The Topeka state journal., 1899-03-22
Agreement Involves Hundreds
of Thousands of Dollars.
BROKERS MUST PAY.
of the Government
is Sustained.
Made on Appeal of Chi
cago Operators.

Washington, March 22.-It is reported
today that the United States supreme
court will announce a decision tomorrow
the effect of which will be to compel
commission merchants and brokers upon
boards of trade to pay the government
hundreds of thousands of dollars an
nually as long as the war revenue law
remains in operation.
The decision, it is said, will sustain
one of the most important features of
the war revenue act. 1t is that section
which requires the seller on an exchange
to deliver to the buyer bill, memoran-
dunn, agreement or other evidence OF
sale showing the date, the name of the
seller, the amount of the sale, and tne
matter or thing to which it refers. rms
memorandum or agreement Sha1I pear /
internal revenue stamps at the rate OIL
/ cent for each 800 in value of the
property sold. The penalty for vlolat-
ing this clause is a fine from $5Uo 10
81 900, or Imprisonment for six months.
Two cases were brought by chicago
brokers against this feature of the law,
and the decision will be of vast import
ance to brokers everywhere In either
case the governments right to tax was
not assailed, but in both the brokers
denied the governments right to COM
pei them to issue a memorandum
The supreme court, it is stated, holds
that inasmuch as the memorandum IS
simply an instrument to facilitate the
collection of the tax, it is const1tu-
tional requirement, because unless a
memorandum were issued 1t woulo pc
obviously impossible for the government
to collect the tax, there being nothing
to attach the stamps to and nothing to
show the amount of tax due.
One of these cases was brought by
Edwin S. Skillen of Chicago. The record
shows that on Nov. 2, 1898, Mr.. Skillen,
a member of the Chicago board of trade,
agreed to sell to Frank Harlow 5,00O
,.1e- 90 Ioe n rod a a
time during the month of December that
Mr. Skillen should select. Mr.. Skillen
did not deliver to Mr.. Harlow a bill or
memorandum of said agreement as re-
quired by the war revenue act.
UPHELD IN THE LOWER COURT.
On Nov. 25 1898, Mr.. Harlow agreed
to sell to Mr.. Skillen a like quantity
of corn to be delivered on any day IN
December that Mr.. Harlow might select.
AfterWard, in accordance with the gen
eral usage in such cases, the one con-
tract was offset against the other and
a settlement of both was effected by
the payment by Mr.. Skillen to Mr.. Har-
low of the difference in the selling prices
of the two contracts.
Upon an information by the district
attorney, reciting these facts, Mr.. Skill
len was convicted in the district court
at Chicago. He at once appealed to the
supreme court, the case being a test
one on the validity of the disputed Sec
tiOn of the law.
The other case was brought by James
Nicol, also a member of the Chicago
board of trade. The only difference in
the case is that Mr.. Nicol made upon
the Chicago board of trade sale for
present delivery of existing corn then
owned by him, and refused to give a
memorandum of sale, while Mr.. Skillen
made an agreement to sell corn for fu-
ture delivery without having at any
time any corn to deliver on such agree
ment
Both cases were brought against John
G. Ames, United States marshal, to
whose custody Messrs. Nicol and Skill
len were remanded by the United States
court at Chicago.
Another case now before the court,
involving the tax on stocks, was
brought by Charles H. Ingiversen.