The Wilmington daily Republican., 1895-04-09
Supreme Court Declares Parts
of 1t Unconstitutional.
NO TAX ON RENT INCOMES.
Municipal, State and County Bonds
Also Relieved.
DECLARED TO BE DIRECT TAXES.

Opposed to the Measure - Dissenting
Opinions by Justices Field and White.
WASHINGTON, April 9.-After almost q
month OF deliberation tho United States
supreme court rendered its decision yes
terday in the income tax cases, deciding
by a divided court the law to be valid ex-
cept as regards the income from rents and
from municipal bonds, on which points
the decision was that the tax was uncon-
stitutional.
There was only one member Of the bench
absent-Justice Jackson, who has not
been able to be in attendance upon the
court since last fall, and who has not par
ticipated in the consideration of the case
in any way. 1t is to his absence that the
even division Of the court on the majority
of the propositions involved in the case Is
due II he had been present such result
would have been impossible and the opin-
ions would have included discussion OF
all the points involved, instead of only the
two in regard to the incomes derived from
rents and municipal and state bonds.
There were only two minor decisions
rendered by members of the bench when
Chief Justice Fuller, after making few
routine announcements, began to read the
courts decree in the case of Charles Pol
lock vs. the Farmers Loan and Trust
company and others. This was the first
in order of the cases against the trust COM
panies, and the conclusions reached in it
apply also to the case Of Hyde VS.. the Con-
tinental Trust company, as the questions
at issue are the same in both cases. The
chief justice read with considerable rapid
ity, but his voice was at all times clear
and distinct, and lawyers present who had
familiarized themselves with the case had
little or no difficulty in following him.
The delivery of the opinion consumed an
hours time, and all present gave the
closest attention.
The body of the opinion was devoted to
the consideration of the question from
constitutional point of view, and involved
very elaborate definition of the meaning
of the phrase direct taxes" and also a
construction Of the constitutional require
ment as to apportionment. He said that
under the constitution federal taxes were
divided into direct taxes and duties, i'm
posts and excises, and laid down the rule
that direct taxes should under that in.
strument be governed by the rule of ap.
portionment among tho several states ac-
cording to population.
Referring to the question of direct tax
alton he said that 1t was not to be pre-
sumed that the trainers of the constitu-
tion were not men capable of appreciating
what they were doing when they provided
for the differentiation of imposts, excises
and duties from other forms of taxation
They knew perfectly we'll for instance,
that a tax on lands was generally regarded
as a direct tax, and it was provided that
direct taxes should be apportloned among
the states, and is therefore, as thus appor-
toned, practicable and just. The trainers
OF the fundamental law had before them
more prominently than any other thought
the idea that taxation and representation
should go hand in hand.
In support of that idea the just revo-
lutionary struggle had been made, and it
had surely not been the intention Of the
convention that state of affairs should
arise which would make 1t possible for
any of the states to combine for the pur-
pose of extorting taxes from other states.
Furthermore, the chief justice continued,
the constitution was the result OF com
promise between the states and the federal
government, whereby the states surren-
dered the right of leyying imposts, duties
and excuses, but it was evident did not
mean to transfer to the general govern
ment the right to levy direct taxes, except
In cases of great emergency. This COM
| pact, the chief justice said, had been OBJ
served up to the time of the passage of the
act of August, 1894.
| The fact that such tax as that under
consideration had been provided by con-
gress at time when the country was en-
| joying profound peace was adverted to,
and this, the justice said, was q circum-
stance which should call for tho exercise
of especial circumspeotion in considering
the present law. 1t was an innovation of
fetr nd cinniGpnnt fi,u nrtn ~
and was clearly in oontravention of the
wishes of tho states when they, indepen-
dent sovereigns up to that time in them
selves, parted with portion of their pre-
! negatives in respect to taxation.
| Much of this reasoning was meant to
| apply to the question of the taxation of
incomes derived from rents, but the chief
| Justice devoted a considerable part of the
opinion to the especial consideration Of
this branch of the inquiry, and held that
in taxing the income derived from land 1t
virtually and to all intents and purposes
taxed the land itself for, he asked, what
was the land to any one but for the profit
derived from itP He failed to see any dis
tinction between tax on the land itself
and on the profit derived from it, and nc
one had gone so far as to contend that a
tax on land would be a direct tax. The
court had reached the opinion thN this
portion Of the law was invalid and could
not be sustained.
The Same conclusion was reached in re-
gard to tho provision for taxing state,
county and municipal bonds, but into this
question the chief justice did not go as
fully as into that of the rent incomes. He
said in effect that 1t was clearly never in
tended by the sta tes to delegate authority
to the national congress to weaken their
credit by providing tax upon their in
strumentalities aud revenue agencies
Power to tax these agencies must of a ne
cessity imply the exercise of an influence
upon contract before it was made. Such
IN exercise Of power was repugnant to the
constitution and, therefore, the portion
Of tho law putting 1t into execution must
also be declared invalid,
On the other points involved the opinion
did not venture, because of the even di'
vision of the court.
In the course OF the decision tho chiel
Justice referred at length to tho cases cited
by the defense in justification and support
of the income tax, but he declared that In
none of these cases had tho specific ques
tion OF the power of congress to tax rent:
and municipal bonds been passed upon
but only by inference or incidentally
hence tho opinion of the court as now an
nounced was not in opposition to previou.
ruling by that tribunal. Indeed, he as
serted, that from the time Of the decision
in the Hylton case TO that in the Springer
case 1t had been uniformly conceded thai
tax on land was in the nature of direct
tax, while, as had been shown, tax OF
land profits was the same thing as a tal
on the land itself
Judge Field read a dissenting opinion
1t was largely devoted to review of th'
provision regarding rents, and was Wig
orous denunciation Of the principles sough
to be established by the income tax law
He also attacked tho law on account of th'
lack of uniformity and dwelt upon III
exemptions and Determinations whiof
were, he said, class legislation, He devoted
special attention to the exemptions o