Charles
Steele r. T. Hough. Solicitor OF Internal Revenue
was also present Among the spectators Weie
REPRESENTATIVE McNn. OF Tennessee. the autno
~ tho Income Tax law and ex-RepresentatVe
william NJ Springer OF Illinois. whose contest
with the Government a number or wears aeo O.
the law OF 1858 resulted In a declaration os '''e 80
nrAme Court OF the United States that an 'n' '
,ax vas NOT a direct In that case 'i' ''
-, - .h,s as ~ the uniformity of the tax WIS
not raised it, .or o,,is
Mr. Guthrie appeared especially ioi "a
HYDE a stockholder in the Farmers Iva" ~
Trust COMPANY OF Nev-York. lie cohIheo MN
seIf 10 a presentation OF the contehuo" '"'' '''
-, .os unconstitutional because OF its ineQuahty'
lack of uniformity and numerous iiesal exceptions
The right and power Of congress 10 TAX incomes
from investments in municipal bonds were expressly
ariod nv Mr. Guthrie The right of the stock
holders of a corporation. the management OF "hich
nroposed voluntarily to pay the tax to seek refer
Nv an Injunction Mr. Guthrie asserted. was well
established in the case Of Dodge agt "aiSey
us Howard and the principles lad down IN Una.
case had been affirmed by the supreme Court OF
the United States. The Farmers Loan ana trust
Con,nany he said, had a capital STOCK OF N"c'V'
xi,b a surplus Of 100000, doing business at
roe, NJ 500 900 annually. 1t owned real estate
q, the value Of s. 10000, with an annual rent ron
NJ $4,000 II also owned 100000 worth OF muhiclpa
bonds from which 1t received $4,000 interest an
nuauv II also held trustee. for minors and
.,har heneAciaries over 100 parcels OF real estate
from which IL collected rents. If the management
aid not preserve its rights, and the law should De
hold N be unconstitutional, the corporation "ouh
become involved in litigation with these minors
and other benefciaries.
Tha law was unconstitutional, also. counsel
ov.rred for the reason that IT was class legisIa-
t,on That it class legislation the brlef OF 'he
Attorney-General distinctly admitted. as the loi-
lowing quotation would prove: congress mas
adopted as the minimum income for the purposes
of taxation the limit of 5000 The limit ma! oe
said now 10 divide the upper from the lower mid
die class financially speaking, in the larger Cities
or ~ divide the middle class from the wealthy IN
the country districts" Mr.. Guthrie then proceeoed
az length to show that the law made illegal eNCep-
tions and illustrating this said that mutual III
surance company in Newly ork CITY, Win SUI
nus Of 500 100000 would be exempt from tax OF
5000 noo a wear which their principal rival In the
sarne business conducting II for the same purpose
but operating as stock concern. must pay Inc
exception of these mutual and other semi or "hony
benevolent institutons-savings banks, bulIuihs
and loan associations and the hke-it was con,
tended, was in violation OF the constitution ana
rendered the law null ana TGid br,a had aTsuei:
GsneTa n nS and Exemptions have
ways been familiar in Federal IegisIatloi never
of a practical construction of the Constitution.
They have been familiar IN state egsa az necisr
restrictions in State Constitutions have been al
ways sus'sinsd ,b correctness of that state
ment," Mir Guthrie added I'VE have not been
ton in any OF the previous income tax laws. copies
of which have been furnished the court"
YOUR psrgH Mnsn inqured Justice harlan
first section tae Of sP Ar,ce V and the nth
ment TO the Constitution. answered Mt Iui Guy re
elimination Mr. Guthrie asked the court to consider
the situation had the malory OF congress Eo ex
empt stock corporations Il am of the opinion that
it would have been severe tax upon your patience
sition. And yet. II the power Of discrimination ana
favoritism exists in Congress the Court cannot say
Thus far and no farther shall you GO The power
10 discriminate granted, the power TO conscate ana
destroy necessarily follows.
Upon the question OF uniformity OF the tax which
the Constitution requires Mr.. Guthrie said the con-
tention Of the Government and other advocates OF
the law, that the uniformity was geographical I'M
itaton merely. was unsound and untenabIe me
uniformity required related 70 the application 81
the tax the parties affected an equal apportlon
rnent: and "A Uniformity which resulted Only IN
spreading inequalities OF the tax over the whole
country would not serve. That II was Sot geo
graphical preference merely which was denied Mr.,
Guthrie said. fully shown by the language oi
the very next section In the Constitution. relating
20 the assessment and collection of customs where
in a preference to any one port over another was
prohibited.
At this point the hour for adjournment arrived
and Mr.. Guthrie suspended his argument. which he
Will conclude in the morning. Clarence A Seward
VIII follow him. against the aw; then Assistant A.
torney- General Whitney Will speak for the law;
ex-senator Edmunds against II: Attorney Genera!
Olney and j. G. Carter for the law and Joseph II.
Choate will close the argument in opposition In
response to a suggestion from Mr. Edmunds to-day.
Chief Justice Fuller ntimated that the time allowed
for argument would be enlarged from to
tuylfN