Evening star. [volume] (Washington, D.C.) 1854-1972, 1895-04-06
THE INCOME TAX
The Supreme Court Divides Evenly
in Its Decision.
PART SUSTAINED, PART REVERSED
Fuller, Field, Gray, Brewer Against;
the Law.
THE LOSS OF REV ENUE


tax case has been given to the public by
way of Chicago The Chicago Tribune to-
day publishes. In a four-oolumn special dis
patch from Washington. what is claimed to
be the decision of the court on the case,
with the full opinions Of the court So far
as can he learned, the report Of the de-
cisicn was purchased by the Tribune
through Its correspondent here, Mr.. R. E.
Patterson, who Is said to have paid large
price for 1t, and it is supposed that the
matter was given out by some one in gov
eminent employ. Naturally, the news
created considerable excitement among
lawyers and government officials. At first
there was disposition to give the story
no credence, but when the particulars con-
nected with the publication of the decision
became known it generally accepted
as substantially correct.
What the Decision Is.
The substance of the decision as published
by the Tribune is that the Supreme Court
in the income tax case has reversed the
decision of the lower court, but the income
tax law, as a whole, is upheld. only, how
ever, by divided court. Two important
portions of the law have been decided to
be unconstitutional. and they are so serious
as to affect materially not only the reve-
nues of the government but the estimation
In which the income tax will be held by the
people.
Under the decision to be handed down by
the court it is said all incomes derived from
rents are exempted from taxation by the
federal government and all incomes derived
from state and municipal bonds are SINH
larry exempted.
Can BE Picked to Pieces.
In other respects the income tax law
stands as it was passed last August, but
the result of the consultations in the Su-
preme Court shows very conclusively. it is
held, that the law can easily be picked to
pieces, provided suits are brought to con-
test each particular point it comes up.
1t is claimed that the law which was
passed at the dictation of the populistic
wing of democratic Congress has been
distorted by the decision of the United
States Supreme Court clearly on coGsti-
tutional grounds, in such a way that it
VIII absolutely protect the class of cap
italists most offensive to the populis.ic
element.
Exemptions Established.
The landlords of the country will pay no
inco--r> tax. The owners of bonds of al
most any kind, either federal, state, county
or municipal. will also be free, while the
business man, the manufacturer and the
salaried employe will, for the present at
least. be compelled to contribute to the
treasury of the United States government
per cent of all incomes in excess of $1,000
per annum.
If the next Congress does not repeal the
law with the sanction of the President
there WILL 1t ts argued, be a sudden rise in
the price of all local public securities, as
we'll as of all real estate for, as they will
be exempted from taxation, they ought to
get the benefit of the two per cent which
other income producers obliged to ac-
count for.
How the Court Stands,
The first meeting of the Supreme Court
was held March 16. two days after the con-
clusion Of the arguments, but no decision
was reached, and it was not until March
30, 1t is said, that they succeeded in agree
Ing upon the outlines of decision covering
the opinion of the lower court.
The court was evenly divided Justice
Jackson too ill to take part Chief
Justice Fuller and Justices Field, Gray and
Brewer were opposed to the law. Justices
Harlan, Brown, ShiraS and White voted
to sustain the law.
The expectation among members of the
court Is that the decision will be rendered
Monday in open court, but there Is bare
possibility that the court may again split
up into irreconcilable sections and hold
up the decision.
The Attorney General is Silent.
The Chicago dispatch containing the Tri-
bune's publication of the decision was laid
before Attorney General Olney this morn
ing by Star reporter. The Attorney Cen
eral said he had absolutely no information
in regard to the matter, and he would not
say whether the dispatch from Chicago
bcre any internal evidence of being either
probably actually true. In short, he
said it would be wholly indelicate for him
to say anything at all about the matter.
Assistant Attorney General Whitney, who
was associated with the Attorney General
i'm the argument of the cases before the
Supreme Court, out of the city, but a
prominent public official. who questioned
Mr. Whitney some days ago about the
probable position of the court on the ques-
ton, stated that the assistant attorney gen.
cIal declared positively that he had no
knowledge of what action the court might
take and that he had no means of know
ing and, Furthermore. did not desire to
krow in advance of the announcement Of
the decision.
An Extra Session.
The attention of several members OF the
cabinet was called today TO the dispatch
from Chicago giving the substance of the
Tribune's publication concerning the de-
c><ion, but they declined to express any
opinion thereon, on the ground that it
would be manifestly improper for them to
discuss any opinion of the court, at least
until it has been officially promulgated.
From another. but entirely authentic
source, it is learned that whatever the de-
ciSion of the court may be, the President
will not call an extra session of Congress.
ar/ even should the decision declare the
law wholly unconstitutional the President
will adhere to his determination not to
call Congress together, and that he will
so announce in a public declaration.
The Revenues of the Government.
A Star reporter assured this after
noon by official of the government, whose
position gives him thorough insight into
the financial affairs of the government and
the policy of the administration, that if the
income tax We're declared unconstitutional,
or If its operation limited SO to cut off a
considerable portion of the revenue expect
ed from that source, it will still be IN
necessary to lave an extra session of Con-
gresS.
This official gave 1t as his opinion, based
upon his own information, that there is no
probability of an extra session of Congress,
there being contingency in sight which
could neceSSitate one.
The Pres, dent and his advisers have
taken into consideration all the possibil-
ties presented by failure OF revenues. and
recent estimates, based upon official fig
ures. dispelled any fears that might have
hitherto existed that an extra session
might be necessary.
At the cabinet meeting yesterday assur-
ances were given that the natural and