The Wichita daily eagle., 1895-05-21

ported the law which Mr. Madison op-
posed, for the same reason that his
friend Fisher Ames did, because il was
an excise and as such was specifically
comprehended by the constitution Any
loose expression in definition OF the
word direct" SO far as conflicting with
his well conceived views in the FEEDER
alist, must be regarded as the liberty
which the advocate usually considers
himself entitled to take with his sub
ject. He gives, however, it seems, as
to the United States, a definition which
covered the question before US a tax
on ones whole income is a tax upon the
annual receipts from his whole prop
erty. and as such it is a tax upon that
property, and a direct tax in the mean
ing of the constitution. And Mr.. Ham,
ilton, in his report on the public credit.
in referring 10 contracts with persons
of foreign country said: This prin-
ciple, which seems critically correct,
would exempt as well the incomes as
the capital Of the property. II pro-
tects the use as effectually as the thing.
without the beneficial if it? In many
cases indeed, the income of an annuity
is the property itself"
We think there is nothing IN the Hyl-
ton case III conflict with the foregoing.
The case is badly reported. What was
decided on the Hylton case was that a
tax on carriages was an excise and
therefore, an indirect tax. The conren-
ton of Mr. Madison in the house was
only SO far disturbed by it that the
court classified it where he himself
would have held it unconstitutional,
and he subsequently, as president, ap-
proved similar act. The condition of
Mr.. Hamilton in the Federalist was not
disturbed by it in the least. In our
judgment the construction given to the
constitution by the authors of the Fed
eralist (the five numbers contributed by
Chief Justice Jay related to the danger
from foreign force and influence and to
the treaty making power) should not
and cannot be disregarded.
AS RELATING TO BONDS.
In relation to the operation of the
income tax law upon municipal bonds,
the opinion proceeds:
The view entertained on this point by
Mr.. Pitt was expressed in his celebra ted
speech on introducing his income tax
law of 1899, and he did not hesitate 10
carry it to its lagical conclusion. The
English loan acts provided that the
public dividends should be paid "free
of all taxes and charges whatever"
but Mr.. Pitt successfully contended that
the dividends for the purpose of thein-
come tax were to be considered simply
IN relation 10 the recipient as so much
income and that the holder had no
reason to complain. "And this" said
Mr.. Gladstone fifty-five years after,
was the national construction of the
pledge
The dissenting justices proceeded in
effect upon this ground in Weston VS..
Charleston, but the court rejected it.
That was a state tax it is true. but the
states have power TO lay income taxes
and if the source is not open to in
quiry. constitutional safeguards might
be easily eluded. We have unanimous
ly held in this case that so far as this
law operates on the receipts from muni-
cipal bonds it cannot be sutained. be-
cause it is q tax on the power of the
states and their instrumentalities TO
borrow money, and consequently repug-
nant to the constitution. But, if as
contended, the interest when received
has become merely money in the re-
cipient'S pocket and taxable as such
without reference to the source from
whence it cams, the question is imma-
terial whether it should have been or
iginaN taxed at all.
TRUE OF BONDS, TRUE OF ALL.
This was admitted by the attorney
general and it inevita bly, follows that if
the revenue derived from municipal