The herald. [microfilm reel] (Los Angeles [Calif.]) 1893-1900, 1895-03-12
Attorneys Discuss the Matter in
the Supreme Court
OBJECTION TO EXEMPTIONS
Wall Street Appears To Be Very Much
In Evidence
Attorney General Oiney and Assistants
Talk for the Oovernment-The
Case Continued

iucuI III sustaining Juo lHCOIIc tdA law
before the Supreme Court today. Attorney
General Olney, ex-senator Edmunds and
many other distinguished counsel in the
case occupied seats at the desk reserved
for attorneys. The court room was
crowded. Mr.. Mcmillan, Mr.. Springer
and several other members of Congress
who had taken part in the enactment OF
the income tax were among those present.
Mr.. Whitney addressed himself to the
question of uniformity in taxation, in an
swer to the charges that the income tax
violated the principle of uniformity. He
contended that the limit OF $4,000 fixed by
the law was not class legislation. If a
subsequent Congress had sought to amend
the law by including those not previously
exempted in tho $4,000 limit, this amend
ment would no doubt be class legislation,
as it would apply to distinct class. Mr..
Whitney reviewed prior decisions in in
surance and other cases, showing that the
Interpretation of this court on class legis-
lation would not apply to the income tax.
Concerning the exemptions allowed to
certain corporations, the Assistant Attor-
ney General said 1t was most surprising
that this was set up as ground for in
validating the tax. He read from numer-
Gus Federal tax laws, showing repeated
exemptions in the cases of art societies
q d many other corporations.
The court had sustained tax exemption
to manufacturing corporations in the
District of Columbia Building and Loan
Associations, and saving companies were
frequently exempted by special consider
alton. During the war the law makers
even excepted the mutual insurance com
panies from the operation of the general
tax law.
Mr. Whitney said that the Supreme
Court had already overruled the conten-
tion that the taxation OF land values and
rentals, as made by the income tax. is in
valid. The state taxes we're against the
land and not against the individual but
the income tax was not aaginst the land
but against the total income Of the indi-
vidual. AS this income came'in part from
land it was merely an incident.
The income tax is in no sense a land
tax. 1t is not on the gross income from
land and other sources, but on net in
come. Mr.. Whitney took up the claim
that the Federal Governments cannot tax
municipal and local securities held by
individuals, as for instance bonds issued
by New York city. He said it had been
the state of Maryland that state could
tax bonds of the city or state of New
York. If the state does not exercise this
power why should not the Federal Govern
ment do the same?
Mr.. Whitney concluded at l 80 and was
followed by. Mr.. Edmunds counsel against
the tax. He spoke quietly and in con-
versational tone. much as he did when
leading figure of the Senate. He stated
the contention of his client against the
invasion of his rights and an inspection
of his private books and papers. If there
was constitutional provision protecting
the individual, it was the rock upon which
\ 81 u fav veou ho
Mr.. Edmunds read from the Constitution
as to the protection OF private rights.
These provisions he said, were trite, and
yet it seemed necessary in these days
with such legislation before us to recall
these constitutional bulwarks against an
invasion of private rights. In a ques-
tion of this gravity, he would feel dis
posed to ask the Court not only to pursue
precedents and follow them in this mat
ter, but to 20 back and rule upon the en-
tire subject so vital to sustaining private
rights.
The worst tyranny in history is that
which comes in the guise of relief. He
endeavoring to take away from the courts
the right to appeal for protection, as was
the case in the income tax law. He did
not think the time had come when there
should be no longer an appeal to the courts
from an act of Congress.
lL was DeyOnU Cue IuuCtlOn OF congress
to pass an act that would strip the courts
of their rights and this was just as true
as to the rights of the citizen as to those
Of the courts.
Speaking of the income tax law, he re-
ferred to the provision that the taxpayer
was required to make his returns to dep
uty collectors. He said the deputy was
the Constitution. I do not. however, he
said. mean to dwell on that, but merely
refer to it in passing as one Of the plants
of vice which bloom in the garden OF
the last Congress. He criticized many
other features OF the law providing for
the collection OF the taxes, pointed out
that it left no room for resort or appeal to
the courts, but left to the revenue officers
the adjustment, who, he said, were not
only the final Judges, but the inquisitors
as we'll.
'It is true" he said "that these re-
turns are to be regarded as confidential,
but how are we to know they, are always
may be treated? Is it not possible they
may be handled, for instance, like the
condolences Of the United States Senator"
Mr.. Edmunds then reviewed the case
heretofore decided, which has been re-
ferred to in the previous argument and
discussed the points involved at length.
He referred to the Hilton case, involving
the tax on carriages when Chief Justice
Fuller called his attention to the fact
that Hilton had an unusual number of
carriages, lbs, as he remembered.
Unusual in numbers, yes" Mr.. Ed
munds asserted, "but he possessed them
as many persons possess virtue and
grace"
He asked the court to overrule it's for
mer decision in the income tax as given
in the Springer case. LET u.s. he said,
come back to the true rule of the con-
stitution. We are to except gradual and
indefinite similar departures from the
line marked out by the constitution, and
we may depart further from it until at
last, like the mariner after storm or the
traveller in the wilderness after the stars
come out, We are compelled to readjust
our course in the new light that is
given"
He urged that the past Congress had
overstepped the limits OF the constitution
in imposing this tax, because, he said,
it was short Of money. He urged that
under the law. 95 per cent OF the tax
would be paid by 2 per cent OF the tax
able voters.
1T becomes, said Mr.. Edmunds, ''an
interesting subject of speculation as to
how long the Government can last under