Evening journal., 1899-04-05
SUSTAINED The WAR TAX.
IMPORTANT .DEClSlON HANDED
DOWN BY U. S. SUPREME COURT.


LIDITY OF DISPUTED SECTIONS or
THE REVENUE ACT-NOT A DI.
RECT TAXATION.
Washington, April Sin the United
States Supreme Court Monday an opinion
was handed down by Judge Peckham in
several cases involving the validity Of the
War Revenue act. The cases all come
from the Chicago Federal Courts.
They involve especially the validity of
the tax provided by the War Revenue acl
upon sales and contracts to sell merchan-
| disc upon exchanges, boards Of trade or
similar places. The War Revenue act re-
quires memorandum to be made Of the
transaction and stamp affixed, the
amount Of which is measured by the
value of the sale.
The point was made that Congress had
no power to require a written memoran-
dunn TO be made upon transactions within
"a state for the purpose of taxing such
memorandums.
The court, in its opinion, carefully dis
cusses all the objections and overrules
them. 1t holds the tax is not a direct tax,
but "a duty or excise laid upon the privl-
lege, opportunity or facility offered at
boards Of trade or exchanges for the
prosecution Of the business mentioned in
the act"
1T is the court further says, mot a
tax upon the members Of the exchange
nor upon the membership therein; nor is
it tax upon sales generally. The act
limits the tax Of sales at any exchange OF
board of trade or other similar place, and
its fair meaning is to impose a duty upon
those privileges or facilities there found
and made use Of"
The exceptional facilities offered al
such places afford, the court says, a just
ground for classification for purposes Of
taxation by Congress of transaction.
there. The flexible character of the tax
ing power and the possibility Of adapting
it to changing conditions is described b,
the court, 1t distinctly holding that in or
der to tax a privilege or facility enjoyed
1t is not necessary that it should be ere
ated by the government. The Requirement
OF a memorandum is upheld because It 4
necessary for the collection of a tax
The tax is pronounced uniform becaus
it applies to all who enjoy the specia
privileges or facilities incident to IN
= transaction Of business at the boards o
. trade and similar places.
In speaking Of the general powers O
Congress as to taxation, Justice Peckhar
said:
B. In searching for proper subjects O
7 taxation to raise money for the supper
Of the government Congress must hav
the right to recognize the manner /
. which the business of the country is aC
tually transacted how among othe
- things the exchange Of commodities is 81
fected; what facilities for the conduct c
business exists; what is their nature an
how they operate, and what If any praC
= ticable and recognized distinction ther
e may be between a transaction which
e affected by means Of using certain facil
n ties and one where such facilities are nc
q availed Of by the parties to the same kin
Of transaction. Having the power
d recognize these various facts It must ais
y follow that Congress is justified If NJ
n compelled. in framing a statute rslztin
r to taxation, to legislate with direct ro
l. srence to the existing conditions of trad
and business throughout the country an
- to the manner in which they are carrie
- on"
''The tax he said, 'is not a direct ia
~ within the meaning Of the Constitutlo
but is in the nature Of a duty Of excis
Il" The amount of such a tax when impos,
a. d, IN a case like this may be increased
a. diminished by the extent to which Il
privilege or facility is used, and it
y fixed in this act by the value of the pro
erty transferred by means of using su,
privileges or facility but this does n
make the tax direct one. We do not S
that any material difference exists VIII
IS the sale is for future delivery. The thii
ey agreed to be sold is the same whether +
ia immediate or future delivery"
on on the point of discrimination Il was 7
re-: marked"a purchase occurglwhenever sa
en- is effected, and to say that a purchas
Is at an exchange sale must be taxed (
th the facilities made use Of in making I
purchase or else that the tax on the sell
is void is simply to insist upon doubli
the tax. Nor is It necessary to tax t
in use Of the privilege under all crcui
ere stances in order to render the tax va
~. upon its use in particular cases. we
on no reason why 1t should be necessary
his tax a privilege whenever it is used
ng any purpose or else not to ta.. it at
aid il is not in its nature indivisible. In no
ing that a tax under consideration is a I
on the privilege used in making sales
an exchange we thereby hold that it
III. not a tax upon the memorandum
Of quired by the statute upon which
as as stamp is to be placed. The act does
N. assume in any manner to interfere W
the laws Of the state in relation to
contract of sale. That Congress mil
have adopted some other means for 8
md lecting the tax which would prove J
we'd troublesome or annoying to the taxpa
ird can surely be no reason for holding 4
vas the method set forth in the act rend
the tax Invalid The means must b,
question for Congress alone"
his -
.ow Jack Henry VIII make a great fight W