The San Francisco call., 1898-07-06
REVENUE LAW PROBLEMS.

n CCORDING to the tone of the discussion that
 / \ has followed the enactment of the revenue bill the measure will require considerable ex- planation and interpretation by the courts or the treasury authorities before it is fully understood in its application to the complex business of the coun- try. Some interesting problems have already arisen in connection with it, and others will doubtless come up in a comparatively short time.
 manufacturing company in the East, which oc- casionaly loans collateral security the cash re- served for the payment of its dividends, applied to the Commissioner of the Internal Revenue for rul- ing to whether under such circumstances it would be subject to the bank tax. The Commissioner de- cided that all companies doing such business must pay special taxes as banks The conclusion of the ruling is thus given by the Chicago Record:
 "The amount of the special tax to be paid is re- quired to be estimated upon the amount of capital used in the business The fact that any manufacturer manufacturing company or firm makes use of its sur plus and is doing banking business does not involve 1t in speciatax liability estimated upon the entire amount of its capital used by 1t in its manufacturing business It is held, therefore, that 1t is this amount, but simply the amount of the surplus on hand for the purpose of making loans, that is to be taken as a basis for estimating the amount of the special tax It is not the average amount loaned within the year. but the entire of surplus on hand out of which loans may be made
 The question of the incidence of taxation on the sale of stock and shares has received good deal of consideration in the exchanges where such sales amount to vast every business day of the year The New York Stock Exchange is reported to have settled for that city who IS not to pay the S2 the sale of every shares of stock, by declaring that the payment of the by the broker will be regarded as a violation of the constitution of the stock ex- change Other exchanges, it is said, will follow this rule. It may be taken determined therefore that whatever may have been the intent of the law makers this is not going to be tax brokers or reve- nue raised out of their profits.
 The tax of I cent on each $Ioo of value on the sales of products or merchandise has created con siderable agitation among the wheat and cotton brokers, and they will have several problems for the Commissioner to settle. It is held by certain Chi cago lawyers that the law does not grain op- tions: that the will be imposed on sales of grain for future delivery. The lawyer who gave this opinion, however, is attorney for the Chicago Board of Trade and his view may not find favor at Washington.
 Counsel for New York clearing houses is reported to have advised that the tax on promssory notes can be avoided by the policy pursued during the Civil War. It appears that during the existence of the former war tax banks made loans from day to day, with securities or commodities as collateral without the use of note contract upon which a stamp was necessary These advances not considered of the same nature ordinary loans promssory notes.
 From these illustrations it will be seen that the new revenue law is going to give rise to good many interesting questions Most of them, perhaps, can be decided off hand by the Commissioner, but some of them will certainly find their way to the courts Whatever may be its effect other trades and pro- fessions the tax is not going to diminish the profits of lawyers