The record-union., 1895-05-08

'ioion ioI tuo dppEaiStLuous Ny Ieutal
value or otherwise of vacant and unpro-
ductive land. If it had been, there would
have been provision for the appraise-
ment, by real value or otherwise, of
houses and grounds which are occupied
as homesteads anu for purposes Of private
enjoyment and pleasure.
The owner of vacant and unproduotive
lands held for investment and 'specula-
ton. whether they De city lots or thou
sands OF unimproved acres. pays nothing
under this law on account of such lands.
The millionaire, with half-million-
dollar mansion in the city, and an equally
costly residence by the seaside, pays
nothing under this law. The manu-
facturer or the railroad corporation, the
very basis of whose business is the inter-
est i'll real estate occupied and used there
for, pays nothing under this law on ac.
count of such real estate. 1t is impossi-
bic 10 contend, therefore, that this law
contemplates real estate as such as the
subject of the tax imposed by it. Ii there
could be a possible doubt on that point,
it is excluded by the enumeration OF the
subjects Tor the tax contained in Section
q. Each and every one is personal prop
erty, and so carefully is the distinction
observed that when the clause imposing
the succession tax is reached it is ex-
pressly limited to money and the value
OF all personal property acquired by the
gift OF inheritance.
'Suoh being the unmistakable purpose
of the law, is it true that Congress has
stultitied itself? Is it true that it has
managed to do the very thing that 1t
meant TO avoid doing? That is supposed
to be the result because taxpayers
rents are placed among the constituents
of his taxable income. But the intent of
Congress is to be recognized and effectu-
ated, if possible, and its inclusion Oh
rents in taxable income is not to be suf-
fered to defeat that intent if any legiti-
mate view of the statute will prevent it.
Can such view be taken? l respectfully
submit not only that it can. Int that it
shouid-that it is the only reasonable and
best way.
1.-The taxpayer pays this year accord
ing TO his money spending ability of last
year, and it is entirely conceivable that
man who this year does not earn cent,
and is without a cents worth of property,
real or personal, may, nevertheless, be
assessed on hundreds of thousands of
dollars OF income actually received by
him last year. ct this IS the sort OF tax
which is called a tax on real estate for no
other reason than that last years rents
form part OF the yardstick by which this
years money-spending capacity is meas
ured. A greater error, l admit, could not
easily be committed.
IF the distinction between personality
and reality in the matter of taxation is
made by the Constitution itself-and that
il is necessary mption of the argu-
ment-where does this court get the au-
thority TO set 1t aside as matter OF form?
No such authority exists. 1t may be a
tax upon personality IN the shape of
rents, AS is the same thing to the landlord
pecuniarily as a tax upon the land itself.
But landlords are not the only parties
concerned. The whole people are inter-
ested, since to them 1t is of the first i'm
portance that the Constitution should be
respected in its entirety, and that no
branch of the Government should under
take to deal with any part of it as nero
matter Of form.
"It is intimated, logically speaking.
that If a tax on real estate is direct tax
so is tax on personal property, and that
if tax on rents Is a tax on real estate so
is tax on interest and dividends tax
on the capital producing them. In 1895.
the fathers of The republic said: Here Is
a Constitution of the Government; not O
metaphysical treatise 1t declares that
certain taxes must be apportioned. The
tax before us is not in its nature appor-
tionable without violating every principle
of taxation, therefore it is not tax which
is required TO be apportioned.
followed, the cases at the bar would
present no difficulties. In lieu of it,
however, and the fragrant inequality OF
the working OF the new doctrine being
fully admitted, what we are presented
with is the suggestion that II Is not for
current, everyday use, but is to be ap-
piled only in extraordinary emergencies.
What is the value of this suggestion?
Legally speaking, nothing, of course.
Wi a II
There are important questions, of course,
to which l have not spoken, but they
were either argued fully at the former
hearing or have been completely covered
at the present time by the able and
learned argument OF my associates. L
leave the case to the court, therefore, at
this point. feeling sure of this, at least,
that if any consideration which could
help save the Government, the integrity
of one of its most important powers has
failed to be developed. Failure cannot
be attributed to any want OF appreciation
of the case, nor any intention not to give
to il the most careful attention and
study"
Mr.. Olney concluded at $40, and was
Immediately followed by Mr.. Choate,
who began the concluding argument for
the appellants in the case. MIR. Choate's
manner of introducing his remarks was
strikingly peculiar. He began as il in
the middle of u sentence, or as If he in
tended to complete sentence begun and
unfinished by either MIR. Olney or MIR.
Whitney.
But" said he. "if the court please, we
are iii court of law and the court OF
Constitution, and not engaged in a mas
querading performance. Nor are we
seemed to think, in whose presence his
chief Mr.. Olney) might be proceeding
for an amendment to the Constitution to
get rid Of what he calls this effete appor-
tionment.
"Why is it," he asked, ''that the court
is holding its breath for the decision on
the second hearing of this case? Why
are the people from end to end OF the
country so eager to hear the definite, and
let us hope, the final verdict in the case.
The reason is found in the fact that the
entire country is deeply concerned to
know whether the safeguards which had
been SO dearly purchased by our fathers
were to be reserved to the present or the
future generations, or to be trampled
under foot and denied to u.s."
Mr.. Choate then began his real argu-
ment, saying that as far as practicable he
would take up the question where it
had been left off by the former decision.
He did not intend to surrender an ad-
vantage gained by the former decision,
and would regard it as settled and fixed
that incomes from municipal and State
bonds could not be taxed. With the
point as to public bonds settled, all the
conundrums involved were answered.
leaving the political questions to take
care OF themselves. The decision meant
that the court conceded the inherent
rights of towns, counties and States to
borrow money. and that the Federal
Government could not Interfere with
This right by crippling and weakening
instrumentalities OF their credit.
MIR. CEoate ridlculed the position of the
Government that a tax on rents was rot
q tax on land. The decision already rem
dered Ine. this objection completely. A
most careful brief had been filed on the
question of direct taxation. The Govern