The Houston daily post. [volume] (Houston, Tex.) 1886-1903, 1899-04-04
THE REVENUE TAX LAW.
Supreme Court Decides the Measure Is
Constitutional
SUMMARY OF FULL OPINION HANDED DOWN
Union stock Yards of chicago ~ an
Exchange and In Liable
for the Tax.

states supreme court To-Day luNoiNihb ~
invaldlty Of the war revenue law. The
opinion was handed down by Justice Peck
ham, who orally announced bare sum
mary Of the written document. The opin-
ion, as prepared for preservation, took all
the various phases of the subject, holding
the law constitutional as applied not only
to stock exchanges, but to live stock yards
as we'll, the principle being the same IN
all cases.
The cases come from the Chicago Federal
courts. These cases involve especially
the validity Of the tax provided by the
war revenue act upon sales and contracts
TO sell merchandise upon exchanges, boards
of trade on similar places. The war reve-
nue. act requires a memorandum TO be
made OF the transaction and q stamp al
fixed, the amount Of which is measured
by the virtue of the sale.
One case involves the question as to
whether the Union Stock yards at Chi
cago is an exchange or similar place, max
ing sales there taxable.
The court in It's opinion sustained the
validity of the tax and has elected also
that the stock yards is place similar TO
an exchange, making its transactions liable
to tho tax.
In speaking OF the general powers of
congress as to the taxation, Justice Peck
ham said:
I'm searching for proper subjects of
taxation to raise moneys for the support
OF the government, congress must have
the right to recognize the manner in which
the business OF the country is actually
transacted; how among other things, the
exchange of commodities is effected. what
facilities for the conduct of business exist
what is their nature and how they oper
ate; and what, II any, practicable and
recognizable distinction there may be be-
tween a transaction which is effected by
means of using certain facilities, and
one where such facilities are not awaited
OF by the parties to the same kind of
transaction. Having the power to recog-
ni2e these various facts. II must also
follow that congress is justified, If not
compelled, in framing a statute relating
1 to taxation to legislate with direct refer
ence to the existing condition of trade
and business throughout the country and
to the manner in which they are carried
| on.
The Chicago board of trade is treated
IN the opinion as a type of board of trade
all over the country the size of the Chit
( cage institution only serving 10 increase
| Importance. 1t Is common knowledge that
these exchanges encourage and promote
honest and fair. dealing among their mem
bers; that they provide penalties for the
violation OF the rules in that regard and
| mat contracts between members relating
to business on the exchange have the ad-
vantage of the sanction provided by the
| exchange for such purposes
| Nor is there any doubt that these 'ex
changes facilitate transactions Of purchase
and sale and 1t would seem that such IA
| ellities or privileges, even though nor
/ granted by the government or by a State.
ought nevertheless to be recognized as
| existing facts and to be subjected TO The
| Judgment OF congress as fit matters for
| taxation
The tax" he said lis not a direct tax
/ within the meaning of the constitution
but is in the nature of duty or excise
| Inc amount of such tax, when imposed
! IN case like this, may be Increased or
I diminished by the extent to which tho
I privilege or facility is used and 1t is fixed
| IN ihis act by the value OF The property
| transferred by means of using such privl-
| lege,o facility; but this does not make the
/ tax a direct one"
we do not see that any material DIFF
ference existed when the sale Is for future
! delivery. The thing agreed to he sold Is
the same whether for immediate or future
| delivery"
On the point OF discrimination II was
1 whenever
q sale is effected, and the purchaser at an
exchange sale must be taxed for the facil-
| tiles made use of In making the purchase.
| or else that the tax of the seller is void
simply to insist upon doubling the tax.
Nor Is 1t necessary to tax the use of the
| privilege under all circumstances in order
to render the tax valid on Its use In par-
ticular cases. We see no reason why It
should be necessary to tax a person for
the privilege whenever 1t Is used for any
purpose or else not TO tax II at ALL Ii Is
not in its nature indivisible.
In holding that the tax under considera-
ton is tax on the privilege used in max
ing sales at an exchange. we thereby hold
that II is not tax upon the memorandum
required by the statute upon which the
stamp Is to be placed. The act does not
assume In any manner to interfere with
the laws of the State In relation to the
contract of sale.
That congress might have adopted some
other means FOR collecting tho tax which
would prove less troublesome. or annoying
TO tax payers can surely be no reason
for holding that the method set forth In
the act renders the tax invalid. The
means must he a question for congress
alone
Chicago, April 5.George F. Stone, Sec
rotary Of the Chicago board of trade, was
much interested today In the supreme
court decision sustaining the validity OF
the war revenue act He said. however,
that he had yet received no Official notice
Of ythe decision and he was unable at
present to say what action would be taken
In the matter by the Chicago board OF
trade
Inquiry by the Associated Press among
others familiar with board of trade
methods developed the fact that no at
tempt has been made TO evade the reve-
nue. tax on the Chicago exchange, but that
there has been a question as to whether
brokers must pay a tax on every trade
IN the pits, or whether by a system az
transfers they could eliminate number
OF intermediate transactions, the tax fall
INK upon the ultimate seller with whom
The trade is finally checked at the end of
the day. Every trade that becomes 4
matter cf record on the books of any
board OF trade house pays the tax The
only question is on transferring of trades
between brokers.
TANEs on BANKS.