The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1899-04-04
WAR TAX LIN GOOD
Supreme Court Decides Cases
Brought Up From Chicago.
TO STOCK EXCHANGES
And Livestock Yards the Law
Equally Applies

Washington. April 3.-Much interest was
manifested by lawyers and others in the
decision Of the cases in the United States
supreme court involving the validity OF
the war revenue law. The opinion was
handed down by Justice Peckham. who
orally announced only a bare summary
of the written document. The opinion, as
prepared for preservation, took up the
various phases of the subject, holding the
law constitutional as applied not only to
stock exchanges, but to livestock yards
as WELL the principle being the same in
all cases. The cases were those of James
Nicol versus James Ames, United States
marshal; petition for habea corpus by
George II. Nichols, petitioner; Edwin s.
SkiIen, appellant, versus the marshal, and
Charles H. Ingwersen. plaintiff in error.
versus the United States. The cases all
came from the Chicago federal courts.
These cases involve especially the invalid
ity Of the tax provided by the war revenue
acts upon sales and contracts to sell mer-
chandise upon exchanges, boards Of trade
or similar places. The war revenue act re-
Quires a memorandum to be made of the
transaction and a stamp affixed, the
amount of which is measured by the value
OF the sale. Three cases Of Nichols, appel
liant; of Nichols, petitioner, and Of Skill
len appellant, present all the phases in
volved in stock transactions on the board
Of trade at Chicago. The case of Inger-
wersen involves the question as to whether
the Union stock yards at Chicago is an
exchange or similar place, making sales
there taxable. The court in its opinion
sustained the validity Of the tax, and held
also that the stock yards is place similar
to an exchange, making its transactions
liable to the tax.
Mr.. j. X. Richards, solicitor general, ap-
peared for the government. Mr.. Carlisle,
who appeared for the petitioners, contend
ed 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 the seller
on the exchange. 1t was also insisted that
if the tax is an indirect tax it lacks uni
formity because not imposed upon all
sales whenever made. The point was also
made that, if an indirect tax It is a stamp
tax on documents and 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 these objections and overrules
them It holds the tax is not direct
tax but "a duty or excise laid upon the
privilege, opportunity or facility offered
at boards of trade or exchanges for the
prosecution of the business mentioned in
the act
lit is" the court further says, mot a
tax upon the members of the exchange,
nor upon the membership therein, nor is it
a tax upon sales generally. The act limits
the tax to sales at any exchange or board
of trade or other similar place, and its
fair meaning is to impose duty upon
those privileges or facilities there found
and made use Of
The exceptional facilities offered at such
places affords. the court says, a just
ground for classification for purposes of
taxation by congress, of transactions thtre.
The flexible character of the taxing power,
and the possibility OF adapting it to chang
ing conditions is described by the courts,
it distinctly holding that in order to tax
a privilege or facility enjoyed, it is not
necessary that it should be crtated by the
The requirement of a mem |
orandum is upheld because it is necessary
for the collection of ajax. The tax is
pronounced uniform btcause 1t applies TO
all who enjoy the special privileges of facil- |
tiles incident to the transaction Of business |
at boards of trade and similar places.
Referring to the stock yards case Jus |
tce Peckham said: "a perusal of tht /
facts contained in the record of the case /
shows that these yards answer all the pur- /
poses Of an exchange or board of trade /
and that they in truth amount in sub |
stance to the same thing. The differences !
existing between them are insubstantial, |
in so far as this point is concerned
In speaking OF the general powers OF /
congress as to taxation, Justice Peckham /
said: In searching for proper subjects |
Of taxation TO raise maneys for the sup |
port of the governmtnt, 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 eff !
fected; that facilities for the conduct of !
business exist: what is their nature and /
how they operate and what, II any, prac- /
ticable and recognizable distinction there
may he between a transaction which is /
effected by means Of using certain facili- /
ties. ans one where such facilities are not /
availed Of by the parties to the same kind f!
OF a transaction. Having the power 20 rec
follow that congress is justified. if not 1
in framing a statute relating
20 taxation, 10 legislate with direct refer