The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1899-04-04
CONGRESS HAS FULL POWER
40 BASE TAXATION ON METHODS or
CONDUCTING BUSINESS.
Decisions Interpreting the Tax Laws
of Kentucky-The Henderson Bridge
and Other Cases-Sarious Rulings.

WASHINGTON. April 3.-Much interest
was manifested by lawyers and others i'm
the decision OF the cases i'm the United
States Supreme Court to-day involving the
validity Of the war revenue law. The option
was handed down by Justice Peckham. who
orally announced only a bare summary OF
the written document. The opinion as pre-
pared for preservation took up the various
phases of the subject holding the ssw
constitutional as applied not only TO stock
exchanges, but TO live stock yards well,
the principle being the same in all cases.
The cases decided to-day were those OF
James NicoI ". James Ames. United States
marshall petition for habeas corpus by
George r. Nichols. petitioner: Edwin
| Skillin appellant vs.. the Marshal and
! Charles Ingwersen. plaintiff in error, vs.
| the United States. The cases all come from
| the Chicago federal courts. These cases in
Volve especially the validity OF the tax pro-
yideG by the war revenue act on sales and
| contracts TO sell merchandise on exchanges,
boards OF trade or similar places. The war
revenue act requires memorandum 10 bs
MADE Of the transaction and a stamp af-
| fixed, the amount OF which is measured by
the value of the sale. The three cases of
Nicol appellant, of Nichols, petitioner. and
of Skillen. appellant present all the phases
| involved in stock transactions the Board
of Trade Chicago. The case OF Ingwer-
sen involves the question 10 whether the
Union stock yards at Chicago Is an eK-
change or similar place, making sales there
| taxable. The court i'm its opinion sustained
| the validity OF the tax and held also thar
the stock yards Is a place similar TO an ex-
| change making its transactions liable To
| the tax.
SAID 1T WAS A DIRECT TAX.
The case was argued by ex-Secretary
Carlisle and Mr. Robbins. of Chicago. for
the petitioners. and by Mr.. j. X. Richards,
solicitor general. for the government Mr.
Carlisle contended that the tax upon sales
on exchanges is a direct tax. first, because
a tax upon sales is virtually tax upon the
property sold. and, second, because the tax
/ cannot be shifted but must be paid by ths
seller on the exchange. IL was also insisted
| that if the tax is an indirect tax IL lacks
uniformity because not imposed upon all
sales whenever made. The point also was
made that if an indirect tax il Is a stamp
tax on documents. and that Congress had
| no right TO require a written memorandum
| TO be made upon transactions within State
for the purpose OF taxing nlemorandums.
The court i'm its opinion carefully discusses
| holds the tax is not direct tax, but a
duty or excise laid upon the privilege op-
portunity or facility afforded at boards OF
trade or exchanges for the prosecution OF
the business mentioned in the act. IL is
| the court further says. mot "A tax on the
members of the exchange nor upon the
membership therein, nor is IL tax on sales
! generally. TIE act limits the tax TO sales
at any exchange or board or trade or other
similar place, and its fair meaning is to-
impose duty those privileges or facili-
ties there found and made use OFF, The ex-
ceptIonal facilities offered al such places
affords. the court says, a just ground for
classification for purposes OF taxation by
Congress of transactions there The fiexible
character Of the taxing power and the possi-
| bility of adapting il 10 changing conditions
is described by the court. 1t distinctly hold
ing that in order to tax privilege or facil-
ity injured IL is not necessary that IL should
be created by the government. The requires
! ment OF memorandum Is upheld because
il l. necessary for the collection OF tax.
! The tax is pronounced uniform because IL
is applied 10 all who enjoy the special privi-
lege or facilities incident TO business at
boards of trade and similar places.
POWERS OF CONGRESS.
| In speaking OF the general powers OF
| Congress as TO taxation Justice Peckham
said: In 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 trans
acted how. among other things. the ex-
change OF commodities is effected; whar
facilities for the conduct OF business exist:
| what is their nature and how they operase
| and what, if any, practicable and recOgnlz-
able distinction there may be between a
| transaction which is effected by means oc
| using certain facilities and one where such
| facilities are not availed OF by the parties
| 10 the same kind OF transaction. Having
the power TO recognize these various facts it
| must also follow that Congress Is justified
| II not compelled i'm framing a statute relat-
| ing TO taxation TO legislate with direct ref
erence 10 the existing conditions OF trade
and business throughout the country and 10
the manner in which they are carried on"
The Chicago Board % Trade is treated as
/ a type of boards of trade all over the coun-
| try the size OF the Chicago institution only
serving TO increase its Importance. 1T 10
Common knowledge" continued the justice.
that these exchanges encourage and pro-
| mote honest and fair dealing among their
members. that they provide penalties for
the violation of their rules in that reggrd
aud that contracts between members relat-
ing TO business on the exchange have the
advantaee Of the sanction provided by the
exchange for such purposes. Nor is
there any doubt that these exchanges facili-
| tate transactions OF purchase and sale. and
II would seem that such facilities or priyi-
| leges. even though not granted by the gov
ernment or BY State. ought nevertheless